Fending Off Covid: Georgia Goes Back Into Lockdown
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GEORGIAN HAZELNUTS STRIKE A LETTER FROM NEWLY- MEET MIZ-MASK: THE BACK – THE NEAR DEMISE AND ELECTED AMCHAM PRESIDENT ELECTRONIC RESPIRATOR REBIRTH OF GEORGIA’S SECOND SARAH WILLIAMSON STARTUP KILLING CORONA FAVORITE CROP WITH UV Investor.A Magazine Of The American Chamber Of Commerce In Georgia geISSUE 76 DEC.-JAN. 2020/21 Fending off Covid: Georgia goes back into lockdown ! "" #$$ #% "& ' ! "" #$$ #% "& ( )* + , - ..., + , DECEMBER-JANUARY 2020/21 Investor.ge | 3 Investor.ge CONTENT 6 Investor news 10 A letter from newly-elected AmCham President Sarah Williamson 12 Georgian snack start-up Enkeni’s journey to make a healthier chip – from apples 14 Rebound: how Georgia can learn from the pandemic and build a more resilient economy 16 Georgian hazelnuts strike back – the near demise and rebirth of Georgia’s second favorite 12 crop 20 Amendments to the Labor Code of Georgia – further advancements towards employee protection 22 Farm (to internet) to table – Covid-19 and the digitization of agriculture 24 Meet MIZ-MASK: the electronic respirator startup killing Corona with UV 25 Georgian aesthetic medicine firm Aptos receives US FDA green light 25 26 Moedani, A Place To_____: revitalizing Tbilisi’s Avlabari district 28 Mikheil Lomtadze – the Georgian who became a Kazakh billionaire 30 Prospects and public concerns in the pension fund’s new investment guidelines 32 Remotely from Georgia: are the digital nomads flocking yet? 36 TBC Capital report on automotive sector points to 28 sector growth on the horizon 38 Georgian education system taking important steps forward with USAID support 40 Long horizons, local talent and luxurious upgrades – how Silk Hospitality is riding out the pandemic 32 NEWS ......46 4 | Investor.ge DECEMBER-JANUARY 2020/21 DECEMBER-JANUARY 2020/21 Investor.ge | 5 GEORGIA REINSTATES PARTIAL INVESTMENT LOCKDOWN MEASURES FOLLOWING STEEP SPIKE IN INFECTION RATES NEWS The Georgian government announced INVESTOR.GE a series of new coronavirus restrictions on November 26 following a jump in the PROVIDES A number of daily cases. The new regula- does not apply to direct international BRIEF UPDATE tions will be in force for two months, ÀLJKWVWKDWDUHFDUULHGRXWRUVFKHGXOHG ON INVESTMENTS between November 28 and January between Tbilisi International Airport AND CHANGES 31. and the following destinations: Munich, IN GOVERNMENT Curfew will be observed between Paris, Riga, Doha, Warsaw, Athens, Am- 9:00 p.m. and 5:00 a.m., to be lifted sterdam, Berlin, Vienna, and Milan. This POLICY THAT COULD temporarily on December 31 and January restriction also does not apply to sched- IMPACT THE BUSINESS 6. Meanwhile, municipal and intercity XOHGÀLJKWVEHWZHHQ.XWDLVL,QWHUQDWLRQDO ENVIRONMENT. transport has been suspended, including Airport and the following airports: Riga, INFORMATION IN the Tbilisi metro, and classes and lectures .DWRZLFH9LOQLXVDQG'RUWPXQG*HRU- THIS ISSUE WAS in all schools and universities will be JLDFRPSOHWHO\VKXWGRZQDLUWUDI¿FLQWKH held remotely. country on May 21 in order to slow the TAKEN FROM Cultural and sporting events have spread of the coronavirus. AGENDA.GE AND been suspended, while all restaurants, OTHER SOURCES. bars and cafés can only operate through GEORGIA EXPECTING $6 BILLION delivery, takeaway and drive-thru ser- IN TOURISM REVENUE IN 2024 vices. Georgia expects 10.5 million inter- Many shops will be forced to close: national visitors in 2024 and $6 billion all retail shops must transfer to online in earnings from the tourism sector in operations, except for shops selling 2024, the Head of the Georgian Tourism food products and home essentials, vet- $GPLQLVWUDWLRQ0DULDP.YULYLVKYLOL erinarian, agricultural or pharmaceutical said in an early October press release. products. Strategic entities providing From 2012 to 2020, the number of visi- electricity, water, gas, gasoline and diesel tors entering the country increased from will remain open, as will press booths. 4.7 million to 9.4 million, while earnings Gyms, swimming pools and spas will were $3.3 billion in 2019. The share have to temporarily shutter, along with of tourism in the country’s economy entertainment venues. exceeded 8% that year, in which more The private sector has also been than 150,000 people were employed in strictly recommended by Prime Minister the tourism industry. Gakharia to work remotely wherever possible. GEORGIA SHOWS IMPROVEMENT ON WORLD BANK SURVEY IN NEW INTERNATIONAL FLIGHTS GOVERNANCE WILL NOT RESUME UNTIL AT LEAST Georgia has shown improvement in NEW YEAR’S IN GEORGIA the World Bank’s Worldwide Gover- Regular international flights will nance Indicators (WGI) study released not resume in Georgia until December in early October in terms of government 31, 2020, the Georgian Civil Aviation effectiveness and regulatory quality. Agency has announced. This restriction Georgia received 77% from the total 6 | Investor.ge DECEMBER-JANUARY 2020/21 100% scale for government effectiveness The World Bank announced readi- Finance Ministry said that in order to and 83% for regulatory quality, which