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BUSINESS WEEK June 23, 2014 #59
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June 23, 2014, Issue 59
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GEORGIA GEORGIA’S FARMERS GET READY FOR MARKET
BILISI | Spading up soil around his potato plants, Valerie Devnozashvili says growing spuds is hard, because you cannot see the vegetables underground. In fact, the whole enterprise of small-scale agriculture is difficult, says Devnozashvili, who also grows wheat and corn on a farm of less than 2 hectares (5 acres) in eastern Georgia. The 55-year-old reckons he made about 1,000 lari ($570) in profit last year.
FITCH AFFIRMS FIVE GEORGIAN BANKS; OUTLOOK STABLE
Agricultural Strategy - what Areas should be Prioritized?
PKF EXCLUDED FROM GOODWILL REHABILITATION MANAGEMENT
nder the court decision, PKF Georgia and its director David Gvetadze have been excluded from the Goodwill’s rehabilitation management because of biased approaches and invaluable business reputation. Pg. 7
CIS UKRAINE OPEN TO WESTERN INVOLVEMENT IN PIPELINE
kraine on Thursday suggested bringing in European and U.S. companies to help operate the strategic pipeline that carries Russian natural gas across the country to Europe. Pg. 10
AZERBAIJAN AROUND 2.5 BLN MANATS INVESTED IN AZERBAIJAN’S OIL SECTOR
round 2.5 billion manats were invested in Azerbaijan’s oil sector in JanuaryMay 2014. Pg. 11
JUMEIRAH GROUP ARRIVED TO STUDY GEORGIA
n Tuesday first deputy of Minister of Economy and Sustainable Development Dimitri Kumsiashvli and deputy minister Ketevan Bochorishvili met with delegation of the international company Jumeirah Group, which arrived to Georgia to study tourism potential and possibly invest in the sector. International company Jumeirah Group represents one of the leading international hotel networks, with the head office in Dubai and which is
member of Dubai Holding. They have developed tourism business in the countries, such as Italy, Great Britain and so on. Jumeirah Group plans to expand the business and works on the projects in the following countries: India, UAE, Thailand, Morocco and so on. The delegation will stay in Georgia till June 20 and held meetings with representatives of the governmental and private sectors of Georgia. They will also visit Batumi, Borjomi and study potential of Tskaltubo resort.
WORLD NEWS IRAQ EXODUS? OIL MAJORS WITHDRAW STAFF AS TERROR THREAT RISES
P and ExxonMobil have both ordered staff to leave Iraq, and China is considering pulling some of its 10,000 workers from projects following the turmoil caused by jihadist rebel group ISIS. Pg. 13
Bidzina Ivanishvili Believes Unemployment is not Government’s Mistake
CAUCASIAN BUSINESS WEEK – MEDIA PARTNER FOR THE GEORGIAN FAN CLUB OF TURIN JUVENTUS AND ITALIAN NATIONAL FOOTBALL TEAM FANS
Giorgi Abashishvili: Georgian Business is Ready for the European Market Pg. 4 “Tbilvino” to Export 1.5 Bottles of Wine to Russia Pg. 4
Papashvili plans construction of 100-room Hilton in Abastumani Pg. 7
MAIN EVENTS caucasian business week
ARMENIAN PRESIDENT VISITS GEORGIA
GEORGIAN GOVERNMENT: WE HAVE NOT DISCUSSED ABKHAZIAN RAILROAD SECTION ISSUES WITH ARMENIAN COLLEAGUES
rmenian President, Serzh Sargsyan, held talks with the Georgian leadership in Tbilisi on June 18 to discuss consequences as Yerevan prepares for joining Russian-led economic bloc and Tbilisi plans to sign free trade treaty with the EU next week. After the talks both the Georgian and Armenian officials were saying that the two countries should work closely in order to avoid setbacks in bilateral trade and economic cooperation and to turn “different paths” chosen by the two countries into new opportunity for Georgian and Armenian businesses. “Let me reaffirm our huge desire and readiness to work with you in the spirit of friendship and mutual understanding. This visit to Georgia is immensely important for us… We have a broad range of issues and we will definitely be able to identify new perspectives of our mutually beneficial cooperation,” the Armenian President said after talks with his Georgian counterpart Giorgi Margvelashvili. “Of course Armenia’s participation in the integration processes taking place in the Eurasian region was touched upon,” President Sargsyan said. “We have presented to our Georgian colleagues efforts that have already been undertaken in this regard and further programs, in particular prospects for mutually beneficial economic cooperation with Georgia,” he said. “I am deeply convinced that by signing the Association Agreement [with the EU] on June 27 and by becoming part of the free trade agreement [with the EU], Georgia is creating an opportunity for those Armenian businesses, which consider being part of the European market, to invest in Georgia, and vice-versa – after Armenia joins the Customs Union perspective will be opening for those Georgian businessmen who have or may have [access] to the Russian market or markets of other members of the Customs Union,” the Armenian President said. Margvelashvili, referring to Sargsyan as a “close friend”, said that timing of this meeting between the Georgian and Armenian Presidents is “especial important” in the light of Georgia’s upcoming signing of the Association Agreement with the EU and Armenia’s intention to join the Customs Union. “We stress that these steps will have positive results for the future of our countries,” the Georgian President said. “We have the same views on this and all the other issues.” Also on June 18, the Armenian President met
speaker of the Georgian Parliament, Davit Usupashvili, and other senior lawmakers. The Armenian delegation, led by the President, also includes several MPs. “We have chosen to follow different paths of development,” the Georgian parliament speaker said after the meeting. “We have decided to sign the Association Agreement with the EU and Armenia has decided to join another union together with Russia, Kazakhstan and Belarus. We have agreed that we understand each other’s choice, we understand reasons, prerequisites of reasons behind our choices and it strengthens need for deepening our bilateral relations. We have agreed that Georgia and Armenia should work hard in order to avoid harming bilateral relations by presence in different trade unions, on the contrary we should work to improve these ties. We have to take special measures for this purpose,” Usupashvili said. He also said that parliamentary delegations, including lawmakers from sectoral committees, will exchange visits “in order to better understand what kind of changes in respect of trade and business will follow after Armenia joins the Eurasian Union, and for Armenia to better understand what is changing in Georgia.” “That is essential in order to have problem-free economic relations,” Usupashvili said. “We should turn these different paths not into a mean of distancing from each other, but into [possibility] of strengthening our ties. We both understand very well that without each other we won’t be able to maintain our security and stability,” the Georgian parliament speaker said. Speaking after the meeting with his Georgian counterpart, President Sargsyan said that “constant strengthening of Armenian-Georgian partnership represents one of Armenian foreign policy priorities.” “Existing fragile stability and peace in the South Caucasus region is largely due to productive and strong cooperation between Armenia and Georgia. We have always been respecting each other’s decisions,” Sargsyan said. “In the context of regional security, we have noted importance of productive cooperation on the international forums, maintaining of balanced and constructive position on the issues, which are sensitive for each of us. This is very important issue. Together with the Georgian President we are of the same opinion, that comprehensive resolution of all the conflicts is possible solely through peaceful means in line with the principles of international law,” the Armenian President said.
ECONOMY MINISTER INTRODUCES 4-YEAR ECONOMIC DEVELOPMENT PLAN TO MOODY’S
insiter of Economy and Sustainable Development of Georgia George Kvirikashvili and leaders of international rating agency Moody’s talked about further cooperation and 4-year economic development plan on Thursday meeting in Tbilisi.
June 23, 2014 #59
Ministry of Economy informs that Kvirikashvili informed representatives of the international rating agency about ongoing reforms in the country. International agency Mood’s works for awarding credit ratings, research and risk analysis. 26000 persons have been employed in the agency in 26 countries.
BUSINESS WEEK caucasian
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resident of Armenia Serzh Sargsyan stated during his visit in Tbilisi that entrance of hiss country in the Eurasian Union will have perspective for Georgian entrepreneurs as well, which have a desire to invest in Armenian economy. Also for those who want to enter to the new markets, among them on the territory of Russia Federation. He stated about it to the journalists on Wednesday, after the meeting with president of Georgia George Margvelashvili. “On the meeting we talked that it’s necessary to expand economic cooperation between two countries. I believe that when Georgia signs Association Agreement to EU, it will become additional opportunity, among them for the representatives of Armenian business sector. On the other hand, membership of Armenia in Eurasian Union will become a perspective for Georgian entrepreneurs who have a desire to invest in our economy. In this way they will enter to the new markets, among them on the market of Russian Federation”, - Sargsyan stated. As for restoration of Georgian-Russian railway route, official
dialogue has not been held in Tbilisi. “It’s a very complicated issue in terms of technical and political standpoint. Therefore we have not dealt to the issue. We talked about many other topics, among them construction of the bridge, which will be a bordering bridge”, - Minsiter of Economy and Sustainable Development of Georgia George Kvirikashvili stated to the journalists. Minister of Foreign Affairs Maia Panjikidze stated that position of the government on the issue is not actual, because it has not been discussed. “The term railway has not been mentioned on the meetings, in any context”, - Panjikidze stated. Armenian information sources report that during his visit to Erevan head of Russian Railway Vladimir Yakunin stated that Georgia and Abkhazia should decide restoration of the Abkhazian railway on the political level. Yakunin declared that accumulated contradictions between Georgian and Abkhazia does not have antagonist character after the regime changed in Georgia and currently they have more likely tactical character. The two sides should resolve issue of Abkhazian railway on the political level.
AGRICULTURE MINISTER SIGNS AGREEMENT WITH KFW
inister of Agriculture and vicepresident of German Bank for Reconstruction and Development (KFW) Eva Viti signed financial agreement on the research of agro insurance potential and opportunities in Georgia. Ministry of Agriculture informs that according to financial agreement, KFW will allocate 200 000 EURO for the research, which considers study of agro-insurance environment in the country. Considering the research results, concept of agro insurance will be worked out. The meeting participants also talked about ongo-
ing and future cooperation issues between Ministry of Agriculture and German Bank for Reconstruction and Development. “Agro insurance is one of the most important components, which should promote development of the agriculture sector. We should establish and operate a scheme of the agro insurance, which will be acceptable and accessible for the farmers and entrepreneurs”, - Shalva Pipia stated. Deputy Minsiter of Agriculture David Natroshvili and representative of Ministry of Foreign Economic Relations of Germany Klaus Tanzberger attended the meeting.
EBRD TO COOPERATE UNDER PRODUCE IN GEORGIA PROJECT
BRD will have several priorities funding investment projects in Georgia. EBRD director in the South Caucasus, Moldova and Belorussia Bruno Balvanera states that the financial institute has 3 priorities operating in Georgia: agriculture, food industry/processing industry and hotel business (tourism). These are the directions, which have development perspective and private sector in the most cases, traditionally gets funding from the commercial banks.
However, despite it, EBRD is going to cooperate with the government in the framework of Produce in Georgia project. “There are over 10 priority spheres, among them textile, light industry and they are considered as promising ones. We will cooperate with great pleasure”, - Bruno Balvanera stated. By May 2014, EBRD has invested 1.9 billion EURO in 169 projects in Georgia. Total value of the projects equals to 5.2 billion EURO. The last, one of the largest investments was a $65 million syndicated credit, allocated for Wissol Petroleum Georgia.
