Heading to Europe for Trade and Travel April-May/2017 • Investor.Ge | 3 Investor.Ge Content YOU HAVE BUSINESS GOALS 6 Investment News
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CREATING A BRAND FOR SILENT REVOLUTION IN INNOVATION: REGISTER INVESTMENT GEORGIAN AGRICULTURE PROPERTY WITH BITFURY 2017 L-MAY I Investor.geA Magazine Of The American Chamber Of Commerce In Georgia ISSUE 56 APR Heading to Europe for Trade and Travel APRIL-MAY/2017 • Investor.ge | 3 Investor.ge CONTENT YOU HAVE BUSINESS GOALS 6 Investment News 7 New Investments Strengthen Georgia’s Place on WE KNOW HOW TO ASSIST YOU IN SUCCESSFULLY the New Silk Road REACHING THEM 10 Making a Difference in Education: Millennium Challenge Georgia 12 Creating a Brand for Investment Georgia attracted nearly five percent more investment . �ata �ente� �n��ast��ct��e Sol��ons in the first nine months of 2016 than the year before—a good start. �i�t�ali�a�on and �lo�d �om���ng 14 The Silent Revolution in Georgian Agriculture More than half of the population of Georgia is working . �n�o�ma�on Technology Sec��ity 10 as smallholder farmers. By using the benefits of the internet, innovative Georgian startups seek to unleash . �ni�ed �omm�nica�ons and �ideo �on�e�encing farmers’ potential. 16 Georgia Becomes First Country to Register �om��te� �a�d�a�e and So��a�e Property on Bitfury’s Blockchain A new agreement between Georgia’s Justice Ministry and . Banking Technologies and Payment Systems Bitfury is aimed at making property registry more secure and more transparent. B�siness ���lica�ons 20 Heading to the EU: Georgia Looks for Ways to . Boost Trade So��a�e de�elo�ment Georgia has enjoyed mostly duty-free trade with the European Union (EU) market since July 2016, when . �ons�l�ng and �om�le� P�o�ects the Deep and Comprehensive Free Trade Agreement 20 (DCFTA) went into force. Investor.ge looks at what is being done to use and promote the trade scheme locally. 22 Traveling in 2017: Trends and Expectations 24 Hopes and Expectations for EU Travel Georgians are now free to travel to the EU’s Schengen area without a visa under certain conditions. Investor.ge spoke with local out-bound tour agencies and tourism organizations about their expectations for Georgians’ summer travels this year. 26 Georgia’s Next Tourism Challenge: Attracting Big 26 Spenders 30 Georgia’s Innovative Push to Develop its Air Services More flights, expanded facilities and better public 17e Chavchavadze Avenue, 0179 Tbilisi, Georgia +995(322) 220505 transportation are just a few of the plans to improve Georgia’s air sector. 34 Shopping Old Tbilisi ...... 38 50 NEWS 4 | Investor.ge • APRIL-MAY/2017 YOU HAVE BUSINESS GOALS WE KNOW HOW TO ASSIST YOU IN SUCCESSFULLY REACHING THEM . �ata �ente� �n��ast��ct��e Sol��ons . �i�t�ali�a�on and �lo�d �om���ng . �n�o�ma�on Technology Sec��ity . �ni�ed �omm�nica�ons and �ideo �on�e�encing . �om��te� �a�d�a�e and So��a�e . Banking Technologies and Payment Systems . B�siness ���lica�ons . So��a�e de�elo�ment . �ons�l�ng and �om�le� P�o�ects 17e Chavchavadze Avenue, 0179 Tbilisi, Georgia +995(322) 220505 APRIL-MAY/2017 • Investor.ge | 5 in January-February 2017, according to velopment process”, Kvirikashvili said. INVESTMENT Geostat, the national statistics office. Financing for the $800 million proj- Georgia’s top trade partners were ect comes from the Asian Development Turkey ($198 million in trade turnover), Bank. NEWS Russia ($163 million in trade turnover) and Azerbaijan ($146 million in trade New “GovernMent City” INVESTOR.GE PROVIDES turnover). PLANNED FOR TBILISI A BRIEF UPDATE Trade turnover is up with several The Georgian government is devel- ON INVESTMENTS countries, including EU countries (15 oping a “government city” where all state AND CHANGES percent) and CIS countries (40 percent). ministries will be located in the capital IN GOVERNMENT Tbilisi, agenda.ge reported on March 23. NEW FRUIT FACTORY IN WESTERN The project will be built in the Ort- POLICY THAT COULD GEORGIA achala district of the city. IMPACT THE BUSINESS A new fruit freeze-drying plant “A huge territory is already allocated ENVIRONMENT. THE opened in Georgia’s western Samegrelo, where all the ministries will be replaced. INFORMATION IN THIS region agenda.ge reported on March 22. This is good as more free space will be ISSUE WAS TAKEN Prime Minister Giorgi Kvirikashvili created for new offices and new hotels in and Minister of Agriculture Levan Da- the centre of the city. Also, on the other FROM AGENDA.GE, vitashvili opened the plant, which will hand, the construction sector will be A GOVERNMENT- produce over 22 tons of different dried given a stimulus,” Prime Minister Giorgi SUPPORTED WEBSITE, fruits per year, the report said. Kvirikashvili was quoted as saying. AND OTHER SOURCES. The factory, owned by Gemuani Ltd., employs 30 people and will sell goods GEORGIA, U.S. DEEPEN locally and overseas. RELATIONS