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September 22, 2014 #68

September 22, 2014, Issue 68

GEORGIA HUALING GROUP PLANS TO OPEN MEAT-PROCESSING ENTERPRISE IN GEORGIA

isit of Vice Premier of Georgia George Kvirikashvili in China, SIanzin-Yuguret Autonomous District was continued. Pg. 2

caucasian1

BE INFORMED, DO BUSINESS

MCDONALD’S VS WENDY’S

Temur Chkonia: Khachapuri, Bean and Khinkali Restaurants Record Higher Turnover than Wendy’s

Iakobashvili to Invest Additional 30 million USD in Georgia

et profit of the banking sector equals to 258,7 million GEL (01/09/13 - 215 million). Profit was 43,7 million GEL in

August.

Pg. 2

Pg. 4

BANK SECTOR ENDS JANUARY TO AUGUST PERIOD IN 258.7 MILLION GEL PROFITS

Dhabi Group plans to increase investment in Georgia

Pg. 2

AZERBAIJAN CAR PRODUCTION INCREASES IN AZERBAIJAN

Bank Republic Welcomes New CEO

CIS RUSSIAN BILLIONAIRE YEVTUSHENKOV UNDER HOUSE ARREST IN MONEY LAUNDERING CASE

SCOTTISH REFERENDUM: SCOTLAND VOTES ‘NO’ TO INDEPENDENCE cotland has voted to stay in the United Kingdom after voters decisively rejected independence. Pg. 13

BUSINESS

FIRST IPHONE 6 IN THE WORLD WAS SOLD IN GEORGIA

DIRSI COMPLEX ARISES ON THE FORMER TRASH DUMP The Comnpany Management Expresses Irritation over Questions on Ecological Problems

WORLD NEWS

Pg. 2

Pg. 5

he Dirsi development company is about completing one of the major construction projects in Tbilisi. The complex is being built in the Isani District, Tbilisi. According to the project authors, Dirsi buildings are strong and reliable. They also make focus on ecological side of the prpoject. According to the project authors, the complex will be one of the cleanest spaces in Tbilisi. When talking about ecological side of the project, the capital city residents, first of all, recall the fact the place on the left bank of the river Mtkvari, where Dirsi complex is being constructed, represented a trash dump previously. In general, according to the international standards, it is in-

admissible to construct residential complexes on trash dumps or nearby, because for many years wastes processing emites toxical substances that are hazardous for human health. Chemical processes of trash dumps continue for several tens of years. Therefore, according to the adopted standards, they are closed and the territory exploitation is forbidden in any form. The Dirsi management has also announced plans for constructing a boulevard on the current territory, on the embankment of the river Mtkvari. In AD and other information spaces the company, however, avoids explaining the methods for removing specific and unpleasant smels of sewage currents that run into the river Mtkvari nearby. Pg. 5

FOODPANDA ACQUIRES 12 IMPORTANT DINING POINTS OVER THE COURSE OF SUMMER Pg. 5

THE COFFEE BEAN & TEA LEAF ALREADY IN GEORGIA Pg. 5

ANOTHER SUCCESS OF GEORGIA IN EUROPE Pg. 5

Irakli Lekvinadze: It is Bank Sector’s Interest to Upgrade Knowledge of Financial Issues in Population

Pg. 4

“Ardi”: Public Tenders Bankrupt Business

Pg. 4

MAIN EVENTS September 22, 2014 #68

caucasian business week

IAKOBASHVILI TO INVEST ADDITIONAL BANK REPUBLIC WELCOMES 30 MILLION USD IN GEORGIA NEW CEO

etrocas Energy Group plans to invest 30 million USD in Georgia-based oil terminal to double its output, David Iakobashvili, the group owner, noted. “We will enlarge the terminal. New assets are required. I believe new volumes will be imported from Iraq (Kurdistan). They will send the oil, because its transportation via Iran is impossible. They find Georgia acceptable”, Iakobashvili told the investment forum SOCHI 2014 in Sochi, the Russian Federation. At this stage, the terminal’s output is about 2 million tons and his investments will double the figure. The businessmen started investing in Georgian assets in spring 2011. Besides terminal, he owns Achara casino, Gulf refueling network and Outdoor. ge AD company.

DHABI GROUP PLANS TO INCREASE INVESTMENT IN GEORGIA

hairman of Dhabi Group - Sheikh Nahyan Bin Mubarak Al Nahyan stated about it on the meeting with Prime Minister Garibashvili. Sheikh informed Prime Minister about the design of the hotel, which has been building in Tbilisi, and other details. He also mentioned that construction of the 5-star hotel will be completed at the end 2015. Nahyan Bin Mubarak AL Nahyan stated that the hotel, which is being constructed on Rustaveli Avenue, in the former Imeli building, will have integrated amusement and trade center. “Georgia has a powerful infrastructure, good ser-

vices, good laws, security and transparency. All these promote attraction of the investments. We hope that visit of Georgian Prime Minsiter will foster enhancement of relations between United Arab Emirates that Georgia and increases number of investments in Georgia”, -Sheikh stated. Reminding that Arabian Dhabi Group purchased 80% share of so called Imeli building in March 2008 from the company Capital Vostok for $22 million. At first Kaminski, then Millennium was nominated as hotel managers. According to released information, $80 million will be invested in the hotel construction.

HUALING GROUP PLANS TO OPEN MEAT-PROCESSING ENTERPRISE IN GEORGIA

isit of Vice Premier of Georgia George Kvirikashvili in China, SIanzin-Yuguret Autonomous District was continued. George Kvirikashvili held meetings with the Chinese corporations, which have already started activities in Georgia or plant business for the future. Representatives of Chinese corporations expressed special interest to the business environment in Georgia, also the opportunities created by Free Trade with EU. The case is about investment in the sectors such as industry, energy, agriculture and so on. George Kvirikashvili stated that it’s pleasant when will of Chinese political and business circles coincided about enhancement of economic relations with Georgia. Therefore, Georgia should use the moment to offer industrial potential to Chinese investors. Vice Premier visited meat-processing enterprise of the corporation Hualing Group, which prepared product for export. The company, which has invested several hundreds million USD investment in Georgian economy, plans construction of livestock breeding and meat processing enterprise in Georgia to produce so called “green product”. Besides, Georgian government dis-

cusses awarding Free Industrial Zone in Kutaisi, which will issue export products. In the Urumch city Minsiter of Economy also visited a constructing residential hall, which belongs to Hualing Group. Chinese company plans construction of similar complex at the Tbilisi Sea territory. George Kvirikashvili also visited head office of corporation TBEA and enterprise, which produces equipment in energy sphere and it’s one of the largest throughout China. George Kvirikashvili and head of Chinese corporation Juan Xanjdei symbolically planted a tree in the yard of corporation. Vice Premier offered opening enterprises in Georgia to the leadership of TBEA. “During the meeting with Vice Premier of Georgia we got very significant information about the local energy complex. We got interested in this issue and soon we’ll send special group in Georgia to study situation on the place. We already work in the Central Asia, Georgia is at the border of the region and therefore, we hope to develop successful relation in the energy sector”, - head of Chinese corporation stated. At the end of the visit George Kvirikashvili also visited economic and technological development zone in Urumch city.

HUAWEI EXPRESSED INTEREST IN THE TECHNOLOGICAL PARK IN GEORGIA

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.

BUSINESS WEEK caucasian

The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW DISTRIBUTED FREE OF CHARGE Director: Levan Beglarishvili Mobile phone: 591 013936; 577965577 Commercial Department: Irakli Lekvinadze Email: caucasianbusiness@gmail.com WWW.CBW.GE

tarting from October this year, Bank Republic welcomes a new CEOAntoine Gabizon. He will replace Christian Carmagnolle, who has led the bank since December, 2010. Several days ago, Christian Carmagnolle and Antoine Gabizon, together with the members of high-level delegation from Societe Generale Paris, hosted clients and partners on the terrace of Radisson Blu Iveria hotel to celebrate the 150th Anniversary of Societe Generale. The welcoming ceremony was followed by the concert of prominent young Georgian talents, in line with the bank’s CSR policy, and dinner. “If I were given three words to describe the period of my work in Georgia, the words would be: luck, happiness and trust. I am lucky because I witnessed vital changes in Georgia’s history, its economic and political evolution, change of government in the peaceful way and signature of association agreement with EU. I am happy when I go to work every morning, meet my clients, partners and work with my valuable, professional and highly motivated staff. I trust the future of Georgia, the future of Bank Republic. We, at Bank Republic, are honored to have the trust of our shareholder Societe Generale, the trust of our clients in our sustained success and our way to becoming a reference bank, who are gathered here tonight to celebrate the 150thAnniversary and whom I would like to thank for that.”, said Christian Carmagnolle in his speech. “This is my first time in Georgia and with Bank Republic and I could not have dreamt of a better way to get to know our dear clients and partners

and our colleagues. I am delighted to be here for two reasons: first reason is the continued successful operation of Bank Republic, the comprehensive set of services it is delivering, as well as the growing number of its quality client base, and second - all the nice things I have heard about Georgia. Together with Bank Republic’s team, I am very eager to continue the good work done by Christian Carmagnolle, providing our clients with best possible services.”, said Antoine Gabizon at the reception. With over thirty years of banking experience, Antoine Gabizon has served on various managerial positions at Societe Generale. Over the last decade, he has been leading Societe Generale subsidiaries in Hong Kong, Kazakhstan, Ukraine and Romania. Mr. Carmagnolle’s next assignment is the Societe Generale’s Banque de Polynesie.

