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September 15, 2014 #67

September 11, 2014, Issue 67

GEORGIA KVIRIKASHVILI OFFERED BUSINESS DIVERSIFICATION IN GEORGIA TO HUALING GROUP

uring his visit in China Minister of Economy and Sustainable Development George Kvirikashvili stated that Georgian government will discuss awarding status of Free Industrial Zone to Hualing Group in Pg. 2 Kutaisi.

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MAJOR PART OF DRIVERS PREFER EFIX AMONG PREMIUM FUELS, THE LOWEST FIGURE IS RECORDED FOR EKO

DEVELOPMENT SECTOR TURNOVER GROWS BY 55.8% IN 2Q14

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CHINESE WILL PROVIDE REHABILITATION OF 600 HECTARES OF TEA PLANTATIONS IN SAMEGRELO REGION

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WORLD FAMOUS CASINO BRAND ENTERS GEORGIA

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BW is publishing a report on preferences of Premium-class fuel customers. A total of 98 drivers were questioned from September 1 to September 10 to identify the most popular fuel product due to qualitative indicators. According to the report, Rompetrol’s Efix emerged is the most popular Premium-class fuel product among Georgian drivers. The product is imported from Europe, namely, from Romania. Efix has collected 33% of the votes.

The second position has gone to Lukoil EuroSuper with 27% of the votes. G-force has recently appeared on the market and ranks third with 19% of the inquired drivers. The fuel is sold in the Gulf network. Nano fuel has also recently appeared on the market and emerged fourth with 13% of the votes. The product is sold in the SOCAR network. The last position was registered for Wissol’s Eko product with 8%. CBW plans to systematically publish reports on fuel prices and quality level.

HUAWEI SHOWS INTEREST IN GEORGIA’S TECHNOLOGICAL PARK

ice Premier of Georgia, Minister of Economy and Sustainable Development George Kvirikashvili met with director general of Chinese Corporation Huawei - Guo Ping. Pg. 4

CIS POLAND STOPS REVERSE GAS FLOW TO UKRAINE, KIEV BLAMES RUSSIA

kraine’s state-controlled gas transit company says Poland cut off reverse flows to Ukraine, alleging that a quarter of Russian gas imports to Poland went missing. Pg. 9

AZERBAIJAN AZERBAIJAN ENJOYS OPPORTUNITIES FOR FURTHER IMPROVEMENT OF COMPETITIVENESS RANKING

WORLD NEWS US AND EU EXTENDS RUSSIA NEW SANCTIONS

Giorgi Kadagidze: Moody’s decision about the future of Georgia’s investment attractiveness ss is very important ortant Milan Investments to Purchase 60% Stake in Goodwill Pg. 2

GPI HOLDING WILL INSURE CITRUS ORCHARDS n the framework of the state agro insurance program GPI Holding will insure citrus orchards. Pg. 8

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Francis Fukuyama Says Putin Playing A ‘Very Duplicitous Game’

ccording to Geostat data, turnover of the construction sector equaled to 750,2 million GEL in April-June, which is 55,8% more than in the Q1 of 2014 (481,5 million).

inister of Agriculture Otar Danelia sated about it o Friday. He talked about his Chinese visit several weeks ago. He emphasized

Gharibashvili: Azerbaijani Companies Plan to Increase Investments in Georgia

POLAND-UKRAINE RELATIONS EMERGE AS ONE OF THE TOPICS AT 2014 FORUM

Economic Forum, September 2- 4,2014 — Krynica Zdrój, Poland

Maka Samushia specially for CBW from Poland

he Economic Forum is the most significant initiative of the Eastern Institute. Organized since 1992, the conference has become one of the most important economic events in Europe attended by political and business elites. The highest level of debates and organizational aspects of the Economic Forum is supported by

the Program Council. The Council determines the content and program of the Forum, and indicates directions for its further development. For over last 20 years, prime ministers, ministers, European Commissioners and other prominent figures of political stage and business life in Poland and in Europe have been hosted at the conference. Pg. 6

GEORGIA IMPROVES POSITIONS IN GLOBAL COMPETITIVENESS INDEX Pg. 5

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MAIN EVENTS caucasian business week

September 15, 2014 #67

MILAN INVESTMENTS TO PURCHASE 60% STAKE IN GOODWILL

GHARIBASHVILI: AZERBAIJANI COMPANIES PLAN TO INCREASE INVESTMENTS IN GEORGIA

zerbaijani companies plan to invest more in Georgia in the future. The Prime Minister of Georgia Irakli Garibashvili said after the meeting with President of Azerbaijan Ilham Aliyev. “I had a very good meeting with President Aliyev. This is my first official visit to Baku. We’ve discussed a lot of issues and once again proved that we are strategic partners. Georgia is Azerbaijan’s reliable partner. Azerbaijani companies plan to invest more in the economy of Georgia. We have talked about these issues, and it’s Presi-

dent Aliyev’s desire to invest in Georgia as much as possible. As for the energy corridor and export of electricity, it is also one of the most important projects. You probably know that I will visit Baku on September 20 to attend a signing ceremony for Shah Deniz 2 project which proves a partnership between Georgia and Azerbaijan, “said the Minister. The Georgian delegation includes Foreign Minister Maya Panjikidze, Deputy Prime Minister Kakha Kaladze, Finance Minister Nodar Khaduri, Minister of Agriculture Otar Danelia and others.

KVIRIKASHVILI OFFERED BUSINESS DIVERSIFICATION IN GEORGIA TO HUALING GROUP

They expressed great interest and we agreed that soon special group will arrive from China, which will study our market and provide respective research. The research will be made not only for our, but for the regional market”, - Kvirikashvili stated. Main activity sphere of corporation Hualing is implementation of large development project in China, in various countries of the world, among them USA, central Asian and Pacific countries. Hualing group was founded in 1988 and in addition to 5 developed retail markets in China; it owns 3 million square meters commercial area. The group entered to Georgia in 2007. It has purchased 88,000 cubic meters wood of deforestation right; they gave started construction of Free Industrial Zone in Kutaisi. In 2012 the company became owner of 90% Basis Bank stocks. Hualing carries out large-scale development project on Tbilisi Lake. Construction of Olympic Village for 2015 European Youth Festival is its first stage. Investment amount till 2015 equals to $150 million. 3800-4000 sportsmen will be placed in the complex during the Olympic festival.

OMV AND REPSOL WILL RESEARCH HYDROCARBON RESERVES IN THE BLACK SEA SHELF

ice Premier and Minister of Energy Kakha Kaladze, senior vice-premier of Austrian oil and gas company OMV and research director of European and Middle East of Spanish oil and gas company REPSOL - Mikel Erkiaga Agire signed cooperation memorandum. The memorandum was signed in the framework of the visit of Ministry of Foreign Affairs of Austria in Georgia. The memorandum aims to research and evaluate data about potential hydrocarbon reserves in the

Black Sea Shelf. Ministry of Energy will give geophysical-filed records to OMW and REPSOL. Ministry of Energy informs that MPW and REPSOL take obligation to prepare new digital copies of the existing and processed/interpreted data, reproduce existing materials, prepare special report based on them, which will determine potential of Black Sea shelf hydrocarbons and will provide recommendations for its further utilization. OMV and REPSOL will provide training of 2 Georgian specialists with own expenses in the data interpretation.

