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BUSINESS WEEK November 3, 2014 #74

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November 3, 2014, Issue 74 GEORGIA BANKS BANNED TO OWN NONCORE ASSETS

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BE INFORMED, DO BUSINESS

GHARIBASHVILI: GEORGIA WILL PROVIDE AS SAFE INVESTMENTS ENVIRONMENT AS IN EUROPE

Giorgi Kadagidze: ent The Government does not Spend the Available Budget Funds Pg. 4

CHANGES GO TO PREFERENTIAL AGROCREDIT PROJECT

inistry of Agriculture has made changes to the preferential agro- crediting scheme as well as to a project of cofinancing of processing enterprises. Pg. 2

GEORGIA TO ENJOY VISA FREE TRAVEL REGIME WITH EU AFTER 2015 RIGA SUMMIT

EXPORT TO AZERBAIJAN REDUCED BY 19%

mount of trade reduced by annual 19% on the number first export market of Georgia. It was caused by reduced motorcars export. Pg. 9

or the potential investor and you investment in Georgia will be as safe as in any European country. The only difference will be lower tariffs and taxes, strictness of regulations and, of course,

GEORGIA, REGIONAL LEADER IN BUSINESS REPORT BY WORLD BANK

Pg. 5

AZERBAIJAN TURKEY, AZERBAIJAN USE THEIR ECONOMIC POTENTIAL FOR REGIONAL DEVELOPMENT

T T

he World Bank’s “Doing Business” report is a study to evaluate how easy it is to conduct business in 189 global economies, using 10 indicators. Pg. 11

Tourism Department of Adjara Proposes to Introduce Accreditation System for Tour Operators

Pg. 4

PASHA BANK A DIAMOND SPONSOR OF BUSINESS BRILLIANCE AWARD

urkey and Azerbaijan achieved important successes in the economic field over a short period, Turkish Ambassador to Azerbaijan Ismail Alper Coshkun said. Pg. 10

CIS UKRAINE’S BUSINESS ENVIRONMENT IMPROVES: WORLD BANK

large amount of your profit,” - Prime Minster stated on Wednesday, on the opening of International Investment Forum. He mentioned that Georgia is ready to use its strategic location and contribute in the restoration of historical Silk Road. Pg. 2

Many People Have Been Needlessly Insulted Because of Sakdrissi and We Apologize To Them

Pg. 9

TAMADA’S WINES – CHOICE OF GERARD BASSET, THE WORLD’S BEST SOMMELIER Pg. 7

WORLD NEWS FOUR REASONS EUROPE IS STUCK BUYING GAS FROM PUTIN

an Europe wean itself from Russian gas? Lithuania seems to have succeeded. The Baltic nation, which until now has bought 100 percent of its gas from Gazprom. Pg. 13

TBILISI HOSTED THE PICKLE AND PRESERVE FESTIVAL OF MARNEULI FOOD FACTORY Pg. 6

PHOTO CONTEST MIXTERIA ORGANIZED BY NABEGHLAVI CAME TO AN END Pg. 6

TBC BANK NAMED AS THE BEST PRIVATE BANK IN GEORGIA IN 2014

Pg. 9

MAIN EVENTS November 3, 2014 #74

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GEORGIA TO ENJOY VISA FREE TRAVEL REGIME WITH EU AFTER 2015 RIGA SUMMIT

eorgia’s State Minister for European and Euro-Atlantic Integration Alex Petriashvili believes the Georgian side expects it could be possible for Georgian citizens to travel to European Union (EU) member countries visa free after the Eastern Partnership Summit (EaP) in Riga next spring. This reality is coming closer as the country has successfully completed the first phase of the visa liberalisation process and moved onto the next step. The country was congratulated by the international community for its efforts, and on Wednesday the European Commission adopted its second progress report on Georgia’s implementation of the Visa Liberalisation Action Plan (VLAP). “The Georgian side expects a decision from the

PM: GEORGIA’S TRADE TURNOVER WITH EU GROWS BY 15% IN 1H14

ccording to the Georgian Prime Minister “DCFTA significantly increases the investment attractiveness of our country and creates new investment opportunities, will increase Georgia’s exports by 12.4% and imports by 7.5%. The head of the Georgia’s Government stated this while delivering a speech at the International Investment Forum “Georgia - Regional Hub and Asia’s Gateway to Europe”. “DCFTA significantly increases the investment attractiveness of our Country and creates new investment opportunities. Pre-estimates indicate that the DCFTA will increase Georgia’s exports by 12.4% and imports by 7.5%, implying at the same time an improvement of trade balance. In the first six months of 2014, Georgia’s trade turnover with the EU grew 15% year-to-year, with an amazing 41% year-to-year increase in exports and 9% increase in imports in comparison with the 2013 data. This was without the DCFTA being in force,”- stated Irakli Garibashvili. According to the statement from the Head of the Government, Georgia enjoys free or near-free trade with all its neighbors, building on these relationships, exports increased by 22.4% to over $2.9 billion in 2013, this growth continued in 2014 with a 15% year-to-year increase in exports in the first half of the year. Irakli Garibashvili also provided information to the foreign business leaders on Georgian Partnership and Co-investment Funds and emphasized the government goals.

“The top goals of our government are - macroeconomic stability; open and fair competition in the market; proper protection of property and intellectual rights; freedom of access to an independent judicial system; effective financial systems; a stable, predictable and transparent legislative environment. For you and potential investors, investing in Georgia is as safe as investing in any country in Europe, except that your costs and taxes will be lower, there will be fewer regulatory burdens, and your returns will be higher”, - told the Prime Minister to the Investment Forum participants. The Head of the Government highlighted investment potential of Georgia in the sectors of transportation, manufacturing, agriculture, energy and tourism. The Prime Minister touched upon the issue of building a new deep-sea port in Anaklia, which will be able to handle 100 million tons of cargo per year and noted that 12 consortiums from around the world had already expressed interest in the project. According to Irakli Garibashvili’s statement, Georgia is ready to use its strategic location and contribute to revitalization of the historic Silk Road. The head of the Government put forward an initiative to establish the “Silk Road Forum” in 2015, within the framework of which an annual high-level meeting of all states and international organizations interested in the future of the Silk Road will be launched.

GHARIBASHVILI: GEORGIA WILL PROVIDE AS SAFE INVESTMENTS ENVIRONMENT AS IN EUROPE

he forum is held with support of Asian Development Bank and 300 visitors participate in it. He introduced investment opportunities in Georgia to the leaders of global business, finance and political spheres and named enhancement of relations with EU and NATO as priorities for foreign policy of Georgia. “Deep and Comprehensive Free trade Zone considerably increases attractiveness of investments in our country and creates new investment opportunities. According to preliminary prognosis, DVFTA will increase export of Georgia by 12.4%, import - by 7.5%, which means improvement of trade balance. In 6 months 2014 trade turnover between Georgia and EU increased by 15% in comparison

with the same period of 2013. Besides, export and import considerably increased (respectively by 41% and 9%) in comparison with the same period of 2013. And it happens when Deep and Comprehensive Free Trade Zone has not been opened yet”, - Irakli Garibashvili said in his speech. Head f the government stated that Georgia has free or almost free trade relation with all neighbor countries. In this way in 2013 export increased by 22.4% and exceeded to $2.9 billion. During 6 months of 2014 export has increased by 15%. During his speech Garibashvili informed business leaders about Partnership and Co-Investment funds. He also focused on investment potential of Georgia in transport, industry, agriculture, energy and tourism, also referred to the construction issue of the new deep-water port in Anaklya.

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The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Address: Shrosha Street 8/10 Director: Levan Beglarishvili Mobile phone: 591 013936; 577965577 Commercial Department: Irakli Lekvinadze Email: caucasianbusiness@gmail.com WWW.CBW.GE

EU about Georgia’s visa free travel [at the] Riga Summit,” Petriashvili said. “It is very important for the European Union to adopt the successful reports on Georgia’s achievements like this recent one. Thus, Georgia strives to achieve a positive assessment about visa free travel [at the] Riga Summit.” Petriashvili also expressed the readiness of Georgia’s Government to fulfill all requirements of the VLAP before the EaP Summit during his meeting with a member of Germany’s Bundestag, Karin Strenz, in Tbilisi today. The Commission said in yesterday’s second progress report on Georgia’s implementation of the VLAP that it was ready to provide assistance to Georgia as it implemented the legislative, policy and institutional framework of phase two of the VLAP.