JAPAN ISSUES 5 MILLION USD GRANT TO GEORGIA FOR PURCHASE OF MEDICAL EQUIPMENT
apanese side assigned grant of $5 million to Georgia to purchase medical equipment and devices necessary for ambulance services. On Wednesday, in the Ministry of Finance Georgian and Japanese governments signed the to be concluded by exchange of Notes about allocation of 500 million Japanese Yen (about $5 million) as a non-project grant. Minister of Finance Nodar Khaduri and Ambassador Extraordinary and Plenipotentiary of Japan to Georgia Toshio Kaitani signed the Notes and attached documents.
Non-project grant will be used for the needs of Ministry of Labor, health and Social Affairs of Georgia. In particular, in the framework of the grant purchase of high-technology equipment, also devices for ambulance service are planned. The grant is the 8th assistance of Japan, provided in the framework of the non-project grant program. Georgia has received about 4 billion Japanese Yen since 1997 in the framework of this program of Japanese government, among them for support of environmental protection, agricultural sector and various municipalities.
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PUBLICITY June 23, 2014 #59
caucasian business week
Every Wednesday At 21:00 On GDS TV Full of humor
Anchors – Kotiko Toloraia, Levan Gogoreliani will offier refined humor, provide good mood and invite interesting guests for the program audience. The program consists of three parts: the first block offers humor and apolitical monologue with funny video clips, pictures and so on. The second and third blocks are dedicated to famous public figures that will be invited as guests. The show will start Wednesdays at 21 o’clock and it will cover all interesting issues excluding politics to guarantee good mood for the audience.
Guests: Nanuka Gogichaishvili, Nini Badurashvili, Misha Mshvildadze and Special guest “Rubilnik”
INTERVIEW caucasian business week
AGRICULTURAL STRATEGY - WHAT AREAS SHOULD BE PRIORITIZED? An interview with Minister of Agriculture of Georgia Shalva Pipia
- What is the effect of the activity of the funds created by the government to support agricultural projects? - Funds are focused on stimulating regions with low economic activity – there are 40 such districts in Georgia. Accordingly, more favorable conditions for business were created there, as well as grants and preferential loans are provided. 5 projects have already been approved, and until the end of the year minimum 30 and maximum 50 projects are to be approved. We have completed work on the agriculture sector development strategy, which is of great importance not only for the agricultural sector - agriculture should become one of the main factors contributing to the economy of Georgia. The document is intended for 2014-2020. Experts of the European Union and the International Organization for Food Protection participated in its development. The strategy aims to increase the competitiveness of the agricultural sector and to create conditions for sustainable development of agriculture. - How are you going to achieve such results? - Strategy is a shared document, which provides
development of 7 main directions - primarily the growth of competitiveness, the development of a full cycle of added value, food security and the conservation of biological diversity. As for how to achieve these goals, we are working on a specific plan of action in which measures for implementation of priorities will be taken into account. As it is known, we have implemented a lot of projects over the past year and a half, many specific projects are to be implemented, which will make it possible to fulfill the terms of strategy. - How will farmers and peasants be able to feel the first results of the strategy? - For example, at this stage extensive work on the rehabilitation of the irrigation system has been carried out in many regions.Currently, the area of irrigated land has almost doubled in comparison with 2012. Of course, this is very small, as in the Soviet times about 400 000 hectares of land were irrigated, and in 2012 – only 25 000. Currently figure has doubled, and in the end, the area of irrigated land will increase to 100 000 hectares. We plan to increase this figure to 400 000 hectares in 4 years. In addition, last year we started a preferential agroloans program, and now loans worth 400 million GEL have been granted on very favorable terms. - The Ministry of Agriculture speaks a lot about the need to implement agricultural insurance system. What is being done in this direction? - We have already developed a draft of agricultural insurance, which, after further consideration will be presented in Parliament. I can also say that we are going to deal with bad weather - in particular, together with the center”Delta” we will have anti-hail rocket system that will ensure the prevention of hail, which constantlydestroys the crop in different regions of Georgia.
June 23, 2014 #59
BIDZINA IVANISHVILI BELIEVES UNEMPLOYMENT IS NOT GOVERNMENT’S MISTAKE
here is unemployment in the country. It is considered to be the biggest mistake of the government but I do not agree with this opinion- the ex - Prime Minister Bidzina Ivanishvili said at the polling station after voting. “I met sociologists in a friendly and informalenvironment. The main problem the current government faces
is unemployment. This is considered the biggest mistake of the authorities but I do not agree with this. The government must create the conditions. Jobs should be created by business, for which the government should create appropriate conditions. What we should do is to create a competitive environment, everyone should have an equal environment to make the choice”, - Ivanishvili notes.
DEFENSE MINISTRY TO SELL SU-25 MILITARY AIRCRAFTS
he Ministry of Defense of Georgia plans to sell six Cy-25 attack aircrafts. The Ministry has spread a statement in relation to this and InterpressNews offers it without
change: ‘’The aviation division of Georgia’s armed forces needs to be renewed. There are six attack aircrafts among them we are planning to sell as they are
outdated and cannot be repaired. They have not been exploited for several years as they are old. The issue of selling them is on the agenda, but we have not determined the exact time yet. The received finances will be spent on the development of the Georgia’s armed forces. The Ministry of Defense aims to have modern armament and renovation of the aviation division serves the same target,”- the statement says.
PATRIARCH OF GEORGIA URGES BUSINESSMEN TO CONTRIBUTE TO REGIONAL DEVELOPMENT
atholicos-Patriarch Ilia II has asked businessmen to undertake material development of the regions. In this regard, His Holiness and Beatitude Ilia ll made a statement during his visit to Khevsureti along with Prime Minister Irakli Garibashvili. His Holiness also addressed monks and noted that new monasteries should be constructed in the border areas so as to strengthen borders. ‘I am happy to visit Khevsureti today. My parents
used to tell me in my childhood that Khevsureti is the region which protects our culture, our traditions and today we are here. I want to address the monks – monasteries should be founded in the border areas in order to strengthen and defend borders. I also want to call on businessmen – each businessman should care for one district. You should care for the material development of districts. I hope all businessmen will listen to me and our country will be happy’, - the Patriarch said.
GEORGIAN BUSINESS IS READY FOR “TBILVINO” TO EXPORT 1.5 THE EUROPEAN MARKET BOTTLES OF WINE TO RUSSIA An interview with Adviser to the President on Economic Affairs Giorgi Abashishvili
- What are the basic principles and approaches of the President on the economy, and why it was necessary to introduce the post of adviser on the economy? - Naturally, the economy is an important topic for any country and for Georgia as well and the President should be informednot only on a general level, but must know everything that is happening in the country at the strategic level, about thecountry’s economy, priorities. This is due to the integration with the EU andGeorgia’s place on the economic map of the world. President is always aware and knows details about all the processes occurring in the country. - Is intervention in economic matters in the President’s responsibility? - It depends on what is meant by the intervention. President is actively involved in determining the economic policy of the country; he takes a serious place in the country’s political leadership. The fact that President is informed about all developments in the country – it is not just desirable, it is his duty. - In the coming days the country will sign an Association Agreement with the EU. How will this agreement help the country to develop effective
local production, and is the Georgian business ready to enter the European market? Association Agreement is a new chance for the country and local entrepreneurs. I am very often asked - what benefit Georgia will get from the associatedrelations with Europe. It must be remembered that the EU is a very important partner of our country today, Georgia carries out exports to the EU. All independent researches show that free trade with the EU increases theeconomic potential of Georgia. Our entrepreneurs will be able to enter the 500 -million market. As for the products that will be exported to the EU, of course, in order to gain access to this market, it is necessary to invest in the development of production and improvement of quality. I think that many of our businessmen are willing to work in the European market. In addition, the EU has also announced his intention to assist Georgia in improving the standards and quality of products - including small businesses. Work will be intensified in this direction and I am convinced that Georgian productswill take a very worthy place in the European market. - This year, exports of Georgian products to Russia rose markedly. Whether or not the same close cooperation is planned with any other country , for example with China? - At this stage the agreement with the EU is the most topical issue. Naturally, weare strongly interested in deepening trade relations with all countries, and the association with the EU does not interfere. It does not limit the economic sovereignty of the country; Georgia’s relations with the rest of the world do not change. So, we will continue to work in this direction. Our natural desire is to be able toexport our products to as many countries as possible and take our place in the global economy.
he company “Tbilvino” plans to export 1.5 bottles of wine to Russia this year. According to the company’s Director Giorgi Margvelashvili, about 700 thousand bottles have been sent to Russia until May 2014. However, he notes that due to the Georgia - Russia road’s closure, the process stalled and the company has not yet renewed export to Russia. Margvelashvili says that due to the road closure,
the company managed to sent only 30 thousand bottles of wine to Russia in May, but the delivery of the ordered 150 thousand bottles has been delayed. “Tbilvino” sent about 760 thousand bottles of wine to Russia in 2013. “Commersant” will offer the other companies’ positions regarding export of products to Russia. As reported, after an almost one- month pause Georgia - Russia’s road damaged by a landslide was opened at the end of last week.
KOREAN COMPANY WILL PREPARE PROJECT FOR 2 HIGHWAY SECTIONS
oad department signed contract with Korean company PYUNGHWA ENGINEERING CONSULTANTS. The contract was signed in the framework of the East-West Highway Improvement Project-4 (EWHIP-4) and considers technical-economic justification of Zemo Osiauri-Argveta section and preparation of
the detained engineering project for Zemo Osiauri-Chumaleti section. The institution explains that technical-economic justification includes determination of the new direction for Zemo Osiauri-Argveta section connecting to the highway. The contract term is 10,5 months, budget - $2 120 342 and 3 449 057 GEL. The project is funded by World Bank.
AEROFLOT RETURNS ON GEORGIAN MARKET
eroflot got permission from the Russian aviation authorities for flights to Tbilisi. They submitted charter flights schedule to Civil Aviation Agency of Georgia in February, although due to absence of permission of the Russian air regulator, they withdrew back the application. The air company wanted daily charter flights to Tbilisi. The agency informs that license has not been issued yet, as the air company has not applied till now. Aeroflot operated to the 2006 embargo. Then
they resumed flights for the short term in 2008, before the war. Gazeta.ru reports that Rosaviation gave permission for flight to Georgia to Aeroflot after they got responsive nota from Ministry of Foreign Affairs of Georgia about the restoration of regular flights. Currently 2 Russian air companies - Siberia and Ural Airways operate on Georgian market. Ural provides Kutaisi-Moscow flights, Siberia - Tbilisi-Moscow flights. Georgian Airways (Airzena) also gas flights to the same directions.