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oodwill trade network is about admitting Italian investments. Milan Investments company plans to purchase a 60% stake in Goodwill. The companies have already concluded a contract agreement and the document will be enforced step by step. Alessandro Azais, a Milan Investments head, noted: “We will invest as much money in Goodwill network as needed to make the company stronger. We plan to draw more customers and develop the Goodwill network in the competitive environment”. As to the interest in Georgia, Azais noted the Italian company has explored the current economic and political situation in Georgia and only after that they made the decision. “Georgia ranks eighth worldwide in terms of business development perspectives”. There were several offers for sales of the company shares, the Goodwill representatives noted.

Gogi Shevardnadze, a Goodwill owner, has preferred Italian Milan Investments, because the company will have wider perspectives for developments thanks to this cooperation, the company representatives noted. On September 9 a news conference was held for introducing Milan Investments and the event was attended by representatives of the Georgian Economy Ministry, the business ombudsman, Italian Ambassador to Georgia Federica Favi and business sector representatives. The Italian Ambassador welcomed the entrance of Milan Investments in Georgia: “I am happy because the conclusion of the associated membership agreement and the deep and comprehensive free trade agreement with EU coincided with the period when Italy was presiding the EU. The document obliges Georgia get closer to EU. This investment will bring these two countries closer. Both Georgian and Italian People pay special attention to food”, the Italian Ambassador to Georgia noted.

CHINESE WILL PROVIDE REHABILITATION OF 600 HECTARES OF TEA PLANTATIONS IN SAMEGRELO REGION

inister of Agriculture Otar Danelia sated about it o Friday. He talked about his Chinese visit several weeks ago. He emphasized On the Cooperation Memorandum signed in the Urumch city, which considers investment of $2025 million in the agriculture of Samegrelo-Zemo Svaneti region by Chinese side.

“The memorandum considers investment in agricultural crops, fishing, livestock breeding, tea production, refrigeration economies, infrastructural development and agro-tourism”, - the minister stated. It’s noteworthy that along with Danelia governor of Samegrelo-Zemo Svaneti Levan Shonia, Gamgebeli of Senaki Gocha Dgebuadze and other representatives of the region visited China.

GEORGIAN-AUSTRIAN BUSINESS FORUM WILL BE HELD IN VIENNA IN NOVEMBER

n November 2014 Georgian-Austrian business forum will be held in Vienna, Austria, - it became known on the meeting of Prime Minsiter Irakli Garibashvili and federal Minister of Europe, Integration and Foreign Affairs of Austria Sebastian Kurtz. Prime Minister hosted to Minister of Foreign Affairs of Austria on Wednesday in the government’s administration. Irakli Garibashvili expressed gratitude to the Austrian diplomat for support to Georgian terri-

torial integrity and sovereignty, also to the EuroAtlantic strives of the country. Head of Georgian government also emphasized on the importance of Austrian support in the implementation process of Association Agreement with EU. The sides expressed hope to enhance bilateral political, cultural and economic relations. On the meeting importance of Georgian-Austrian economic forum was also emphasized, It’s being holding in parallel to the Sebastian Kurtz visit in Tbilisi.

HOTEL VARAZI WILL CONTINUE WORKING WITH COSTÉ BRAND

ormer hotel Varazi will continue working with Costé brand. Newly renovated and reconstructed Costé meets requirements of 4-star hotel. The management explains that the guests will have modern interior, high-level service and 60 comfortable rooms. The hotel complex also includes café with European and Georgian cuisine, lobby bar, library, summer terrace, conference hall and meeting room. “Hotel’s mission is to create high level Georgian hotel brand, which will mix heritage of Hotel

Varazi, Georgian traditions of hospitality and international standards of hospitality,” - the hotel management states. The hotel has already announced job openings.

The weekly is distributed to top companies, banks, embassies, state sector, Tbilisi and Batumi hotels, Tbilisi, Batumi and Kutaisi Airports, as well as in the town of Marneuli. The newspaper will also penetrate Azerbaijan in the near future

PUBLICITY September 15, 2014 #67

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INTERVIEW caucasian business week

September 15, 2014 #67

FRANCIS FUKUYAMA SAYS PUTIN PLAYING A ‘VERY DUPLICITOUS GAME’ In his 1989 essay “The End Of History?” renowned political scientist Francis Fukuyama suggested that the world might not be seeing just the end of the Cold War but the triumph of liberal democracy as the final form of human government. Amid talk of a Cold War revival, Fukuyama, now a senior fellow at the Center on Democracy, Development, and the Rule of Law at Stanford University, spoke with Marina Vashakamdze, RFE/RL’s bureau chief in Tbilisi, about Russia, Ukraine, and NATO.

- Do you think the West could have made better use of the years after 2008 [since the RussiaGeorgia war]? Could Europe at least have become less vulnerable to Russian leverage? - I think the main point of leverage that the Russians have is gas, obviously. They [Europe] have been doing things in terms of alternative pipelines and allowing the gas to flow backward as well as forward, so Ukraine now is much less vulnerable to a Russian cutoff than it was a few years ago. But I think in terms of the global gas market, there’s much more to be done because the United States has become a major producer of natural gas and we don’t have a fully-developed liquefied natural gas market. And so, in order to reduce vulnerability of Western Europe to cutoffs of Russian gas, I think that’s something that could’ve been started earlier. I’m pretty confident that everything that’s happened in Ukraine has stimulated much more interest and hopefully much more investment in this area. I think the other thing that really needs to happen is that NATO needs to return to being a real

military alliance. I think that it hasn’t been for a couple of decades now. It’s been more of a democracy club or democracy-promotion organization. But in terms of actually thinking seriously about how to defend countries against external aggression -- I think we need a lot more work in that area. - What do you think will be happening now with Ukraine and Russia? Other neighbors? Can you try to outline possible scenarios? - [Russian President Vladimir] Putin is playing this very duplicitous game of keeping the level of intervention low enough that it doesn’t attract major attention and pushback from publics in the West, and he’s been fairly successful at that. I think he does not want to lose, but I think we have to also be aware of the fact that he could escalate much more rapidly and in a sense he’s already passed the point where he can draw back, I think, particularly easily. Right now, people are thinking, “Well, the problem is only going to be in eastern Ukraine, and protecting, let’s say, a corridor to Crimea or something.” But he could go much farther than that. He made this statement apparently to [European Commission President Jose Manuel] Barroso about his ability to take Kyiv in two weeks, and I think nobody has taken that kind of scenario seriously, but I think we need to think about it. - Do you think more should be done by NATO?

- I think that it’s really time to figure out how to supply some serious military equipment to Ukraine and training and things of that sort. I think the Germans have been dragging their heels on this, and the United States unfortunately as well, but I think the time has really come to do that. - Hungarian Prime Minister Victor Orban started to use the term coined earlier by American journalist Fareed Zakaria -- “illiberal democracy” -- drawing comparisons to Putin’s “sovereign democracy” and raising concerns that he might unwillingly be offering some kind of ideological assistance to Putin when he most needs it. Are these Hungarian developments something serious and should the West worry about this? - I think what Orban said was terrible. This is a country that is a member of the EU that is, in theory, signed up to the kinds of liberal democratic standards that the EU stands for. [And then] he suddenly announced that he doesn’t want the “freedom” part of liberal democracy. This is very serious, and I think the Germans and in particular [Chancellor] Angela Merkel have been soft-pedaling Hungary because they don’t want to upset their coalition within the European Parliament, the center-right parties. But I think there really has to be a mechanism in the EU for disciplining countries like Hungary that purport

to want to be part of the club but don’t accept the values of the club. - In your interview with “Magyar Narancs” published in Hungarian, you indicated that, while Prime Minister Orban was the only one who openly spoke about the illiberal system, there might be other leaders who quietly entertain similar ideas. Why do you think Prime Minister Orban decided to expose such attitudes so straightforwardly? - Hungary under Orban, when Fidesz came to power several years ago, has been moving steadily in this direction where they have a strong parliamentary majority and they basically want to be able to exercise power without observing any of the checks and balances that should exist in a proper democratic system. And I think he’s just trying to cast around for an ideology that justifies him in using power in this fashion, and I’m afraid that there are other democratic leaders that have that temptation that they get power and they want to exercise it without having to worry about checks and balances. It’s particularly disappointing in Hungary’s case because I think everybody thought this was one of the most successful transitions -- that Hungary had returned to Europe after a long period after it wasn’t allowed to join, absorbed the values of modern Europe. But clearly this wasn’t the case. rferl.org