CHANGES GO TO PREFERENTIAL AGROCREDIT PROJECT

inistry of Agriculture has made changes to the preferential agro- crediting scheme as well as to a project of co-financing of processing enterprises. According to the Ministry, as a result of the project optimization, from January 2015 instead of the current 8 components there will be a preferential agro-credit of two components : • preferential agro-credit for current assets • preferential agro-credit for fixed assets • preferential agro-leasing • state program “Produce in Georgia” Upper limit rate to the interest rate on a loan was set under the preferential agro-credit project. In the framework of the optimization, annual interest rates on bank loans have reduced and the upper limits are defined as follows: For current assets: • GEL 20 000 to GEL 10 000 000 loans (depending on the loan amount) annual interest rate was set at 10% -15% For fixed assets: • USD 12 000 - USD 600 000 (depending on the loan

amount) annual interest rate was set at 12%- 15% Simultaneously with a decline in interest rates, the Agency reduced annual interest rates on cofinancing and defined as follows: • the current assets component - 8%; • the fixed assets component - 11% annual interest rates on co-financing remained unchanged for preferential agro-leasing and the government program “Produce in Georgia • preferential agro-leasing - 12%; • “Produce in Georgia” - 10%. To interest and attract large business groups, changes were introduced to the project of cofinancing of processing enterprises. These changes will provide incentives for investment in the regions, which will eventually promote important projects. New enterprises will be created and the locals will be employed. The government launched a preferential agrocredit program on March 27, 2013. According to the Ministry of Agriculture, 22 thousand people have benefited from the preferential agro-credit until October 13 and loans worth GEL 566 million 493 thousand 582 have been issued.

BANKS BANNED TO OWN NON-CORE ASSETS

he National Bank forbade commercial banks to carry out non-core activities. An appropriate decision has been published on the NBG official website today. The banking sector has the right to provide only traditional financial services. The commercial banks, which own non-core assets, have to submit a detailed strategy for a phased withdrawal from the non-financial sector to the National Bank within 30 calendar days. Banks should give up non-core business until December 31, 2015. The National Bank explains the adopted decision by the argument that the banks’ involvement in non-core activities in the medium term is risky. In addition, the central bank claims that such a practice raises the risk of a conflict of interest. An avoidance of adverse impacts on competition in the real sector of economy is named an additional argument. According to the NBG, the decision was adopted after meetings with the representatives of various business sectors and reviewing the international practices. Along with that, the National Bank significantly reinforces the approach to issuing new permits for non-core activities which is consistent with the practice until 2008. The National Bank announced about the possible

prohibition of non-core assets of commercial banks on October 13. The NBG President noted that the final decision would be adopted by the end of the month. Development companies met the NBG’s initiative to restrict non- core assets positively. Most of them were in favor of banning the ownership of non-core assets. According to President of the Association of Bank of Georgia, the decision of the National Bank of the ban on the possession of non-core assets is designed mainly for the future. In his words, it is more a preventive measure than the effect reflected the current situation, because there is nothing to adjust at the stage.

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

Reporters: Nuca Galumashvili; Nino Gojiashvili; Mary Lomtadze

Source: www.commersant.ge, www.bpi.ge, www.gbc.ge

PUBLICITY November 3, 2014 #74

According to the GOEuroâ&#x20AC;&#x2122;s 2014 research, Georgia ranks second worldwide in terms of cheapest train tickets. Only South Africa is recorded ahead of Georgia. GOEuro is one of the major multifunctional research companies in the travel sector. The company compares and calculates prices for travel by train, bus and airplanes. GOEuro published the report in August 2014.

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INTERVIEW caucasian business week

November 3, 2014 #74

NBG: THE GOVERNMENT DOES NOT TOURISM DEPARTMENT OF ADJARA SPEND THE AVAILABLE BUDGET FUNDS PROPOSES TO INTRODUCE An interview with President of the National Bank of ACCREDITATION SYSTEM FOR TOUR Georgia Giorgi Kadagidze OPERATORS

- One of these days you have expressed surprise at the fact that the Georgian government is not fulfilling its obligations - for example, in the area of infrastructure, despite the fact that funds are allocated for this purpose. What may be a reason? - First of all, I would say that the banking system of Georgia is developing steadily, it has high capitalization, international reserves of the National Bank are adequate to the situation, and macroeconomic stability is assured. This is important, but not sufficient the population to feel the improvement. For this, we need to do more, in particular, to go to the next stage of economic development. The country should maintain the level of competitiveness, ie low taxes, secure environment, minimal bureaucracy, a small number of regulations, as well as to begin structural changes in the economy. The main problem of the country is that we have neither the knowledge nor the skills to produce competitive products that can be taken to the international market. -What is the main reason that all of this is not yet done? What prerequisites are needed the people to feel the improvement of living conditions? - The economy must move to a qualitatively new stage. Education, skills that will help to be competitive are also required. For example, we talk a lot about agriculture, but we have almost no agronomists who can learn from foreign experience and implement it in Georgia. When we, for example, talk about energy, there is no consensus in society about whether we need giant hydropower stations. We need to import technology and knowledge - there is nothing

shameful. For example, when England needed a new governor of the National Bank, they invited a Canadian who was more competent than local staff. And moreover, we should improve management and increaseknowledge. - Nevertheless, the country is run by the government and they should invite foreign experts, but they do not do that. Is it necessarily? - I can tell you about myself - 5 years ago when we started reforming of banking supervision service, we needed experts on specific issues. We brought experts from the Netherlands, who worked with us every day. And now, our employees share their experiences with many countries in Africa, Asia, and Latin America. - It is known that the Economy Council at the Prime Minister includes 41 people. Maybe their advice is sufficient for Prime Minister? - In this case, I’m not talking about the expert assessments, and on the import of specific knowledge, performers, both in the public and private sectors. In addition, we should invest in education, in order a new generation to acquire new knowledge and skills. But since this is a long process and the results will take many years, it is necessary to invite foreign experts to increase the productivity of our economy. - Now the country faces a new problem –revenues part of the budget for 3 quarters was fulfilled, but the government cannot cope with theexpenditures - they cannot implement the planned projects that are alreadyfunded. Is this a problem? - Fiscal policy has a great impact on the economy, and it would be wrong to assert that uneven and insufficient spending is not a problem for the country. But the fundamental problem is the structure of the economy, which did not overstep the limit after which the country will begin to produce quality products. - Can an emergency expenditure of funds within 2-3 months lead to the depreciation of the national currency, as it happened last year? - We have a floating exchange rate of the currency, and of course, it varies from time to time in one or another direction. In no case there will be a serious devaluation of the currency. The National Bank is the guarantor of this. But I’ll repeat that this is very important, but insufficient for the economy to develop, the business to be active, and the country to be competitive. It is vital to carry out the second phase of reforms that will put the country on a new stage of development.

eputy Head of the Tourism Department of Adjara Mamuka Berdzenishvili states about the need to introduce the accreditation system for travel agencies. According to him, 30 travel agencies are operating in the region of Adjara and the negotiations are underway to resolve their problems. “Obviously, there are violations, and the government should pay attention to them. For example, there is a shortage of qualified personnel, especially in summer, when many tourists come. Therefore, we should adopt a solution that will harm neither the state nor the private sector. It is time to introduce some regulations in respect of the tourism business, “- he told “Commersant “. In his words, during the year several meetings with tour operators will be held and the Tourism Department of the region will take on the role of mediator between the private sector and the central government. It is also planned to develop a series of recommendations to address the problems. Some tour operators have a negative attitude to the introduction of the accreditation system, as they believe that it can be biased. If decisions are taken objectively, without any other interests, then fine, but at I do not believe in such a prospect. We has been operating on the Georgian market for 5 years, and mainly sent tourists from Georgia abroad, but we plan to launch a domestic tourism as well. It is unclear how we’ll do it, if a decision on accreditation is made, “- Director of the tourist company TR – Travel Eka Liluashvili notes. However, there are other opinions. For example,

Director of Medea Travel Irakli Gogorishvili agrees with the need to introduce such a rule, since, in his opinion, it will bring stability to the tourist market of Georgia. “A lot of companies do not meet even the minimum standards. Therefore, it is necessary to introduce the accreditation system. To get it, a travel company should know the market, have 3 years of experience, must have office, a website, service quality must conform to international standards. Many companies in Georgia cannot meet any of these conditions, “- the head of the company adds.

PAWEL SMALINSKI– GEOCELL’S NEW CEO

he existing CEO Pasi Koistinen will be leaving the position after having had a handover to the new CEO. Having spent almost 6 years in TeliaSonera Eurasia, two years out of which he was leading TeliaSonera’s operations in Georgia, Pasi Koistinen’s contract has come to an end and he’ll return to his home organization TeliaSonera Finland. Mr. Smalinski has previously worked in TeliaSonera International Carrier. He has over 15 years of experience establishing new technologies and services in emerging markets – as long

as the history of Geocell. He has held various senior sales and general management positions in telecoms. He joined TeliaSonera International Carrier (TSIC) in 2002 and has held the positions of Managing Director of TSIC operations in Poland, Turkey, Romania and Bulgaria and of Regional Sales Director for Central and Eastern Europe, the Middle East and Africa. Before joining TSIC, he worked for 5 years for Polish telcoPolkomtel (PLUS GSM). Pawel holds a M.Sc. degree in Electrical Engineering from the Maritime Academy of Gdynia, Poland, and an MBA from the University of Gdansk, Poland.