BUSINESS & ECONOMY June 23, 2014 #59
caucasian business week
GEORGIA’S FARMERS GET READY FOR MARKET
BILISI | Spading up soil around his potato plants, Valerie Devnozashvili says growing spuds is hard, because you cannot see the vegetables underground. In fact, the whole enterprise of smallscale agriculture is difficult, says Devnozashvili, who also grows wheat and corn on a farm of less than 2 hectares (5 acres) in eastern Georgia. The 55-year-old reckons he made about 1,000 lari ($570) in profit last year. “You have to plow and till the land, sow seeds, spray plants with chemicals twice a season, and harvest. But your harvest is only enough to feed your family. There’s not much left to sell,” he says. And selling those leftovers is not easy. No outlet in his village buys vegetables from local farmers, and Devnozashvili does not have a truck to take his produce to the nearest town. Last year he harvested eight tons of potatoes big enough to take to market – a little more than half of his total crop – but he barely sold any. Soon neighbor Nodari Tsikhelashvili joins Devnozashvili for lunch. Tsikhelashvili, who farms a plot about 10 times the size of Devnozashvili’s, commiserates. “Farming is generally an unprofitable business. It’s difficult to develop,” he says. The government has given farmers new equipment, he acknowledges, “but no one really knows how to operate it.” Another potential headache is looming just down the road. Georgia is poised to sign a free trade agreement with the European Union in late June. The pact will open up the European market to Georgian goods, and vice versa. But it will also require Georgian exports to meet strict food safety and quality standards – which some farmers fear they will not be able to do. “Agriculture is underdeveloped here,” Devnozashvili says. “Last year we had a poor fruit harvest, but there was plenty of fruit available on the market. Where did it come from? It was imported from Turkey.” Tsikhelashvili nods in agreement. “Agriculture is a complex industry. The Soviet system wasn’t able to develop it; can the new authorities cope? The agreement with the EU may be good for the country, but it’s bad for farmers. The state should help us to sell our produce to Europe.” CHANGING HABITS The deal that Georgia plans to sign with the EU gives it access to a market of 500 million people, but that market is one of the most heavily regulated in the world. After signing the agreement, farmers who wish to trade in the EU will not only to be required keep records of their goods’ attributes, such as size, weight, and color, but also to ensure the transparency of the entire cycle – from soil studies to packaging, said Nino Zambakhidze, chairwoman of the Georgian Farmers Association. “It could be difficult to make them run their business in a new way,” Zambakhidze said, using the example of a small cheese-making facility she runs. “It was difficult to teach the employees to change their shoes when they enter the shop. It wasn’t until I installed indoor surveillance cameras and introduced penalties for violations that they complied.” Irakli Lekvinadze, an economist who specializes in Georgia’s relations with the EU, said the agreement’s requirements could be tough, but because they are to be phased in over a decade, they should not be catastrophic. “If Georgian farmers were required to comply with European standards today, most of them would go bankrupt,” Lekvinadze said. But he added, “It’s as wrong to say that Georgian goods will flood the European market after the agreement has been signed as to say that the Georgian economy will collapse.” The European Union is among Georgia’s major trading partners, accounting for 26 percent of Georgian imports and 23 percent of its exports, according to the country’s statistics agency. Key exports include wine, mineral water, and hazelnuts, the latter making up 64 percent of the country’s goods sold abroad. The facts of Georgia-EU trade would seem to belie worries that a major barrier will soon fall and a free-for-all ensue. The association agreement drops customs duties in both directions, but most of the 40-odd Georgian products regularly exported to the EU already enjoy low duties (although not the all-important wine or mineral water). Likewise, Georgia assesses only symbolic duties on imports from the EU. Eager to ease farmers’ anxiety, officials at the Agriculture Ministry say the pact’s requirements seem complicated only at first glance and that meeting them will not entail large additional costs. “Fear has big eyes,” said Kakha Sokhadze, head of the Food Safety Agency. “One shouldn’t be afraid of new standards. Many countries have successfully introduced them. The key European standards have already been written into [Georgian] law. New requirements mainly deal with product labeling and packaging.” Sokhadze said Georgia’s food safety controls have been tightened in the last few years, with goods that do not meet quality standards removed from distribution and unscrupulous producers fined. In the past year his agency picked up only minor “irregularities” in its regular inspections of agricultural goods, he said, and they posed no danger to life or health. In the past two years, the EU has rejected Georgian goods on a handful of occasions. Italy sent back a shipment of nuts that exporters had steamed to increase their weight; several batches of Georgian-made fruit juices were returned for containing preservatives in excess of EU standards; and a shipment of satsebeli, Georgia’s traditional hot sauce, was rejected over a banned artificial coloring agent. THE LITTLE GUY Lekvinadze warned that if badly handled, the agreement could serve the interests of big players, experienced in trading with the EU, while threatening the small farmers who account for most of Georgia’s agriculture. “Small farmers don’t have the money to improve the quality of their products. But if the government develops the right strategy in its relations with the business sector, even small companies will be able to overcome this barrier, as happened
in Bulgaria, Romania, Poland, where farmers were able to adapt themselves to new realities,” the economist said. The EU has already given money to Georgia to develop agriculture, and the European Bank for Reconstruction and Development recently announced a 51 million euro ($69 million) loan to help the country’s exporters meet EU standards. Georgian agriculture thrived in the Soviet era of collectivization, but farms are now much smaller. More than half the population works in agriculture, an overwhelming majority of them on farms of less than 5 hectares, according to 2013 report by the UN Food and Agriculture Organization. While most countries in Central and Eastern Europe and some in the former Soviet Union reported a rise in agricultural output in the last decade, Georgia saw its meat and potato production plunge by half, the agency said. Its harvest of grain fell by 77 percent, of vegetables by 63 percent, and of fruit by 63 percent. Despite Georgia’s temperate climate, about 80 percent of food sold in the country is imported, and agriculture has been the slowest part of the economy to recover from the financial crisis. The area of fertile land has been shrinking because not enough farmers rotate crops and use modern cultivation methods, and because of the increasing share of older people in rural areas, the UN agency said. Investors are reluctant to put their money into such a beleaguered pursuit. Vakhtang Charaia, an analyst at the Caucasian Institute for Economic and Social Research, said consumers and producers in Georgia may be hit hard in the first few years of the agreement, but the long-term benefits will be worth the initial pain. “The introduction of new technologies is welcome, of course, but it may push up prices because producers would have to spend extra money,” he said. “On the other hand, investment is expected to flow in, creating new jobs and raising living standards.” Technical barriers such as phytosanitary and hygiene standards, packaging requirements, even the minimum acceptable sizes of vegetables for export are a much bigger challenge for Georgian producers than tariffs and taxes, said Irina Guruli of the Economic Policy Research Center in Tbilisi. “It’s necessary to make up to 300 changes to bring our legislation into line with European rules. The changes cannot be made in one day or even in a year. Transition to new standards may take several years,” she said. A WAY FORWARD To support agriculture, the government stepped up subsidies in 2013. Farmer Devnozashvili said the payments are enough to get a field plowed but not enough to boost production. “If you drive along the main road, you’ll see many plowed fields, but nothing has been sown there,” he said. But others have found their own way to thrive. Georgi Mchedlidze, a farmer and agronomist from the central village of Nikozi, proudly shows off neat rows of almond and walnut seedlings stretching into the distance. Among them are saplings planted on the sidelines, treated with special care. These are rare varieties of almonds, which Mchedlidze grows for his experiments. Ten years ago, Mchedlidze left for the United States to study and work as an agronomist. He returned to his native village last year to start this farm. Nikozi is in a “buffer” zone along the de facto border between Georgia proper and the breakaway region of South Ossetia. Residents there sometimes unwittingly fall foul of the Russian soldiers who have been there since the 2008 war between Georgia and Russia. Some are detained for unknowingly crossing the line, and some complain that they cannot get access to fields, churches, and cemeteries on the other side. “I took a risk to start up my business here,” Mchedlidze said. “I want farming to develop in my region. We have to master modern methods. It’s impossible to improve agriculture without it. Farmers elsewhere in the world no longer cultivate land the way we do. Our land has been exhausted. It should be restored.” Among the needed changes, he said, are new methods of fertilizing. But Zambakhidze of the farmers’ association said there is no lab in Georgia doing soil analysis to EU standards to help farmers see what nutrients they should be using. Mchedlidze’s 10-employee farm recently joined the ranks of Georgia’s 26 agricultural cooperatives. The organizations, which represent about 200 farmers, offer a chance to pool resources and help farmers overcome the obstacles of working tiny plots of land in isolation. Still, most are loath to join, wary of anything that smacks of Soviet-era collectivization, in which workers had no say. Established in October, the Agricultural Cooperative Development Agency has been working to educate farmers about the differences between the modern institution and its reviled ancestor. Asked about cooperatives, Devnozashvili admitted he doesn’t know how they differ from collective farms but says he’s open to the idea. “I’d like to set up a cooperative, but I don’t know who I can team up with. You can’t work together with just anyone. You need a person you can trust,” he said. Although the agency offers help with red tape, the technicalities of creating and registering a cooperative put off many farmers, Zambakhidze said. “In general, paperwork is a big problem for farmers. They’ve worked in the fields all their lives, and now they’re required to have some legal knowledge,” she said. Another possibility as farmers face the competition of the EU is to develop a specialty, such as organic produce, Lekvinadze suggested. Mchedlidze said the government needs to pay more attention to agriculture, which officials have admitted took a back seat to reforms in other areas in the post-Soviet period. Specifically, it needs to step up training for farmers, he said. “Georgia is a small agrarian country. We have a lot of resources. But we don’t have enough knowledge,” he said. “We often cite America as an example, but it was the Americans who made it. We’re going to have to build our country ourselves without expecting others to do it.”
DEVOTED FANS NOISILY MARK ITALIAN NATIONAL FOOTBALL TEAM’S VICTORY OVER ENGLAND
evoted Fans in Georgia have noisily marked the victory the national football team of Italy gained over England. On June 14 Georgian fans of the Italian national team and members of the Turin Juventus fan club gathered at the restaurant of Barakoni. The event was sponsored by Roniko, Beeline, Verona, an Italian furniture house, Khortytsa, Morosha, AF LTD company and Las Vegas sweepstakes club. The event organizers offer various prizes, highquality beer at low prices and comfortable environment to the devoted fans. Moreover, visitors are able to enter the fan club free of charge. Georgian fans of the Italian national team who have visited Barakoni restaurant several days ago are giving their comments on their impressions: “The evening was excellent. I believe Italy has got one of the most valuable fan clubs in Georgia. I have met this spirit only in Italy. I believe not only Italian national team fans, but also all football fans will appreciate this fan club”, TEONA BAGHDAVADZE, a head for the Beeline PR service, noted. -Why have you chosen the Italian national team to back at the 2014 World Cup? - Our partner Wind Telecomunicazioni SPA works in Italy. The company is united in our group and it is very successful company. Therefore, we have chosen Italy. We were fans for the Netherlands national team at the 2010 World Cup. We have decided to choose new teams every year and back the country, where Beeline is represented under various brands”. GIORGIO TSIKLAURI, a representative of Las Vegas sweepstakes club, stresses the advantages of the Italian fan club in Georgia and explains the reasons the company has chosen this national team. “Everything is organized very well. Everyone had got good mood on June 14. We were content with the environment. Las Vegas is one of the sponsors of this fan club. I personally support the Italian national team, but the main thing is that, unlike other fan clubs, this one is organized very well and that’s why we have chosen Italy. This is a European-level fan club and this is really surprising”, Giorgi Tsiklauri noted.