BANK SECTOR ENDS JANUARY TO AUGUST PERIOD IN 258.7 MILLION GEL PROFITS

et profit of the banking sector equals to 258,7 million GEL (01/09/13 - 215 million). Profit was 43,7 million GEL in August. By September 1, 2014 the sector

is represented by 21 commercial banks, among them 17 - with contribution of the foreign capital in the authorized capital, 2 branches of the foreign bank. Contribution of the foreign capital in the gross paid-in share capital exceeds to 75%.

EIB TO OPEN OFFICE IN TBILISI

bilisi (European Investment Bank (EIB) plans office opening in Tbilisi and funding of the new projects. It became known on the meeting of Minsiter of Regional Development and Infrastructure David Shavliashvili and representatives of EIB. On the meeting the sides discussed future cooperation perspectives. EUB will assist Georgia, which has signed Association Agreement with EU, in all directions, which will promote ap-

proach of the country to European standards. One of the largest donor organizations of the world expressed interest in the implementation of several new projects in Georgia, among them: introduction of security measures in the tourist zones, Kutaisi water supply project and construction of Rikoti section of E60 highway. At the end of the meeting EIB invited representatives of the ministry in Armenia, on the conference organized by EIB and Asian Development Bank, main topic of which is water supply.

RIXOS HOTEL IN LIKANI TO RECEIVE FIRST GUESTS BY 2015

artnership Fund informs that construction and equipment works of the hotel are intensively going. During his visit to Georgia director of Kazmunaigas-Service Batirbek Basheev visited current works with management of Partnership Fund. “We plan to officially open the hotel till the end of the year and open first guest”, - executive director of the fund Irakli Kovzanadze stated. Reminding that Partnership Fund and Kazmunaigas-Service jointly provide construction of 5-star hotel.

152-room hotel will be equipped with the modern infrastructure, which is necessary for the rest. Health and fitness procedures will be available in the complex. The project considers also rehabilitation of roads, parking, amusement center and auxiliary buildings adjacent to the hotel. Total investment value of the complex equals to $38,5 million. Contribution of the fun is 50% of the capital. Turkish company Decon works on the equipment of the hotel with modern technologies, furniture and other necessary elements. World known operator RIXOS will provide its management.

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 22, 2014 #68

caucasian business week

INTERVIEW caucasian business week

“IT IS BANK SECTOR’S INTEREST TO UPGRADE KNOWLEDGE OF FINANCIAL ISSUES IN POPULATION” The CBW has interviewed economic expert Irakli Lekvinadze on several moments over the 2013 financial report of the National Bank of Georgia (NBG).

- According to the NBG report, quick upturn of nonbank financial sector was one of the main challenges in 2013. This factor has grown the loans payment burden of our population. Do you think this challenge is really heavy and what would you suggest our population in relation to the microfinance sector and so-called usurers ? -The nonbank financial sector is divided in two parts, the regulated one (credit unions and microfinance organizations) and the unregulated one (pawn-shops, online credits and online installment schemes and usurers). The growth was registered in both directions. Namely, according to the 2013 indicators, the credit portfolio of the microfinance sector is over 600 million GEL and the figure is up by 100 million GEL compared to the previous year. There are no exact reports on the unregulated sector, but it is clear that the sector has recorded serious upturn and the sector’s revenues are valued by hundreds of millions of GEL. These sectors offer expensive financial products to the market and it is natural, along with the market growth, the loan burden also becomes heavy. On the other hand, there is full freedom of choice on the Georgian financial market. There are vari-

ous credit products tailored to consumer interests and potential. The main challenge is that the citizens’ financial conditions are not improved at the pace that is required to serve their financial liabilities or coming financial needs. This is a main reason more and more citizens apply to both microfinance organizations and usurers to serve the current consumer requirements or complicated bank liabilities. As to the advices, according to our legislation, any physical and legal body is able to provide financial services. Therefore, all abovementioned directions are legal. The consumers take decision themselves and they should analyze whether they are able to serve the liabilities. If the borrowers cannot use bank credit resources, because the bank negatively appraises risks, and go to the nonbank sector, then they should be very cautious and they should not take such liabilities if there is no source to serve the credits without problems. In this case it is reasonable to abstain from taking a credit despite the situation, because the existing complicated conditions will further worsten instead of alleviation, and all other accompanying negative factors will also arise. The encouraging factor is that, unlike the previous period, the consumers’ credit culture has been upgraded. The consumers have collected quite big experience and they take decisions over credits with caution. At the same time, the financial sector also carefully appraises risks. All these factors will ensure minimization of unpleasant surprises between the sides. - There are many questions about properties the financial sectors seize and appropriate. Do you find this process to be just and is not it the financial sector’s predatory interest ? - We should agree that the financial service implies two parties, a lender and a borrower and their relations are regulated by a contract agreement that must include all available development of processes along with expected outcomes. The parties assume obligation by concluding these agreements and ignoring these obligations bring due financial responsibility. This responsibility implies sales of the mortgaged real estate. Therefore, myths as if commercial banks, microfinance organizations and even usurers aspire for appropriating real estates are absolutely ungrounded.

Any financial institution prioritizes to take back the issued financial resource under agreed interest rates in agreed terms. All other steps depend on the quality of complication of credit relations. As a rule, both banks and microfinance organizations restructure loans prior to taking decisions on real estate sales and offer more acceptable schedules for payment, more preferential periods and if even these measures fail to bring positive results, the companies resort to sales of real estate to satisfy their just interests. I have recently read a quite interesting research by Society and Bank nongovernmental organization.The work clearly proves the results of the approach I have described above. Namely, from October 2013 to May 2014 only 952 mortgaged real estates were sold, including 172 real estates (18.07%) were sold by commercial banks, 157 ones (16.49%) by microfinance organizations and the remaining 623 (65.44%) - by private usurers. The fact is that the problem of citizens damaged by mortgage loans is mainly related to contract agreements concluded with private usurers, while bank and regulated nonbank sector show different approaches to bad loans. -The 7-month period you have mentioned seems very pessimistic. In this short period about 1000 real estates have been sold in such a small country as Georgia. What measures should be taken to alleviate the situation? -I have noted above the increased credit culture among consumers raises hopes, but a lot of work should be still done in this direction and this job should be, first of all, performed by the financial sector. The more informed is our society on credit relations, the more the financial sector itself will be protected from excessive risks. Both commercial banks and the microfinancial sector have to work much on the issue. Higher level of awareness of financial aspects is, first of all, in their interests. I think, however, that the current situation will not be mitigated radically without improving the economic parameters. And this depends on a number of local and global factors and I hope the positive tendency, that is discerned in this respect, will become of irreversible charatcer. It is also important that the finance sector improve the risks management and the government refine financial legislation so as to tailor it to consumer interests. The unity of this and other factors will seriously foster upgrading the quality of financial relations and consequently, problematic issues will be minimized in this respect.

September 22, 2014 #68

TEMUR CHKONIA: KHACHAPURI, BEAN AND KHINKALI RESTAURANTS RECORD HIGHER TURNOVER THAN WENDY’S

merican brand KFC will launch operation in Georgia in several weeks. Competition sharpens on Georgia’s fast food restaurants market. Temur Chkonia, a McDonald’s-Georgia founder, comments on the entrance of the American brand. Many and many international brands should launch operation in Georgia so as the service culture and quality go better and the state budget receive serious revenues, Chkonia said. As to the competition with KFC, Chkonia does not consider the American brand as a competitor. There is much difference between McDonald’s and KFC, both in ratings and in menus, Chkonia noted. “We appeared on the Georgian market long ago and McDonald’s is number one restaurant worldwide. If KFC dares and takes risks of entering Georgia, we are in better conditions. They are on starting positions, while we are on the market for many years and we have got loyal clients. Therefore, they will be in more difficult situation”, Chkonia said. It is necessary Wendy’s, KFC, Subway, McDonald’s operate in Georgia, but McDonald’s is a visit card of Georgia and it is higher level. McDonalds is first of all and others come after it, Chkonia noted. Nevertheless, he wished success to KCF and promised to taste their products if he is invited. McDonald’s is a leading company and other fast food restaurants come behind it, Chkonia said. For example, Wendy’s has withdrawd from Russia. Khachapuri, Bean and Khinkali restaurants have got higher turnover than Wendy’s. McDonald’s considers all companies as competitors, but the competition shows up winners and losers and McDonald’s is winner in the competition, Chkonia said. “There are famous ratings of the world’s famous companies due to turnover and quantity of clients. McDonald’s is a leader company due to these ratings. According to the Forbes, McDonald’s ranks 9th or 10th for many years and competes with such strong companies as Microsoft, Google and so on. I do not mean only fast food assets”, Chkonia noted.

“ARDI”: PUBLIC TENDERS BANKRUPT BUSINESS An interview with Executive Director of “Ardi” Kartlos Korganashvili

- You declare that government tenders conducted in Georgia bankrupt business. What is the reason? - A very alarming recent statistic shows it. The number of unfulfilled government contracts has increased. If they grew by 10-20%, this could be the subject for discussion, but the growth is 500-600%. Disruption of any project is a blow to the state and companies, as heavy fines are imposed on them. Formally, hundreds of thousands of companies operate in Georgia but most of them are poor with 2-3 employees.