MANY PEOPLE HAVE BEEN NEEDLESSLY INSULTED BECAUSE OF SAKDRISSI AND WE APOLOGIZE TO THEM

he Sakdrissi-Kachagiani site has been the topic of public interest and scientific disputes for a few years now. Some describe it as the oldest gold mine, others see untapped industrial potential which would benefit both the company and thousands of employees, for the local and governmental budget. Unfortunately, the polemics around the topic often go beyond level-headed correctness and even insults towards opposing opinions and scientists start becoming

commonplace. CEO of “RMG”, Sergei Eganov, explains the company’s position regarding the situation surrounding the Sakdrissi-Kachagiani site. - What’s the company’s position on the status of the Sakdrissi-Kachagiani site and what plans does it have in terms of industrially utilizing given territory? - “RMG” absolutely abides by Georgian Law and our plans on Sakdrissi Kachagiani’s first site will be dependent on the decision made by official organs regarding the status. Only then will the matter become resolvable my world-tested methods. Protecting cultural heritage is one of the priorities in our values, and it directly feeds into our stance of studying the site in every way. We cannot take a side in scientific discussions, since we consider that those conclusions should be drawn by scientists with appropriate competence, along with foreign expert inclusion if need be. After this, the extents to which the site can be industrially utilized will become clear. I think all sides should be oriented towards finding the optimal solution. - As you know, public opinion regarding the Sakdrissi-Kachagiani site is drastically divided. Those that share the theory of Sakdrissi being an ancient mine consider scientists holding the

opposite opinions as defenders of the company’s interests, noting that some of them were even contracted by the company and hence have certain financial incentives as well. - Unfortunately, a lot of scientists who are authoritative and experienced in their respective fields have been subjected to insults because of Sakdrissi. We apologize to them; we aplogize that they had to listen to many incorrect statements for simply specifying their stance. I don’t understand similar attacks on scientists with different viewpoints, this doesn’t help the matter of conducting an argumented and academic discussion on the issue. The majority of the scientists who are being accused of having financial ties to the company have received no direct or indirect compensation from it. If any one of them has received some sort of financing in the past, this was done in return to their specific services rendered. The company respects the stances of all scientists and considers any types of pressure on them unacceptable, be it financial instruments or public opinion manipulation and going after people with different opinion. - Members of the so-called Committee for Sacving Sakdrissi are stating that there’s a present danger from the company’s side towards the

mining operations and damages to the site. What would you say about this? - The company will start operating only if the appropriate permits are acquired. Any type of arbitrariness here is out of the question. As of now the company is carrying out gas pipe moving operations on the Sakdrissi-Kachagiani site, in order to utilize the #2, #3 and #4 areas. This operation has nothing to do with the #1 area, the archeological site. I’d like to assure all those invested in the issue, no hidden and illegal activities will be carried out at Sakdrissi-Kachagiani. - A media tour took place in SakdrissiKachagiani a few days ago. Will the future hold similar events which will give the public a personal insight into what Sakdrissi is and what the state of the place is? - “RMG” is oriented on maximum openness. We realize the measure of society’s interest in this topic. For this case, we deemed it best to invite media representatives on-site and let them know of the conditions. The company’s stance will be similarly open with all other relevant matters, be they ecological problems, employee work conditions or any other important issue. RMG conducts its public relations as openly as it can, and that will ensure that all questions are answered.

DOING BUSINESS 2015 November 3, 2014 #74

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GEORGIA, REGIONAL LEADER IN BUSINESS REPORT BY WORLD BANK

eorgia holds first place for ease of doing business among countries in the Eastern Europe and Central Asian region according to a new study by World Bank. The ‘Doing Business 2015: Going Beyond Efficiency’ report saw Georgia rank first in the region and take 15th place out of 189 countries. The research said Georgia had carried out 36 reforms in this field since 2005 – the highest number in the region after Rwanda. Georgia was followed by the Republic of Macedonia with 34 reforms. “Economies in Europe and Central Asia have consistently led the world in the pace of regulatory reform,” said Rita Ramalho, Doing Business report lead author. “Governments’ commitment to improving the regulatory environment for entrepreneurs has allowed them to close the gap with the top performers in some areas. For example, the average time to register property in the region has fallen by 14 days since 2010, making the process faster than in OECD high-income economies,” she noted. Globally, Singapore took the top spot in terms of ease of doing business, followed by New Zealand, Hong Kong, Denmark,

Korea, Norway, United States of America, United Kingdom, Finland and Australia. Georgia’s 15th global position was one spot lower than the ranking it was offered in 2014. The Doing Business Report is a study annually elaborated by the World Bank Group since 2003, which presented a detailed analysis of costs, requirements and procedures a specific type of private firm was subject to in all countries, and then, created rankings for every country. The study has become one of the flagship knowledge products of the World Bank Group in the field of private sector development, and is claimed to have motivated the design of several regulatory reforms in developing countries. The ‘Doing Business 2015: Going Beyond Efficiency’ report measured regulations that affected 10 areas of the life of a business. These were: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.The report also measured labour market regulation however this was not included in this year’s ranking.

DOING BUSINESS 2015 GOING BEYOND EFFICIENCY OVERVIEW Doing Business 2015: Going Beyond Efficiency, a World Bank Group flagship publication, is the 12th in a series of annual reports measuring the regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies—from Afghanistan to Zimbabwe—and over time. Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking. Data in Doing Business 2015 are current as of June 1, 2014. The indicators are used to analyze economic outcomes and identify what reforms of business regulation have worked, where and why. This year’s report introduces a notable expansion of several indicator sets and a change in the calculation of rankings. MAIN FINDINGS • Doing Business 2015: Going Beyond Efficiency finds that entrepreneurs in 123 economies saw improvements in their local regulatory framework last year. Between June 2013 and June 2014, the report, which measures 189 economies worldwide, documented 230 business reforms, with 145 reforms aimed at reducing the complexity and cost of complying with business regulation, and 85 reforms aimed at strengthening legal institutions - with Sub-Saharan Africa accounting for the largest number of such reforms. Read about business reforms. • Tajikistan, Benin, Togo, Côte d’Ivoire, Senegal, Trinidad and Tobago, the Democratic Republic of Congo, Azerbaijan,Ireland and the United Arab Emirates are among the economies that improved the most in 2013/2014 in areas tracked byDoing Business. Together, these 10 top improvers im-

plemented 40 regulatory reforms making it easier construction permits; measuring quality of land three of the 10 topics covered, with further to do business. administration in registering property; impor- plans to expand on five topics in next year’s • Sub-Saharan Africa accounts for 5 of the 10 top tance of registries in getting credit; going beyond report. improvers in 2013/14. The region also accounts related-party transactions in protecting minority The Doing Business rankings are now based on for the largest number of regulatory reforms mak- investors; trends before and after the financial cri- a distance to the frontier measure. Each economy ing it easier to do business in the past year—75 of sis in paying taxes; judicial efficiency supporting from the 189 economies measured is evaluated the 230 worldwide. More than 70% of its econo- freedom of contract in enforcing contracts; and based on how close their business regulations are mies carried out at least one such reform. measuring strength of insolvency laws in resolv- to the best global practices. A higher score indi• For the first time this year, Doing Business col- ing insolvency. See all case studies. cates a more efficient business environment and lected data for 2 cities in 11 economies with more • The report this year expands the data in stronger legal institutions. than 100 million inDealing Ease of habitants. The econTrading Register Protecting with Enforcing Resolving Paying Getting Doing Starting a Getting Across ing Minority Economy Constructi omies are: BanglaBusiness Contracts Insolvency Taxes Business Electricity Credit Borders Property Investors on desh, Brazil, China, Rank Permits India, Indonesia, Singapore 1 6 2 11 24 17 3 5 1 1 19 Japan, Mexico, Nigeria, Pakistan, New Zealand 2 1 13 48 2 1 1 22 27 9 28 theRussian FederaHong Kong tion, and the United SAR, China 3 8 1 13 96 23 2 4 2 6 25 States. The added Denmark 4 25 5 14 8 23 17 12 7 34 9 city enables a subnational comparison Korea, Rep. 5 17 12 1 79 36 21 25 3 4 5 and benchmarking Norway 6 22 27 25 5 61 12 15 24 8 8 against other large 7 46 41 61 29 2 25 47 16 41 4 cities. Differences United States * between cities are United Kingdom 8 45 17 70 68 17 4 16 15 36 13 more common in Finland 9 27 33 33 38 36 76 21 14 17 1 indicators measur10 7 19 55 53 4 71 39 49 12 14 ing the steps, time Australia and cost to complete a standardized 17 26 20 56 13 23 56 28 6 32 37 transaction where Estonia local agencies play Latvia 23 36 47 89 32 23 49 24 28 16 40 a larger role, finds Lithuania 24 11 15 105 9 23 78 44 21 14 67 the report. Turkey 55 79 136 34 54 89 13 56 90 38 109 • Case studies highlighting good prac- Belarus 57 40 51 148 3 104 94 60 145 7 68 tices in 8 of the Federation areas measured by Russian 34 156 143 12 61 100 49 155 14 65 62 * Doing Business in63 35 175 149 22 23 56 70 152 42 58 dicator sets are fea- Moldova tured in the report: Kazakhstan 77 55 154 97 14 71 25 17 185 30 63 the growing effiAzerbaijan 80 12 150 159 10 104 51 33 166 31 94 ciency of company 96 76 70 185 59 17 109 108 154 43 142 registries in starting Ukraine a business; zoning Kyrgyz Republic 102 9 42 168 6 36 35 136 183 56 157 and urban planUzbekistan 141 65 149 145 143 104 100 118 189 28 77 ning in dealing with