The company will also offer prizes for active fans, but the award will be kept secret and this is main intrigue in this process, Tsiklauri added. Roniko company has also set encouraging prizes. The company representatives have already raffled special T-shirts and bags at the previous match. Roniko will hand over a special discount card for the Roniko network to the most devoted fan. “The June 14 evening was very joyful. We have raffled many prizes and named winners. Roniko will raffle prizes at the next matches too. I am sure everyone who will visit the fan club even once, they will definitely become Italian national team fans”, Roniko representative KETEVAN CHINCHARAULI noted. One box of spirits will be handed over to the fan who will most quickly answer the event organizer’s question. The prize is set by Khortytsa and Morosha companies. “Prizes were raffled at the previous match too and we will raffle prizes at all matches the Italian national team will play. I am sure we will mark the victory of the Italian national team with our spirits”, Khortytsa representative LASHA DAVITAIA noted. SALOME SHENGELIDZE, a representative of Verona Italian furniture house, emotionally remembers the match between Italian and English national teams. Our company is nearer to the Italian national team, because the furniture house trades in Italian products, she noted. ”We back the national team with huge football traditions and this is Italy. We are involved in these activities. Girls in our house wear Italian national team T-shirts and we express our support in this way. We have also prepared interesting banners and the have been hung in the city. As to the June 14 evening, I would say only positive things about it. This 90-minute evening was full of positive emotions. All members of our company were attending the match broadcasting at Barakoni restaurant and we have spent a good time”, Salome Shengelidze noted,. The fan club and Barakoni restaurant invites all Georgian fans for watching all coming matches with the participation of the Italian national football team. The evenings will be full of surprises and positive emotions.
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BUSINESS caucasian business week
June 23, 2014 #59
INTERNATIONAL STUDENT FILM FESTIVAL AMIRANI HELD IN TBILISI WITH SUPPORT OF HEALTHY WATER
n June, during 5 days, the eighth season of International Student Film Festival Amirani was being held. The opening ceremony was opened by Guram Odisharia, the Minister of Culture and Monument Protection of Georgia and the other officials. On the first day, 2103 –year Grand Prize Winner Film – Intersection was shown (Director Zurab Demetreshvili). During Festival days film presentations, master classes and the other events were organized in the second administrative building of the Theater and Movie University where attendance was free. A group of professionals guided y Irina Demetradze, Professor and Film Expert selected 50 films out of 300 presented for the contest program of the Festival. Cinematography Schools were presented at the Festival from 23 countries: Finland, Germany, Belgium, Israel, Denmark, Great Britain, Columbia, Ukraine, Russia, Morocco, Czech Republic, Philippines, Slovakia, Austria, Turkey, Spain, India, Portugal, Poland, Brazil, Vietnam, Greece and Georgia. FESTIVAL PRIZES GOT DISTRIBUTED AS FOLLOWS: The Best Short Film – “My Father’s Truck” directed by Mauricio Osaki (Brazil)
The Best Documentary – “Alfonse” directed by Judith Devlieger (Belgium) The Best Animated /Experimental Film – “Wind” directed by Robert Löbel (Germany) Special Prize of the Jury – “The Forgotten” directed by Ehab Tarabieh (Israel) Special Prize of the Jury – “Mi ojo Derecho” directed by JOSECHO DE LINARES (Spain) Student Jury Prize - “Wind” directed by Robert Löbel (Germany) Cultural issues, supporting local Georgian traditions as well as international projects have always been priorities for Healthy Water. International Student Film Festival was one of the most significant cultural events being held in our country for the eighth year now. Similar festivals support Georgian and Foreign young film directors and other persons in the movie business to improve their skills, share their works, views and discuss problems and challenges in the field. Healthy Water is delighted that it became a partner and supporter of a similar event and we hope that our cooperation will be actively continued in the future” – noted Victoria Zhizhko, Public Relations Manager of Healthy Water.
ISIE STUDENT CHALLENGES WITH SUPPORT OF HEALTHY WATER (TSKALI MARGEBELI)
MARGEBELI HOLDING PRODUCTS WERE ONE OF THE MOST DISTINGUISHED AT THE EXHIBITION „Georgian products will acquire a decent position at the European Market tomorrow…”
UGBC Expo and Economic Photo Exhibition was held at the big hall of the National Library of the Parliament of Georgia, where over 30 Georgian companies presented their products and photos. The Exhibition was organized by EU – Georgia’s Business Council (EUGBC) with the aim to actively present acting Georgian companies in European countries. It is noteworthy that EUGBC is planning to organize Expo and Photo exhibition in 2014-2017 in EU member states as well. Marneuli Food Factory and Healthy Water (Tskali Margebeli) presented their products and photos. Their corner at the exhibition was one of the
most distinguishable. David Usupashvili, Chairman of the Parliament, opened the exhibition: “I am sure that Georgian products exhibited here will acquire a decent place on the European market tomorrow. Some of them already attained its niche and are extending it. After signing the Association Agreement, more entrepreneurs will have the opportunity, as a result of liberalization of trade-economic relations, to follow paved way. This means more investments and economic growth” – the Chairman said. The exhibition was attended by representatives of diplomatic corps, government, Parliament of Georgia, Georgian and European business circles.
n June 8, International School of Intellect and Education organized a Students Conference on “Student Challenges” with support of Healthy Water at Tbilisi State
University Over 100 students from 5 various universities took part in the conference which covered the following topics: • Students’ expectations and the university reality • Student’s needs and university environment/ resources • University problems and ways for their resolution 25 Speakers had the opportunity to present their works to the audience during 7 minutes. ISIE creates additional space for the youth in Georgia and abroad, thus adding required experience to the education acquired at the university, so that the generations are able to initiate and implement processes beneficial for the public. Gvantsa Chitishvili, ISIE Vice President stated:
“Conference “Students Challenges” was organized by International School of Intellect and Education in which 25 speakers took part. The Conference was about the university environment and speakers talked about their expectations prior to enrollment in the University, student challenges and problems, existing university resources and reality.” „Situation in Georgian education system and assistance have always been a priority for our company, this is true about school education as well as higher education. “For Educated Future” – a Project of Healthy Water being implemented for the second year now is a clear example of this. In this case we eagerly accepted the students’ initiative and offer to get engaged in this project. Healthy Water will actively support similar ideas and contribute to development of critical reasoning and analytical skills among students” – noted Victoria Zhizhko, PR Relations Manager of the Company.
BUSINESS & ECONOMY June 23, 2014 #59
caucasian business week
PKF EXCLUDED FROM GOODWILL REHABILITATION MANAGEMENT
nder the court decision, PKF Georgia and its director David Gvetadze have been excluded from the Goodwill’s rehabilitation management because of biased approaches and invaluable business reputation. The court has determined – rehabilitation manager PKF company (PKF Georgia S/K205198212) be excluded from LLC Goodwill’s rehabilitation management. The corresponding appeal was submitted to the court by Goodwill director general and six creditors. The distrust arose after rehabilitation manager David Gvetadze deliberately concealed very important information from creditors. A group of initiators of the creditors says PKF Georgia director David Gvetadze has hidden information 50% of its 85% stake in PKF UBC SERRVICE, a founder of PKF Georgia, had been mortgaged by TBC Bank, an only guaranteed creditor of Goodwill. Gvetadze has also concealed that he and his family members owed problematic loans to TBC Bank. This fact proves the rehabilitation manager was in direct dependence on TBC Bank, an only guaranteed creditor of Goodwill. This fact fundamentally contradicts the main principle, as under the
law on insolvency, the rehabilitation manager must be completely independent from the rehabilitation process participant sides, form both management and creditors. These facts and indifferent behavior of David Gvetadze on the position of Goodwill’s rehabilitation manager, who did not introduce rehabilitation plan to creditors, have given a full ground for appealing to the court with demand for firing David Gvetadze from the mentioned position, creditors noted. The court has excluded PKF from the Goodwill’s rehabilitation management. This decision has also announced the reputation of PKF Georgia and its director David Gvetadze questionable. The court decision reads: “As to the business reputation, the materials show that the stakeholders’ ratios were changed prior to the assembly and this raises certain doubts. The court has confirmed the submitted information, namely on May 8, 2014 David Gvetadze applied to the Business Registry to register the sales of a 50% stake in PKF UBC SERRVICE to the company employees at 5 000 GEL. The court has appraised the deal as dishonest and cheating and the court has excluded David Gvetadze from Goodwill’s rehabilitation process”.
BARCLAY’S DELEGATION VISITS GEORGIA
n Wednesday Vice Premier of Georgia, Minister of Economy and Sustainable Development George Kvirikashvili met with delegating of one of the leading investment banks f the world - Barclays. Ministry of Economy informs that on the meeting the discussion dealt to the foreign capital growth potential in Georgian economy. Besides, the sides talked about first Initial Public Offering (IPO) of TBC Bank of London Stock Exchange made with
participation of Barclays Bank PLC and Swiss bank UBS. It was focused that after the successful placement of another Georgian bank’s stocks on the London Stock Exchange interests of international investors to Georgia will increase. The sides mentioned that the event will promote and increase investors’ trust to the companies operating in Georgia, which will make for them easier to enter on the international capital markets and in total, will promote development of the country’s economy.
M2 REAL ESTATE TO CONSTRUCT RESIDENTIAL BUILDINGS WITH 29 000USD APARTMENTS
² Real Estate starts construction of the residential houses, with unprecedented price for the flats ($29 000) in August. The company states that the developer offers customers low price in expense of quick construction (as soon it is sold, as quickly next business project will be funded). Besides, ceiling height is 30 cm less and does not exceed to 2,7 meters, as in European standard. In the framework of the offer, price of 2-room flat
in face equals to $29 000. The buildings will be constructed in Saburtalo and Isani. The company states that they have diversified funding sources. Revenue received from the newly offered obligations will be directed to the construction. Currently M² Real Estate and M² have amount of $24 million on the accounts. M² has emitted 1-year obligations of $15 million. They announced about the offer of additional $10 million on June 11. Previous placement successfully ended in May.
TEXTILE EXPORT INCREASED FROM ADJARA
xporters’ Association of Adjara informs that in May textile of $7,3 million has been exported from Adjara, which is 1.5 times more than in April. Textile takes 90% of the total export of Adjara. In the same period nuts of $281 thousand, wooden-shavings tiles of $266,1 thousand and tea of $149 thousand have been exported. Export of tangerine concentrate equaled
to $139,7 thousand, furniture - $75,7 thousand, drugs - $67,6 thousand, bay leaves - $67,6 thousand, plastic scrap - $31,3 thousand, decorative plants - $6319, sunflower oil sediment - $2827 and eucalyptus leaf - $300. In the same period re-export of copper concentrate ($7 million), vacuum gasoil ($2,9 million) and wooden-fiber tiles (332 thousand) have been provided.