Problems with the implementation of government projects bring problems not only to companies contractors, but also to their partners, suppliers, etc. It is a whole chain. This is well illustrated by the actions of the previous government, who thought that they affected the interests of only a couple of dozen large companies, but in fact they destroyed almost the entire sector. At the same time, the situation was different under the previous government -projects were not disrupted and on the contrary, the past government was too motivated and practically forced businessmen to implement projects as soon as possible. This caused problems for companies which were under informal pressure during tenders. We can say, it was the state racketeering. Today there is no racketeering anymore, but projects are constantly thwarted. We all should understand that at the present time business is very poorly developed in Georgia, there is no relationship to the business, not only as a mean of making money, but as a process, planning and management. Accordingly, it is very easy to find fault with the companies. The state should be loyal and tolerant to private busi-

ness, and not play the role of a punitive body. Of course, any action can have negative consequences, in particular, companies may feel emboldened and not pay due attention to the implementation of government tenders, this often happens. But we are talking not about forgiveness, but about the legal procedures. It’s an endless process - reforms never finish and always need updating. Businesses should be allowed to work honestly. - Can change of approach make a difference or the government will have to do something else? - If the approach changes, all the rest are details. - Maybe the State needs hard-line approach to ensure the society that there is no relationship between the company and government officials? - The approach liberalization would benefit all, including ordinary citizens. This will not be done for the benefit of a particular company. We have repeatedly appealed to the government to take the necessary measures and pay attention to the alarming statistics, but so far there is no response. In addition, we are not allowed to participate in the selection of members of the Council

of Claims at the Public Procurement Agency. The reason is that our company is a supplier and takes part in tenders. It hampers in defending the interests of business. If the Council member is neither the provider nor the purchaser, never had to deal with tenders, how can he deal with quite complex juridical suits? Therefore, it turned out that actually the Council is a formal body in order to report on the participation of business in the work of the Council. - In your opinion, how long may it take to solve this problem? - Political will is the main thing. Everything can be done in 2-3 months. Many laws, procedures and standards in our country are borrowed from the Western analogues, the same thing can be done here. The lack of approach is the main problem. Unfair processes initiated by the previous government are still ongoing in the courts, as the approach has not changed. Officials in government agencies cannot give up old habits, especially if there is not clearly expressed political will. So, at this stage it is clear that systemic violations need systemic reforms.

BUSINESS September 22, 2014 #68

caucasian business week

DIRSI COMPLEX ARISES ON THE FORMER TRASH DUMP The Comnpany Management Expresses Irritation over Questions on Ecological Problems

e asked the management about ecological issues of the project. They noted AC Group Investment, an Azerbaijani holding, has been operating on the internaitonal real estate market for 10 years. The company launched operation in Georgia in 2011 and in 2012 the it started constructing the South Caucasus’ biggest residential complex Dirsi. The complex covers 40 hectares between Cholokashvili Street and the river Mtkvari. This place was known as Dirsi Gardens in the 20th century. Fruits trees used to blossom on the river bank and Georgian nobility used to relax in the Dirsi Gardens to avoid the capital city heats. At the end of 1990, however, the gardens were chopped down and the territory was made into storehouses and a trash dump for construction wastes. At the first stage of preparatory works, AC Group Investment carried out laboratory examination of the territory. The laboratory tests gave positive results on all problematic issues and the company launched construction works. The first stage was to remove the old soil and to clean up the territory.The company cut off ground of the height of 7 to 11 meters and put the foundation of the buildings on the rocks. The territory was explored in several stages. At the first stage, the company examined the ground on seismic steadiness, as well as the issue of translocation of rocks. The document was prepared by ILIA State University research center. On the ground of this research, a geological report was prepared, under which, the complex foundation was put immediately on the rocks. The second stage implied examination of wa-

ter on the territory. The company made drills and water, not any other compound, appeared in the ground. Expertise bureau took samples of the water and no harmful substances were found in it. The last stage of the territory exploration was related to the preparation of environment impact conclusion. The research showed the construction process would not damage ecological situation and, on the contrary, the process would improve it, as the project calls for planting trees on 25 hectares. This space is three times bigger compared to the Tbilisi City Hall norms. Besides scientific researches, the Dirsi Complex construction quality is determined by the construction technologies. The Dirsi complex is being built by the tunnel gauge technology. Under this technology, 80% of the complex walls are supports, while the construction is monolithic. Constructors and architects assert the construction by tunnel gauge methods is expensive, but the quality and reliability is very high. Similar buildings withstand earthquakes with a magnitude of 9, the Dirsi PR statement reads. P.S. Our questions over the trash dump on the neighboring territory irritated the company management. This issue has been clarified and it is not interesting any more, they noted. Therefore, we note that considerations expressed on the Tbilisi Forum have led us to actualizing the problem. And the Tbilisi Forum is the space, where users every day exspress their attitude to this or that problem. The users have named several other problems concerning the Disri complex. The Banks & Finances will publish information on these problems in the next issues.

FOODPANDA ACQUIRES 12 IMPORTANT DINING POINTS OVER THE COURSE OF SUMMER

ANOTHER SUCCESS OF GEORGIA IN EUROPE

onde Selection, International Institute for Quality Selections was founded in 1961. Since then it sets and evaluates quality / criteria for such products as spirits and liqueurs, beers, waters and soft drinks, food products, diet and health products, cosmetic goods and tobacco. At this contest products are examined by two aspects, organoleptic (or taste) and physicalchemical tests, aiming at ascertaining the product composition and the label compliance. Objective Jury consists of 70 professionals. This year, 3163 products of various categories from 88 countries were presented at the contest.

Natakhtari Beer was presented from Georgia, which got awarded with a golden medal. The awarding ceremony was held in Bordeaux. “Golden Medal of Monde Selection is the proof that a product made in Georgia and Georgian brand are recognized by International Institute for Quality Selections, taking honorable position among European or global brands. In my opinion, every Georgian has to be proud of it. Personally for me recognition of Natakhtari Beer has double significance, since I made my modest contribution to its creation and it is always pleasing to have your correct and qualitative work appreciated.”- said Giorgi Kokiashvili, Technical Director of Efes Georgia.

THE COFFEE BEAN & TEA LEAF ALREADY IN GEORGIA

he fast food market is seeing a rising demand on ordering food online through the website - www.foodpanda.ge . It has gained universal acclaim from people in all circles and of all professions and ages. “foodpanda” offers simplicity, security and a wide range to its consumers. The service, which delivers food to your home without any problems, has raised electronic commerce to new heights. There is no business model competing with foodpanda in Georgia. Throughout the summer, foodpanda has signed deals with 12 important dining points, which include Pueblo, the Mexican restaurant; Burger Bar, Sakhachapure #1, Burrito, Pizza Time, Ronny’s Pizza, Land of Thai, Sushi Room, Prego Reale, Steak House #1, Maharaja, and others. At this point the company is in talks with several famous restaurants and will partner with them in the nearest future. Foodpanda is constantly at work to enrich its restaurant line, but apart from this, the company also takes good care to improve and tweak its service. It’s important to note that all orders from “Subway” can now be processed via online payment, and the method is planned to be integrated into as many restaurants in the future as possible.

HELLOFOOD TAKES OVER COMPETITOR ENTREGA DELIVERY

he oldest and one of the largest coffee-tea-producing international company which establishes a coffee quality in several countries has entered Georgia. A team of professionals always takes care of consumers’ comfort. The coffee bean & tea leaf is the choice of the Hollywood celebrities. The coffee bean & tea leaf is the largest privately owned brand in America, which was founded in 1963 in Southern California.

Georgia is the 25th country for “Coffee bean” which will become a central office in Azerbaijan and Armenia in future. The coffee bean & tea leaf has opened its first store in “Tbilisi Mall” on September 16, the largest shopping center in Georgia which is completed with various international brands. The official opening ceremony was attended by Deputy Mayor Aleksandre Margishvili, Deputy Minister of Economy Keti Bochorishvili and others.

Leading food delivery marketplace makes fourth acquisition in Brazil

ao Paulo, September 19th, 2014: hellofood, together with its affiliated brands foodpanda and Delivery Club, one of the world’s leading food delivery marketplaces, announces today that it has acquired Brazilian food delivery competitor Entrega Delivery. Through this deal, hellofood further strengthens its position in Brazil, after taking over Brazilian food delivery services Peixe Urbano, Jánamesa and MegaMenu last year. The hellofood app and website is now offering access to over 2,000 restaurants in more than 30 cities across Brazil. Entrega Delivery will keep operating under its brand. Marcelo Ferreira, Co-Founder and Managing Director of hellofood Brazil: “We are excited to announce the acquisition of Entrega Delivery and its talented team, which will allow us to strengthen our presence in the strategic cities of Campinas and Belo Horizonte. This acquisition is in line with our strategy to be the top of

mind for every customer, no matter where they are, when it comes to order food online” hellofood launched its service in Brazil in mid 2013. Globally, the company is present in over 40 countries in Europe, Asia, Middle East, Africa and Latin America. Eduardo Penna, Founder and CEO of Entrega Delivery: “We have worked very hard during the last three years, developing strategic alliances with the main players in the local food industry and building trust among our customers. That together with our working ethics and culture, helped us to become the leader of online food delivery in Campinas. With the experience, resources and technology of hellofood, we are ready to take the next big step in order to provide a world class service to Brazilian consumers.” Entrega Delivery started operations in 2010 and operates in Campinas and Belo Horizonte, partnering with over 400 restaurants.