BUSINESS caucasian business week

November 3, 2014 #74

PHOTO CONTEST MIXTERIA ORGANIZED BY NABEGHLAVI CAME TO AN END TBILISI HOSTED THE PICKLE AND PRESERVE FESTIVAL OF MARNEULI FOOD FACTORY

eorgian capital hosted the Pickle and Preserve Festival organized by Marneuli Food Factory at Rike within the framework of Tbilisoba Celebration. Visitors of the city took part in the event along with locals. Pickle and preserve corners got organized within the Pickle and Preserve Festival framework, where the guests had the opportunity to taste delicious pickles and preserves of Marneuli Food Factory made of Georgian fruits and vegetables. Products of Marneuli Food Factory were sold at special prices for the Festival visitors. Folklore Group Modzakhili took part in the event. The children enjoyed the sweets and had fun with favorite fairy tale heroes, animators on stilts and magicians. The Pickle and Preserve Festival was held for

the first time last year in the capital at Tbilisoba celebration. This year the Festival took start in Bakhmaro Village of Chokhatauri Region. The Festival coincided with the traditional annual horse race being held at the Feast of Transfiguration. Riders, Bakhmaro visitors, representatives of the local government and the sports community took part in the Festival along with locals. The festival was held in 12 largest cities of Georgia: in Batumi on September 1-2, Akhaltsikhe on September 6, Gori on September 7, Ozurgeti on September 13, Zugdidi on September 14, Kutaisi on September 20, Sampredia on Sptember 21, Gurjaani on September 27, Marneuli on October 4, Rustavi on October 18 (at Rustavoba celebration). The festival traditionally ended in the capital at Tbilisoba celebration.

hoto Contest Mixteria organized by Nabeghlavi officially ended on October 13. The contest was going on for three weeks on the company’s website. The contest participants had the opportunity to send to a specific e-mail a cocktail photo made in accordance with their visions and fantasy, the major component of which would be Nabeghlavi mineral water. As a result of 3-week competition, approximately 36 works were received. The Jury chose photos of Oto Gordeladze and Zourab Loladze.

„The photo contest was of promotional type. Nabeghlavi water has been frequently used in preparation of various cocktails by barmen and we decided to engage ordinary consumers of our products in the project. Everyone could use the mineral water according to his/her taste and send creatively made photo to our e-mail. We would like to congratulate the winners and thank for participation in the contest. Nabeghlavi will also hold the other similar contests on a larger scale”said Victoria Zhizhko, Head of the Public Relations Department of the Company.

HEALTHY WATER PROJECT – FOR EDUCATED FUTURE WILL CONTINUE IN 2015

ealthy Water Project – For Educated Future will continue in 2015. The Project, which is of social type and specifically is focused on development of pupils of Chokhatauri Region, will continue in 2014/2015 academic year. The Company will award top three pupils from the Chokhatauri municipality with the highest scores acquired in the National Olympiad in English language with two-week trip in Great Britain. Project For Educated Future was held for the third time this year and more and more participants are taking part in it. “This will not happen in our lives without surprise made by Healthy Water – the Company sent us the successful pupils to the Summer School in Great Britain and it covered tuition and all travel related expenses…”- remember winners upon their return from Great Britain in 2014.

„Project – For Educated Future was held for the third time and already represents a significant part of the company’s social policy. Since learning English language is very important and is vital for a person’s self-realization in the modern world and for better presentation of one’s own skills, we decided to give the equal opportunity to the youth living in regions to work, study and distinguish themselves. Respectively, during this academic year pupils from Chokhatauri municipality will have the opportunity to show their knowledge through the National Olympiad, which will enable them in the future to travel to Great Britain to language courses. We advise schools of the municipality, teachers, parents and of course pupils to start preparation today for the National Olympiad in order to have better chances in winning the project. I wish success them on behalf of the company”- said Victoria Zhizhko, Head of the Public Relations Department of the Company.

BUSINESS November 3, 2014 #74

caucasian business week

TAMADA’S WINES – CHOICE OF GERARD BASSET, THE WORLD’S BEST SOMMELIER

erard Basset, the French world’s best sommelier was invited to Georgia by Georgian Wines and Spirits Company (GWS) and Tamada Wine. He tasted Georgian wine, namely Georgian wines produced under the brand name Tamada, for the first time in May and decided to take part in its popularization. He studied well Georgian wine culture and traditions and later developed a special concept how to select Tamada wines matching with Georgian and European cuisine. Gerard Basset and Tamada Wine will hold wine tour in four countries, which will contribute to popularization of Georgian wine and growth of wine consumption culture abroad. The Sommelier, in concert with a local Chef in all four countries, will select those dishes and desserts, which match exclusively with Tamada Wines. The French Sommelier together with Marika Sajaia and George Silva, Chefs of Funicular Restaurant, created unique match of dishes exclusively for Tamada. Introduction of matching culture is very important in order to better perceive the wine flavor and taste. “The purpose of being in Tbilisi is to popularize Georgian wine at maximum extent. It will successfully compete with wines recognized in Eu-

rope. I selected four types from Tamada Wines Mukuzani, Tsinandali, Kindzmarauli and Pirosmani. two of them are dry and two semi-sweet. The menu selected especially for these wines will assist the wine connoisseurs in feeling the best qualities of the presented wine”, - Gerard Basset said. And still … how to select Tamada Wines so that they match with Georgian and European cuisine? Pumpkin cream-soup with pumpkin seeds – Semi-Sweet Wine Pirosmani Beat Carpaccio with Guda Cheese and Walnuts – Dry White Wine Mukuzani Roasted Prawns with garlic butter - Dry White Wine Tsinandali Roasted Quince and Parma Ham Salad with Parmesan - Semi-sweet Wine Kindzmarauli Roasted Marinated Chicken with Tkemali Sauce - Semi-sweet Wine Pirosmani Salmon Fillet Roasted in Josper with Red Caviar and Sparkling Wine Sauce - dry white wine Tsinandali Lamb Ribs with Savory - Dry White Wine Mukuzani Chocolate Lava Cake with Caramel Ice-cream and Hazelnut - Semi-sweet Wine Kindzmarauli

COMPANY NATAKHTARI TAKES CARE OF BARMEN’S VOCATIONAL EDUCATION

ompany Natakhtari presented social responsibility project in Barmen’s training class of Vocational College Bleqsi on October 23, which provides for caring for Barmen’s vocational education. Representatives and of Natakhtari and Bleqsi Collage introduced the project details to journalists and taught them how to prepare refreshing drinks from beer. Media representatives also had the opportunity to taste these drinks. NINO SURMAVA, PR Manager of Natakhtari Company: „Company Natakhtari cares for beer quality at all stages of beer production, as evidenced by Golden Medal of Monde Selection. The Company aims to achieve offering and pouring beer in bars and restaurants at a professional level.

That is why we want to give the opportunity to the future barmen within the framework of social responsibility project to study pouring beer at professional level.” The meeting was attended by college lecturers, students and representatives of Adjara Government and Tourism Department. The Company will equip vocational schools and colleges with beer pouring equipment, special dishes and the other required material so that the future barmen acquire the pouring technique and machine caring skills better. This will improve customer service in bars, pubs or restaurants of all Georgian cities and contribute to implementation of modern beer consumption skills. Similar event was held in Tbilisi, at the barmen training class of vocational college Ikaros on October 2.

PUBLICITY caucasian business week

November 3, 2014 #74

BANKING & STATISTICS November 3, 2014 #74

caucasian business week

LIBERTY BANK PROFITS RECORD 17 MLN GEL IN JANUARY TO SEPTEMBER PERIOD

iberty Bank completed 3 quarters with 17,4 million GEL profit (01/07/14 - 9,999 millions). By October 1 clients’ deposits equal to 1,4 billion GEL, credit portfolio 760,7 million GEL (01/07/14 - 746 millions).

Overall obligations are 1,4 billion GEL. Bank’s actives equal to 1,6 billion GEL, market share - 8,4%. At the end of the Q2 it was 1,5 billion (8,7%). Stock capital of the bank is 169 million GEL (01/07/14 - 161,6 million).