PAPASHVILI PLANS CONSTRUCTION TOURISM SECTOR REVENUES IN OF 100-ROOM HILTON IN 2013 EXCEEDED 1.7 BILLION USD inistry of Economy and Sus- put f the country equaled to 7,1% in 2013, instead ABASTUMANI tainable Development informs of 6,7% in 2012. Besides, revenues from tourism
ormer shareholder of the Bank Republic Lasha Papashvli plans construction of Hotel Hilton in Abastumani. According to government’s order, the businessman’s obligations have been postponed for the construction of the hotel. According to the new terms, he should start exploitation of the hotel till August 19, 2018. The place, where the hotel will be located, was directly sold to Papashvii in 2009. The hotel should have at least 100 rooms and as
Lasha Papashvili stated to GBC, minimal investment will equals to 7 million GEL. Besides, according to government’s order, the businessman should invest at least 626 530 GEL out of the total sum this year. Lasha Papashvili should provide receipt construction permission for the hotel complex till the end of 2014. He should start the construction in 2015. Besides, imposed/possible fine was abolished to the businessman provided that he will fulfill the new obligations according to indicated schedule.
NUTS PROCESSING ENTERPRISE TO OPEN IN ZUGDIDI
ut processing enterprise worth 500 000 GEL is planned to be built in Zugdidi. According to the author of the initiative, the project has been developed, and they are waiting for funding in the frames of the Agriculture Ministry’s grant program. He notes that the project includes processing and
production of nuts of several species. After the production approaches the European standards, nuts will be exported to Europe. Levan Kuchuloria says that nut products will be sold in 4 kg and 10 kg packaging. In his words, four nut processing factories manufacture products of this type, although a separate plant doesn’t operate in Georgia.
AZERBAIJANI INVESTORS BUILDING “CUBE TOWER’’ HOTEL IN BATUMI
ommersant” reports that the hotel project worth more than 40 million USD is being carried out in Batumi by Azerbaijani investors. A five-star “Cube Tower’’ hotel in Batumi is being built by ‘’Adog Georgia” company 100% owned by Azerbaijani businessman. According to “Adog Georgia’’ managing director, “Cube Tower” will be a 30-storey hotel and will consist of 180 rooms. Mikheil Dzodzuashvili notes that ‘’Adog Georgia” will spend more
than 40 million USD on the project and the hotel will be opened in early 2016. ‘’Adog Georgia” was founded in 2011 and its head office is located in Baku. Dzodzuashvili confirms that in 2011 the company has purchased the area of 1 621 square meters for 1 GEL. According to the undertaken commitment, the investor should build a 22 - storey hotel complex. As the company’s CEO says, the project is implemented according to plan and it is possible ‘’Adog Georgia “ will be interested in the implementation of other projects.
that tourism industry considerably grows in Georgia. In 2013 overall product output in the tourism spheres equaled to 2,9 billion GEL, which is 251 million GEL (9,6%) more than in 2012. Besides, share of tourism sector in the total out-
exceeded to $1,7 billion, which is 22% more than 2012 data. In 2013 Real growth of hotels and restaurant sectors in the GDP equaled to 7,2%. In the Q1 2013 salary of the employees in the hotels and restaurants also increased, It exceeds by 5,2$ to Q1 2013 data, and it’s 24% higher than in the Q1 2012.
HOUSING SECTOR TURNOVER GROWS BY 17% Y-O-Y
urnover of the construction sector increased by 17% in comparison with last year. According to data of Ministry of Economy, in the Q1 2014 turnover of the construction sector equaled to 481,5 million GEL, which exceeds by 69,2 million GEL to the data of the Q1 2013. In the same period output of the sector equaled to 530,3 million GEL, which is 19% more than
in the Q1 2013. The ministry also publishes statistic of the employees in the construction sector. They mention that in January-March 41 455 persons were employed in the sector, which is 592 jobs more than in the same period of 2013. In 1 year salary in the construction sector increased by 143,6 GEL (17% and equaled to 995,2 GEL. The data is 20,5% (169 GEL) more than in the same period of 2012.
OVERALL OUTPUT OF AGRICULTURE INCREASED BY 11% LAST YEAR
ccording to preliminary data of Geostat, in 2013 overall output of agricultural products equaled to 3,4 billion GEL, which is 11,4% more than in 2012, 17% more than in 2011, 41% more than in 2007 (compared the period before the crisis). Besides, output of the purely agricultural products (without forestry, hunting, fishery) equals to 3,18 billion GEL.
Overall output of the products received as a result of the agricultural products output has increased by 10,4% (389 million GEL) in comparison with 2012 and equals to 4,1 billion GEL, compared to 2011 - by 16% (568 million GEL)> It’s noteworthy that in 2013 share of agriculture in the total GDP of Georgia has increased to 9,3%, instead of 8,6% in 2012. Reminding that 46,3% of Georgian population lives in the rural area.
8 GIGA BUKIA: “KHUDONI HPP WILL BRING HUGE RESOURCES AND INVESTMENTS TO THE COUNTRY”
mplementation of energy projects and investing in this sector were declared as priorities by the government. As economists and industry experts say, implementation of such projects will have vital impact on country’s economic development. Giga Bukia, Member of the Parliamentary Majority, thinks that Khudoni is the Project of the Century and will be a step forward towards country’s energy independece and security. Giga Bukia: “I understandt the problems which may be dangerous for the locals, but, unlike the previous government, we will consider their interests in terms of compensations or any other form. Simultaneously, local population has to consider country’s interests. Therefore, I am sure that consensus will be reached. This project will bring vast resources and investments to the country and be beneficial for Svaneti’s development. This is economically strong and profitable project.”
TEMUR PEIQRISHVILI: “IF WE WANT TO DEVELOP COUNTRY’S ECONOMY, KHUDONI NEEDS TO BE BUILT”
eorgian energy and economy experts state that implementation of Khudoni HPP Project is the most significant for the country’s energy independence along with the economic benefit derived from the project. Members of the Parliament expressed their views on this issue: “Implementation of Khudoni Project is essential for the country’s economic development and I think there is nothing to argue about. Naturally, peoples’ interests are to be taken into account. Therefore, we have to explain to local people how important the project is. The economy needs to grow and everyone has to contribute to it. Without energy development no economic growth can be achieved. If we do not want to have underdeveloped economy, we must build Khudoni.”
HPP caucasian business week
June 23, 2014 #59
MEMBERS OF PARLIAMENT ABOUT KHUDONHESI Manana Kobakhidze: “Khudoni Project is very important for Georgia’s energy independence and security, economic growth and development. Without such projects it would be impossible to drive the country out of the crisis…The reality that the country needs additional energy resources, and the local production will not develop without it, is more than obvious. Reasonable person cannot be against such process no matter whether he or she supports the government or not..” Irakli Sesiashvili: “Khudoni Project is a guarantee for our energy security. In my opinion, energy security is the country’s primary priority. Azerbaijan has oil, we have hydro resources. Our oil is water and this water, as experts say, will have gold’s value in the future. Therefore, the project is very important for the country. 700 megawatts represent the guarantee of energy security and a cheap power in the long run”. David Saganelidze: “Khudoni is the most promising project and it needs to be built. We cannot do more good for our grandchildren. We have extensive resources of mountain rivers which many countries don’t. Such plants are essential for the country.” David Darchiashvili: “Khudoni is needed not only for Svaneti but also for the whole Georgia. Svaneti will lose population without development, since in the 21th century people require to live in comfort. This is a long-term perspective and development of tourism and infrastructural projects serve this purpose. Khudoni is a national project needed for the whole country.” Gigla Agulashvili: “Everyone agrees that Khudoni HPP is of vital importance for the country. However, adequate decision needs to be made on this. For opponents the response will be reality created after project completion. So the effective step of the government will be valued by history shortly.” Eliso Chaphidze: “Khudoni needs to be built as well as Namakhvan HPP. There were opposing considerations against Baku – Tbilisi - Ceyhan project as well before its commencement. Currently without this pipeline there would have been no revenues in
the budget and the country would not have strategic and geopolitical importance. Goga Khachidze: “Khudoni should be constructed, otherwise the country will not develop. Khudoni is not only important for the country’s energy system but it is also the most significant project. People have to make choice. If we do not want development and more power we don’t have to build it, but if we support development we have to implement this project. It is as simple as that.” Zviad Kvachantiradze: “We have to start implementation of Khudoni Prokject immediately. It is essential for the country. Without implementing this project we will face serious problems and then it will be too late.” Bidzina Gujabidze: “This project is essential for the country’s economic development. We have to be energy independent. The more energy sources we have, the sooner we acquire energy independence.” Gigi Tsereteli: “Everyone knows what benefits projects like Khudoni can bring, these are employment and energy independence of the country to which Khudoni contributes indeed.” Kakha Oqriashvili: “Rejection of Khudoni Project means Giving up Future! There is no other project for such a large station. In my opinion, it should be implemented and does not have alternative. You know that Georgia is not an oil producer, the only thing we have is hydro power. This is the only means for energy security and quality improvement. How can we reject it? “ Levan Berdzenishvili: “Khudoni’s opponents have weak arguments. Just stating that no power station should be built in Georgia is not serious. Water is one of the main resources for the country that needs to be used.” Zurab Tkemaladze: “If we built Khudoni HPP earlier, Georgia would have been in a completely different situation now. Power will also become an export product. Khudoni HPP is very important from the economic perspective, since it will con-
tribute to country’s energy independence. Growth in natural export products will facilitate the budget fulfillment, economic development and revival. Zurab Japaridze: “ Khudoni Construction has a principal importance for our country. If Khudoni HPP is not constructed during the coming years, this will mean having deficit in energy supply from year to year. This itself implies increasing energy import, which is an unfortunate situation since the only source of energy is Russia and we’ll get even more dependent on this country.” Zurab Abashidze: “Khudoni is a large-scale, promising project which I support. The country will not have perspective without energy development. This project will give Georgia such an opportunity. The only resource which the nature granted to the country is represented by hydro resources and we have to use it at maximum extent if we support country’s economic growth.” Levan Bezhashvili: “We have to convince locals in importance of Khudoni Project. The government should always be looking for new energy sources. Therefore, Khudoni HPP is one of the most significant projects.” Giga Bukia: “Khudoni is the project of the century which has enormous importance for the country’s development. This project will necessarily be implemented. In addition, this project is a unique opportunity for Svaneti’s revival, since local budget is going to increase several times. Khudoni will bring extensive resources and investments to the country.” Lexo Tamazashvili: “Khudoni project is necessary for country’s economic development, energy independence and security. In my opinion, problems are being settled with the local population. They understood that the project is essential for the country. Government and locals will agree on it and the project will be implemented.”