FIRST IPHONE 6 IN THE WORLD WAS SOLD IN GEORGIA

eliko Mekiqauri is owner of the first iPhone 6. Before the start of international sales, company Apple City provided shipping of the most recent Apple model for her. They presented iPhone 6 on September 18, one day before the world presentation. As company representative Alex Revazishvili stated to CBW, price of the first iPhone6 s confidential, as client requested. Meanwhile earlier it was sold cheaper

than price nominated in other shops – 10 000 GEL. He also informs that at the end of the week any person will be able to purchase iPhone 6 in Apple City (#19 Chavchavadze, Tbilisi) and its price will be 2500 GEL. The clients can also use interest-free installment of any bank. Company Apple presented 2 new models: iPhone-6 and iPhone 6 Plus on September 9. It’s noteworthy that sales of the new iPhone start in 5 countries on September 19.

STATISTICS caucasian business week

September 22, 2014 #68

1/3 OF GDP COMES ON TRADE AND INDUSTRY

n the Q2 2014 DGP in the current prices equaled to 7,175 GEL. Real GDP growth to the same quarter of previously year was at 5,2% level, deflator increased by 4,4%. In the sectorial structure of GDP the following sectors are distinguished by the largest share: trade (16,9%) and industry (16,2%). Next comes transport and communication (11%), public administration (102%), agriculture, fishery (9,2%),

construction (7,4%). Following sectors have grown: construction (18,7%), financial activities (9,6%), communication (9%), processing industry (7,5%), trade (6,9%), transport (6,2%), communal, social and personal services (6%), real estate operations, rent and consumer services (5,3%). Reduction was mentioned in the following spheres: mining industry (-7,6%) and production and distribution of electricity, air and water (-6,1%).

LIVING WAGE INCREASED BY 6 GEL IN A MONTH

n August a man capable to work needed 150,6 GEL for living. According to Geostat data, living wage increased by almost 6 GEL compared to July, in a year - by 4,5 GEL. During a year living wage reached to maximum in April and equaled to 155,6 GEL. In August of the current year living wage for av-

erage consumer equaled to 133,4 GEL, average family - 252,6 GEL. Geostat specialists considered that in August for the support of 2-person families 213,4 GEL was enough, for 3-person family - 240,1 GEL, for 4 person family - 266,7 GEL, for 5-person family 200,1 GEL, for the family with 6 and more members - 354,7 GEL

34% OF THE FOREIGN DIRECT INVESTMENTS IN AZERBAIJAN COME ON GEORGIA 33,7% of the foreign direct investments of Azerbaijan comes on Georgia. Geostat informs that in the first half of the current year Azerbaijan has made direct investment of $124 million in Georgia. Among them - 77 million only in the Q2. According to Balance of Payment of Azerbaijan, in the first half of 2014 amount of the direct investments made by Azerbaijan to abroad equaled to $367,2 million.

As agency Trend reports based on Azerbaijani Central Bank, in January-June Azerbaijan invested $6 billion in the foreign countries. Among them 367,2 million was direct investment, 204,8 million - portfolio, 5,57 billion - other kinds of investments. Itâ&#x20AC;&#x2122;s also noteworthy that Azerbaijan invested 266,8 million out of direct investments in the oil and gas sector, 100,4 million - in the other sectors.

BUSINESS September 22, 2014 #68

caucasian business week

RESPONSIBLE BUSINESS ACTION MONTH 2014 Radisson Blu, Georgia Challenges YOU

CONTEST FOR A FAIRY TALE ILLUSTRATION!

Participate and win a Wacom drawing tablet!

R & Marketing Communications Company “Gepra” issues a contest for artists and designers to create an illustration based on “The Flea and The Ant” fairy tale. Choose a moment from the tale you like the most, draw it, make it to the final stage and win a prize. The contest is divided into two stages. During the first stage, the participant chooses a scene to draw and creates it over a span of two weeks. During the second stage, a competent board of judges will choose the three best entries and give an additional week to these three artists to design a cover for the same tale. Finally, the book will be published with the illustrations of the winner, for which the artist will have to create an additional 12 drawings of various scenes (details regarding the scenes will be disclosed to the winner separately). The winner will also receive an A3 Wacom Digital Tablet as a prize. Entry submission will begin on September 22nd and end at 06:00 PM on October 6th; Submissions should preferably be in the JPEG picture format, although other formats may also be accepted. In order to participate, visit Gepra’s Official Facebook Page, Like it and submit your entries

as private messages. The message must include your full cell phone number; entries which violate ownership rights will not be eligible for the contest. In an event of discovering such violations, Gepra retains the right to exclude the entry from the contest. By sending in a submission, you agree to Gepra’s terms and confirm that the entry is fully under your ownership. After the deadline, the entries will be published on Gepra’s website, facebook page and emagazine, as well as on the Timelines and Albums of your proud relatives; entries are eligible from contestants aged 16 and up; submissions will be evaluated by a board of competent judges: artist Gia Gugushvili, artist and professor of the Academy of Arts, Tamaz Varvaridze, photo journalist Goga Chanadiri, CEO of Gepra Ekaterine Zhvania, and Senior Consultant at Gepra, Soso Galumashvili; the number of entries is not limited. After the contest ends, all the submissions will be exhibited, and the winner will be awarded at this exhibition. Participate and win a Wacom Drawing Tablet! For Further Information Please, contact Gepra Promotion Manager, Khatia Alpaidze Mob: 595 90 73 53

uring September, Radisson Blu Hotels in Georgia celebrate the Responsible Business Action Month. For the 30 days of the month, the teams of the Radisson Blu Iveria Hotel & Radisson Blu Hotel, Batumi will be initiating activities for the local community and World Childhood Foundation, the nominated charity of the company. During this month long campaign, the Radisson Blu, Georgia’s team will be urging our hotel guests to get engaged. Hotel staff will be encouraging each guest to contribute one Euro via their room bill which will be donated to the World Childhood Foundation. The hotels will also participate in Kazbegi Charity Marathon, World Clean Up 2014, donate blood, gather books for underprivileged school children, plant trees, organize a charity dinner in the elderly house Catharzisi, visit Iashvili Chil-

dren’s Hospital and organize a theatre play for the little patients and hold the lectures in various schools about environment & pollution. “Doing business in a responsible way is a part of our company DNA and we embrace every opportunity to support and give back to the communities where we operate hotels. Both of our hotels in Tbilisi and Batumi have been celebrating the Responsible Business Action Month since the opening and we are extremely delighted that our efforts are improving every year”, - said Michael Jacobi, General Manager of the Radisson Blu, Georgia. Responsible Business Action Month is Carlson Rezidor Hotel Group’s overall Responsible Business strategy. It addresses how the company interacts with all of its stakeholders, including its people, its customers, its partners, its suppliers, the environment, governments, and the communities in which it operates.

BANKS&INVESTMENTS caucasian business week

September 22, 2014 #68

BANKING NEWS September 22, 2014 #68

caucasian business week

ZOLOTAYA KORONA REMAINS NBG: DEBTS OF THE POPULATION LEADER AMONG MONEY TRANSFER - A SERIOUS CHALLENGE FOR THE SYSTEMS ECONOMY

olotaya Korona remains a leader among money transfer systems in August. In May Contact left the list of the leading system. 10 million was transferred through this system in April, in the next months transfers reduced by 2 million, in August $4,444 million was transferred (3,4%) Source: National Bank of Georgia.

LIBERTY AWARDED CITYPASS OWNERS

iberty Bank organized promo action for the users of CityPass in Batumi municipal transport. They announced awards on only 10 000 transactions (smartphone, notebook or TV set). 10 winners got the prizes. Over 16,500 CityPasses have already been issued, through which over 120 000 travel payments have already been made. Liberty Bank, Batumi Municipality and LTD Batumi Auto Transport jointly carry out the project. CityPass holders can use it in the other channels as well, in particular: - 50% discount in over 100 trade objects on CityPass payments. Number of such objects permanently increase (http://cheap.ge/) - Payment with preferential tariff on communal and other tax payments on the websitehttp://

smartivi.ge - In the case of payments by the card, the users get points in the Liberty Club. For the points they can get cash, fill mobile balance or pay communal taxes. Additional information is available on the website www.LBClub.ge CityPass travel cards are free. Filling balance on CityPass card is available according to these channels: - Service centers of Liberty Bank and quick payment machines - NOVA quick payment machines (Paybox) - TBC PAY quick payment machines - VISA/MasterCard of any bank, from the website Smartivi.ge - Banking transfer - eMoney electronic wallet.

CAPITAL BANK LOSSES SHRINK

SC Capital Bank (former Invest Bank) competed 8 months with 3,8 million loss. Meanwhile, August was profitable like previous months (01/08/14 -3,9 million). By September 1 deposit portfolio (without banks’ deposits) equals to 26,8 million EL (Q2 - 25,4 million), credit portfolio - 17,9 mil-

lion GEL (Q2 - 17 million), actives - 37,5 million GEL (Q2 - 35,9 million). 70% of the banks’ share belongs to Alexander Kurtanidze. Stock capital of the bank does not exceed to 6 million. Supervision capital is 4,6 million GEL. In addition to name, the bank also changed head office (#1 Vertskhli Street).