AUGUST RECORDS CONTRACTION IN GEORGIA’S ELECTRICITY EXPORTS

WORLD FAMOUS CASINO BRAND ENTERS GEORGIA

he world famous casino brand will enter Georgia in the near future. Negotiations are already underway with the company - the Deputy Economy Minister Keti Bochorishvili told commersant.ge, however, declined to disclose further details at this point. As reported, Spanish businessmen expressed their interest in the gambling business in Georgia. The MP Zurab Tkemaladze stated last September that Spanish investors were interested in the gambling business and shared their own experiences with relevant agencies. Casino “Adjara” former shareholder and a former political prisoner Iva Chigvinadze, whose name is linked to the Spanish investors, confirmed that the investors were holding talks with members of the parliamentary committee studying the gambling business. Chigvinadze claimed that investors were engaged in purchasing and repairing facilities in Tbilisi and Batumi. In his words, soon Russian investors will be also interested in the Georgian gambling business. However, later it was reported that the Spanish investment company stopped investing in Georgia. Minister of Finance also spoke about the plans of serious investors to make investments in the gaming business in Georgia at the beginning of June. “Commersant” wrote that Georgian government softened its attitude to gambling business- experts came to such conclusion after Finance Minister’s statement that decline in economic growth in April is associated with reduced activity of

gambling business. Currently, the government encourages the creation of new casinos that in the short term will lead to a sharp increase in their number. In particular, a boom is expected in the seaside resort of Batumi, where six casinos are functioning, and by 2017 their number will grow by 8. The number of casinos is increasing in Tbilisi as well - in particular, the company “Rakia” is going to renovate the hotel “Sheraton”, where a casino will be located. Against this background, the Association of Young Economists of Georgia requires a tightening of regulations in relation to gambling, as gambling is tightly controlled in all civilized countries, including online casinos. According to the chief editor of “Banking and Finance” Zurab Kukuladze, the government’s argument about the fact that the opening of casinos in the regions will contribute to the economic revival is wrong. “Of course, the opening of the casinos leads to improvement of infrastructure and employment of several dozen people, but at the same time more people are suffering from gambling. In the end, the social background deteriorates, and the state does not get much profit, as taxes on gambling are not very high. It is profitable only for the casino owners. The government should not stimulate the casinos, butsmall and mediumsized businesses. One can only welcome the fact that these programs exist, but public awareness about them is low, very few people use them. Foreign investment is nice, but it would be nice to intensify local capital,”- the editor notes.

nly 19,1 million KW/hours has been exported from Georgian in August. According to information of Electricity System Commercial Operator (ESCO), last month Georgia supplied electricity to Armenia and Turkey, among the - 9,04 million KW/hours to Armenia, 10,04 million KW/hours to Turkey.

In previous month, in July 162,26 million KW/ hours had been exported to Turkey, 21,9 million KW/hours - in Russia and 13,7 million KW/hours - in Armenia. As for import, Georgia purchased 74,45 million KW/hours electricity from Azerbaijan. According to 8 months data, 497,46 million KW/Hours is exported. In the same period the country purchased 362,17 million KW/hours.

DEVELOPMENT SECTOR TURNOVER GROWS BY 55.8% IN 2Q14

ccording to Geostat data, turnover of the construction sector equaled to 750,2 million GEL in AprilJune, which is 55,8% more than in the Q1 of 2014 (481,5 million). Besides, it’s 31% more than data of the Q2 of 2013 (571,5 million). Amount of the output of the construction sector has also been increased. In the Q2 the sector’s has produced products of 831,9 million GEL, which is 56,9% more than in the Q1 and

12,8% more than in the same period of previous year. According to Geostat data, in the Q2 of the current year 47 254 persons were employed in the construction sector, which is 14% more than in the previous quarter. According to official declared data, in the Q2 2014 overall turnover of the enterprises equaled to 11.1 billion GEL, overall output of the products - 5.7 billion GEL. Share of construction sector in the total turnover according to activity kinds equals to 6,8%.

HUAWEI SHOWS INTEREST IN GEORGIA’S TECHNOLOGICAL PARK

ice Premier of Georgia, Minister of Economy and Sustainable Development George Kvirikashvili met with director general of Chinese Corporation Huawei - Guo

Ping. Ministry of Economy informs that on the meeting the sides talked about main directions go corporation Huawei activities in Georgia and the projects, implementation, which is planned by Chinese. Chinese side expressed special interest to the in-

formation about creation of high technology and innovation center in Georgia. In particular, first time in Georgia High Technologies and Innovative Development Center (Technological Park) will be constructed. It will create united ecosystem in the direction of innovations and technologies and will promote development of the innovative ideas. George Kvirkashvili says that Technological Park gives unique opportunity to establish representations of international high-technology companies in Georgia and to attract foreign investments.

ECONOMY September 15, 2014 #67

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GEORGIA IMPROVES POSITIONS IN GLOBAL COMPETITIVENESS INDEX

eorgia has climbed three points on the World Economic Forum (WEF) 2014-2015 Global Competitiveness Report (GCR). With an overall score of 4.2 out of a possible 7, Georgia moved to 69th position out of 144 global economies. Georgia maintained its place in the group of efficiency-driven countries. Since 1979, the WEF GCR has benchmarked the global business environment and competitiveness landscape of most of the worldâ&#x20AC;&#x2122;s major economies. Georgia has been included in the GCR since 2004. Data for the GCR originated from the Executive Opinion Survey of small, medium and large businesses across various sectors in each economy (2/3 of the indicators) as well as from International Organisations (1/3 of indicators). The report contained three main stages of country development: factor-driven, efficiency-driven and innovation-driven. There were also intermediary transition stages. The GCR is a set of institutions, policies, and factors that determine the level of productivity of a country, conditions of public institutions and technical conditions. It analyses the factors that play a significant role in creating a favorable business-climate environment in the country and are important for competitiveness and manufacture point of view. The GCR also considers strength and weaknesses of a country and identifies priorities for the facilitation of political reforms implementation.

