Investor.A MAGAZINE OF THE AMERICAN CHAMBER OF COMMERCE IN GEORGIA ge

ISSUE 21 JUNE-JULY 2011

Includes articles from the FT

10 Year Visas to America

The End of Aggressive Audits?

Boys (and Girls) of Summer

Viva Batumi

Tbilisi Finding its Niche

Investor.ge

Investor.ge CONTENT

Investment/ 18 A Blossoming Development Business 6 Grabbing the FDI Greenhouses in georgia Opportunity are inching into the EPI’s investment country’s import-driven promotion specialist flower market and Rodrigo Ortiz says cultivating a demand Georgia is at a strategic for landscaping. moment to attract investment. 20 New Owner, New Plans for Poti Port Wine and Tourism 6 Ten Year Visas to the APM Terminals, part of United States Moller-Maersk Group, 52 Delegation to the USA A new visa policy from purchased 80 percent the U.S. government of Poti Sea Port in April extends the valitity from RAKIA 30 Health: A Culture of visas, but does New Frontier for 39 Overcoming the not affect criteria for 21 Trouble Shopping? Investors Lack of Cooperation applicants. Tbilisi has Plans This is the second of – Social Capital in New malls and brand three articles dedicated Georgia 8 Improved franchises might to the health industry. CRRC analysis the Regulations for change shopping in role of social capital Securities Market Tbilisi. The Financial Times in Georgia, and its Could Help 32 Medvedev Seen potential to influence Georgian Business 24 Privatization to Target Capital economic growth. Victor Kipiani, a partner Planned for Flight as Election Bid at Mgaloblishvili, Parliament? Evolves 41 Economic Crime Kipiani, Dzidziguri What will happen to the Russian President and the Spirit of (MKD) law firm, building on Rustaveli Dimitri Medvedev Capitalism analyzes changes to Avenue? is targeting new the Georgian securities investments. 44 Viva Batumi market. 26 In Brief Officials hope a A new feature on 33 Microsoft’s Skype summer full of festivals 9 Can a Leopard new investments and Gamble and concerts in Batumi Change its Spots? business news by Eteri Analysis of Microsoft’s will help boost the The Georgian Revenue Maisuradze decision to buy Skype region’s allure as a Service is changing, for $8.5 billion. destination. what does this mean for 26 A New Plan for your business? Tbilisi 36 FIFA Hit By New 47 Team Georgia City Hall, together Bribes Claims Over Far from the cries of 12 Attitude Toward with the World Bank, World Cup Bid fanatic fans, the World Business Shifting is working on a New allegations of Series and foot-long hot Attitudes toward the strategy for the city’s accepting bribes dogs, America’s favorite business community are development. dog FIFA’s executive pastime is going strong, improving. committee. thanks to a Georgian 26 Analyzing enclave of enthusiastic 14 Berta, Georgia’s Investment: How 38 Intel Hails 3D Chip players and dedicated New Manufacturing Cities Position Technology coaches. Adventure Themselves for FDI Intel to start production A case study of Berta, a on chips this year. new joint-venture light 27 Georgian industry production E-Healthcare, plant. Education and Training ...... 49

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AmCham Georgia Patron Members:

© The American Chamber of Investor.ge Commerce in Georgia, 2011 All rights reserved. No part of this magazine may be re-printed, or reproduced or utilized in any form or by electronic, AmCham Executive Director George Welton mechanical or other means now known or hereafter invented, including photocopying Editor in Chief Molly Corso and recording, or in any information Copy Editor Fiona Coxshall storage or retrieval system without permission. Marketing & Promotion Bella Makaridze, Diana Karibova The opinions expressed in this magazine Promotional Design Levan Baratashvili do not refl ect the opinion of the American Chamber of Commerce in Georgia nor its Magazine Design and Layout Giorgi Megrelishvili Board Members or staff, unless otherwise Writers Nick Clayton, Molly Corso, stated. AmCham Georgia neither endorses, Andrew Coxshall, Maia Edilashvili, nor can be held liable for any eventuality Monica Ellena, Victor Kipiani, arising from the use of any product or Eteri Maisuradze, George McGurn, FT Special Reports service advertised within the pages of this issue. Photographs Molly Corso, Adjara Department of Tourism Investor.ge is printed by CEZANNE Cover Batumi House of Justice AmCham Georgia