COMMERCIAL BANKS NET PROFITS RISE BY 11.6%

MC Group Research Center has published a review of the banking sector. The research covers the January - July period. Net profit of commercial banks increased by 11.6% in January –July 2014 compared with the same period of 2013 and amounted to GEL 214.9 million. In July 2014, the balances of deposits increased (19.1%) compared to July 2013 and amounted to GEL 10,953 million. During this period, the volume of loans allocated for the national economy increased by 23.2% and amounted to GEL 10.816 million. As of July 2014, the volume of deposits increased (19.1%) and amounted to GEL 10.953 million. In addition, compared with the same period of last year, deposits denominated in the national currency increased (21.0%) and in foreign currency (17.9%). The share of foreign currency deposits (60.9%) was higher than the share of deposits denominated in GEL (39.1%). This is primarily due to the policy of the National Bank of Georgia, including the expansion of banks collateral base used in the National Bank’s operations and the establishment of standard certificates of deposit for commercial banks. In July 2014, the interest rate paid on deposits decreased (-0.4 percentage points) compared to July 2013 and amounted to 6.1%. The interest rate is reduced both on deposits denominated in GEL (-0.2 percentage points), as well as in foreign currency (-0.5 percentage points). In July 2014, the volume of loans granted by

commercial banks in the national economy increased (23.2%). The volume of loans issued in the national currency increased by (44.3%) and in foreign currency by (10.6%). Loans issued in foreign currency (59, 7%) still exceed the value of credit in the national currency (41, 3%), although a growth in lending in GEL is observed - policy of the National Bank allows to reduce liquidity risks of the national currency, which in turn increases the demand for loans in local currency. In July 2014 a volume of loans issued to individuals increased 31, 1% and 16% - to legal entitiescompared to July 2013, indicating that the growth of economic activity in the country. In July 2014 the percentage rate for loans to legal entities in national and foreign currency decreased by 1.6% compared with July 2013. Basic interest rate credits for individuals in foreign currency reduced by 0.4% in July and in the national currency - by 0.8%. In July 2014, 50. 8% of all loans were issued to the business sector. Of these 31, 1% falls on trade, 22.7%- for industry, 7.8% - on the real estate, 7.4% were issued for construction. In July 2014 consumer lending increased by 35.7%, the amount of loans secured by real estate increased by 34.6%. Compared with July 2013, in July 2014 the amount of non-performing loans increased by 24.2% which led to its growth in total loans from 9% to 9.05%. In this case, the amount of overdue loans decreased by 4% and amounted to GEL 358 million. The share of overdue loans in total loans also reduced by 0.9% and currently stands at 3.3%.

An interview with President of the National Bank of Georgia GIORGI KADAGIDZE - What are the challenges faced by the banking system in Georgia? - The main challenge for the banking sector is the same as for the entire economy of the country - the creation of new jobs. We can compare the situation in this respect with what is happening in Bulgaria, not very rich and prosperous country of the EU, which exports medicines worth USD 700 million, despite the fact that Georgia imports drugs for USD 300 million? A Turkey, for example, exports textile in the amount of USD 10 billion, including carpets valued at 4 billion. Banking sector is certainly a very important segment of the economy, but it operates in a country with GDP of about USD 6 thousand, respectively, banks cannot take on the whole burden of the country’s development. Georgia has a sound banking system, for example, our people have forgotten what it means to “lose deposits”, this stage has already been passed. What’s the problem? Why the whole country is constantly talking about agriculture and the results are not visible? For example, Israel, whose territory is 3 times less than Georgia and is mostly located in the desert, exports agricultural products in the amount of USD 1.5 billion. For example, there is a village in Zugdidi district where hot water comes straight from the ground, but there are no greenhouses there. Why the agricultural sector of Georgia does not become highly productive sector of the economy? The main reason is a low level of education, knowledge and skills. - It is difficult not to agree that the level of education should be increased. Still, banks could contribute to the development of the economy. For example, offering low-interest loans. - Georgia is a country with a lot of different stereotypes, including in economic matters. For example, all are confident that we have the highest interest rates on loans, that we have huge international debts, etc. But in fact, all this is nothing more than stereotypes. 15 years ago the country faced a problem of access to credit. It has already been solved, and now the main claim concerns the interest rate. This phase is also gradually passing and interest rates are falling, and no one argues with this, mortgage loans at 9-11% per year, which was simply unthinkable a few years ago, have become the norm. With regard to the challenges of the specific financial system, I would not focus on banks, as there is a much more serious problem - various financial institutions that issue online, instant and other loans, pawn shops, etc. These structures are not controlled by the National Bank. At the same time they give out loans at very high interest rates, as a result, the number of debtors is increasing, and this is a serious challenge for the economy.

- In order to reduce the risk, it is necessary to increase the level of awareness of populationabout the loans they take and the real interest rates they would have to pay. Especially when it comes to those who cannot use banking services and apply to such strange organizations. What is being done in this regard? - In general, the solution to this problem lies in the growth of population income level that will enable people to more easily repay their loans. Of course, a minimum financial education is also necessary. It should be noted that according to our data, 70% of instant installments and very high-grade credits are not related to the vital necessity - they are basically taken to buy expensive phones, cars, tours, etc. - As for macroeconomics, how real, in your opinion, is a 5% economic growth in 2014 forecasted by the government? - We have reasons to be optimistic, and most likely, as per results in 2014, economic growth will exceed 5%. However, this does not mean that new jobs will be created and people will feel improvement on themselves. We have structural problems, almost half of the population lives in rural areas and produces only about 10% of GDP, and in order to increase the average income, a constant economic growth of 6-7% for 10 years is required. At this stage it is not observed. - As it is known, the Association Agreement between Georgia and the EU came into force. What concrete steps can be taken for real convergence with the European Union? - Georgia will have to keep a very delicate balance, about which experts say, including in the West. On the one hand, we need to be closer to the EU standards, on the other – we should not increase regulation of all sorts, prohibitions and restrictions, as this can make life difficult for the population and for investors. That is why a transition period of 5 - 10 years was defined for the implementation of particularly complex solutions. Thus, the EU gives Georgia time for the implementation of standards and regulations that will be particularly difficult for the population.

HALYK BANK OPENS A NEW BRANCH IN TBILISI

alyk Bank plans to expand network of the branches. The bank informs that at the beginning of October a new branch of the bank will be opened in Tbilisi, adjacent to metro Akhmeteli. Currently Halyk Bank is represented by 4 branch-

es throughout Georgia, among them 3 in Tbilisi and 1 in Batumi. JSC People’s Bank of Kazakhstan is a founder of Halyk Bank-Georgia. The bank obtained banking license at the beginning of 2008. It’s noteworthy that Halyk Bank completed 7 months with 1,3 million GEL profit.

BANK OF GEORGIA NET PROFITS RECORD 90 MILLION GEL IN JANUARY TO AUGUST

ank of Georgia completed JanuaryAugust with 90,318 million Gel net profit (01/08/14 -80,3 million GEL). The bank is a leader according to almost all indicators.

By September 1 actives equal to 5,969 billion GEL (01/08/14 - 6,05 billion), market share 32,1% (01/08/14 -32,8%, 01/01/14 - 33,8%, 01/01/13 -37%). Stock capital of the bank exceeds to 1 billion GEL.

AZERBAIJAN caucasian business week

CAR PRODUCTION INCREASES IN AZERBAIJAN

zerbaijan has increased production of cars more than fivefold. The country produced 1771 passenger cars in eight months of this year, which is 5.4 times higher than in the same period of 2013, the State Statistics Committee reported. In 2013, 424 cars were produced in Azerbaijan, which was 21.8 percent less than at the same period in 2012. The report shows in January-August, Azerbaijan produced 180 trucks, which is 22.4 percent surpasses the same period last year. In 2013, Azerbaijan produced 246 trucks, which is 52.8 percent more than in 2012. Moreover, production of tractors has also increased this year. The country produced 874 tractors, which is two times higher than in the same period of 2013.

In 2013, Azerbaijan produced 739 tractors, which is 19.6 percent more than in 2012. There are two factories for the production of motor vehicles in the country located in Nakhchivan and Ganja. At the same time, import of cars has decreased in Azerbaijan. In January-August, Azerbaijan imported 43,276 vehicles versus 67,226 in the same period of last year, the Statistic Committee said. Import of cars to the country started to fall after Azerbaijan shifted to the Euro-4 ecological standard in April. Thus, only cars produced in the EU since 2005, in the U.S. since in 2004, in China and Japan since 2011, in Korea since 2006, and in Turkey since 2009 can be imported to the country since April 1. Some 39,198 vehicles, out of those imported to the country in this period, were the cars and motor vehicles designed for passenger transportation. In January-August 2013, this figure was 60,924. In total, Azerbaijan imported 104,385 cars in 2013, and 101,255 in 2012. At present, experts predicts, the number of imported cars will be reduced by about 20 percent to 75,000 units in 2014. Some 94,879 cars out of the imported ones were the cars and motor vehicles designed to transport passengers. During the reporting period, the country also imported 3,575 trucks compared to 5,060 trucks in January-August, 2013. In 2013, Azerbaijan imported 7,823 trucks versus 9,433 in 2012.