XXIV ECONOMIC FORUM September 15, 2014 #67

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MAKA SAMUSHIA specially for CBW from Poland BUSINESS SLOWS DOWN Europe500/ Leaders of the Region Ended the year with a slight Fall of income. For the eight time “Rzeczpospolita” daily together with Deloitte announced in krynica The “Europe 500” list that presents the financial results of the biggest companies of the region. AWARDS FOR LEADERS In 2013,the aggregate income of the 500 biggest companies of the region amounted to EUR 712 billion,which means a slight fall in comparison with the list in the previous edition.In 2012,the companies derived an aggregate income of EUR 715 billion.The last years have been clearly marked with stagnation,and the current year does not promise to be much better,especially due to the situation in Ukraine.”It is why we should expect even worse results”,said Jacek Chwedoruk,Managing Director of Rothschield Poland.The effect is not bad,but it is not a good forecast for the next edition,because this year’s results can be even worse.46% of the companies included in the list reported a decline in turnover in 2013 (in 2012 – only 40%)For the fifth time, as part of the presentation of the list,the Index of success awards were granted to the best companies of the region.The slovenian pharmaceutical company Krka received an award in the category of development and stability and PKN Orlen in the category of mergers and acquisitions.”The committee made its decision unanimously.We considered not only the profits derived by companies but also their stability,development,as well as care for the local environment” said Jan Krzysztof Bielecki,Chairman of the Economic Advisory Council to the Prime Minister.” We appreciate the editors for the concept of this project and its continuation over the past few years”, he added. UP AND DOWN Manufactures of industrial products whose turnover increased on average by 2.9% have achieved the best results.The usually fast growing industry of consumer products and transport has reported a further increase in turnover, but only by 1.1%.In the previous edition the dynamics was 4.8%.”Companies must struggle with numerous challenges:economic slowdown,crisis in the eurozone, but they cannot forget about the most important issue they must keep investing,”said Alistair Teare, CEO of Deloitte Central Europe.He beliaves that countries should be more active in this respect and help companies develop,especially those that represent the research and development segment.”The share of R&D expenses in the in the GDP should be much greater,” he added. For a few years, the TMC industry (technologies,media and communication)has been suffering a decrease of average income (in 2013,by 4.9%).The sector that has reported the greatest loss for the second time in a row (by 15.7%) is the construction sector.In turn, the year 2013 was quite good to banks 60% of the banks included in the “Europe 500” list reported an increase of assets.Insurers ended the year with an average decrease of the gross premium written.”Only two out of five biggest economies of the region: Hungary and Romania,developed faster than in 2012.The situation of the remaining three countries: Poland,Czech and Ukraine has not changed in relation to 2012,” explained Tomasz Ochrymowicz, Managing Partner of the Financial Advisory Department,Deloitte. THE TOP WITHOUT MAJOR CHANGES Once again, PKN Orlen is the unquestionable leader in the region.It reported,however, a fall of turnover in 2013.The top four positions are the same on the list as in 2012.The fifth position (up from the seventh position) was occupied by the Ukrainian energy group DTEK. Two companies operating in Poland entered the top ten:the eight position (from the twelfth)- Jeronimo Martins Poland,the owner of Biedronka, and the ninth position (from the thirteenth) – PGNIG.

POLAND-UKRAINE RELATIONS EMERGE AS ONE OF THE TOPICS AT 2014 FORUM Just as in the previous edition of “Europe 500”, Poland can take pride in the strongest representation.161 companies come from our country.However, year to year, the group of Polish companies is slightly decreasing.In 2008, Polish capital was represented by 188 companies.The three largest sectors listed in the ranking, i.e. energy,natural resources and industrial products, and consumer goods and transport account for 90% of total revenues of the analysed companies.Compared to the previous year,in 2013 there were no considerable changes in the weight of particular sectors. Companies from the sectors of consumer goods and transport,pharmaceuticals and healthcare received one place more on the list than last year,at the expense of the TMT sector. COMPANIES MOVE FORWARD Assessment of results may be very different in particular sectors.Trade, even through its scale of growth is not surprising, is very visible on the list Europe 500, and its presence will be growing. In this edition, this sector of economy has got as many as 92 representatives in the ranking,while a year ago there were 62, and still a year before 58. An impressive example of the growing importance of the sector year-on-year is the company Jeronimo Martins Poland which owns Biedronka shopping chain the leader of retailtrade in Poland, and which is climbing the list. Experts maintain that the current situation,both economic as well as political,poses the largest challenges to the sector of consumer goods and natural resources sector.Here we do not mean only the consequences of the turmoil in the east,but also the difficult situation in the Euro zone.”A potential threat for instance is the economic slowdown in Germany”, says Jacek Chwedoruk,President of Rothschild Poland. This is bad news for all the countries in the region,which are now celebrating 25 years of democratic transformation.Since 1989,the cumulative economic growth of Poland has reached 230% and this is the best result in the whole region,better than in other countries by 30 or even 50 percent. On the other hand, as Deloitte experts point out,Polish GDP per capita is still way below the EU average and Central European economies are visibly smaller than the largest economies in the EU. RUSSIA IS A COMFORTABLE EXCUSE The situation is made worse by the conflict in Ukraine and the sanctions imposed by the EU into Russia.In the case of Poland, the Russian embargo will affect,above all,trade of pork,apples and dairy products.Last year,Polish export to Russia was worth $10.8 billion,and the value of the goods subject to embargo amounted to $1.1billion. Should we expect that the next edition of the list Europe’s 500 companies will record even worse results,mostly due to the situation in the east? There are different opinions.”Today,relations with Russia are treated as a comfortable excuse in the case of all the difficulties and failures,especially when we are talking about the European Commision and its priorities of the broadly understood climatic policy,”says Andrzej Sadowski,Vice President of the Adam Smith Centre.”The results of these actions can be seen in many fields: we are not only talking about the light bulbs or vacuum cleaners which are being taken off the market,but also about factories,because more and more sectors will have to disappear from Europe due to the restrictive greenhouse gases policy.In Poland, there are also attempts to explain failures with the Russian criss,”he adds. He thinks that in analysing the impact of the Russian crisis we should not forget about unquestionable values.”Such small countries like Denmark or the Netherlands have a greater purchase power than Russia.Our export eastwards is not that big either,compared for instance to Germany,to turn in into a great problem for the whole economt. Even thought,some companies will have a hard nut to crack,” says Andrzej Sadowski.”

Media about Forum ECONOMIC PROBLEMS SIGNAL CHANGES FOR POLAND Growing problems of the biggest Central European economy change the way of thinking of Polish state officials, financial supervision bodies and monetary policy bodies. How to improve economic growth at the expense of earlier intentions to reduce budget deficit and public debt? “One of Polish specialties is to balance between economic growth and discipline. The most important thing is to approach this matter in a rational way because the current economic situation is unpredictable” – said during the Economic Forum in Krynica, Jan Krzysztof Bielecki, former Prime Minister, currently a leading economic adviser to Prime Minister Donald Tusk. THE FORUM IN KRYNICA ABOUT ACQUISITION OF ALIOR BANK BY PZU PZU, the biggest Polish insurer, holds talks aimed at purchase of Alior Bank S.A. “Talks are under way with private funds regarding purchase of shares in Alior Bank. If we decide to invest, it will be a minority stake” – announced during the Economic Forum in Krynica Andrzej Klesyk, President of the Management Board of PZU S.A. THE CRISIS SHOWS LESS COURAGEOUS EUROPE The debt crisis has demonstrated a new division in the European Union into the members, who are able to tackle it and the ones who lost courage. The financial crisis has awaken many Europeans from a luxurious nap showing that affluence and high living standards are something that cannot be taken for granted” – said President Bronisław Komorowski during the Economic Forum in Krynica. POLAND CLOSER TO NUCLEAR ENERGY During the Economic Forum in Krynica PGE, KGHM, Enea and Tauron signed a letter of intent concerning purchase of shares in a special purpose company established to build and maintain the first Polish nuclear power plant. RUSSIA WANTS TO JOIN CONSTRUCTION OF NUCLEAR POWER PLANT IN POLAND Rosatom wants to take part in the bid for construction of a nuclear power plant in Poland – announced director for management of engineering projects of the concern, Sergey Bojarkin. In his opinion, Poland could also purchase energy from the power plant in Kaliningrad. Bojarkin, who participated in the 22nd Economic Forum in Krynica, emphasized that if Poland decides to construct its own nuclear power plant, it has to select a location and invest much money in the project. “Al that takes much time, and time is money. Meanwhile the power plant in Kaliningrad will be soon operational and Poland could take advantage of that” – he said adding that Poland could import even 1000 MW of electric energy from the power plant in the Kaliningrad District. POLISH-UKRAINIAN RELATIONS AS ONE OF THE TOPICS OF THIS YEAR’S FORUM Referring to Polish-Ukrainian relations, Deputy Prime Minister Valery Choroszkowski emphasized that turnover between the two big countries in the amount of 6 billion US dollars is not satisfactory. – The turnover should be at least doubled – stressed the deputy prime minister of Ukraine. KRYNICA WILL BE VISITED THIS YEAR BY MORE THAN 2.5 THOUSAND GUESTS – POLITICIANS AND EXPERTS FROM EUROPE AND THE USA