CURRENT TENDENCIES OF BANK DEPOSITS

ccording To the National Bank of Georgia, the total volume of non-bank deposits in the country’s banking sector increased by 3.1 percent, or 320.1 million GEL, compared with September 1 2014, and reached 10.7 billion GEL by October 1, 2014. In September 2014, the volume of demand deposits increased by 277.8 million GEL (6.1 percent) and term deposits increased by 42.3 million GEL (0.7 percent) compared to the previous month. The dollarization ratio of total non-bank deposits

constituted 60.34 percent by October 1, 2014; increasing by 0.53 percentage points compared to September 1, 2014. The annual average weighted interest rate on term deposits constituted 6.2 percent. In particular, the interest rate for national currency denominated deposits was 8.4 percent and the interest rate for foreign currency denominated deposits 5.2 percent. The share of the US dollar in the total volume of foreign currency denominated deposits equals 82.2 percent and the share of the euro equals 15.5 percent.

IN SEPTEMBER OUTPUT OF COMMERCIAL BANKS INCREASED, FOR NATIONAL BANK – REDUCED

ompared to previous month, output of commercial banks increased, for National Bank - reduced. According to Geostat data, total output of the sector equaled to 93,9 million GEL. Besides, total output of 21 commercial banks equaled to 89,5 million GEL in September, which is 3,6 million more than in August.

Besides, it’s 8,7 millions more then in the same period of last year. As for output of National Bank, compared to August it reduced by 1,6 million GEL, to 4,4 million GEL. In September of last year output of the regulator equaled to 7,2 million GEL. In August total output of the banking sector was 91,9 million GEL.

PASHA BANK A DIAMOND SPONSOR OF BUSINESS BRILLIANCE AWARD

ASHA Bank, a full service corporate bank, sponsored annual Business Brilliance Award Ceremony, hosted by London based Global Event and Training Group, BOC (Blue Ocean Consultancy). In October 2014, BOC Global Events Group was back to Tbilisi for the 2nd year running, hosting the annual Business Brilliance Award Ceremony with an exclusive Business Development Forum for progressive Leaders, Marketing and Communications Seniors of Georgia, and its neighboring countries, to find the tools to work smarter and keep up with the fast changing marketplace. Participants were given an opportunity to attend the master classes of world popular marketing and public relations specialists. They were introduced to coming trends at marketing fields. Presentations of world leading brands: Microsoft, Greenwich Village PR, Bupa, UNICEF were featured during the conference. This International Conference was packed with insights from World-class Speakers and some of the leading innovators, who put a fresh perspective on the current drivers of the dynamic business world.

The Business Brilliance Award, together with local leading Media and Press has celebrated some of the most innovative Businesses, as well as Personal achievements across various industries and sectors. “Georgian economy continues to grow. We are observing the continuing entrance of international companies. The volume of foreign investments also increases. So the local resources require the expertise and information that the speakers and invited quests of the ceremony can share with them” said Shahin Mammadov, CEO at PASHA Bank Georgia. In Mammadov’s words, it is a big honor for him that PASHA Bank Georgia was a sponsor of such a reputable ceremony. “PASHA Bank has joined Georgian business community and we feel responsibility for supporting its further development,” Mammadov told. “I would like to congratulate the winners of the award. Business Brilliance Award is one of the highest profile awards and winning this Trophy says a lot about the quality of organization and the strength of its management team. Winners had one thing in common – being truly excellent at what they do and have proved this by winning a Business Brilliance Award,” said Mammadov.

EXPORT TO AZERBAIJAN REDUCED BY 19%

TBC BANK NAMED AS THE BEST PRIVATE BANK IN GEORGIA IN 2014

BC Bank named Best Private Bank in Georgia in 2014 by The Banker and Professional Wealth Management (PWM) Magazines. The Banker and PWM extend the prestigious competition to Georgia for the first time. According to an announcement from the publications, 136 banks from 60 countries were considered for the awards by 15 private banking industry experts. TBC Bank was commended for its ability to effectively reach non-resident Wealth Management clients through its representative office in Israel, and its successful application of multichannel capabilities in the private banking lines. Commenting on the news, Vakhtang Butskhrikidze, TBC Bank’s Chief Executive Officer said: “We are very proud of this pioneering achieve-

ment in the field of private banking. TBC Bank’s VIP Banking, introduced in 2005, was one of the first services of its kind to be established in the Georgian market. It has since developed into a strong brand renowned for bespoke relationship management, highly-tailored products and worldclass staff expertise. This prestigious award from The Banker and PWM Magazine brings welcome recognition for the long-standing excellence of our private banking business lines.” The annual Awards recognize players that are emerging as industry leaders in private banking. Private banks operating in Europe, Asia, North America, Middle East, Latin America and Africa, or globally, are evaluated against a set of growth and performance measures, as well as on their particular private banking services.

TBC BANK’S RATIO ON RETAIL LOANS MARKET

y October share of TBC Bank on the retail lending market equals to 23,3% (01/01/2014 -23%). Amount of the retail loans portfolio equals to 1,278 billion GEL. Overall loan

portfolio of the bank standsnatn2,891 billion GEL (01/01/14 - 2,786 billion). By October 1 credit inonvestment of the commerial banks equals to 11,1 billion. Among them credit portfolio is 5,494 billion GEL (01/01/14 -4,7 billion).

mount of trade reduced by annual 19% on the number first export market of Georgia. It was caused by reduced motorcars export. According to Geostat data, in 9 months of the current year value of the motorcars export reduced by 30,6% (95,9 million). In January-September vehicles of $207,2 million were exported to Azerbaijan, in total - 14 822 units. Compared to last year, export of so-called armature reduced by 144 million and equaled to $45,19 million in 9 months. Export of livestock reduced from 34,8 million to 25 million. Besides, export of remedies increased by 57%, to 21 million. Top-5 list of the export also includes cement. Its

export reduced by 1,9 times, to 13,8 million. As for import, it has increased from Azerbaijan. In 9 months products of 453,3 million have been imported from Azerbaijan to Georgia. It’s 16 millions more than last year. Natural gas ranks first in import. In 9 months Georgia purchased natural gas of 198,99 million GEL, which is 31,5 millions more than in 9 months of 2013. Oil and oil products rank second with $181 millions (-6,9 millions). Top-5 list of the import products includes gypsum and plaster - 18,4 million, electricity - 8 million, air turbines - 2,4 million. It’s noteworthy that Azerbaijan is the second trade partner of Georgia.

AZERBAIJANI EXPORTS FALL 19%

uring last year export from Georgia to USA increased by 31,8%. According to Geostat data, in 9 months of the current year amount of export to USA, which is strategic partner of Georgia, equaled to $156,5 million. It’s $37,8 millions more than in the same period of 2013. USA ranks 5th among the export markets of Georgia. Its share in the total export has increased

from 5,9% to 7,3% in a year. As for import, products of $220,69 million have been imported from the United States to Georgia. It’s 3,5% of the total import. The amount is 33,2 million more than last year. Turnover between Georgia and USA equals to $377,2 million. It’s 4,5% of the total turnover. USA ranks 8th among the largest trade partners of Georgia according to turnover.

MINERAL WATERS IMPORTS GROW BY ANNUAL 56%

eostat informs that in January-September of the current year mineral and fresh waters of $113,75 million have been exported from Georgia. In the same period 2013 the figure equaled to $72,8 million. Mineral waters rank 5th

in the export basket of Georgia. 5,3% of the total export comes on it. According to official data, only in September mineral waters of $14 million were exported. It’s noteworthy that mineral and fresh water export has been growing sine 2009. In 2013 export of the group equaled to $107 million.

AZERBAIJAN caucasian business week

November 3, 2014 #74

AZERBAIJAN’S COMPULSORY SOCIAL INSURANCE CHARGES INCREASE

T AZERBAIJAN IMPROVES POSITION IN DOING BUSINESS - 2015 RANKING BY 8 POINTS

zerbaijan improved its position in the annual ranking of Doing Business-2015 of the World Bank and the International Finance Corporation by 8 points, said the authors of the report Oct.29 during a video conference held in Baku office of the World Bank. They said that a new method of counting, called the “principle of the remoteness from the forward line” (an index of how far the legal regime of any country is from the best indicator on a particular parameter) was applied in the rating this year. For example, the period of registration of new business recorded in New Zealand is the best indicator on the criterion of “the ease of starting business”. Therefore the index of New Zealand was taken as “the forward line” for other countries. The previous year indexes have been re-calculated using the new method in order to be able to make a comparison, the bank representatives said. “For example, Azerbaijan ranked 88th in 2013 versus 80th in 2014, according to the new method of calculation,” the authors of the report said. “The index of Azerbaijan on the remoteness amounted to 61.97 points in 2013, and the fig-

ure is 64.08 points in 2014, according to the new method of calculation.” Talking about the changes in the calculation of the rating, the bank’s representatives said that the process of updating the methodology will take 2 years and changes in the following 5 criteria are expected in the next year: obtaining construction permits, connection to the power supply system, registration of ownership, tax payment and contract enforcement. Azerbaijan’s ranking consists of the following indices: establishing enterprise business – 12th, tax payment – 33rd, international trade – 166th, registration of ownership – 10th, obtaining construction permits – 150th, lending – 104th, insolvency settlement – 94th, contract enforcement – 31st, protection of investors’ rights – 51st, connection to the power supply system – 159th. Doing Business - 2015 report is compiled 12 times and covers 189 countries. The regulations contributing or hampering business development throughout the cycle of their activity, including the establishment of the company, doing business, the implementation of foreign trade activity, tax payment and investors’ rights protection are examined there.