Special thanks to the AmCham Editorial Board – Irakli Baidashvili, Betsy Haskell, 36a Lado Asatiani Street, 3rd fl oor Badri Japaridze and Stephanie Komsa – the AmCham staff, Nino Kacharava, Tel: 22-69-07 Michele Dunn, Sarah Williamson, and The Financial Times [email protected] [email protected], www.amcham.ge www.investor.ge

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thousand CEOs and decision makers who Grabbing the FDI Opportunity should be interested in Georgia, not the umbrella of CNN watchers. Georgia is at a strategic moment to attract investment but it needs a target “This is not a mass consumption and consistent approach, says Rodrigo Ortiz, a senior investment promotion audience,” he said. “You probably want specialist with USAID’s new Economic Prosperity Initiative. to target 100 thousand key executives in the whole world.” odrigo Ortiz paints a tantalizing market place, it will keep growing and It is not politics, Ortiz stressed, but future for Georgia; a future that growing.” the potential for profi ts that will bring Rfollows Costa Rica and Singa- Organization is also vital, Ortiz add- business to Georgia – and keep it here. pore – countries that seized a policy to ed. The Georgian National Investment That means the government has to attract foreign investors, and keep them Agency is at the core of the country’s fi gure out its precise – “consistent” -- coming. efforts to promote investment, but its message to businesses, Ortiz noted. And the secret of successful policy, real power could be in the structure of And once Georgia captures busi- Ortiz said, is a strategy that evokes im- its board. Ortiz noted that the GNIA is nesses’ attention, decision makers need ages of a complex dance: the perfect overseen by a powerful group of minis- to have access to information, like aver- timing, message, and organization -- plus ters and Prime Minister Nika Gilauri – a age pay. That data, he said, is currently consistency. cross section of decision makers that diffi cult to obtain. “It is all about promotion …it is all should make it easy for the government Georgia, he stressed, is in a “strate- about having a consistent and sustained to identify and resolve obstacles for gic moment of time” when it is on the approach ... And it is not something that investors quickly. world’s radar screen. is going to happen in three months,” he Ortiz warned however that the GNIA “But you won’t stay there for very stressed. should readjust its approach. long,” he warned. “So there is an op- “It is going to happen in the next Promotion has to be “laser” – direct portunity to go in there and play in the two or three years and if you stay in the and proactive, tailored to target 100 game. Or just watch it.”

U.S. Government: Ten Year Visas for Georgians

A new, ten year visa for Georgians But the change does not signal a “Do not apply for a green card as traveling to America simplifies shift in how visas are issued or how the an expeditious way to get to the United travel but does not affect the long embassy determines who is eligible for States and avoid the visa process,” he standing laws on who is eligible and a visa, since the law remains unchanged. said. how visa applications are approved. The process of determining who fi ts “If they don’t plan on living in the that criteria is not “a formula,” Wingate United States right now and they are mar- explained – underscoring a persistent ried to an American citizen, then wait… eorgians traveling to the United impression that the application process go ahead and travel on the ten year visa.” States will now receive mul- is erratic. Gtiple-entry business-tourism “It is on a case-by-case basis,” he The consular section also works for visas valid for ten years – up from the 12 said – and boils down to demonstrating American citizens, ranging from the fi nal month visas issued previously. social and economic ties. visa for adoptions to for-a-fee notary ser- The program is a refl ection of fewer The ten-year visa is also potentially vices. For more information on citizen, visa violations, and a visa waiver system signifi cant for Georgian citizens who and non-citizen, services, visit in Georgia for American citizens. have a US Green Card – but currently georgia.usembassy.gov ”The main point there is actually reci- reside in Georgia. In addition, the consular section has procity,” Patrick Wingate, the consular Green Cards are “a benefit” that a registration system for US citizens chief at the embassy, told Investor.ge: allows people to stay indefi nitely. The visiting the country – the Smart Traveler Georgia allows Americans to stay for up catch, however, Wingate noted, is Green Enrollment Program (STEP): to 360 days without a visa. Card holders are “expected to stay”. travelregistration.state.gov