The conference began from discussion about the debt of southern European countries. Participants in the plenary session tried to find a way out and indicate new development directions, which are required in the European Union by the adopted integration model and competition conditions. According to participants in the session, the major role in tackling the economic turbulences should be played by the European Central Bank. THE 22ND ECONOMIC FORUM IN KRYNICA HAS ALREADY BEGUN Today is the first day of the 22nd Economic Forum in Krynica-Zdroj. This year the motto of the event is „New visions for difficult times. Europe and world in the face of crisis”. The meeting is attended by presidents, prime ministers, ministers, economists and businessman. A special guest will be the former president Lech Wałęsa. The media partner of this year’s edition is Polish Television. I WORK IN ORDER TO STUDY, AND STUDY IN ORDER TO WORK. BEGINNING WORK, THEY ALREADY KNOW THAT THEY HAVE NO CHANCES FOR A DECENT PENSION. DO YOUNG EUROPEANS BELONG TO THE LOST GENERATION? Young people are accustomed to bad information. They have experienced a crisis of values, political and economic crises. What are their ideas for being successful? Do they think that their situation is positive? – For us, the young generation, the sky is the limit. We can decide how to overcome barriers and develop socially and professionally – denied Anna Moskwa from the European Meeting House during the 22nd Economic Forum in Krynica Zdroj. CHINA: HUNDREDS OF MILLIONS WILL MIGRATE TO CITIES China anticipates that in more than one decade, 350 millions of citizens of this country will migrate from rural to urban areas. Chinese experts discussed the anticipated social changes during the Economic Forum in Krynica Górska on Thursday. The Council President and Director General of the Chinese Centre of Contemporary World Study, Hong Jun Yu, emphasized in his speech during the panel “ yesterday’s and today’s China”, that in connection with the forecasted migration of population, China will have to learn from the West how to administer urban areas. ZYGMUNT BERDYCHOWSKI: POLISH EXPERIENCE CAN BE A LESSON FOR THE EU Within the recent 20 years, Poland has carried out reforms in the scale, which is unprecedented in comparison to other EU countries. It can be a perfect lesson for our partners from the European Union, how to prepare and realize such reforms – said Zygmunt Berdychowski during an interview with EurActiv.pl. THE BIGGEST COMPANIES FROM THE INDUSTRY WILL BUILD THE FIRST NUCLEAR POWER PLANT IN POLAND Next week, Polska Grupa Energetyczna PGE will sign an agreement on cooperation with Tauron, Enea and KGHM Polska Miedź at construction of the first nuclear power plant in Poland. The project is estimated to be worth approximately PLN 50 million. The start-up of the first nuclear block is planned by PGE in 2023, while the entire nuclear power plant, with the capacity of ca. 3000 MW, is expected to be opened in 2025. The second nuclear power plant, also with the capacity of ca. 3000 MW, is planned to begin operation in 2029.

BUSINESS September 15, 2014 #67

caucasian business week

BANKS&INVESTMENTS caucasian business week

KADAGIDZE: MOODY’S DECISION ABOUT THE FUTURE OF GEORGIA’S INVESTMENT ATTRACTIVENESS IS VERY IMPORTANT

resident of National Bank of Georgia Kadagidze considers that awarding “positive” outlook to the sovereign rating of Georgia by rating agency Moody’s is very important or the future of the investment attractiveness of Georgia. President of NBG considers that it’s important Georgia to maintain sustainability to the foreign debt, which will determine at least maintenance of the rating and then its further increase.

Kadagidze also mentioned that fiscal and monetary discipline has been high during many years in the country and in this regard Georgia is one of the leading countries. Moody’s reviewed sovereign rating of Georgia several days ago and changed Ba3-rating outlook from Stable to Positive. Analysts of the agency related the decision to enacting of Association Agreement between Georgia and EU. 80% of the agreement enters into force on September 1.

NET PROFITS OF INTERNATIONAL BANK OF AZERBAIJAN (GEORGIA) CONSIDERABLY GROWS

et profit of Azerbaijani International Bank-Georgia sharply increased. The bank’s management informs that by July 1, 2014 net profit of the banks equaled to 1,333 million GEL, which is 143% more than in the same period of last year. As Azerbaijani agency abc.az reports, total capital of the ban operating in Georgia has increased by 15,6% in a year and equaled to 40,5 million

GEL by July 1. Stock capital has increased by 9,8%, to 27,5 million GEL. Reminding that majoritarian shareholder and owner of 75% package of Azerbaijani International Bank-Georgia is open JSC Azerbaijani International Bank (Azerbaijan). 12,5% of the stock capital belongs to Industrial Bank of Azerbaijan, which is based in Azerbaijan as well. 12.5% belongs to former MP and Minsiter of Economy Ivane Chkhartishvili.

LEASING COMPANY OF GEORGIAN PLANS PLACEMENT OF THE BONDS

ubsidiary of Bank of Georgia - Leasing Company of Georgia will place bonds of 10 million on the market on September 22. The company’s management informs that they’re going to place the bonds in the trade system of Georgian stock exchange and access to the listing. JSC Galt and Taggart is a placement agent. It’s noteworthy that the company issues bonds first time. Nominal vale of each obligation is $1000. Besides, it has already been known that annual interest rate of the bonds will be 7.50%-8.75% (including taxes for total accrued yield); coupon

payment will be made twice a year. Bonds cashing date is September 22, 2017. Funds from the bonds sales will be directed to the implementation of company development strategy. The company informs that during the bonds placement process advantage will be given to the investors, which will express interest on comparatively low interest rate. Those who wish to purchase the bonds, should apply to the company till September 12, 22:00. Reminding that Leasing Company of Georgia operates since 2001. In 2005 the company became subsidiary of JSC Bank of Georgia.

BANK OF GEORGIA HOSTS INVESTORS, WHO ARE INTERESTED IN SECURITIES OF THE REGION

irst conference is being held about the perspectives of securities market. It’s organized by subsidiary of bank of Georgia - Galt and Taggard’s. Representatives of Georgian companies, Azerbaijani economic team and 40 foreign investors are attending the conference, among them from the large companies, such as: Goldman Sachs, UBS, Bank of America, Citi, Renaissance Capital. The conference aims to connect existing and potential investors, who are interested or are

discussing investments in the securities of Georgian companies. Conference of Bank of Georgia will be unique opportunities for the investors interested in Georgian securities, or Georgian companies eminent of the stocks and obligations, to discuss new development perspectives. The conference participants, who have invested over $1 million in Georgia and Azerbaijan, were informed about ongoing economic processes in both countries.