AZERBAIJAN TO RELEASE NEW COMMEMORATIVE COINS

zerbaijan is planning to release new silver and gold commemorative coins dedicated to the 20th anniversary of signing of the Contract of the Century, launching of the Baku-Tbilisi-Kars railway and the 90th anniversary of the Nakhchivan Autonomous Republic. In this regard, the Central Bank of Azerbaijan (CBA) announced a competition on designing these commemorative coins, CBA said on October 28. The sketch designs should be delivered to CBA by November 15, 2014. The winners will be selected by a jury and awarded with a prize of 500 manats. CBA is a supreme emission agency that pursues the state policy in the sphere of credit, money turnover, settlements and foreign exchange relations, regulates the overall activity of the banking system as a whole and fulfills the duties of reserve bank functions. CBA released the first gold coin of 100 manat and the silver coin of 50 manat dedicated to the 500th anniversary of the life and activities of the notable poet and thinker Mahammad Fuzuli (1494-1556) in 1996. The face of the coin reflects the image of Mahammad Fuzuli, and its back is a scene from a famous poem by the poet ‘Leyli and Majnun’. The commemorative coins were minted in the Royal Mint of Great Britain. The gold coin of 100 manat and the silver coin of 50 manat dedicated to the 1300th anniversary of ‘Kitabi-Dede Gorgud’ epos was first circulated in 1999. The commemorative coins were minted in the Mint of the National Bank of Ukraine. CBA also issued platinum, gold and silver commemorative coins into circulation on December 10, 2004 under a presidential decree on perpetu-

ating the memory of Heydar Aliyev, the national leader of Azerbaijan. The face of the coin depicts a portrait of the national leader; the words ‘Heydar Aliyev’ are depicted on the right side of the portrait, the back presents the map of Azerbaijan and the words ‘The independence of Azerbaijan is permanent, eternal, irreversible...’ The issue date of the commemorative coins ‘2004’ is presented under the map on the back side of the coin, the words ‘The Republic of Azerbaijan’ are depicted around the map on the top in a circular form, and the bottom presents the nominal of the commemorative coins. Also, CBA concluded an agreement with Austrian Mint in 2006 to release a gold set of new gapiks due to denomination. Some 50 pieces of a special gold commemorative set and 50 pieces of special gold commemorative batch were produced under the agreement in 2005. The silver coins with the face value of 50 manat dedicated to the World Cup held in Germany in 2006 were released in Polish Mint and issued into circulation. CBA ordered gold coins with the face value of 100 manat with Austria Mint Co and issued them into circulation in 2008 due to countrywide celebration of the 85th anniversary of Heydar Aliyev. Later, CBA released the gold commemorative coins with the face value of 100 manat dedicated to the memory of genius poet and thinker of Azerbaijan, Nizami Ganjavi, genius opera singer, vocalist Bulbul and genius composer Uzeir Hajibeyov in 2008 within culture series, as well as the commemorative coins dedicated to the 85th anniversary of Nakhchivan Autonomous Republic, the 135th anniversary of the National Press, the 20th anniversary of restoration of the state independence of Azerbaijan, and the 20th anniversary of establishment of CBA.

he charges for compulsory social insurance have increased by eight times in Azerbaijan in the past decade amounting to 1.780 billion manats. This remark was made by Head of State Social Protection Fund (SSPF) of Azerbaijan Elman Mehdiyev at a meeting with a mission of the International Monetary Fund (IMF) headed by Raja Almarzoqi. During the meeting, the sides discussed the fiscal issues on the pension and insurance system of Azerbaijan, implementation of the fund’s budget for 2014 and forecasts for 2015. “Balance of economic growth and increase of social expenditures are always at the center of our attention, which promote the living standards of citizens. As a result of application of the Azerbaijani model of social reforming, one can distinguish three main achievements, which are evaluated today by authoritative international organizations and financial institutions as an example for emerging countries,” Mehdiyev added. The first achievement is ensuring ties between social protection of pensioners and the country’s economy based on the principles of market economy. “The insurance-pension system of Azerbaijan is formed in such a way that the growth of wage, attracted to the social insurance, paves the way for the growth of pensions,” Mehdiyev noted. “The share of pension payments in the country’s GDP increased from 3.9 percent in 2003 to 5 percent in 2014.” The second achievement of reforms in the pension-insurance system is the successful regulation of the impact of changing demographic trends on the background of the global crisis of the pension system. The third and main achievement is the fair distribution of financial capabilities among the pensioners of Azerbaijan, who constitute 13.5 percent of the country’s population, and addressing their poverty problems by strengthening social protection of pensioners and conducting reforms in this regard. “Currently, the average scale of monthly pension exceeds the poverty line among the pensioners by 1.7 times, while in 2003 this figure was twice lower the line. In a period of 2003-2014, the average scale of monthly pension increased by 9.4 times, reaching 173 manats,” Mehdiyev added. Almarzoqi, for his part, highly appreciated the works carried out in the pension-insurance sys-

tem of Azerbaijan, and expressed his confidence in the effectiveness of future cooperation. Later, speaking at a press conference, Almarzoqi said the crisis in Ukraine will not affect the development of Azerbaijan’s economy. “Azerbaijan’s economy is more focused on the export of hydrocarbons, so the crisis in Ukraine could have only an indirect affect on its development. The crisis retards the development of the region. However, Azerbaijan’s economy is able to confront these problems, as soon as the oil price is relatively at high level,” he noted. The IMF official believes the sanctions imposed on Russia could have a positive impact on Azerbaijan. “The sanctions imposed on Russian allow Azerbaijan to export major part of its agricultural products, which will generally have a positive impact on the country’s economy as a whole” he added. Almarzoqi went on saying that Azerbaijan’s GDP growth is forecasted at 4 percent in 2014 and at 3.5 percent in 2015, while the inflation rate of the country will amount to 3 percent. He also noted the IMF mission supports the Azerbaijani government for significant progress towards the fiscal sustainability and fiscal consolidation of the state budget for 2015. Almarzoqi believes the exchange rate will remain as a stable pillar of monetary policy based on strategic currency reserves of the country. He also said the next IMF mission will arrive in Azerbaijan on November 24 to prepare for the second assessment of the country’s financial sector. The first assessment was held by IMF jointly with the World Bank in 2003. After this, Azerbaijan adopted laws on banks and the national bank, as well as various legislative documents. The second assessment of the country’s financial sector will start in March 2015 and last till the beginning of June 2015. “The assessment process will cover all the financial operations of the country,” Almarzoqi stressed. Azerbaijan joined IMF on September 18, 1992. During the years of cooperation with the fund, Azerbaijan attracted IMF’s loans worth $577.3 million for realizing six various programs as part of economic reforms. The cooperation between IMF and Azerbaijan was particularly intensive between 1995 and 2005. Throughout these years, Azerbaijan often enjoyed IMF’s consulting and financial assistance to support the government’s economic programs.

TURKEY, AZERBAIJAN USE THEIR ECONOMIC POTENTIAL FOR REGIONAL DEVELOPMENT

urkey and Azerbaijan achieved important successes in the economic field over a short period, Turkish Ambassador to Azerbaijan Ismail Alper Coshkun said. He noted that the two countries managed to use their economic potential for the region’s development by keeping the political stability. “The economic projects realized by Turkey and Azerbaijan are directed to better both the welfare of their peoples and nations of the entire region,” Coshkun said. The diplomat noted that the Baku-Tbilisi-Kars railway and Baku-Tbilisi-Ceyhan oil pipeline are among the significant projects implemented by Turkey and Azerbaijan. He added that the TransAnatolian gas pipeline (TANAP) will, undoubtedly, play a leading role, too. “TANAP and TAP (Trans-Adriatic gas pipeline) are important projects which ensures energy security in the world. Turkey and Azerbaijan are proud of that projects, but the other countries should also support it,” Coshkun said. The ambassador noted that the joint projects of Turkey and Azerbaijan also take into account the needs of the Nakhchivan Autonomous Republic. He said the two partner countries are planning to extend the Erzurum-Kars-Igdir gas pipeline and Baku-Tbilisi-Kars railway up to Nakhchi-

van. “The relevant talks are underway,” Coshkun added. Turkey and Azerbaijan own strong and universal relations in energy field. The State Oil Company of Azerbaijan has become a leading investor in Turkey, building the $5 billion Star refinery on the Aegean coast. It owns Turkey’s Petkim chemical company. Total investment in the two neighboring countries’ joint oil and gas projects is forecasted to reach $45 billion by 2018.