ness to help Georgia purchase Covid-19 be granted the status of an international assesses reforms carried out by the gov- vaccines as soon as an effective one company in Georgia, it is necessary for a ernment for the development of the pri- becomes available. The World Bank has ¿UPWREHUHJLVWHUHGLQ*HRUJLDDQGKDYH vate sector. The Worldwide Governance already provided $80 million to Georgia at least two years of work experience in Indicators project reports aggregate and under the Fast Track Covid-19 Facility the country. After obtaining the status individual governance indicators for over to mitigate the health and social impacts of an international company, a company 200 countries and territories over the of the Covid-19 pandemic in April 2020. will enjoy reduced property (but not period 1996–2018, for six dimensions ODQG SUR¿WGLYLGHQG IXOOH[HPSWLRQ of governance, including voice and ac- 100,000 GEORGIAN CITIZENS DQGLQFRPHWD[HVZLWKSUR¿WDQGLQFRPH countability (in which Georgia received LOSE SOURCE OF INCOME taxes reduced to 5%. 53%), political stability and absence of DURING PANDEMIC YLROHQFH JRYHUQPHQWHI¿FLHQF\ As of mid-October about 100,000 SEPTEMBER 2020: MONEY (76%), regulatory quality (82%), rule of Georgians have lost their source of in- TRANSFERS TO GEORGIA UP 28% law (62%), control of corruption (74%). come during the pandemic, the Finance Georgia received $192.7 million Ministry says. This estimate was based from abroad in September 2020, which FRUIT EXPORTS REACH NEW on the number of people receiving 1,200 is 28.7% more than the amount in Sep- HEIGHTS DESPITE PANDEMIC GEL over the course of six months per tember 2019, says the National Bank of Georgia exported 25,000 tonnes of the government’s social support plan, Georgia (NBG). Russia, Italy, and the peaches and nectarines for a total of or individuals employed in the informal United States were the largest remit- $21.3 million between May 1 and Oc- sector or the self-employed, who have re- tance senders to Georgia in September tober 4—a 100% year-over-year bump ceived one-time assistance of 300 GEL. 2020. Georgia received $35 million from for the otherwise small industry in the Russia, $29 million from Italy and $23 country. Georgian peaches and nectarines NEGATIVE TRADE BALANCE million from the United States. were mainly exported to Russia, Armenia DECREASES SLIGHTLY IN After Russia, Italy, and the United and Azerbaijan. Meanwhile, Georgia JANUARY-OCTOBER 2020 YEAR- States, other countries regularly sending exported 2,149 tonnes of apples worth OVER-YEAR money transfers to Georgia in September $947,000 between August 1 and October Georgia had a negative trade bal- 2020 included: Greece ($21.4 million), 11, announced the Georgian Ministry of ance of $3.7 billion in January-October Israel ($13.9 million), Turkey ($10.6 Agriculture and Environmental Protec- 2020, which constituted 40.7 percent of million), Germany ($7.5 million), Azer- tion. The volume of apple exports is its share in external trade turnover. One baijan ($7.4 million), Ukraine ($13.2 six times higher than it was in the same \HDUHDUOLHUWKHWUDGHGH¿FLWRI*HRUJLD million), Spain ($4.8 million), Poland period of 2019, while the value of exports amounted to $4.3 billion over the same ($2.6 million), France ($2.9 million) and increased by $713,000, said the ministry. time period, and amounted to 41.4 WKH8. PLOOLRQ percent of total trade turnover. Turkey, In September 2020, remittances leav- WORLD BANK TO HELP GEORGIA China, and Russia remain Georgia’s ing Georgia totalled $25.1 million, which PURCHASE COVID-19 VACCINES largest trade partners. is a 22.4% increase year-on-year. INTERNATIONAL IT, MARITIME BAG INDEX: 50% OF COMPANIES COMPANIES TO ENJOY TAX HAVE LOW LEVEL OF TRUST, OR BENEFITS IN GEORGIA NONE AT ALL, IN THE GEORGIAN Companies that offer IT and maritime JUDICIAL SYSTEM services will be able to enjoy favorable About 41% of Georgian companies terms of taxation in Georgia if they have a low level of trust in the Georgian obtain the status of an international judicial system, while 9% have none at company in the country. Announcing all, shows the Business Association of WKHEHQH¿WVRQ2FWREHUWKH*HRUJLDQ Georgian (BAG) Index. Only 18% of DECEMBER-JANUARY 2020/21 Investor.ge | 7 those businesses surveyed indicated a loan in late October to support Georgia’s of electricity and 200 cubic meters of high level of trust in Georgian courts. recovery from the coronavirus disease natural gas per month. Electricity will Moreover, 33% of companies assess SDQGHPLFE\ODXQFKLQJD¿VFDOUHVLOLHQFH be covered for more than approximately WKH*HRUJLDQMXGLFLDOV\VWHPDVHI¿FLHQW and social protection support program. 1.2 million households, while natural gas RUYHU\HI¿FLHQWZKLOHWKLQNWKDW This program is aimed at ensuring mac- utilities bills will be covered for approxi- WKHV\VWHPLVLQHI¿FLHQWRUYHU\LQHI¿- roeconomic stability in the medium to mately 650,000 households. cient. Legal and administrative barriers long term while continuing to protect were cited as one of the main factors the livelihoods of those most affected NEW LOCAL AIRLINE COMPANY hindering business activity, with the by the crisis.