GPI HOLDING WILL INSURE CITRUS ORCHARDS

n the framework of the state agro insurance program GPI Holding will insure citrus orchards. Agricultural Projects Management Agency and insurance company GPI Holding will hold first informational meeting with farmers on September 12 in the village Akhaksheni, Khelvachauri municipality. The company informs that on the meeting citrus producers will get information booklets about agro insurance, submission of applications will also be possible. Besides, every person who comes on the meeting and has child under 7, will get children books as gifts. In the framework of the State Agro Insurance Pi-

lot Project, according to government’s order, upper tariff of the citrus (tangerine, lemon) is 11%, out of which co-funding o the agency will be 8%, contribution of farmer - 0,5%-3%. It’s noteworthy that normative price for tangerine/1 hectares equals to 12 000 GEL, for lemon - 24 000 GEL. As for normative price for 1 kg, in the case of tangerine it’s 0,48 GEL, for lemon - 0,96 GEL. As for subtropical cultures (kiwi, subtropical persimmon, feijoa), upper limit of the insurance tariff is 14%, co-funding of the agency - 10%, for farmer - 0,5%-4%. 1-year program started from September 1. Its budget is 5 million GEL.

September 15, 2014 #67

CIS & IRAN September 15, 2014 #67

caucasian business week

LUKOIL INVESTS OVER $300 MLN IN UZBEKISTAN’S HYDROCARBON EXPLORATION

IRAN’S PRIVATE SECTOR TO REALISE WATER PROJECTS WORTH $300 MLN

ussia’s Lukoil Company invested $301 million in hydrocarbon exploration and production in Uzbekistan in January-June 2014. This figure is 16.2 percent more compared to the same period of 2013, Lukoil said. The projects in Uzbekistan are operated by the Lukoil Uzbekistan Operating Company - a subsidiary of Lukoil Overseas Holding Ltd., which represents Lukoil’s interests in the international oil and gas production. Lukoil is one of the largest foreign investors in Uzbekistan. Since 2004, the company has invested over $3 billion in the Uzbek economy.

he Iranian private sector has signed an agreement with the country’s Energy Ministry to implement water and wastewater projects in the country, worth over $300 million. Based on the agreement, seven projects will be implemented in six provinces, Fars news agency reported on September 8. The projects include: supplying water to Khash city in Sistan-Baluchestan province, supplying water to Garmsar city in Semnan province, establishing water desalination facilities in Bandar Torkman and Gomishan cities in Golestan province, establishing wastewater treatment plant in Zavareh city in Isfahan province, establishing water desalination facility in Kerman province, and establishing water and wastewater treatment plants in Tehran province, are the seven projects. Iranian Industry, Mine, and Trade Minister Mohammad-Reza Nematzadeh said earlier that the

Currently, Lukoil works in Uzbekistan on the implementation of the three projects - KandymHauzak-Shady-Kungrad, the mining of the Southwestern Hissar, and the conduction of exploration of the Uzbek part of the Aral Sea in the international consortium. Lukoil plans to produce 18 billion cubic meters of gas annually by 2017 and to increase the amount of investments up to $5 billion within the frameworks of the first two projects. Lukoil plans to produce in Uzbekistan at least 18 billion cubic meters of gas annually by 2020. The company’s cumulative gas production in the country currently exceeds 22 billion cubic meters.

POLAND STOPS REVERSE GAS FLOW TO UKRAINE, KIEV BLAMES RUSSIA

kraine’s state-controlled gas transit company says Poland cut off reverse flows to Ukraine, alleging that a quarter of Russian gas imports to Poland went missing. Gazprom said it continues to supply the same amount of gas as previously. Uktransgaz CEO Igor Prokopiv accused Russia of reducing supplies to “disrupt reverse deliveries” from Poland. “At 2pm Poland stopped reverse gas flows to Ukraine, which had been in the range of 4 million cubic meters,” Prokopiv told journalists in Kiev on Wednesday. “Today Poland put in an order for 11 million cubic meters a day, and Russia confirmed orders for 7 million cubic meters. Those 4 million cubic meters are our reverse flows.” Poland’s state-controlled gas company PGNIG said in a statement Wednesday that deliveries from Russia that traveled through Ukraine and Belarus had been reduced 20 percent on September 8 and 24 percent on September 9. PGNiG said it was working to find out why volumes were down in the past two days. In the meantime, Russia has denied that its staterun gas giant Gazprom has been limiting flows to Poland. “Reports by news agencies on the reduction of volumes of gas supplies by Gazprom to Poland’s PGNiG are incorrect,” Itar-Tass reported Gazprom spokesman Sergey Kupriyanov as saying. “The same volume of gas as in previous days – 23 million cubic meters a day – is being supplied to Poland now.” Before Gazprom issued its statement, Uktrans-

gaz’s Prokopiv blamed Russia for trying to “derail” the plan for Poland to supply Ukraine with “reverse” gas, while Ukraine refused to pay its debt to Gazprom and is currently cut off from Russian supplies, and accused Russia of limiting the supply of gas. Poland established a reverse-flow gas scheme with Ukraine in April 2014, under which Kiev can receive 4 million cubic meters of gas per day. In August, Russia’s energy minister, Aleksandr Novak, warned that in the upcoming winter Ukraine may begin siphoning off Russian supplies intended for Europe if it fails to build up its reserves. He said that Ukraine had stockpiled up to 16 billion cubic meters of gas, but needed to pump as much as 10 billion more into storage. Ukraine is seeking reverse-flow gas as it can no longer import gas from Russia, which halted non pre-payment gas deliveries in June over debt and pricing disputes. Gazprom says that Kiev’s Naftogaz has accumulated more than $5 billion in unpaid gas bills and also says it will not offer Ukraine a lower gas price than $385 per 1,000 cubic meters, a price Kiev is still fighting to reduce. EU Energy Commissioner Guenther Oettinger said Sept. 3 that the bloc was preparing a “Plan B” to protect gas supplies in the worst-case scenario on energy security. The plan would bar the EU from “re-selling” any gas to keep enough supplies to heat the continent through the winter months. Ukrainian natural gas consumption is estimated at about 50 billion cubic meters per year, while the country’s own production is about 20 billion cubic meters.

government is trying to facilitate the private sector’s investment in national projects. “The government is trying to help the private sector to construct more factories,” he said. He further asked the people to buy domesticallymade products instead on imported goods, saying that it will help to create more job opportunities.

S&P SAYS HIGHER CAPITAL REQUIREMENTS FOR KAZAKH BANKS NOT TO REMEDY BUSINESS ACTIVITY

he Kazakh banking regulator’s plan for a tenfold increase in minimum capital requirements will not be a cure-all for the country’s weakened financial system, Standard & Poor’s Ratings Services said on September 8 in the report “Capital Alone Won’t Strengthen Kazakh Banks.” One of the latest parts of the banking regulator’s initiative to support Kazakh banks is to raise minimum capital requirements to Kazakh 100 billion tenge ($546.2 million) from the current 10 billion tenge (182 tenge = $1), effective Jan. 1, 2019. As of July 1, 2014, 33 of the 38 banks in Kazakhstan stood short of the proposed 100 billion tenge capital requirement. “Such a sharp increase in the absolute amount a bank may be required to hold to do business might unleash a series of mergers and acquisitions across the banking sector in the coming years, with some of the smaller players being swallowed up by larger ones,” the report says. “Although consolidation could create opportunities for the Kazakh banking sector over the long term, the system’s major weaknesses--the lenient

banking regulation and supervision, banks’ aggressive risk management practices, and sometimes deficient corporate governance procedures are very likely to remain,” said Standard & Poor’s credit analyst Ekaterina Marushkevich. “Furthermore, the resulting higher barriers to entry could lower the sector’s attractiveness to foreign investors.” Still, the agency currently does not anticipate that the proposed regulation will affect the ratings on Kazakh banks over the next two years, given that the capitalization analysis focuses more on the amount of capital compared with risk assets rather than on the absolute amount of capital.