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the possibility of placing local currency placed with a recognized foreign stock denominated government debt securi- exchange. Improved ties. If, however, the transaction occurs In December 2010 the National through a stock exchange licensed Regulations Bank of Georgia took an even more under Georgian law, there is no need to radical step when the bank’s president notify the National Bank of Georgia: for presented a list of “foreign recognized” a locally licensed stock exchange con- stock exchanges – opening them up to tacts the regulator to notify it about the the local securities market. This was placement of securities on the recog- Securities not merely a legal act, but substanti- nized foreign stock exchange. ated various provisions of the Georgian So, by granting nearly free and Market law on capital markets and signaled a unrestricted access to securities on further step forward, bridging the gap recognized foreign stock exchanges, between domestic and international Georgian policy makers are trying to Victor Kipiani, a partner at stock exchange regulation. entice investors with extra incentives Mgaloblishvili, Kipiani, Dzidziguri The National Bank’s decision rep- in order to boost to the domestic capital (MKD) law firm, analyzes changes licates the law that issuing securities in market. to the Georgian securities market that could help companies. Georgia has to be pursuant to the rules This business-oriented approach is of the Georgian stock exchange - but similar to other successful cases, which with no additional regulations if they have contributed to the development of have already been registered on “for- capital markets in some small jurisdic- eign recognized stock exchanges”. tions by allowing fast-track, effi cient This decision paved the way for and cost-effective listing procedures further integration of Georgian capital to facilitate the listing of securities market regulation with the world (whether equity or debt). asing regulation on securi- regulatory regime. However some ties trading could be a huge technicalities remained streamlining The goals of the current local Esource of investment capital the admission of overseas securities to trend are to: in Georgia. Recent changes to the a local stock exchange or, even more Develop the Georgian platform for regulation of securities could open new importantly, providing a clear and ex- trading with securities into an invest- opportunities for Georgian businesses haustive list of those stock exchanges ment exchange in a potentially major and the local stock market. Specifi cally which,under the law, will be treated as regional economy or a signifi cant a new initiative by the National Bank “recognized”. regional fi nancial centre; and to streamline the issuing of securities As already mentioned, the key Adopt proper and fi nancial arrange- and their registration. The fi rst step advantage of the current legal regime is ments for fi nancial regulations that towards enhancing the securities trade that an owner (or holder) of securities meet internationally accepted standards profi le was the 2008 order to issue placed on a recognized foreign stock in the industry. government securities for raising funds exchange is free to proceed with pub- on international capital markets. This licly offering his securities in Georgia The above-mentioned regulations move that permitted denominating without applying for approval by the are a huge step in bringing the local se- local securities in foreign convertible National Bank of Georgia – the regula- curities regulatory environment closer currency. Previously, there were no tor of the local capital market. to international standards. However, domestic regulations specifi cally ad- In practical terms, what is required the practical results of these changes dressing procedures for public place- before offering such shares in Georgia have yet to be seen since they greatly ment of government securities on stock is serving a formal notifi cation to the depend on a number of factors, includ- markets. regulator and fi ling a set of documents ing, among others, who will eventually Georgian law is silent however, on as evidence that the securities are being run the local stock exchange.

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Can a leopard change its spots? The Georgian Revenue Service is changing, what does this mean for your business?

ANDREW COXSHALL, A new leader of the pack around the world. The concept of get- MANAGING PARTNER, In March 2011 a new Head of the ting a private company or individual to KPMG SOUTHERN CAUCASUS GRS was appointed – Mr. Jaba Ebanoid- carry out a tax audit on a business rather ze. Having previously worked as the than the tax authorities exists in some ne of the biggest complaints Head of the National Agency of Public shape or form in the United Kingdom, from businesses already in Registry (NAPR), the Deputy Minister the Netherlands, Turkey and Pakistan to OGeorgia is the selective appli- of Justice and the Head of the National name a few examples. cation of the tax laws and the aggressive Bureau of Enforcement, Mr. Ebanoidze While each country seems to have manner in which tax audits are carried immediately set about implementing its own methodology for the execution out. The Georgian Revenue Service some reforms, one of the most important of the audits, the selection of the audi- (GRS) is seen as a predator waiting to of which is the outsourcing of tax audits tors and the liability of the auditor and pounce on its unsuspecting prey. announced by the Prime Minister on auditee, the basic idea is the same. For those of you who have seen a April 13th. The basis for such a move is trust leopard in the wild or watch nature pro- However, more importantly for the and transparency – the GRS has to trust grams you may know that sometimes a longer term, Mr. Ebanoidze’s appoint- the taxpayer and the tax auditors to act leopard does not kill its prey instantly, ment signals a change in the tone at correctly and the system of audits needs but may drag its victim out of sight, keep- the top of the GRS and hopefully an to be transparent. ing it alive until it is ready to feast. Some improvement in the tax environment in business people are of the opinion that Georgia. The consultation process the GRS is like a leopard when it comes The GRS has held several meet- to tax audits. However recent events Outsourcing of tax audits ings with accounting companies, tax would indicate that the leopard is trying The idea of outsourcing tax audits consultants and others to try to fi gure to change it spots… is not new but neither is it widespread out what is workable in the short and