BANKING & STATISTICS June 23, 2014 #59
caucasian business week
STOCKHOLDERS OF TBC BANK WILL DIVIDE ONLY 25% FROM THE LAST YEAR PROFIT
tockholders of TBC Bank will divide only 25% from the last year profit - Stockholders of TBC Bank will divide only 25% from 2013 profit. They will get 26 million GEL out of 106 million GEL (according to IFRS) net profit. TBC stockholders adopted dividends distribution scheme on the March session, where they approved a new supervision board: Irina Schmidt (Russia) Nikolas Dominic Haag (Britain) NIkoloz Enukidze (Britain), Eric Ragendra (USA), Stefano Eugenio Marsalia (Italy). Main stockholders of TBC were: TBC HOLDINGS LTD - 19.07%, EBRD - 19.65%, I F C - 19.65%, D E G 11.23%, LIQUID CRYSTAL INTERNATIONAL N.V - 6.51%, JPMorgan Chase Bank - 4.55%, Ashmore Cayman SPC - 4.17%, F M O - 5.22%. Reminding that in June of the current year the bank made the first IPO. As a result the structure changed.
VTB COMPLETED JANUARY-MAY WITH 2,3 MILLION GEL PROFIT
TB completed January-May with 2,3 million GEL net profit (01/06/13 - 4,7 million). By June 1 nonbanking deposits equals to 554,5 million GEL (01/06/13 -317 million GEL), credit portfolio - 549,2 million GEL (01/06/13 - 423 million GEL), Overall obligations - 750 million GEL (01/06/13 -506 million GEL). Annual growth of deposit portfolio equals to 75%, loans have increased by 30% since the same period of last year. Bank’s actives have increased by 47%, to 840 147 million GEL (01/06/13 - 571 million) and market share - to 4,7% (01/06/13 -3,9%). Stock capital of the bank is 90,3 million GEL (01/06/13 - 65 million GEL).
MONEY TRANSFERS INCREASED IN MAY
n May $126,4 million transfers have been made to Georgia, which exeeds to previous month by 6 million, to the same period of past year - by 11,7 million. Over 90,5% of the money transfers made from abroad to Georgia comes on the 9 largest countris, from where tranfers exceeded to $1,5 million in December.
MONEY TRANSFERS FROM GEORGIA INCREASED
mount of the money transfers made from Georgia equaled to $14,5 million. National Bank of Georgia informs that growth can be mentioned in comparison with previous month and the same period of last year (04/14 - 13,2 million). The data includes transfers by banks and micro-finance organizations.
DOLLARIZATION INDICATOR OF THE CREDITS REDUCED
y May 1 dollarization coefficient of the loan portfolio of the banks equals to 59,1% (01/05/13 -66,4%). Average rate for the retail loans in GEL is 24,2% (01/05/13 -23,9%), in the foreign currency - 13,5% (01/05/13 -16,7%). Loan rates for the legal entities are average 12,2% in GEL (01/05/13 -14,4%), 11,2% - in the foreign currency (01/05/13 -12,9%).
FITCH AFFIRMS FIVE GEORGIAN BANKS; OUTLOOK STABLE
itch Ratings has affirmed five Georgian banks’ Longterm Issuer Default Ratings (IDRs) and Viability Ratings (VRs). The banks are Bank of Georgia (BoG), TBC Bank (TBC), ProCredit Bank (Georgia) (PCBG) , JSC Liberty Bank (LB) and Basisbank (BB). The Outlooks on the banks’ Long-term IDRs are Stable. A full list of rating actions is available at the end of this commentary. The affirmation of BoG’s, TBC’s, PCBG’s, LB’s and BB’s VRs, and (with the exception of PCBG) their Long-term IDRs with a Stable Outlook, reflects their generally robust capitalisation, ample liquidity and still sound financial metrics notwithstanding a challenging operating environment in Georgia. Unlike the other four banks whose IDRs are a reflection of
their intrinsic strength, PCBG’s Longterm IDR is driven by institutional support. The banks’ asset quality ratios remain reasonable, with non-performing loan ratios (NPLs, loans overdue by 90 days) ranging from 1% to 5% of gross loans and restructured loans also moderate. Fitch views the banks’ near-term prospects as mildly positive, given the agency’s forecast of 5% GDP growth for the Georgian economy in 2014, rising to 5.5% in 2015. This should support banks’ internal capital generation capacity and asset quality notwithstanding margin pressure from competition. Margins should remain reasonably wide in the medium term, supported by growth in higher-margin lending and funding cost optimisation. However, asset quality is likely to remain key to banks’ performance through the cycle.
PROFIT OF BASISBANK IN 5 MONTHS EQUALED TO 5,8 MILLION GEL
SC BasisBank completed January-May with 5,801 million GEL profit (01/06/13 -3,546 million). The profit equaled to 3,7 million GEL in May. BY June 1 deposit portfolio (without banks’ deposits) equals to 190,5 million GEL (01/06/13 -151,5 million), loans - 216,04 million GEL (01/06/13 -133,05 million GEL), overall obligations - 291,3 million GEL (01/06/13 -223,5 million). Annual growth of deposit portfolio is 25,7%; loans have increased by 62% since the same period of last year. Bank’s actives have increased by 26% since the beginning of the year and equaled to 413,9 million GEL by June 1 (01/06/13 -329 million). Market share is 2,3%. Basisbank operates since 1993. In 2012 the largest Chinese company Hualing Group entered to the ban, share of which is 93%. 5% belongs to the bank’s founder Zurab Tsikhistavi, 1,85% - to EBRD. Overall stock capital of the bank equals to 122 million GEL (01/05/13-55,1 million GEL).
10 WB RETAINS UZBEKISTAN’S GDP GROWTH FORECAST AT 7PCT
CIS caucasian business week
UKRAINE OPEN TO WESTERN INVOLVEMENT IN PIPELINE
zbekistan’s GDP growth will amount to 6.7 percent in 2015 and 2016, according to the current forecast. Gas exports will help the economic growth of Uzbekistan, but low prices for cotton and gold, as well as the difficult economic situation in the main export markets (including Russia, Turkey, Ukraine and China) will not allow achieving GDP growth at the level of 8 percent, as in recent years, according to the report. Uzbekistan’s current account balance was 2.1 percent of GDP in 2014 compared to 1.2 percent in 2013, 1.8 percent - in 2015 and 0.7 percent - in 2016, according to the WB analysts. WB expects that Uzbekistan’s exports increased by 3.9 percent in 2014, by 4.5 percent in 2015 and the same amount - in 2016. The import growth will hit 9.5 percent in 2014, 7.9 percent in 2015 and 6.2 percent - in 2016. It was reported that the economic growth is forecasted by the government at 8.1 percent, industrial production - by 8.3 percent, agriculture - six percent, investments - by 9.5 percent in 2014. Uzbekistan joined the World Bank in 1992. The bank has provided Uzbekistan with loans totaling about $2 billion to implement the projects in the area of privatization, financial sector development, modernization of agriculture, energy, improvement of social infrastructure, health and education since 1995. At present, the bank’s total current liabilities to Uzbekistan are more than $1 billion.
EBRD TO FINANCE ENERGY EFFICIENCY IMPROVING IN KAZAKHSTAN’S ALMATY CITY
he European Bank for Reconstruction and Development (EBRD) will allocate a loan worth $34 million to Kazakhstan to improve energy efficiency and upgrade public utilities and transport in the Almaty city. The loan provided by the EBRD for the benefit of the municipal communal enterprise Almaty Kala Zharyk, comprises two elements: $17 million from the EBRD’s resources and $17 million provided by the Green Energy Special Fund, an EBRD-administered fund supported by international donors. Technical cooperation grants will be also provided for a total amount of €780,000, of which €400,000 will come from the TaiwanBusinessEBRD Cooperation Fund and €380,000 from the EBRD Shareholder Special Fund. The project documents were signed in Almaty by EBRD President, Sir Suma Chakrabarti, Akim of Almaty Akhmetzhan Esimov, and Director of Almaty Kala Zharyk Baurzhan Ibrayev. In his remarks Chakrabart said the modern energy-efficient lighting will result in significant energy savings for the Almaty city. “We have already financed the purchase of 400 new environmentally friendly buses and almost 200 trolleybuses for the city and we will continue to support the modernization program in Almaty,” he noted. Esimov, in turn stressed this project will enable Almaty to begin important work to bring innovation and energy-efficient technologies into the street lighting system of the city. Street lighting is responsible for fully 25 percent of the Akimat’s current electricity consumption. The new energy-efficient technologies will allow the city to minimize electricity consumption (which will reduce CO2 emissions) and reduce operating and maintenance costs. Since the beginning of its operations in Kazakhstan, the EBRD has invested close to $6.5 billion in the country’s economy.
June 23, 2014 #59
kraine on Thursday suggested bringing in European and U.S. companies to help operate the strategic pipeline that carries Russian natural gas across the country
to Europe. The move is part of an effort to revamp the pipeline, which is among Kiev’s most valuable assets, and ensure Ukraine remains a key transit country for gas to Europe. Analysts say it’s also an attempt to defuse potential claims that Ukraine might be siphoning gas intended for European customers.
Focus on the pipeline has intensified since Russia on Monday halted gas supplies to Ukraine after talks over past debts failed. Russia continues to send gas on to Europe through Ukraine’s pipelines but there are fears over whether the flow of gas will continue uninterrupted if Kiev and Moscow remain at loggerheads. Prime Minister Arseniy Yatsenyuk told parliament that Ukraine intends to set up a company to manage the pipeline. Ukraine would own 51 percent of the venture, but is ready to invite Western companies as shareholders for the remaining 49 percent. Ukraine would not sell the pipeline as such, he insisted. Russia has for years sought unsuccessfully to buy Ukraine’s pipeline, which is owned by a state company. Moscow on Thursday said it wants to be consulted on any decisions affecting the pipeline’s management. But it has no powers to stop Ukraine from selling the pipeline or bringing in foreign companies to manage it. Yatsenyuk said that foreign investment in the
Ukrainian gas transport system would undermine support for South Stream, a pipeline system backed by Russia that could ship gas to Europe by avoiding Ukraine. “This will make it possible to stop the construction of South Stream and send the entire volume through the Ukrainian gas transport system, since the EU member countries will, first of all, have an interest in this,” Yatsenyuk was quoted as saying by the Interfax news agency. Alexei Kokin, an oil and gas analyst at the Moscow-based UralSib bank, called Yatsenyuk’s offer “a sensible idea” that could bring much-needed investment to revamp the pipeline as well as oversight of the gas flow. Gazprom, which has complained about the shabby state of the Ukrainian pipeline, should be pleased, Kokin said, “unless it gets paranoid and suspects that the operating company helps Ukraine to siphon off the gas, which no respectable organization will do.” There would be risks for a company to get involved financially in a country that is torn by a militant uprising and political divisions. Whether Ukraine will be able to entice an outside company will depend on the terms it offers, such as a share in the gas transit fees that Ukraine gets from Russia, Kokin said.