CIS November 3, 2014 #74

caucasian business week

GAZPROM TO INCREASE CAPACITY OF SUBSURFACE GAS STORAGE IN EUROPE

UKRAINE’S BUSINESS ENVIRONMENT IMPROVES: WORLD BANK

pen Joint Stock Company Gazprom is taking additional measures to provide European countries with gas from subsurface storage units this winter. The company also plans to increase its active storage capacity by up to five percent of the annual amount of export supply, the company’s statement says. “As of today, Gazprom has access to subsurface

storage in Austria, Great Britain, Germany and Serbia. Currently, Gazprom can store 5 billion cubic meters of gas in European storage,” the statement says. In the end of June, Gazprom’s Head Alexey Miller said that Gazprom disposed more than 2.6 billion cubic meters of gas in European subsurface storage places and was planning on transporting more than five billion cubic meters of gas there. In 2014, Gazprom is planning to provide Western Europe with 158.4 billion cubic meters of gas. Alexander Medvedev, Deputy Chairman of the Board of Executive Directors of Gazprom, said that the supply could be much higher; everything depends on the weather conditions in autumn and winter. Last year, Gazprom provided Europe with 161.5 billion cubic meters of gas. Gas supply to the Baltic regions and the Commonwealth of Independent States (CIS) may drop from 59.4 cubic meters to 56.4, comparing to 2013. Besides developing subsurface storage units in Europe, Gazprom is also developing new export pipe lines, like the South Stream pipeline.

he World Bank’s “Doing Business” report is a study to evaluate how easy it is to conduct business in 189 global economies, using 10 indicators. Ukraine’s business environment has improved despite economic crisis and political upheaval, according to a World Bank report. Ukraine ranks the 96th in the World Bank’s “Doing Business” report released Wednesday, up by 16 notches.

The report noted positive changes in Ukraine in terms of starting business, registering property and paying taxes. “Ukraine made paying taxes easier for companies by introducing an electronic system for filing and paying labor taxes. On the other hand, it increased the environmental tax,” the report says. However, Ukraine lost ground in dealing with construction permits, protecting minority investors and getting electricity, says the report.

RUSSIA, UKRAINE AGREE ON BASIC CONDITIONS FOR GAS SUPPLY RESUMPTION IN WINTER

ussia and Ukraine have agreed on the basic conditions for the gas supply resumption to Ukraine in winter, Russian Energy Minister Alexander Novak said at a govern-

mental meeting Oct. 30, Tass reported. “The basic conditions were achieved to resume the gas supply conditions to Ukraine in winter,” Novak said. “A package of documents, including an additional agreement to the contract with the Naftogaz and Gazprom will be prepared,” he said. “The technical issues related to the supply volumes in the daily regime, the bid verification mechanism and procedures for their execution will be agreed.” The European Commission fully agrees with Russia’s position on the settlement of the Russian-Ukrainian gas dispute.

ARMENIA WILL GET OVER 34 UZBEKISTAN BECAME A CO-FOUNDER MILLION EURO FROM EU NEXT YEAR he European Union will allocate “Next year EU will allocate 34. 387 million OF THE ASIAN INFRASTRUCTURE more than 34 million to Armenia euro as a targeted grant which will be distribnext year, Deputy Finance Minister uted in three directions: 6.120 million for upINVESTMENT BANK Pavel Safaryan during debates on grading of Bagratashen and Bavra checkpoints,

n October 24 in Beijing, representatives of 21 Asian States signed a Memorandum of understanding to establish an Asian Infrastructure Investments Bank (ABII). The representatives were from Uzbekistan, Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand and Vietnam. The headquarters of the new financial institution will be located in Beijing. Developing countries in the Asian region thanks to AIIB will be able to develop infrastructure and to maintain a fairly fast, stable and sustainable economic development. Devel-

oped countries can expand their capital needs and to stimulate economic recovery, said the Chinese Minister. The initiative to create a financial structure belongs to the PRC. Until now China has spent five multilateral meetings on the establishment of ABII and one meeting at the Ministerial level. Note that the Bank’s share capital, according to the Memorandum, will be $100 billion, and the initial equity - $50 billion. It is expected that the new Bank will be formed and will begin to operate until the end of next year. The new Bank will be primarily engaged in financing major infrastructure projects. Priority areas will include energy, transport, logistics, urban and rural infrastructure.

the 2015 draft budget. The amount will be allocated in the form of targeted and general grants. The official explained that the targeted grants are issued for specific programs, and the government can not spend them on other projects.

2 million for modernization of checkpoints in general, and 2.8 million to provide small villages with water. Another 20 million euro will be transferred to the budget as a support for the implementation of education reforms,” Safaryan said.

GEORGIA INCREASES CONSTRUCTION MATERIAL IMPORTS FROM AZERBAIJAN BY OVER QUARTER

eorgia increased the import volume of Azerbaijan’s construction materials by 25.45 percent during a year, the Georgian National Statistics Service’s report as of January-September says. Around 107,630 metric tons of construction gypsum and other anhydrite totaling $ 18.45 million were imported from Azerbaijan to Georgia during this period or by 18.5 percent more than in the same period of last year. For comparison, around 85,792 metric tons of building materials in the amount of $15.57 million were imported to Georgia in January-September 2013. Around 188,787 metric tons of cement in the amount of $13.849 million were exported to Azerbaijan in January-September 2014. Around 356,907 metric tons of cement products in the amount of $26.334 million were exported from Georgia to Azerbaijan in the same period of last year. Around 73,090 metric tons of iron rods in the amount of $45.194 million were exported from Georgia to Azerbaijan during this period. Around

49,237 metric tons of iron rods in the amount of $30.789 million were exported to Azerbaijan in the same period of last year. The share of construction materials in Azerbaijan’s total export volume to Georgia for the period amounted to four percent. Georgia imported goods worth $453.39 million from Azerbaijan in January-September 2014. According to the report, the volume of imports from Azerbaijan to Georgia increased by 3.7 percent. For comparison, Georgia imported Azerbaijani goods worth $437.3 million in JanuarySeptember 2013. Azerbaijan ranks third in the list of the countries from which Georgia imports products. The share of Azerbaijan’s exports in a total volume of goods imported into Georgia is 7.3 percent. Georgian imports most of goods from Turkey. The volume of Georgia’s imports from Turkey totaled $1.26 billion in January-September 2014 or 20.2 percent of a total import volume. China ranks second with $549.07 million and a specific weight of 8.8 percent of Georgia’s total import volume.

PUBLICITY caucasian business week

November 3, 2014 #74

WORLD NEWS November 3, 2014 #74

caucasian business week

CHEAP OIL LIFTS ALL AIRLINES, BUT SPIRIT GETS TO FLY HIGHEST

he crude oil bear market represents a strong financial tailwind for airlines, which will likely fatten their profit margins over the winter. When jet fuel is cheaper, of course, more money flows “straight to the bottom line,” as American Airlines (AAL) President Scott Kirby put it last week. Yet a decline in crude oil expense doesn’t help every airline equally. A carrier’s nonfuel spending plays an important role in how much profitability cheaper jet fuel will offer. Nowhere is that financial shift more pronounced than at Spirit Airlines (SAVE), which just reported a record pretax profit margin of 21.3 percent in the third quarter. Spirit executives cheered analysts by suggesting they can hit an operating profit margin of about 20 percent in 2015—the same year the Florida-based airline is planning a major growth spurt and hiring 250 new pilots. Behind the profitability boom are Spirit’s nonfuel costs, which are about the lowest in the industry. Every airline pays roughly the same amount for jet fuel, which is tied to crude oil futures currently sitting at multiyear lows. Brent crude, the index most closely tied to jet fuel prices, is below $86. Barclays cut its 2015 forecast for Brent by $3 to $93 per barrel, the bank’s second downward revision in less than a month. When crude oil is expensive, as it has been for the last several years, a low-cost airline’s nonfuel cost advantage—lower wages, greater use of its

airplanes, cheap coffee in employee break rooms, stingier medical benefits—becomes less important to the total cost base. A giant like United (UAL) or Delta (DAL) narrows the cost advantage a small rival like Spirit or Southwest (LUV) enjoys, while goosing higher revenues from its global network through higher fares and fuel surcharges. But when oil prices retreat, a nonfuel cost advantage becomes far more important for a low-cost carrier than for the giants. “Legacy airlines are better equipped to win the revenue game, whereas low-cost carriers are better equipped to win the cost game,” industry journal Airline Weekly noted last year in analyzing the advantages higher jet fuel prices afford large airlines. Flying its Airbus jets on slower travel days, as Spirit has begun doing on Tuesday and Wednesday, will lower the airline’s unit costs even further as it gains greater productivity from the assets. That means flights will be slightly less packed— which is already happening at Spirit—but it also pays off financially. Here’s how Spirit Chief Executive Ben Baldanza explains the math of mixing low nonfuel costs with cheaper fuel: Since we’re a margin-driven airline, if we can drive higher margins with a little lower [revenue] and even greater lower [costs], that’s a great thing for us, and that’s a great thing for our model and that means even lower fares for customers and a good thing for investors. So that’s the way we’ve always been thinking about 2015. I think early on there was some apprehension, not here at Spirit, but outside, about in a 30 percent growth year, why might that not pressure your revenues because you will have so much new flying? We were always internally saying yes, but our costs are going to be great because of all that, so margins might actually improve. Investors love such news. Spirit shares gained more than 7 percent on Tuesday, part of a 56 percent surge this year.