Gemuani is part of Georgia’s United Georgia is ready to strengthen its stra- Agro Project and received $484,512 from tegic partnership with the United States, the Ministry of Agriculture’s Agriculture Foreign Minister Mikheil Janelidze said $80 MILLION IN LOANS Projects Management Agency (APMA)’s following an official visit to the United CONVERTED TO LARI Preferential Agro Credits Program, the States. Loans worth nearly $80 million have report said. He cited his trip as evidence that been converted to Georgian lari, agenda. Gemuani also received $250,000 in both sides are committed to stronger ties, ge reported on March 24. foreign grants. agenda.ge reported on March 24. The loans were converted as part of Bilateral cooperation in security and the government’s Program on the Lariza- NEW 42-KILOMETER HIGHWAY trade-economic relations were discussed tion of Loans, which was a two-month PLANNED with US senators, members of Congress initiative that launched in January as part Prime Minister Giorgi Kvirikash- and other representatives of the U.S. gov- of a wider effort to ease the debt burden vili announced plans for a new, 42-km ernment during the visit, the report said. in the country. highway connecting eastern and western Janelidze met with members of the Around 33,000 loans were eligible Georgia, agenda.ge reported on March U.S. Congress, and discussed develop- for the program, according to govern- 23. ments in the region and the situation ment estimates. The new four-lane highway will be in Georgia’s breakaway provinces of built on Rikoti Mountain Pass. Abkhazia and South Ossetia. EXTERNAL TRADE UP 18 PERCENT “This road will link east to west and “We will do our best to make sure Georgia’s external trade is up 18 also will have a transit function for neigh- that Georgia’s security and the security percent, according to official statistics, boring countries. This is a very important of the region, as well as trade-economic agenda.ge reported on March 20. part of our Spatial Arrangement Plan, and cooperation with the U.S. will further de- External trade was worth $1.4 billion I am glad to see the fast pace of the de- velop,” Janelidze was quoted as saying. 6 | Investor.ge • APRIL-MAY/2017 JOSEPH LARSEN at the Poti FIZ, a 300-hectare zone that New Investments has housed companies producing every- Strengthen his January, CEFC China Energy thing from wood products to steel to IT Company Limited, a multina- services. There, goods can be produced Georgia’s Place on Ttional company with headquar- exempt from profit- and value-added ters in Shanghai, signaled it would enter taxes and then loaded onto container the New Silk Road the Georgian market for the first time by ships at the nearby port, from which purchasing a 75 percent share in the Poti they’re bound for export markets in 2017 WILL BE REMEMBERED Free Industrial Zone (FIZ). Europe and elsewhere. AS A YEAR THAT BROUGHT A memorandum of understanding MAJOR DEVELOPMENTS TO (MOU) on the deal has been signed, but “THE STRENGTHENING OF BOTH POTI AND ANAKLIA. no concrete information about a timeline GEORGIA AS A TRANSPORT AND WITH GROWING CAPACITY for the investment has been publicly LOGISTICS HUb” IN SHIPPING AND INDUSTRIAL released. On January 16, CEFC signed a PRODUCTION, Georgia’s Investor.ge was told by the Prime memorandum of understanding with the BLACK SEA COAST Minister’s office that there have not been Ministry of Economy and Sustainable LOOKS POISED TO HELP any developments concerning the agree- Development. Under the agreement, THE COUNTRY FULFILL ITS ment since the MOU was signed. the company will develop the FIZ by PROMISE OF BECOMING A CEFC launched in 2002 and special- sharing its practices and technologies, KEY STRETCh on the “NEW izes in the fields of oil and gas, financial and will work to attract investments in SILK Road” BETWEEN ASIA operations, and industrial processing. processing, modern technology, ware- AND EUROPE. The latter area will be the main focus house management, and logistics. CEFC ADVERTISEMENT APRIL-MAY/2017 • Investor.ge | 7 and relative proximity to European mar- kets—make it uniquely suited to serve large vessels. During an interview with Investor.ge, Levan Akhvlediani, CEO of Anaklia Development Consortium, said he expects the new port to seize a leading position in Georgia’s container market: “The ability to accept large vessels will enable shipping lines to take advan- tage of economies of scale and thus make transportation of containers more cost effective. Consequently, this would boost the competitive advantage of Georgia as a transit country and over time will surely attract larger volumes of transit cargo.” has offices in 11 countries and its total employs more than 1,000 employees and Akhvlediani expects the Anaklia 2015 revenue topped RMB 263.1 billion handles roughly 9 million tons of cargo port to eventually capture 60 percent ($38.1 billion).