TURKEY IS THE BIG WINNER FOLLOWING THE CRISIS IN UKRAINE
ussia’s annexation of the Crimean Peninsula and the possibility of further action taken in Ukraine and other former Soviet Bloc nations have led many investors to wonder, understandably so, what impact the crisis has had on investment opportunities in Eastern Europe. To unravel these concerns and more, U.S. Global’s Director of Research John Derrick caught up with Gavin Graham of VoiceAmerica’s “Emerging and Frontier Markets Investing” program. Below you can read some of the interview highlights, in which John speculates on who were the winners and losers in the aftermath of the RussiaUkraine conflict. He also touches briefly on the violence that has recently erupted in Iraqi Kurdistan and what effect it might have on neighboring Turkey. - Which European countries have the greatest potential and have benefited the most from what’s been happening? - I think Poland’s been a beneficiary. It’s used as a safe haven in the region: stable economy, stable political environment. It’s benefited from the European recovery and doesn’t have that much trade with Russia. I think Turkey has benefited, more from a money flow standpoint. If you were worried about what was going on in Russia and some of the longer-term implications, I think money flowed into places like Turkey. Money also flowed into places like Greece because a lot of the international investors tend to be regional investors, and within that region, there are shift allocations into places like Turkey, which has been a very strong performer this year. Part of that money is coming out of Russia. - That’s a very fair point because, as you say, if you’re running a dedicated Eastern European fund, Russia’s been overwhelmingly the largest weight within it, though a fair number of people were underweight even before Crimea because of concerns about governance and the like. Nonetheless, where are you going to go? Turkey is obviously a major market. Some of the reasons you like it include the demographics as well as the government’s pro-business attitude. - Exactly. If you just take a step back and look at the long-term secular growth, the demographics are very positive. There’s an entrepreneurial culture in Turkey: good government policies generally speaking toward business development, toward foreign investors. Basically business can get done, businesses can be created, and all those kinds of things that most Americans can relate to. It’s still an emerging market country, and they’ll do things that you’ll look at and scratch your head, like banning Twitter or Facebook. But the political situation has definitely calmed down, and so I think the long-term secular story for Tur-
key is probably the best long-term secular story in the region. That’s what you want to hitch your wagon to over the long run. - Now I know that maybe one or two eyebrows will have been raised by you mentioning that Greece has been seen as a safe haven, but you are very right and very early in picking Greece as a market that had some very positive changes taking place. Do you want to just briefly recap where we are now? - Six years into a recession, Greece is finally starting to see the light at the end of the tunnel. They’ve made some significant structural changes. Essentially the banking system has been consolidated down. There are now four major players there. All in the last month, they actually have recapitalized, raised money. That put some pressure on the Greek market and banks over the last month or so, and it puts them on a much firmer footing. The banking system can function more properly, and you can actually start seeing real growth. The European Central Bank (ECB) has been very supportive. The ECB announced a TARP-like program where you can get long-term funding— essentially a four-year repo currently at 25 basis points. That’s going to be positive for peripheral banks in general whether it’s Greece or Spain or Italy. They’ve also talked about doing a securitization program where you get some kind of quantitative easing. All those kinds of incremental things are very positive for Greece. After six years of recession, they’re finally starting to come out of it. It’s just like a natural cycle. It doesn’t stay bad forever. That’s going to continue for the next 12 to 18 months. - Which is about as long as one can look ahead, especially with exciting things like the Ukrainian crisis happening. Briefly, in terms of those countries, which don’t look as attractive? Presumably the Baltic republics, which are seen as being more vulnerable, given what happened with Crimea and Ukraine? - Definitely. There’s concern there that Russian expansionism is going to continue. Will NATO really defend those countries if Russia tries to reexert its influence in those regions? I think those have been areas that have been hurt by the crisis because they’re viewed as the next dominoes, if you will. Obviously those are not big markets and have limited investment opportunities, but definitely I think they’ve been negatively impacted. People aren’t really sure what the Russians’ ultimate goals are here, what they’re really trying to accomplish: are they done, or are they trying to recreate the Soviet Union? - Just to finish up, in terms of talking about military action, you were mentioning earlier about what’s been happening in Iraq where an al-Qaeda-linked group has taken over the second ma-
jor city, Mosul, in Iraq and led to hundreds of its inhabitants fleeing. Maybe that’s going to have some effect on next-door neighbor Turkey? - The Turkish market is down about 3 percent today, and currency’s down 1 percent or so. Obviously it sounds like the situation in Iraq is deteriorating pretty rapidly. That’s a pretty significant development. It just raises a lot of questions about what’s happening there and what’s going to be the impact for Turkey. There’s a fair amount of trade that goes across there—oil pipelines that they’ve finally got up and running, particularly in the north in the Kurdistan region, sending oil to Turkey. There’s still some controversy about who’s going to buy it because they don’t have an agreement with the central government. Nevertheless, there’s oil and gas and all those kinds of things that are good for Turkey in the long run. I look at today’s developments as probably likely a buying opportunity in Turkey. Indeed, having reduced our exposure in Russia following the events in Ukraine, our Emerging Europe Fund (EUROX) now invests the largest percentage of its assets in Turkey (24.29 percent), followed by Poland (14.75 percent) and Greece (11.80 percent). You can listen to John’s entire interview on the VoiceAmerica website, starting 18 minutes into the program. Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content. Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. By investing in a specific geographic region, a regional fund’s returns and share price may be more volatile than those of a less concentrated portfolio. The Emerging Europe Fund invests more than 25% of its investments in companies principally engaged in the oil & gas or banking industries. The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fund’s performance more volatile. BRIC refers to the emerging market countries Brazil, Russia, India and China.
AZERBAIJAN June 23, 2014 #59
caucasian business week
PRESIDENT ALIYEV APPROVES LAW ON STATE BUDGET FOR 2013
A AZERCOSMOS TO MANAGE BELARUSIAN SATELLITE
elarusian satellite operator Belintersat expressed its interest in using the resources of the ground satellite control center of Azerbaijan’s space agency Azercosmos as a reserve satellite control center. This was said by Azerbaijan’s Communications and High Technologies Ministry on June 19. Belintersat management visited the agency and observed closely the work of the ground satellite control center of Azercosmos and its infrastructure. During the talks, the sides discussed issues of cooperation in the form of exchanging of experiences in the space industry. Belarusian satellite communication system will be built on its own communication satellite Belarus Sat-1/Belintersat-1. It will render a wide range of telecommunication services, including satellite TV, radio broadcasting and broadband internet. Currently, a ground-based satellite control com-
plex Belarus Sat-1/Belintersat-1 is under construction. The work will be completed before its launch date in mid-2015. The satellite will be launched from the Xichang Satellite Launch Center by Long March 3B carrier rocket and will be located at the 51.5 ° E orbital position. Azercosmos agency was established in May 2010, in order to ensure the implementation of work on development, placing in orbit, management and operation of telecommunications satellites. The agency provides transponder lease, television broadcasting and telecommunication services. Azerbaijan became a member of the space club by launching its own satellite into orbit in February 2013. Azerspace-1 telecommunication satellite covers Eastern Europe, the Caucasus, Central Asia and North Africa. The second satellite is scheduled to be launched in 2017. Moreover, Azerbaijani space agency “Azercosmos” plans to launch a low-Earth orbit satellite in 2016.
CARGO TRANSPORTATION THROUGH AZERBAIJAN EXCEEDS 15 MLN TONNES
ore than 15.4 million tonnes of cargo were transported by vehicles on the territory of Azerbaijan in January-May 2014. The figure is 9.4 percent less
than in the same period in 2013, the Azerbaijani State Customs Committee reported on June 18. The export of goods for this period amounted to 12.04 million tonnes, imports - 3.37 million tonnes. Some 42,070 tonnes of cargo were exported by ships, 927,700 tonnes by railway, 207,400 tonnes by vehicles, 20,990 tonnes by planes and 10.8 million tonnes by stationary vehicles in JanuaryMay 2014. Some 728,900 tonnes of cargo were imported to Azerbaijan by ships, 1.85 million tonnes by railway, 776,200 tonnes by vehicles and 4,630 tonnes of cargo by planes during this period.
SOCAR’S TWO EMPLOYEES DIE IN ACCIDENT
wo employees of Azerbaijan’s state energy company SOCAR died in an accident, SOCAR said on June 18. As a result of a gas explosion in the well No 1249 (liquidated in 1989) in the Gala area, the welders Zakir Aliyev (born in 1965) and Dmitriy Baranov (born in 1963) were killed. “The cause of the accident is being investigated,” SOCAR said. Baku City Prosecutor told Trend Agency on June 19 that a criminal case was initiated on the death of two men.
An operation group including the prosecutors and the Police Department of the Khazar district conducted an inspection of the crime scene and the corpses with the participation of forensic experts and experts of the Expertise Center under the Justice Ministry. The criminal case was opened under the article 223.2 (violation of safety rules on explosive objects, resulting in the death or other serious consequences) in the district Prosecutor’s Office. Meanwhile, necessary expertise was assigned. The investigation is underway.
SOCAR UPS OIL EXPORTS FROM CEYHAN PORT
arketing and Economic Operations Department under Azerbaijan’s state energy giant SOCAR exported 84,832 tons of crude oil through Novorossiysk port (Black Sea, Russia) in May, 2014. Some
161,315 tons of crude oil were exported through Supsa port (Black Sea, Georgia), 1,661,255 tons through Ceyhan port last month. In January-May, 423,644 tons of crude oil was exported through Novorossiysk port, 1,210,535 tons through Supsa port and 8,442,415 tons from Ceyhan port.
zerbaijani President Ilham Aliyev has approved a law ‘On fulfillment of state budget of Azerbaijan for 2013’. The news was announced in the official press on June 14. Azerbaijani Parliament adopted a draft law ‘On fulfillment of state budget of Azerbaijan for 2013’ at its plenary session on May 16. The country’s state budget for 2013 was fulfilled successfully. Revenues of the consolidated budget amounted to 23 billion manats, which is 12 percent more than the projected revenue. Last year expenditures of the consolidated budget of the country amounted to 22 billion manats. The consolidated budget was fulfilled with a surplus of around one billion Manats. The development of agriculture and ensuring food safety were among the priorities of the state budget for 2013. Azerbaijan allocated 832 million manats for the development of agriculture and this figure was 6 percent more compared to 2012. The volume of loan agreements signed by the Azerbaijani government with international credit and financial organizations amounted to $12 bil-
lion as of the beginning of 2014. Fulfillment of the state budget of Azerbaijan in 2013 showed that a solid financial base has been created in the country. In 2013, Azerbaijan’s GDP exceeded $73 billion, while this figure amounted to $48.8 billion in 2008. Last year revenues of the state budget exceeded $25 billion for the first time. Last year Azerbaijan’s strategic currency reserves grew steadily. They reached about 70 percent of GDP. The macroeconomic stability was ensured and the development of the national economy continued in 2013.
AROUND 2.5 BLN MANATS INVESTED IN AZERBAIJAN’S OIL SECTOR
round 2.5 billion manats were invested in Azerbaijan’s oil sector in January-May 2014. This figure is 33.1 percent more compared to the same period of last year, Azerbaijan’s State Statistics Committee said. In 2013, around 4.8 billion manats were invested in the country’s oil sector, which is 24.2 percent more compared to 2012. In January-May 2014, the total volume of investment in Azerbaijan’s industry sector amounted to 2.98 billion manats, which is 8.1 percent more compared to the same period of 2013. Some 2.45 billion manats of these funds were invested in the mining industry, which is 31.9 percent more than in January-May 2013. The total volume of investment in the country’s industry sector in 2013 amounted to 7.08 billion manats, which is 16.4 percent more compared to 2012. The State Statistics Committee also said the total volume of the Azerbaijani GDP amounted to 23.4 billion manats in January-May 2014, which exceeds the figure for the same period last year by 2.8 percent. Nominal GDP growth made up 4.8 percent. Some 61.2 percent of GDP in Azerbaijan was formed in the fields of production during this period, which showed an increase of 0.9 percent. The value added share generated in industry makes up 47 percent, and construction-11.5 percent. Some 31.7 percent of gross output was generated in the service sector.