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longer term. Due to the revolutionary lot less stressful. Secondly, GRS staff of an acceptable standard; also funda- nature of this reform it is taking a while may not be that well informed on the mental considerations such as client for everyone to fully understand how it latest tax laws and regulations and confi dentiality, professional ethics and will work in practice. Consequently there are very unlikely to be well versed in independence are often absent from some have already been many variations on the modern risk-based, systems-based au- players in the market. This leaves the precise nature of the tax audit outsourc- diting methods, whereas tax auditors system open to abuse; one can envisage ing. The key points of the scheme are (especially professionals from the “Big the situation where a tax auditor agrees set out below, however by the time you 4” audit companies) have been through (for a small sum) to “turn a blind eye” read this article these points may well substantial obligatory training and their to a taxpayer’s tax issue and give a clean have changed. knowledge must be completely up to date audit opinion so that the taxpayer ends up otherwise their clients will not pay for the with a smaller tax assessment or maybe Current GRS thinking services they provide. none at all. As of today the GRS plans to let pri- Thirdly, although the taxpayer will Secondly, these changes are revo- vate tax, audit and consulting companies have to pay the tax auditors for the work lutionary and there will inevitably be and individuals (tax auditors) conduct they do, these costs should be more teething problems during the implemen- pilot tax audits over the next few months than offset by any reduction in fi nes and tation phase, so the GRS will need to on a limited number of medium-sized penalties that would be made available have oversight of the process and make tax-paying companies (taxpayers). The by the GRS. the necessary changes before the new taxpayer would request the tax auditors Lastly, by voluntarily requesting a tax system of tax audits is rolled out for all to carry out a tax audit on historic data audit to be carried out the GRS is more taxpayers. (probably for the three years to 31 De- likely to view the taxpayer as a lower Lastly, if taxpayers and/or tax audi- cember 2010) and conclude a contract risk taxpayer and hence less likely to be tors are found to have acted improperly with the tax auditors. For audit compa- subject to tax inspections in the future. then the necessary action (fi nes/prosecu- nies the audit would be carried out in tion) should be taken against them and accordance with International Standards It’s a jungle out there in a very public way as such actions are on Auditing (probably ISA 800 – Special The above all sounds good but it is a breach of the very trust which is the purpose audit engagements) and the important to be aware of the many po- foundation of such a system. audit opinion would be provided to the tential traps which need to be avoided. taxpayer. For “consultants” the “audit” Firstly the system will only be as good What next? would be carried out in accordance with as the tax auditors who are carrying out The pilot tax audits are due to start their own methodology. the work, secondly there needs to be very soon with up to 50 taxpayers be- oversight from the GRS before the pilot ing subject to tax audits over the next 7 So what’s in it for my project is rolled out for all tax audits and months with the audits carried out by tax company? thirdly there needs to be tough sanctions auditors approved by the GRS. On the face of it asking for a tax audit for tax auditors and taxpayers who abuse The results of these tax audits (which does seem a bit like a turkey voting for the pilot program. can take from two or three weeks up to Christmas! However, asking a private tax Currently in Georgia there is no several months depending on the number auditor to carry out a tax audit (which proper regulation of audit companies, of years to be audited and the nature of the taxpayer has to pay for) in return for accountancy companies and “consul- the Company) will be known later in a lower risk rating from the GRS and tants”. Whilst a lack of regulation makes the year and it will be up to the GRS to a reduction in any fi nes and penalties it easier for companies to do business, decide whether or not to roll the program sounds a lot more attractive. when you are dealing with profession- out for all taxpayers. Firstly, having the tax authorities als such as auditors and accountants Whatever happens the next few in your offi ces can be very disruptive a regulatory framework is essential to months will be an interesting time for the and unsettling for staff, customers and maintain standards. GRS, taxpayers and tax auditors as the suppliers, whilst having a private tax Unfortunately the quality of work exact scope and extent of the tax audits auditor carry out the work should be a of some accountants/auditors is not are clarifi ed.