September 22, 2014 #68

FDI IN AZERBAIJAN REACHES $3.9 BLN

he total amount of foreign direct investment made in Azerbaijan’s economy amounted to $3.9 billion in the first half of 2014, some 85.3 percent of which was made in the oil and gas sector. This was noted at the balance of payments recently published by the Central Bank of Azerbaijan. CBA said these investments were used to finance major oil and gas projects in Azerbaijan. The bank also predicts that the volume of direct investments in Azerbaijan’s non-oil sector amounted to $569 million, which accounted for 14.7 percent of the total amount of direct investments made in the country in the first half year. The document also noted Azerbaijan’s net financial assets amounted to $6 billion in January-June 2014, which was generated through the direct investments made abroad ($367.2 million), portfolio investments ($104.8 million) and other investments ($5.574 billion). Around $266.8 million of direct investments were made by Azerbaijan in the oil and gas sector, and $100.4 million in other sectors. Other investments include trade loans and advances ($2.923 billion), loans and advances ($56.9 million), deposits and cash ($2.594 billion). Azerbaijan’s commitments were made n the amount of $4.552 billion in the first half of this year, some $2.071 billion of which accounted for direct investments, and $1.748 billion for portfolio investments. CBA also said the total value of transactions carried out by Azerbaijan with foreign countries on secondary income in the first half of 2014 amounted to $1.8 billion, 48.1 percent of which falls on receipt in the country.

Some 92.7 percent ($1.7 billion) of the total receipts on secondary income accounted for remittances of the individuals carried out from foreign countries to Azerbaijan, 3.7 percent accounted for the cost of humanitarian goods imported into the country, 3.6 percent - other income in the reported period. Surplus arising from transactions with secondary income of the country in total amounted to $66.2 million. CBA went on to add that the surplus of the current account totaled $6.4 billion in January-June 2014, decreasing by 4.5 percent compared to the same period of last year. The surplus of current account of Azerbaijan’s oil and gas sector amounted to $10.3 billion in the reporting period. The total balance of payments surplus made up $4.4 billion, increasing 1.88 times compared to the same period of last year. The analysis of the balance of payments on sectors showed that, as in previous years, foreign trade operation figures in the oil and gas sector were in the black, while the non-oil sector reflected red ink in January-June 2014. The total foreign trade turnover volume amounted to $20.1 billion in January-June, while the foreign trade balance equaled $11.1 billion. Azerbaijan maintained trade relations with 136 countries during the reporting period. While 7.7 percent of trade turnover accounted for the CIS countries, the other 92.3 percent applied to foreign countries. Azerbaijan has been involved in intensive trade with Italy, Turkey, Great Britain, Indonesia, Germany, U.S., Russia, Israel, France, and Japan. Some 69.1 percent of export-import operations in Azerbaijan accounted for these countries.

MOLDOVA VIEWS AZERBAIJAN AS POTENTIAL INVESTOR AZERBAIJANI-GERMAN TRADE TURNOVER HITS $2.2 BLN

he trade turnover between Azerbaijan and Germany increased by 25 percent hitting $2.2 billion in 2013, Shahin Mustafayev said. Speaking at a meeting with a delegation of the German Parliamentarians in Baku on September 15, Azerbaijan’s Economy and Industry Minister noted the trade relations between the two countries increased by 15 percent in January-July 2014. “The trade relations with Germany, which is the main trade partner of Azerbaijan, are being expanded year by year,” Mustafayev added. He noted currently, around 177 companies with German capital are operating in various sectors in Azerbaijan, and Azerbaijan closely cooperates and implements joint projects with the German Society for International Cooperation, KfW Development Bank. In their remarks, Chairmen of the Bundestag Committees on Economy and Industry Peter Ramsauer and Economic Cooperation Dagmar Woehrl appreciated the socio-economic development of Azerbaijan. They said there is a great capacity for the development of cooperation between the two countries. They also discussed mechanism of expanding economic ties. During the meeting, the sides also discussed industrial ties, production and processing of agricultural products, tourism, and ICT as important sectors for developing bilateral cooperation. As part of the visit to Azerbaijan, the German delegation also attended the opening ceremony of the Goygol-Ganja main water pipeline, built as part of the ‘Open Program of Public Infrastructure,’ financed by the KfW and the Swiss State Secretariat for Economic Affairs (SECO). Speaking at the opening ceremony, Azerbaijan’s Deputy Prime Minister Abid Sharifov said the government is in talks with the KfW Develop-

ment Bank for the provision of an additional 250 million euros (over $320 million) loan. “Throughout the cooperation period, since 1994 the German bank has allocated loans totaling 241.4 million euros for various projects in Azerbaijan,” Sharifov said. “These funds were directed at various sectors of the economy, including the restoration of water supply and sanitation systems.” He said the reconstruction of the water supply and sanitation systems is a priority, and similar projects are being implemented in 38 cities and regional centers under the instruction of Azerbaijani president with the support of international financial organizations, including the KfW. In his remarks Teyyub Jabbarov, the First Deputy Chairman of Azersu, an organization engaged in drinking water supplies and sanitation services in Azerbaijan, said various works were carried out to at the Goygol water source to supply the consumers in Ganja with drinking water and improve sanitation services there. He said these works included restoration of a drainage system, construction of a reservoir and a pipeline, which was constructed from the Goygol source to Ganja using the pipes with a diameter of 500 meters. “Ganja city’s problem with water supply and sewerage services will be completely solved for the next few years,” Jabbarov said. Diplomatic relations between Azerbaijan and Germany were established in February 1992. The economic relations between the two countries are developing successfully. To date, 67 documents have been signed between Azerbaijan and Germany in various fields. Azerbaijan has sent about 200 entrepreneurs and young managers to various German cities in 2009-2014 to take training courses within a joint program to upgrade their skills in business management.

oldova regards Azerbaijan as a potential investor, Moldova’s Deputy Prime Minister and Minister of Foreign Affairs and European Integration, Natalia Gherman said on September 8. Gherman, who is attending the 4th informal dialogue meeting of Eastern Partnership countries energy ministers’ session, made this remark at a briefing in Baku. “Moldova is especially interested in cooperation with Azerbaijan in the energy sector,” she stressed. Gherman also noted that the scope of Azerbaijan’s business has already expanded in Moldova. Now Moldova is interested in Azerbaijan’s expanded economic participation on its soil. “Moldova proposes to start the supply of its agricultural products to Azerbaijan,” she said add-

ing that the Azerbaijani consumers’ expectation would be met with her country’s high-quality agricultural products. In his remarks, Azerbaijani Foreign Minister Elmar Mammadyarov said the positions of the two countries coincide on many issues that are important for both sides. “We had an intensive exchange of views on cooperation between the two countries,” Mammadyarov said. “Our positions coincide on many issues. Both countries take the same stance on such issues as the Nagorno-Karabakh conflict and the Transnistrian conflict, which are highly important for us.” Azerbaijan and Moldova are strategic partners. The two countries are cooperating at bilateral and international levels. The trade turnover between Azerbaijan and Moldova amounted to $3.2 million, according to the Azerbaijani State Customs Committee.

AZERBAIJAN TO SUPPORT E-COMMERCE DEVELOPMENT

zerbaijan’s Communications and High Technologies Ministry is preparing proposals to support the development of electronic commerce, the Ministry said on September 4. The proposals include points which exempt business entities engaged in e-commerce from the customs and tax duties. Certain steps have been taken at the legislative level in the creation of appropriate conditions for the development of retail e-commerce. The abolition of customs duties on goods purchased outside of the country (through electronic trading platforms) worth up to 1,000 manats could serve as an example. Previously, customs duties were imposed on goods worth up to 200 manats. “As a major commercial activity on the Internet, this aspect also paves the way for the use of tax and customs privileges. The Ministry intends to initiate negotiations on this issue with the relevant government agencies,” the Ministry said. The volume of ecommerce market in Azerbaijan amounted to 2.6 million manats in 2013, which is 1.6 times more than in 2012, the State Statistics Committee said.

The pace of e-commerce development is increasing in Azerbaijan monthly in line with ICT sector enlargement. Moreover, more than 36 million users have used the services of e-commerce portal www.b2b.azsince 2008. The portal was established in Azerbaijan to support entrepreneurs’ free exit to the market. Over 10,000 people used the portal’s services in the first half of 2014. It is visited not only by Azerbaijan’s citizens, but also foreigners.

CIS September 22, 2014 #68

caucasian business week

RUSSIAN BILLIONAIRE YEVTUSHENKOV UNDER HOUSE ARREST IN MONEY LAUNDERING CASE

he main stockholder in the Russian conglomerate AFK Sistema and the country’s 15th richest man according to Forbes, Vladimir Yevtushenkov, has been placed under house arrest on charges of money laundering. The billionaire is accused of acquiring shares in oil producer Bashneft, in the Russian province of Bashkiria, by “criminal means.” “Investigators have reasonable grounds to believe that Sistema Board Chairman Vladimir Yevtushenkov is involved in the legalization of property acquired by criminal means. Today he was accused of money laundering,” the Russian Investigative Committee said in a statement on its website. The alleged crime carries a possible penalty of seven years in prison and a fine of one million rubles (US$26,000). Yevtushenkov must stay under house arrest until November 16. His lawyers have three days to appeal against the Moscow Court decision. The accusations against Yevtushenkov follow months of investigation. The decision to place the billionaire on house arrest follows a criminal case opened in April regarding Bashneft shares in 2002-2009. Authorities in Russia’s Republic of Bashkortostan suspect that the company underpaid for Bashneft shares in 2009. It sued Sistema for $5.8 billion in damages, but the company has not admitted its involvement in the case. In August, a Moscow court ruled that Sistema paid $500 million less than agreed with its owner. According to the investigation, the company pur-

chased Bashneft shares for $2 billion, while the contract price was set at $2.5 billion. Sistema’s shares in Bashneft were frozen in July, when a Moscow court arrested Bashneft’s stock under a money laundering probe. On Tuesday, Sistema said it considered the allegations against its main stockholder “completely baseless.” The company’s central Moscow office has already been searched. “We believe the charges brought by Russia’s Investigative Committee against AFK Sistema Chairman V.P. Yevtushenkov [are] completely groundless and we will use all legal means to defend our position,” the company told Reuters. AFK Sistema also controls Russia’s largest mobile phone operator, MTS. New York-listed stock in the company fell by 4.8 percent following the news. The Kremlin said late on Tuesday that President Vladimir Putin “hopes investigators will get all answers...as a result of investigative activities in line with the law,” according to presidential spokesman Dmitry Peskov. “It is absolutely wrong and absurd to attempt to paint the story in any political color,” Putin’s spokesman stressed, most likely making connections to tycoon Mikhail Khodorkovsky – the former head of Yukos oil company – whose prosecution was widely portrayed as politically motivated. Khodorkovsky spent 10 years in prison after being convicted of fraud and tax evasion, and was released from jail in December. In 2014, Forbes ranked Yevtushenkov the 15th richest businessman in Russia and the 141st richest in the world.