FOUR REASONS EUROPE IS STUCK BUYING GAS FROM PUTIN

an Europe wean itself from Russian gas? Lithuania seems to have succeeded. The Baltic nation, which until now has bought 100 percent of its gas from Gazprom (GAZP:RM), this week inaugurated a liquefied natural-gas facility, supplied from Norway and elsewhere, that could furnish all the country’s gas needs as early as next year. “Finally, we have our energy independence,” Energy Minister Rokas Masiulis said. Alas, few other countries can replicate that feat. A study released this week by the Oxford Institute of Energy Studies in Britain predicts that Europe won’t significantly reduce its dependence on Russian gas for at least a decade—and probably longer. Here’s why: Buyers are locked into multiyear contracts with Gazprom. “The vast majority of Russian gas exports to Europe are sold on long-term contracts varying from 10 to 35 years,” the report says. (Lithuania is an exception; its contracts expire in 2015.) Through the mid-2020s, European buyers will be obliged to take at least 75 percent of the amount of Russian gas they bought in 2013, a year in which Russian gas supplies to Europe hit an all-time high, the report says. Although some European buyers have recently renegotiated their contracts with Gazprom, “there are significant limitations on the options to reduce the volumes in these contracts, or to terminate contracts be-

fore expiry.” Other suppliers can’t take up the slack. Norway is a major gas exporter to the rest of Europe. But Norwegian gas production is forecast to reach a plateau and possibly decline by the end of this decade, and gas from potential new wells above the Arctic Circle is likely to cost far more than current supplies do, the Oxford report says. North African countries, including Algeria and Egypt, also supply gas to Europe. But the outlook for increased production from the region is “bleak,” the report says, as development has been hampered by political instability and lack of investment. Fracking has been a bust in Europe. Drillers in Poland, considered one of the most promising sites for shale-gas development in the region, are packing and leaving after early results disappointed. While development is continuing in Britain and some other countries, progress has come slowly, and shale gas is unlikely to provide a significant share of Europe’s supply for decades, the report says. Liquefied natural gas is a possible substitute, but it might cost too much. The U.S. is gearing up for a major increase in LNG exports because of the shale-gas boom. However, buyers in Asia, the Middle East, and South America will be competing with Europe for those supplies, which could drive prices above what Gazprom would charge, the report says.

MANY WINNERS, A FEW BAD LOSERS

A lower price will boost the world economy and harm some unpleasant regimes—but there are risks

HE collapse of the Soviet Union in 1991 had many causes. None was as basic as the fall in the price of oil, its main export, by two-thirds in real terms between 1980 and 1986. By the same token, the 14-year rule of Vladimir Putin, heir to what remained, has been bolstered by a threefold rise in the oil price. Now the oil price is falling again. Since June, it has dropped from about $115 for a barrel of Brent crude to $85 or so—a reduction of roughly a quarter. If prices settle at today’s level, the bill for oil consumers will be about $1 trillion a year lower. That would be a shot in the arm for a stagnating world economy. It would also have big political consequences. For some governments it would be a rare opportunity; for others, a threat. THE SCALE OF SHALE Predicting oil prices is a mug’s game (we speak from experience). The fall of the past three months is partly the result of unexpected—and maybe short-lived—developments. Who would have guessed that chaotic, war-torn Libya would somehow be pumping 40% more oil at the end of September than it had just a month earlier? Saudi Arabia’s decision to boost output to protect its market share and hurt American shale producers and see off new developments in the Arctic was also a surprise. Perhaps the fall was exaggerated by hedgefund investors dumping oil they had been holding in the false expectation of rising prices. Geopolitical shocks can surprise on the upside as well as the down. Saudi Arabia may well decide to resume its self-appointed post as swing producer and cut output to push prices up once more. With war stalking Iraq, Libya still fragile and Nigeria prey to insurgency (see article), supply is vulnerable to chaotic forces. But many of the causes of lower prices have staying power. The economic malaise weighing down on demand is not about to lift, despite the tonic of cheaper oil (see article). Conservation, spurred by high prices and green regulation, is more like a ratchet than a piece of elastic. The average new car consumes 25% less petrol per mile than ten years ago. Some observers think the rich world has reached “peak car”, and that motoring is in longterm decline. Even if they are wrong, and lower prices encourage people to drive more, energysaving ideas will not suddenly be uninvented. Much of the extra supply is baked in, too. Most oil investment takes years of planning and, after a certain point, cannot easily be turned off. The fracking revolution is also likely to rage on. Since the start of 2010 the United States, the main winner, has increased its output by more than 3m barrels per day to 8.5m b/d. Shale oil is relatively expensive, because it comes from many small, short-lived wells. Analysts claim that a third of wells lose money below $80 a barrel, so shaleoil production will adjust, helping put a floor under the price. But the floor will sag. Break-even points are falling. In past price squeezes, oilmen confounded the experts by finding unimagined savings. This time will be no different. For governments in consuming countries the price fall offers some budgetary breathing-room.

Fuel subsidies hog scandalous amounts of money in many developing countries—20% of public spending in Indonesia and 14% in India (including fertiliser and food). Lower prices give governments the opportunity to spend the money more productively or return it to the taxpayers. This week India led the way by announcing an end to diesel subsidies. Others should follow Narendra Modi’s lead. THE AXIS OF DIESEL For those governments that have used the windfall revenues from higher prices to run aggressive foreign policies, by contrast, things could get uncomfortable. The most vulnerable are Venezuela, Iran and Russia. The first to crack could be Venezuela, home to the anti-American “Bolivarian revolution”, which the late Hugo Chávez tried to export around his region. Venezuela’s budget is based on oil at $120 a barrel. Even before the price fall it was struggling to pay its debts. Foreign-exchange reserves are dwindling, inflation is rampant and Venezuelans are enduring shortages of everyday goods such as flour and toilet paper. Iran is also in a tricky position. It needs oil at about $140 a barrel to balance a profligate budget padded with the extravagant spending schemes of its former president, Mahmoud Ahmedinejad. Sanctions designed to curb its nuclear programme make it especially vulnerable. Some claim that Sunni Saudi Arabia is conspiring with America to use the oil price to put pressure on its Shia rival. Whatever the motivation, the falling price is certainly having that effect. Compared with these two, Russia can bide its time. A falling currency means that the rouble value of oil sales has dropped less than its dollar value, cushioning tax revenues and limiting the budget deficit. The Kremlin can draw on money it has saved in reserve funds, though these are smaller than they were a few years ago and it had already budgeted to run them down. Russia can probably cope with today’s prices for 18 months to two years, but the money will eventually run out. Mr Putin’s military modernisation, which has absorbed 20% of public spending, looks like an extravagance. Sanctions are stifling the economy and making it hard to borrow. Poorer Russians will be less able to afford imported food and consumer goods. If the oil price stays where it is, it will foster discontent. Democrats and liberals should welcome the curb the oil price imposes on countries like Iran, Venezuela and Russia. But there is also an increased risk of instability. Iran’s relatively outward-looking president, Hassan Rouhani, was elected to improve living standards. If the economy sinks, it could strengthen the hand of his hardline opponents. Similarly, a default in Venezuela could have dire consequences not just for Venezuelans but also for the Caribbean countries that have come to depend on Bolivarian aid. And Mr Putin, deprived of economic legitimacy, could well plunge deeper into the xenophobic nationalism that has fuelled his campaign in Ukraine. Cheaper oil is welcome, but it is not trouble-free. economist.com

PUBLICITY caucasian business week

November 3, 2014 #74

TBILISI GUIDE November 3, 2014 #74

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 RESTAURANT BARAKONI Restaurant with healthy food. Georgian-European Cuisine Agmashenebeli Alley 13th Phone: 555 77 33 77 www.barakoni.com 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

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

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

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

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

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

PUBLICITY caucasian business week

November 3, 2014 #74