Net taxes on products and imports amounted to over 1.656 billion manats or 7.1 percent of the Azerbaijani GDP. Some 14.2 percent of GDP originating in the services sector accounted for social and private services, 8 percent - trade and services, 5.6 transportation and warehousing, 2.7 percent - agriculture, forestry and fish farms. The non-oil sector grew by 8.3 percent compared to the same period last year, and its share in GDP was 55.4 percent. The volume of value added production in the extraction and processing of oil and gas decreased by 2.8 percent. The volume of value added in the Azerbaijan’s construction sector increased by 17.3 percent in January-May 2014, tourist accommodation and catering - 15.2 percent, information and communication services - 12 percent, trade and repair of vehicles - 8.8 percent, transport and warehousing - 6 percent, social and other services - 3.3 percent, agriculture, forestry and fish farming- 2.7 percent compared to the same period last year.
AZERBAIJAN CUTS POWER EXPORT
zerbaijan exported about 289.1 million kilowatt hours of electricity based on customs declaration in January-May 2014. The figure is 17.4 percent less than the same period last year. About 350.01 million kilowatt hours was exported in January-May 2013, the State Customs Committee reported. Azerbaijan exported electricity totaling $13.41 million in January-May compared to $13.93 million for the same period in 2013 (a decrease of 3.7 percent), the report said. In 2013, Azerbaijan exported over 595.67 million kilowatt hours of electricity on customs declaration totaling $24.85 million versus 482.7 million kilowatt hours worth about $24.76 million in 2012. The main producer of electricity in Azerbaijan is “Azerenergy” JSC, which has on the balance sheet of more than 200 substations with capacity of 500, 330, 220 and 110 kV / amp, as well as, eight hydroelectric plants and 13 thermal power plants.
The capacity of electricity energy generation system of Azerbaijan has increased by 30 percent over the past five years. At present, the figure is 7105 megawatts, which allows to produce annually about 24 billion kilowatt / hours of electricity, which in turn allows the country to export annually 2.1 billion kilowatt / hours of electricity.
PUBLICITY caucasian business week
June 23, 2014 #59
WORLD NEWS June 23, 2014 #59
caucasian business week
IRAQ EXODUS? OIL MAJORS WITHDRAW STAFF AS TERROR THREAT RISES
P and ExxonMobil have both ordered staff to leave Iraq, and China is considering pulling some of its 10,000 workers from projects following the turmoil caused by jihadist rebel group ISIS, which has rocked the country and threatened security. Exxon is plucking 20 percent of its staff, mostly foreigners, from Iraq fearing the Sunni rebel group ISIS, a breakaway Al-Qaeda group, could target oilfields and refineries in their terror sweep. An official from Iraq’s state-run South Oil Company confirmed this on Wednesday. BP has shipped out all non-essential employees from the Rumaila field in the south and Exxon has been evacuating staff from the West Qurna 1, also in the south. Royal Dutch Shell, which has played a large role in revamping the country’s oil industry, announced it hasn’t evacuated any employees yet, but has a plan if need be, according to the chairman Hans Nijkamp. Shell has invested billions in the Majnoon oil field, which is just east of West Qurna 1 and II. China, the world’s fifth largest importer of crude, is also preparing a contingency plan for a worstcase situation, recalling thousands of workers stationed in the south of the country, where unrest could spread. “As of today, most Chinese workers have gone to work as usual. But if insurgents begin to attack Baghdad, we will pull out of the country immediately,” an employee of the Chinese state owned energy giant China National Offshore Oil Corp. (CNOOC) told the Global Times newspaper. According to the Iraq Oil Ministry 90 percent of the country’s oil is safe from attacks, but in case, 100,000 police are tasked with protecting oil facilities. Iraq is home to the world’s fourth largest oil re-
serves, which are estimated at over 150 billion barrels. Daily output reached an all-time higher earlier this year, pumping 3.5 million barrels per day. Many of Iraq’s main oil fields are in the southern regions, which are predominately Shi’ite, the main target of the group. ISIS, a jihadist rebel group that seeks the creation of an Islamic Iraq and Syrian state, is making significant territorial advances having taken Iraq’s second largest city and is pushing towards Baghdad. The US has mentioned it may team up with longtime diplomatic foe Iran in order to combat the insurgents in Iraq. Oil prices have spiked as the Jihadist rebel group has swept over several regions in the country. At the time of publication on Thursday, August futures for Brent crude jumped to $114.26 per barrel, after large gains on Wednesday. ISIS militants launched an attack on Iraq’s largest oil refinery with mortars and machine gun fire, according to reports.The refinery process about 300,000 barrels per day and supplies the northern regions with oil and was a key strategic goal the US took over in its 2003 invasion of Iraq. Italy’s ENI, France’s Schlumberger, Swiss-based Weatherford, and Baker Hughes, the third largest oil and gas service company in the world, are all rumored to be considering similar exits, Reuters reports. Gazprom Neft, an arm of Russia’s largest producer of natural gas, owns a 30 percent stake in the 300 million barrel Badra deposit, situated near the Iranian border. The company announced on Tuesday it is experiencing “no problems” in Iraq, despite the outbreak of violence and plans to start supplying gas from the field at the end of June. Lukoil, Russia’s largest independent oil company also has significant stakes in the region, including a stake in the hard to reach crude in West Qurna II.
POPE FRANCIS CALLS OUT ‘GREEDY’ BANKERS: ‘STOP GETTING RICH ON FINANCIAL SPECULATION!’
ope Francis has called on “greedy” bankers to establish a stricter ethics code, and stop getting rich through financial market speculation. He attacked the practice of hedging as ‘intolerable’ equating it to stealing food from the poor. “It is increasingly intolerable that financial markets are shaping the destiny of peoples rather than serving their needs, or that the few derive immense wealth from financial speculation while the many are deeply burdened by the consequences,” Pope Francis said at an investors ethics’ seminar at the Vatican on Monday. Specifically, the pope denounced the practice of betting on the price of commodities such as corn, meat, and rice, which can drive up food prices
and trigger periods of starvation in parts of the worlds. “Speculation on food prices is a scandal which seriously compromises access to food on the part of the poorest members of our human family,” he said. This Pope called for an end to this “scandal” and said that finance institutions should serve the interests of all mankind, and not just wealthy and privileged individuals. Pope Francis has been more vocal than any other Pope on the modern superstructure of wealth, which in his first major published work as a Pope, The Joy of the Gospel, he slammed as a “new tyranny” and called on the rich to share their wealth. In the same speech he equated not sharing wealth with the poor to stealing.
CANADA APPROVES PIPELINE TO ASIA BUT FACES ENRAGED OPPONENTS
he Canadian government has given thumbs up to the ‘Northern Gateway’, a $6 billion oil pipeline project headed by Enbridge Inc. which will supply oil and petroleum products to meet growing Asian demand. The proposed pipeline would on average transport 525,000 barrels per day from oil rich northern Alberta 1,777 kilometers across two provinces to the Pacific port town of Kitimat in British Columbia. The new pipeline will be able to deliver Canadian oil to energy hungry Asia, mainly China. Residents of northwest British Columbia (BC) see the project as a lose-lose for the province, which won’t directly benefit from the transmission, but will suffer environmental risks from the construction which could taint the pristine water systems in the area. Groups like LetBCvote are advocating for BC residents to have a bigger say in the matter. Another petition asks the company only to go ahead with the project if they have “100% consent’. Local officials are already demanding oil and gas royalties from the parts of the pipeline that run through their areas. Enbridge says there are benefits for BC and promises the project will generation $1.2 billion in tax revenue for the province and $4.3 billion in labor-related income in a four year period. An estimate by Enbridge suggests the pipeline will contribute more than $300 billion to Canada’s gross domestic profit in the next 30 years. Prime Minister Stephen Harper’s Conservative government allowed the project to move forward on the condition it fulfill 209 conditions that were
made by a regulatory review panel last December. The first regulatory process began with the National Energy Board in May 2010. First Nations and environmental groups are already planning legal hurdles to delay or stop the project. Those against the project have 15 days to file formal objections. However, transporting oil by rail has dangerous aspects, which Canadians in the Alberta were reminded of last fall when a train derailedkilling 13 and damaging surrounding homes. Canada’s largest pipeline company has its hands full with $33 billion (CAD$36 billion) worth of development projects through 2017, including a project to transport crude to refineries in Quebec, Bloomberg News reports. Already protestors have gathered in many of Canada’s main city to denounce the decision, which they claim most Canadians are against. Keystone’s twin Across the border, the American government is working to get the Keystone XL project approved by Congress, which has proved a difficult task. On April 18, the Obama administration said it is delaying a decision on the 1,897 km pipeline that would transport crude from Alberta to Nebraska and link up with other active pipelines in the southern US and Midwest. Supporters herald it as a move towards better export diversification, energy security, and some pundits say it is an environmental disaster waiting to happen. The pipeline would carry an average of 830,000 barrels of oil per day. Native American groups staged a six day protest against the pipeline, urging President Obama to ‘Reject and Protect’ the Keystone Pipeline.
PUBLICITY caucasian business week
June 23, 2014 #59
TBILISI GUIDE June 23, 2014 #59
Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: firstname.lastname@example.org; email@example.com United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: firstname.lastname@example.org Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: email@example.com 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: firstname.lastname@example.org Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: email@example.com Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: firstname.lastname@example.org Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi. E-mail: email@example.com 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: firstname.lastname@example.org Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: +995 32 2 75 21 11, Fax: +995 32 2 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: email@example.com 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: firstname.lastname@example.org 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: email@example.com; firstname.lastname@example.org 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: email@example.com 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: firstname.lastname@example.org 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: email@example.com 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: firstname.lastname@example.org Romania Embassy 7 Kushitashvili St., Tbilisi Tel: 38-53-10; 25-00-98/97 E-mail: email@example.com Republic of Poland Embassy 19 Brothers Zubalashvili St., Tbilisi Tel: 292-03-98 Email:firstname.lastname@example.org Web-site: www.tbilisi.polemb.net Republic of Iraq Embassy Kobuleti str. 16, Tbilisi Tel: 291 35 96; 229 07 93 E-mail: email@example.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: firstname.lastname@example.org United Nations Office Address: 9 Eristavi St. Tbilisi Tel: 225-11-26/28, 225-11-29/31 Fax: 225-02-71/72 E-mail: email@example.com Web-site: www.undp.org International Monetary Fund Office Address : 4 Freedom Sq., GMT Plaza, Tbilisi Tel: 292-04-32/33/34 E-mail: firstname.lastname@example.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: email@example.com; 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: firstname.lastname@example.org 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: email@example.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
June 23, 2014 #59