INVESTORS LOSING BILLIONS AS HEAD OF RUSSIA’S BIGGEST HOLDING PUT UNDER HOUSE ARREST

ussia’s largest publicly traded holding company AFK Sistema has lost about 37 percent of its value in Moscow by midday, after boss Vladimir Yevtushenkov was put under house arrest for alleged money laundering late Tuesday. Investors have seen the price of their shares plummeting, with billions of dollars wiped off the company’s value. Shares in Sistema, a company which Yevtushenkov controls and manages, fell by 37 percent on the Moscow Exchange at 13.00, Moscow Time, which means the company has seen its capitalization lose an estimated $3.55 billion. In the first half hour of Wednesday trading it was down 28 percent.

Sistema controls Russia’s largest mobile phone operator MTS, the oil company Bashneft as well as other lucrative assets. MTS was down 8 percent and Bashneft lost 23.5 percent on the Moscow Exchange. The Moscow Stock Exchange halted trading in Sistema’s shares as a safety precaution. It is applied when a stock drops more than 15 percent in an hour. Vladimir Yevtushenkov’s net worth is estimated by Russia’s Forbes magazine at $9 billion, making him the 15th richest man in the country. Russia’s investigative committee accused the billionaire of acquiring shares in oil producer Bashneft, in the Russian province of Bashkiria, by “criminal means.” Sistema insists the deal was “legal and transparent.” “The company is fully cooperating with the investigation and intends to use all legal means to defend its position,” an officialpress release said Wednesday. Dmitry Peskov, the press secretary to President Putin, denied any allegations that Yevtushenkov’s arrest was politically motivated. “Any attempts to add political context to this issue don’t have the right to exist,” ITAR-TASS quotes Peskov denouncing attempts by some experts to draw a parallel with the Yukos case.

UKRAINE TURMOIL TO HIT EMERGING ECONOMIES AS RUSSIA BRACES FOR SETBACK - EBRD

ngoing tensions between Russia and Ukraine, which have reverberated across the globe, will particularly impact economies of the EBRD region, with a modest recovery predicted in 2015 following a sharp contraction this year. The European Bank for Reconstruction and Development (EBRD) gave a gloomy prognosis for the whole region, which it says will slow to 1.3 percent in 2014, compared with 2.3 percent last year. Next year it anticipates 1.7 percent growth, marking the fourth consecutive year of regional growth below 3 percent. Uncertainty is the dark cloud that dominates the EBRD report. “The volatile security situation in Ukraine makes the forecasts exceptionally uncertain,” it said. At the same time, the violent conflict between Western and Eastern Ukraine, with each side accusing the other of receiving military assistance from external powers, points to an increase in military spending at a time when the country cannot afford such expenditures. “Just when national governments remain financially strapped in the wake of the global financial crisis, any new build up in military spending will be an additional fiscal burden that will stand in the way of the recovery and economic reforms for the future,” the EBRD’s Chief Economist Erik Berglof said. Much of Ukraine’s economic problems stem from the breakdown of trading with Russia, which was prepared to assist Kiev with its monetary problems before political strife broke out in Ukraine between West and East. “There are significant downside risks to the outlook stemming from protracted and intensified fighting and from further breakdown of trade linkages with Russia,” the report said. “On the upside, eventual stabilization in the East may pave the way for infrastructure rehabilitation and for confidence recovery, although the timeline is highly uncertain.” Meanwhile, Russia’s ban on food imports from

central and south eastern European countries and the Baltics will act as a drag on growth in the region, partly offset by some positive influences from the eurozone. In an echo to the monetary emergency policy that the US Federal Reserve employed to pull the US economy out of dangerous waters, the EBRD report discussed the possibility of using quantitative easing (QE) in the Eurozone for emerging European countries. “The case for quantitative easing has become compelling to support the still fragile recovery in the Eurozone, to which much of the (Central Europe and Baltic and south eastern European) regions are strongly linked. An effective Eurozone QE may help lessen the risk of setbacks in the recovery of those regions,” the report said. RUSSIA UNDER A SANCTION CLOUD Although Russia and the West have exchanged tit-for-tat sanctions against each other over Ukraine, EU sanctions announced in September may be particularly painful, as they focused on Russia’s oil industry, the supporting column of its economy, EBRD said in a separate report. A full quarter of budgetary revenues and half of Russia’s exports are related to the oil industry. The report said that the Russian economy would stagnate in 2014, after a slightly better than anticipated first half of the year. However, growth in 2015 has been predicted to contract by 0.2 per cent. In May, the bank forecast that the Russian economy would grow by 0.6 per cent in 2015. In addition to affecting business confidence in Russia, the sanctions limit the access of companies and banks to international capital markets. Meanwhile, Russian companies must make repayments of around $190 billion on foreign debt by the end of 2015. Unable to borrow outside of the country, interest rates may further increase, which could drag down consumer spending. At the same time, Russia’s own sanctions on food imports from European countries could push up inflation in Russia by one to two percentage points.

KAZAKHSTAN TO INCREASE OIL PRODUCTION IN 2015

azakhstan’s oil production is expected to reach 81.8 million metric tons in 2015, local media reported with reference to National Economy Minister Erbolat Dossayev on September 15. “The Energy Ministry forecasts that oil production will reach 81.8 million metric tons in 2015 and increase to 96 million metric tons in 2019,” Dossayev said while presenting the forecast of Kazakhstan’s socio-economic development in 2015-2019. He also noted Kazakhstan produced 81.8 million metric ton of oil and gas condensate in 2013. The baseline scenario of the forecast envisages 4.1 percent annual average growth of the world economy. It is expected that oil prices will stand at $90 per barrel and prices for metals will increase by 1.4 percent in 2015 and 5.3 percent in 2019. “Real GDP growth in Kazakhstan is expected at 5.0 - 6.8 percent,” the minister added. The nominal GDP will reach 45 trillion tenge (181.95 tenge = $1) in 2015 and increase to 72.8

trillion tenge in 2019, the forecast states. GDP per capita will also increase from $13,900 in 2015 to $21,400 in 2019. “The industrial production will grow by 1.9 -5.8 percent,” Dossayev said. Export will increase from $79.2 billion in 2015 to $93.5 billion in 2019 and import will grow from $50.1 billion in 2015 to $57.8 billion in 2019. Kazakhstan, one of the five Central Asian countries, is rich with hydrocarbon reserves. The country’s production comes mainly from five onshore fields - Tengiz, Karachaganak, Aktobe, Mangistau, and Uzen - and two offshore fields Kashagan and Kurmangazy, both located in the Caspian Sea. The Statistics Committee of the Ministry of National Economy said earlier that crude oil production in the country amounted to 53,585 million metric tons for 8 months of this year, and this is 0.7 percent less compared to the same period of 2013. The production of crude oil amounted to 45,012 million metric tons, condensate to 8,573 million metric tons and natural gas to 28.3 billion cubic meters in the reported period.

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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 22, 2014 #68

WORLD NEWS September 22, 2014 #68

caucasian business week

‘BABA’ BLACK SHEEP? WHAT TO EXPECT FROM ALIBABA IPO

n Friday morning China’s biggest online retailer Alibaba will list on the New York Stock Exchange as ‘BABA’ in what may be a recordbreaking initial public offering, raising between $22-$25 billion, making it one of the world’s top three tech firms. The final Alibaba price share, expected in the range of $60-$68 per unit, will be announced at 4:00p.m. Thursday. On Friday morning the stock will start trading on the NYSE. If the price hits the top range, Alibaba may attain a market value of more than $200 billion and as much as $25 billion in stock offerings. That would put it among the world’s three most valuable tech firms, behind Google and Facebook. In the year’s most buzzed about IPO, Alibaba will offer a total of 368 million shares to eager investors looking for a buy-in to China’s rapidly growing internet sector. Co-founder and Executive Chairman Jack Ma will sell 12.75 million shares in the IPO, which could earn him over $800 million in a matter of seconds if prices go above $66 per share. High demand from investors forced the company to add new shares to the deal, which could drive up the IPO price to between $22-25 billion, meaning it may even top the $22.1 billion raised by Agricultural Bank of China Ltd in 2010. Leading up to the IPO, shares of other US e-commerce companies tumbled- Amazon’s share price dropped 5 percent and eBay fell too. Either way, experts forecast it will be the biggest offering of any technology company, beating out giants like Google, Facebook, and Yahoo. Last year’s hot tech IPO was Twitter, which raised

$1.82 billion. All were listed on the New York Stock Exchange, which with the help of the Alibaba IPO, may have its most successful year since 2000. Already, $46 billion in capital has been raised in over 200 deals. “To me I think Ali Baba missed this great opportunity to be listed in Hong Kong,” Jack Ma said during the Alibaba road show in Hong Kong. The company- which has more payment transactions than both Amazon and eBay combined- will attract many foreign investors with its New York debut, however, they can’t technically own shares in Chinese internet companies, so it will all be conducted via a third party, a shell company. China’s internet giant filed for the IPO on May 6, 2014, and the release of its Form F1 revealed the enormity of the deal, which from the financial data was set for an IPO of at least $20 billion. The document showed that Alibaba is a strong company with a strong balance sheet; net income in 2013 was $2.9 billion. In the 18 month period leading up to its public filing, Alibaba increased its active buyers to 231 million, an almost 100 million increase. Net income in the first nine months between December 2012-2013 increased 304.8 percent. But investors may worry over stunted growth and the fact it is yuan-based; a currency that is under the control of the Chinese government whom not everyone trusts. But the company is strong, and its $6.5 billion revenue in 2013 had hedge funds hooked. Goldman Sachs, JPMorgan Chase, Citigroup, Morgan Stanley, Credit Suisse Group, and Deutsche Bank are brokers for Alibaba. Alibaba was founded in 1999.