KAZAKHSTAN-EU COOPERATION CHINA, RUSSIA REPORTED TO BUILD REACHES NEW LEVEL azakh Foreign Minister Yerlan partner of Kazakhstan for the last few years. The HUGE SEAPORT IN NORTH ASIA Idrisov met with the head of the trade turnover between Kazakhstan and the EU

hina and Russia are to build one of the largest ports in northeast Asia on Russia’s Sea of Japan coast, Chinese media reports. It is the latest step by Beijing and Moscow to bring their economies closer, and diversify from Western influence. The new seaport will be located in Russia’s Far East, just 18 kilometers away from the Chinese border and will be capable to handle up to 60 million tons of cargo a year, China’s state-run

People’s Daily Online reported. The deal between the two countries was signed at May’s Conference on Interaction and Confidence Building Measures in Asia (CICA) in Shanghai, the report said. Chinese booming domestic consumption makes the country search for ways to diversify its sources of energy. Russia, in turn, is seeking to refocus its trade towards Asia from western markets amid the tit-for-tat sanctions over the crisis in Ukraine. In August the two countries agreed to set up a special logistics center which will allow to sell fruit and vegetables directly to Russia, which is expected to offset any negative effect of the Russian food embargo. READ MORE: Russia bans agricultural products from EU, USA, Australia, Norway, Canada On September 1 Russian President Vladimir Putin Chinese Vice Premier Zhang Gaoli have launched the construction of the first part of Gazprom’s ‘Power of Siberia’ pipeline. The construction follows a historic gas deal signed in May which will provide the world’s fastest growing economy with 4 trillion cubic meters of natural gas it needs to keep pace for the next 30 years.

European External Action Service (EEAS) department for Russia, Eastern Partnership, Central Asia Regional Cooperation and OSCE countries, Gunnar Wiegand, the Kazakh foreign ministry reported. The issues relating to the eighth round of negotiations on a new agreement on expanded partnership and cooperation between Kazakhstan and the European Union were discussed at the meeting. It was stressed that the sides conducted largescale operations as part of the negotiation process with good results. Idrisov emphasized that the new agreement confirms the mutual growing interest in establishing closer, privileged and mutually beneficial cooperation in all spheres. It will create a favorable sphere for the active involvement of the European business and investments in the development of Kazakhstan’s economy, as well as open up new opportunities in various fields. They also discussed issues of bilateral cooperation, including the liberalization of the visa regime and economic cooperation, Kazakhstan’s accession to the WTO, as well as regional and international agenda. The EU has been the leading trade and investment

amounted to $53.4 billion in 2013. The trade volume between Kazakhstan and the EU amounted to $28.4 billion in the first half of 2014, which corresponds to 54.7 percent of the total foreign trade turnover of the country. Some 49 percent of foreign capital in Kazakhstan’s economy is of European origin. The inflow of direct investments from the EU countries in the Kazakh economy amounted to more than $92.7 billion (out of drawn $189.7 billion) from 1993 to the first quarter of 2014.

AZERBAIJAN 10 GLOBAL COMPETITIVENESS REPORT 20142015 - REPORTS - WORLD ECONOMIC FORUM

September 15, 2014 #67

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AZERBAIJAN ENJOYS OPPORTUNITIES FOR FURTHER IMPROVEMENT OF COMPETITIVENESS RANKING

zerbaijan enjoys all required opportunities to further improve its positions in the competitiveness ranking of the World Economic Forum (WEF), President of the Azerbaijani Marketing Association Jahangir Najafov told Trend Sept. 3. According to the Global Competitiveness Report for 2014-2015, released by WEF on Sept. 3, Azerbaijan has improved its positions in the competitiveness ranking to 38th among 144 countries. “This is a very positive change for Azerbaijan,” he said. “Azerbaijan yielded only to Estonia among the countries of the former USSR. For the first time in the history, Azerbaijan was able to overtake two Baltic republics - Latvia and Lithuania in the rating. Azerbaijan is ahead of Russia and Kazakhstan in the ranking. This is the result of fruitful works of the Azerbaijani leadership.” He stressed that it is necessary to improve the system of licensing and customs duties to further strengthen Azerbaijan’s positions in the competitiveness ranking. He also stressed that the main condition for improving the position of Azerbaijan in the WEF competitiveness ranking is further liberalization of foreign trade. WEF rankings are based on a combination of available statistics and a survey of business executives. The survey is in fact a comprehensive annual survey conducted by the World Economic Forum together with national partners - leading research institutes and companies that specialize in competitiveness and economic development in the countries analyzed in the report.

WORLD NEWS September 15, 2014 #67

caucasian business week

CUBA CALCULATES COST OF 54YR US EMBARGO AT $1.1TN

uba says its economy is suffering a “systematic worsening” due to a US embargo, the consequences of which Havana places at $1.1 trillion since Washington imposed the sanctions in 1960, taking into account the depreciation of the dollar against gold. The US blockade against Cuba remains in force and intensifies its extraterritorial nature with increasing harassment against third-country firms and banks doing business with Cuba. This was the message from Cuban Deputy Foreign Minister Abelardo Moreno, who presented the country’s government annual report to the United Nations on the US sanctions. “There is not, and there has not been in the world, such a terrorizing and vile violation of human rights of an entire people than the blockade that the US government has been leading against Cuba for 55 years,” Abelardo Moreno told reporters. This persecution is increasingly fierce and intense, and it has become a real financial war, Moreno added. He accused Washington of carrying out the “implacable persecution’” of investors in Cuba and the country’s financial transactions via the numerous sanctions that create substantial disincentives for establishing economic links with Havana. The damage to Cuban foreign trade between April

2013 and June 2014 amounted to $3.9 billion, the report said. Without the embargo, Cuba could have earned $205.8 million selling products such as rum and cigars to US consumers, it added. Moreno also emphasized the damage inflicted on tourism, with that sector being unable to earn at least $2 billion due to the impediments on traveling to the island imposed on US citizens. What is of even more importance for ordinary people is the fact that the US prevents the country from providing basic, necessary and free services to its population. Among them, the deputy foreign minister named education and health care. In that regard, Moreno denounced that 22,875 students with special needs have been affected by damages caused by the US blockade against Cuba. In the health sector, no figure can “reflect the intangible costs of the social and human importance of the damage caused by the impossibility of getting access to medications and technology,” the deputy foreign minister said. He also blamed the embargo for the difficulties in accessing internet on the island, saying that the United States creates an obstacle for companies providing broadband services in Cuba. Additionally, he said that the area is one of the “most sensitive” to the embargo, with economic losses estimated at $34.2 million. It is also the sector that has fallen “victim of all kinds of attacks” by the US, as violations of the Cuban radio or electronic space “promote destabilization” of Cuban society, the report notes. The United Nations General Assembly, which lacks the power to enforce resolutions, has passed a resolution calling to end the blockade of the communist island-nation 22 years straight. Barack Obama last week signed the one-year extension of the embargo on Cuba, based on the Trading with the Enemy Act of 1917, created to restrict trade with countries hostile to the US.