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NICK CLAYTON “bridge” between business interests Attitude and government authorities. espite a rocky relationship Then, as tax revenues began to rise with business in the past, the once again late last year, the president Toward Dgovernment is working hard announced a package of tax reforms. to create better ties with the private Also under discussion is a provision sector. giving businesses the right to opt for Business New state intiatives - including a a third-party auditor to carry out tax business ombudsman to advocate for inspections and determine appropriate Shifting tax-payer rights and a business council fi nes. in parliament - are easing tensions “If implemented properly, [allowing between the government and business. the use of third-party auditors] would Last December, President Mikheil greatly help to put up a fi rewall Saakashvili said in a speech that between the government that wants to there were “many defi ciencies” in the freely pursue its own tax collections, relationship between the government and the business community that and the private sector, admitting that feels under attack by the inspections,” business leaders felt that “the State Sheets said. Attitudes toward the does not listen to them appropriately There has also been a societal business community and treats them unfairly”. shift in attitudes toward business, are improving, thanks The speech marked a step in commented Koba Turmanidze, country to economic growth the president’s year-long campaign director for the Caucasus Research to repair the frayed relations – and a dramatic policy Resource Council - which he noted, damaged, in large part, by a period of could be another reason for the shift to build trust and increasingly aggressive raids and hefty government’s softening stance towards communication. punishments for tax crimes at the hands business. of Georgia’s Financial Police. Turmanidze said that most Lawrence Sheets, International Georgian respondents speak positively Crisis Group’s Caucasus project about wealth and are generally manager, said in an interview with indifferent towards inequality, unlike Investor.ge that the government’s in many other post-Soviet countries – ballooning foreign debt, which is Russia in particular. projected to reach 43.2 percent of GDP During the chaotic boom-and-bust in 2011, put pressure on the authorities 1990’s when a small number of crafty to increase tax collections, resulting – and often unscrupulous entrepreneurs in a soar in both the frequency of tax – amassed conspicuously massive raids and amounts of the eventual fi nes. wealth in Russia, such individuals Georgia’s economy also contracted by did not exist in Georgia, he said. All 3.9 percent in 2009 following its 2008 the business opportunities were in the war with Russia, further straining tax north, and the Georgian businessmen revenues. who did go to Russia to make their The government responded to millions usually returned to Georgia the growing gulf of distrust between keeping quietly out of the spotlight and the public and private sectors by fi rst not intruding upon national politics. hiring former AmCham customs “In the nineties there was no specialist Giorgi Pertaia to advise the serious business to speak of; people prime minister’s offi ce and serve as a were struggling for survival,” he said.

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The speech marked a step in the president’s year-long campaign to repair the frayed relations

“People equated big business with a wide variety of topics, in Georgia, the branches of government, the media, being corrupt because if you wanted banks scored well in questions or NGOs. Furthermore, when asked to make any money you had to pay measuring the public’s trust in local what was the single most important someone off, which was pretty much institutions. Despite a variety of scams factor in getting a job in Georgia, true.” and bank failures in Georgia since connections and education came a Today, he said that perception the fall of the Soviet Union, only 10 near tie with 25 percent and 24 percent is still present in the interviews percent of Georgian respondents said respectively. Just one year earlier, in and opinion surveys conducted by that they either “rather distrust” or 2009, respondents overwhelmingly CRRC, but it has largely moved into “fully distrust” banks. chose connections with 43 percent, the background. In CRRC’s 2010 On the contrary, 13 percent said while options like hard work, talent Caucasus Barometer report, which they “fully trust” banks – a higher and work experience continue to surveyed South Caucasus residents on percentage than that received by any of register only in the single digits.