CHINA PUMPS $81BN INTO BANKS TO STOP SLOWDOWN

he Chinese central bank is to inject $81 billion (500 billion yuan) into 5 major state banks to stimulate economic activity and lending, according to a source inside the People’s Bank of China. It is an attempt to counter slower than expected growth in the world’s second largest economy while the government pursues economic reforms, The Wall Street Journal reported, citing an unnamed senior Chinese banker. About $16 billion (100 billion Yuan) in stimulus will be injected into Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China, the Agricultural Bank of China, which are all headquartered in Beijing, and the Bank of Communications headquartered in Shanghai. The sum is much higher than the 22.07 billion yuan allotted last year. When contacted by Reuters, a central bank spokesman said that the bank will make an an-

nouncement if there is any news. The stimulus is expected to be issued as threemonth low interest loans, according to the WSJ’s source. Growth in China has slowed to 7.4 percent from its 7.7 percent rate in 2013, and it looks likely that without a GDP revision China will miss its 7.5 percent target. Last week China released data showing industrial production growth had slowed to its lowest level since 2008 when the global financial crisis hit. Beijing’s big four banks ran into trouble with bad loans in the 1990s, and the central bank helped the banks redirect 1.3 trillion yuan of bad debt into “bad banks” essentially a holding area that allowed the big banks to successfully go public. China is trying to avoid another trillion yuan bailout, and the measure may be a sign it is trying to act preemptively. China’s monetary boost comes at a time when the US is just about to finish winding down its stimulus program, which is due to end by October.

NUMBER OF BILLIONAIRES HITS NEW RECORD HIGH IN 2014-REPORT

he number of billionaires increased by 155 in 2014 reaching a record high of 2,325, according to the Billion Census report. The research showed that more than half of the new super-rich are self-made, and more than a third don’t have a university degree. There was a 7.1 percent increase in the number of billionaires across the world in 2014 said the report, compiled by the consulting company Wealth-X and the Swiss bank UBS. Even though 2,325 is a new record, experts suggest the number could reach almost 4,000 by 2020 in the most bullish scenario, while conservatively it could reach 3,600. The report shows that 55 percent of the wealthiest people are self-made men and the number who inherited wealth has decreased. Around 35 percent of the world’s billionaires don’t have university degree, but those who do usually go on to pursue further studies like MBA

or Ph.D. So the report suggests education is not a prerequisite for becoming a billionaire. The average age of a billionaire is 63, a year older than in last year’s survey. Most billionaires are married, both men and women – 86.1 percent. There are more wealthy people in Europe, with 775 people classed as billionaires, next up is North America with 609, followed by Asia at 560. The United States has 571 billionaires, and Russia has 114. The experts compiled a list of the top cities where the super-rich live. The first five positions are New York, Moscow, Hong Kong, London and Beijing. Wealth-X’s researchers and analysts in 13 offices across five continents compiled and analyzed data on the world’s billionaires, identifying key themes and macro trends, and building a profile of a “typical billionaire”, which reveals their average age, their mean net worth and wealth source, their social graph, philanthropic activities and their interests, passions and hobbies.

SCOTTISH REFERENDUM: SCOTLAND VOTES ‘NO’ TO INDEPENDENCE

cotland has voted to stay in the United Kingdom after voters decisively rejected independence. With 31 out of the country’s 32 council areas having declared after Thursday’s vote, the ‘No’ side has an unassailable lead of 1,914,187 votes to 1,539,920. Scotland’s First Minister Alex Salmond called for unity and the unionist parties to deliver on more powers. UK Prime Minister David Cameron said he was delighted the UK would remain together and called for national unity. In other developments: • Mr Cameron said Lord Smith of Kelvin would oversee the process of more powers for the Scottish Parliament. Draft laws on new powers will be published by January. • The PM also promised a resolution to the West Lothian question - the fact that Scottish MPs can vote on English issues at Westminster. • The pound hit a two-year high against the euro and a two-week high against the US dollar, as Scotland voted against independence. • Royal Bank of Scotland said it would keep its headquarters in Scotland following the “No” vote. • Scotland rejected independence by 55% to 45%. For latest results and full coverage, go to bbc.co.uk/scotland-decides. The result became a mathematical certainty at 06:08, as the returning officer in Fife announced a comfortable No vote. Shortly afterwards, Mr Salmond said he accepted the defeat and called for national unity. He said the referendum and the high turnout had been a “triumph for the democratic process” and promised to keep his pledge in the Edinburgh Agreement which paved the way for the referendum to respect the result and work for the benefit of Scotland and the United Kingdom. He told supporters: “The unionist parties made vows late in the campaign to devolve more powers to Scotland. “Scotland will expect these to be honoured in rapid course - as a reminder, we have been promised a second reading of a Scotland Bill by March 27 next year. “Not just the 1.6 million Scots who voted for independence will demand that timetable is followed but all Scots who participated in this referendum will demand that timetable is followed.” Mr Salmond said he would shortly speak to the Prime Minister on the results. But he highlighted the “empowerment” of firsttime voters, including 16 and 17-year-olds. And the First Minister said: “Whatever else we can say about this referendum campaign, we have touched sections of the community who have never before been touched by politics, these sections of the community have touched us and touched the political process. “I don’t think that will ever be allowed to go back to business as usual in politics again.” In a rallying call to his supporters, Mr Salmond urged the Yes voters to reflect on how far they had come. “I don’t think any of us, whenever we entered politics, would have thought such a thing to be

either credible or possible,” he said. “Over the last few weeks we have seen a scare and a fear of enormous proportions - not a scaremongering directed at the Scottish people but the scare and the fear at the heart of the Westminster establishment as they realise the mass movement of people that was going forward in Scotland. “Today of all days as we bring Scotland together, let us not dwell on the distance we have fallen short, let us dwell on the distance we have travelled and have confidence the movement is abroad in Scotland that will take this nation forward and we shall go forward as one nation.” This margin of victory for the Better Together campaign - 55% to 45% - was greater by about 3% than that anticipated by the final opinion polls. The winning total needed was 1,852,828. Alistair Darling, who led the Better Together campaign, said the people of Scotland had “chosen unity over division and positive change rather than needless separation”. “It is a momentous result for Scotland and also for the United Kingdom as a whole,” he said. Mr Darling said the result had “reaffirmed all that we have in common and the bonds that tie us together”, adding: “Let them never be broken.” He also acknowledged that the campaign had highlighted the need for change. “As we celebrate, let us also listen,” he said. “More than 85% of the Scottish population has voted. People who were disengaged from politics have turned out in large numbers. “While they have voted on the constitution, that was not the only or perhaps the major issue that drove them to the polls. “Every political party must listen to their cry for change, which could be echoed in every part of our United Kingdom but had this opportunity to express itself in Scotland.” Mr Darling thanked his “great team of volunteers” who had worked on the Better Together campaign. He added: “You represent the majority of opinion. Your voices have been heard. We have taken on the argument and won. The silent have spoken.” Mr Salmond’s deputy, Nicola Sturgeon, said in an earlier concession statement that there was a “real sense of disappointment that we have fallen narrowly short of securing a ‘Yes’ vote”. She told the BBC the projected result was “a deep personal and political disappointment” but said “the country has been changed forever”. Ms Sturgeon said she would work with “anyone in any way” to secure more powers for Scotland. The vote was the culmination of a two-year campaign. Talks will now begin on devolving more powers to Scotland. Glasgow, Scotland’s largest council area and the third largest city in Britain, voted in favour of independence by 194,779 to 169,347, with Dundee, West Dunbartonshire and North Lanarkshire also voting “Yes”. But Edinburgh, the nation’s capital, rejected independence by 194,638 to 123,927, while Aberdeen City voted “No” by a margin of more than 20,000 votes. There have also been big wins for the proUK campaign in many other areas.

PUBLICITY caucasian business week

APARTMENT

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Anchors â&#x20AC;&#x201C; 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 oâ&#x20AC;&#x2122;clock and it will cover all interesting issues excluding politics to guarantee good mood for the audience.

Guests: Chele, Nutsa Mestumrishvili, Nuka Orjonikidze, Qeti Jaoshvili, Ruska Chumburidze, Tamuna Morchiladze

September 22, 2014 #68

TBILISI GUIDE September 22, 2014 #68

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

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September 22, 2014 #68