EU PUBLISHES RUSSIA SANCTIONS LIST: ENERGY, FINANCE, DEFENSE TARGETED

rms producer Kalashnikov and oil giant Rosneft are among Russian companies hit by a new round of EU sanctions, which have come into effect Friday morning upon being published in the EU Official Journal. Moscow on sanctions: ‘EU unwilling to see Russia’s efforts on Ukraine’ The sanctions target the finance, energy and defense sectors. The union has restricted three Russian energy companies from raising long-term debt on European capital markets – Rosneft, Transneft and Gazprom Neft. The EU has also halted services Russia needs to extract oil and gas in the Arctic, deep sea and shale extraction projects. The export of any technology considered military ‘dual-use’ has been banned from nine Russian companies, including the manufacturer of Kalashnikov rifles. Five major Russian state-owned banks – Sberbank, VTB, Gazprombank, Vnesheconombank (VEB) and Rosselkhozbank - have been banned from receiving any long-term (over 30-day) loans from EU companies. Brussels has also added 24 individuals to the list, blocking travel to the EU and freezing assets. Russian MPs and businessmen, as well as politicians in Crimea and Donbass, are on the blacklist. The US is going to join the EU initiative with its

own set of sanctions to be announced later in the day. READ MORE: Finance, energy & defense sectors: EU and US set to impose new Russia sanctions The EU package of sanctions against Russia was adopted on Monday, and had to be officially published before coming into force. Brussels has said the list of sanctions could be reviewed and they could be revoked if the situation in Ukraine improves. “Depending on the situation on the ground, the EU stands ready to review the agreed sanctions in whole or in part,” the president of the European Council, Herman Van Rompuy said in a statement. READ MORE: Moscow on sanctions: ‘EU unwilling to see Russia’s efforts on Ukraine’ Moscow has described the sanctions as counterproductive and coming at the wrong moment, when Russia has helped negotiate the latest ceasefire in Ukraine and has already signaled its commitment to facilitating peace in the region. The presidential spokesman, Dmitry Peskov, said on Thursday that Brussels either fails to see or “is unwilling to see the real situation in Donbass and does not want to get informed about the steps the parties are taking towards settlement.” Russian authorities have vowed to support the companies hit by Western sanctions and have promised to adopt a package of retaliatory sanctions in response.

US EXTENDS RUSSIA SANCTIONS, TARGETS BIGGEST LENDER SBERBANK & GAS GIANT GAZPROM

T CHINA FINES CHRYSLER, AUDI $46MN FOR PRICE FIXING

hina’s anti-monopoly regulator announced Thursday its first punishment of a foreign carmaker for price-fixing, fining Audi and Chrysler a combined $46 million. The Chinese National Development and Reform Commission fined FAW-Volkswagen Sales, which markets Audi in the country, $40.6 million. It also fined eight Audi distributors a total of $4.9 million. “We accept the penalty and we have been optimizing the management processes and sales and dealership structure,” the Financial Times quotes Audi in China as saying. In turn Chrysler, a part of Fiat Chrysler Automobiles, was fined $5.2 million for enforcing minimum prices for vehicles sold by dealers in Shanghai, according to the city’s price bureau. Three of its dealerships were fined a combined $343,000, the NDRC said. The Punishment for Chrysler and Audi didn’t come as a surprise. The NDRC had previously said the two carmakers had broken anti-monopoly law.

Audi admitted it had partially breached the rules. The penalties increase the possibility of similar fines against Daimler’s Mercedes-Benz and Tata Motor Jaguar Land Rover, as the companies are being investigated for possible anti-competitive behavior. In recent weeks the Chamber of Commerce has responded, challenging the Chinese investigations, saying that foreign companies were unfairly targeted. However NDRC denied the selectiveness. “If people say we are selective [towards foreign companies], the truth is that we do not have the time and energy to select,” the Financial Times quotes Xu Kunlin, a senior official at regulator NDRC. “We do not select which companies to look into - the consumers do the selecting. We investigate the companies where we receive well-grounded complaints,” he added. In August 12 Japanese auto parts makers were fined about $200 million for manipulating prices in China.

he US has introduced new sanctions against Russia’s biggest lenders – Sberbank, Gazprombank and Rosselkhozbank – and added some of the country’s state-owned technology firms and five energy companies, the Treasury said on Friday. Another Russian lender, Bank of Moscow is also on the blacklist. In the oil sector, there will be new limitations on exploration facilities for Gazprom, Gazprom Neft, Lukoil, Surgutneftegaz, and Rosneft. The US also said it would prohibit “transactions in, provision of financing for, or other dealings in new debt of greater than 90 days maturity issued by two additional Russian energy companies, Gazprom Neft and Transneft.” The US said it was joining European allies, as Russia keeps on with“direct military intervention and blatant efforts to destabilize Ukraine,”Treasury Secretary Jack Lew said in a press release. EU publishes Russia sanctions list: Energy, fi-

nance, defense targeted However, the US said it was ready to withdraw some of the sanctions against Russia, if Ukraine and the militia in the east of the country fulfill the Minsk agreement sealed in early September, as ITAR–TASS quotes a US spokesman. While on paper sanctions have become tougher, in fact little will change for Sberbank, the lender’s head Herman Gref said. “Given the fact that the [western debt] markets are de facto closed today, the financing for three months, or for even 30 days is no longer possible. Therefore de jure sanctions worsen the situation, but de facto nothing new has happened,” Gref said. Sberbank has also started exploring new capital markets, Gref added. “We are exploring all possibilities. Our objective is to explore everything that can somehow be used in such a situation,” Gref added. However, he declined to comment on whether Sberbank will place its securities on alternative capital markets this year.

PUBLICITY caucasian business week

TBILISI INTERNATIONAL FESTIVAL OF THEATRE International Program

with elegant touch of reality… SEPTEMBER 20 - OCTOBER 8

27 SEPTEMBER Song of the Goat Theatre (Teatr Pieśń Kozła), Poland

SONGS OF LEAR Based on “King Lear” Directed by Grzegorz Bral

Songs of Lear seems to have already passed into legend even though it’s only a work in progress. The Guardian ABOUT PERFORMANCE Songs of Lear is a non-linear dramatic event that shows the world of subtle energies and rhythms that govern Shakespeare’s tragedy. The ensemble members have chosen crucial scenes from King Lear to weave a story out of gestures, words and music. Each song is a starting point for another ‘dramatic poem’. Here the music becomes character, relationships and events. The creative process has been divided into several phases: preparation of the concert, dramatizing the songs (an oratorio), creating movement and visual structures, integrating text, music and movement and finally molding the performance into a mature shape. Songs of Lear is a constantly evolving creative research project in which audience may witness a very intimate artistic process. Duration: 65 Minutes, without intermission Web-site: www.songsoflear.com www.tbilisiinternational.com www.facebook.com/TbilisiInternational

PERFORMANCE WAS SUPPORTED BY

September 15, 2014 #67

TBILISI GUIDE September 15, 2014 #67

Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi. E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: +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: zhangling@access.sanet.ge Republic of Bulgaria Embassy 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08; E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail: ukraina_pu@wanex.net; emb_ge@mfa.gov.ua Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Av., Tbilisi Tel: 225-20-72/73/74/76 E-mail: turkemb.tbilisi@mfa.gov.tr Address: 8, M. Abashidze str. Batumi, Georgia tel: (8-88-222) 7 47 90 Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00 Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16

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

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

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

Restaurants CHARDIN 12 Tbilisi , 12 Chardin St. , Tel: 92 32 38 CAFE 78 Best of the East and the West Lado Asatiani 33, SOLOLAKI 032 2305785; 574736290 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

September 15, 2014 #67

PUBLICITY September 15, 2014 #67

caucasian business week

PUBLICITY caucasian business week

September 15, 2014 #67