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Berta, Georgia’s new manufacturing adventure

The creation and growth of Berta’s gained experience from the United States Location location location new facility in Tserovani suggests to Germany, from oil to consumer goods The machinery at the industrial plant that light industry in Georgia can be companies, going back home was a natu- never stops moving: select and sort, pour a successful business for export and ral move. Now, Berta’s results make him and pack. The constant fl ow of powder import substitution. confi dent about the future. and liquid into cardboard packets and “An investment of US$35 million plastic containers is managed by precise went into setting up Berta – an unprec- conveyor-belts and quick human hands. edented move for the Georgian manu- The factory covers about 7 hectares facturing sector. We are planning to add of land in Mtskheta, on a hill overlook- MONICA ELLENA new lines to the existing products, bring ing the internally displaced person (IDP) in more machinery and additional capital settlement at Tserovani. The high rate of SEROVANI –Vasil Sulkhanish- investment. This is just the beginning,” unemployment amongst the 6,000 or so vili seems almost diffi dent when he smiles. people living in the village has been an Ttalking about his job. The 39 The Swiss-Georgian partnership be- issue since the settlement was set up in year-old, reserved, smartly dressed Geor- hind the company set up headquarters in the aftermath of Georgia’s war with Rus- gian measures his words carefully. But Tserovani in 2009. Berta’s four lines of sia in August 2008. The new industrial when he speaks about the challenge of products hit the shelves on March 22nd complex provides much-needed jobs. taking over as general director of Berta, and the company’s logo is now present in That’s no coincidence. the biggest producer of household and both big supermarkets and small retail- “The original plan was to locate personal care products in the Caucasus, ers across the country. The management in Tbilisi’s Lilo district,” explains his calm manner reveals steely pride. Af- team is working hard on new products to Sulkhanishvili,” but our plan changed ter all, he was used to challenges: having expand the range. after the war. We believe that employing

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people from Tserovani has been a good challenge is to convince customers here good business environment that’s been social-based decision. We are a socially- that they can get premium quality in lo- established in what is still a very under- responsible business. Being an active cally manufactured products.” developed market, there are great op- player in the Georgian economy means portunities in Georgia. And I think over producing and providing employment.” Investment needed the past several years, Georgia has been Berta currently employs 250 people, Berta is yet another sign that slowly, attracting investors who see this, slowly half of whom come from the settlement. but steadily, something is moving in but steadily – perhaps a better sustainable The company shuttle bus picks up the the manufacturing sector. According to approach than a major infl ux in invest- workers according to their shifts. offi cial statistics, over a thousand manu- ment – and I think the trend is set to con- “A multi-national team of profes- facturing plants have opened since 2008. tinue.” Komsa has witnessed a number sionals manages the quality control and Some of this is driven by foreign direct of business ventures involving US and the research and development units,” investment (FDI): over US$90 million in other foreign investors prove successful. explains Sulkhanishvili, “and the ma- FDI went into industry in 2010, accord- One example is Open Revolution – a US chinery is state of the art in the sector.” ing to Geostat, the National Statistics group that recently launched MobiPay, Since the company is still in the start-up Offi ce of Georgia. Transport and com- a new mobile payment network, with phase, Berta currently operates at about munication got the biggest share of FDI Georgian partners. Having been quite 40% of total capacity: the machinery in with over US$193 million. These fi gures satisfi ed and successful thus far, Komsa place can produce up to 35,000 tonnes of however are a fraction of the amounts believes the group is planning to build powder and 8,000 tonnes of liquid a year. in previous years. According to Geostat Georgia into their regional headquarters. That’s enough to keep the country data in 2009 FDI was US$658 million, “Most of what I’ve encountered have clean, and more. Berta is already in while in 2007, at the height of investment been smaller ventures than the Berta the process of signing agreements with nearly 25% of the US$2.01 billion in FDI project,” she adds, “but I think Berta neighboring Armenia and Azerbaijan. went to the manufacturing sector. Berta will be setting an important precedent CIS countries are the immediate target can be the green light that Georgia is for other private investments of such for the company, which is also eyeing ready to return to the 2007 fi gures. scale. It will also demonstrate that be- big markets like Ukraine. “Yes, Georgia is ripe for investment,” yond its principal sectors of agriculture, “We have the capacity to produce and explains Stephanie Komsa, a Tbilisi- tourism, the pipeline, and hydro-power, distribute beyond the national borders,” based business consultant for foreign Georgia offers an attractive base for es- comments Sulkhanishvili. “Our main investors and Georgian companies seek- tablishing light manufacturing and other competitors in Georgia are imports: our ing funds to set up enterprises. “With the industries.”

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square meter hothouse in Orkhevi, near gardening tradition should be revived. Tbilisi. Vako Togonidze of D&D told The American Friends of Georgia journalists that modern technology at (AFG), where Kiladze serves as execu- the greenhouse will enable them to sell tive director, helped set up the Institute fresh fl owers and plants at 30-35 percent of Ecology and Decorative Gardening in cheaper than the Dutch imports. Tbilisi in 2006. The three year program is Today, the majority of Georgia’s based on the curriculum of the University A Blossoming fresh fl ower supply comes from Tur- of Bonn (Germany) and is supported by key and Ecuador. According to offi cial the Georgian Patriarchate’s Offi ce. Business statistics these two countries exported There is no tuition fee at the Insti- 178 thousand and 115 thousand tonnes tute. Every year up to 100 students are Greenhouses in Georgia are inching into the country’s import- respectively, to Georgian dealers in accepted, although only 60 percent are driven flower market and cultivating 2010, while in total, Georgians bought successful enough to be awarded the a demand for landscaping. 331 thousand tonnes of imported fl owers Landscape Designer Diploma. last year – up from 238 thousand tonnes According to Mother Tekle, all the MAIA EDILASHVILI in 2007. Bakhuijzen says that he has graduates of Institute have found jobs noticed a “gradual increase in demand” and some were hired as lecturers, includ- ith a market worth an es- in Georgia for fresh fl owers, but there ing Marine Sikharulidze, aged 39. timated US$2.55 million, is a lingering misconception about land The future landscape designers Wthe imported fresh fl ower architecture. studying at the Institute have an oppor- business in Georgia is attracting interest The lack of professionals in this fi eld, tunity to hone their skills with practice from foreign and local investors. specialists believe, has led to mistakes as at the Patriarchate’s greenhouses. For Ivo Bakhuijzen, general director of cities and towns try to create green space instance, together with their teachers, Dutch Design Garden, said the high and parks around the country. they designed the huge terraces and proportion of imported fl owers translates “Landscape architecture and design squares of the St Trinity Cathedral. In into higher prices for local customers. requires huge knowledge – not all trees addition, the students are engaged in the “Currently most of the plants and and fl owers can be planted in a one place. preservation and cultivation of Georgian flowers are all being imported. That In general we have lots of problems and Caucasian endemic species. means consumers have to pay 5 lari for with regard to this in Tbilisi,” says Lena Sikharulidze, who studied in Ger- one rose, which is a lot.” Flowers are Kiladze, who holds PhD in Architecture many and has worked at greenhouses blooming into a serious business: early and completed her Fulbright and post- in Poland, sees a future in the industry this year Dutch Flowers D&D, a joint doctoral research at the Yale School of – and a chance to help nature and urban venture between Georgian and Dutch Architecture and Columbia Graduate dwellers. businessmen supported by the Dutch School of Architecture Planning and “We see Tbilisi being designed in government and Tbilisi Municipality, Preservation. a pitiful way. Some fl owers die just a announced plans to construct a 10,000 According to Kiladze, Georgia’s month after they were planted,” she said.

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JUNE-JULY 2011 19 Investor.ge ADVERTISEMENT

New Owner, New Plans for Poti Port

APM Terminals, part of Moller-Maersk Group, purchased 80 percent of Poti Sea Port in April from RAKIA.

NICK CLAYTON

ince acquiring an 80 percent share of the Poti port earlier this year, APM Terminals now plans to invest S$100 million on upgrading the port facilities, and is eyeing additional investment projects in the region, company offi cials said. APM Terminals, part of the Moller-Maersk Group, an- nounced that it had acquired an 80 percent share of the Poti Sea Port in April, and offi cially took over from UAE-based RAKIA, in May. APM Terminals’ Senior Vice President and Head of New Terminals, Peder Sondergaard, said APM intends to “add value” to the port, meeting the demand for a “high-quality port infra- structure in the Black Sea.” In the same press release, he also said APM would be investing $100 million in the port facilities over the next fi ve years. RAKIA continues to operate the Poti Free Trade Zone (FTZ), which occupies about 100 hectares adjacent to the port. RAKIA, which bought the zone in 2008, hopes to develop it into a major logistics and industrial center, pledging a $200 million investment. APM Terminals’ Vice President for Business Development, Hans-Ole Madsen said in an interview with Investor.ge that the fi rst stage of APM’s development plan has already begun, with engineers surveying the port’s existing equipment and determining which terminal cranes will be updated and which will be scrapped. In this initial stage, APM will also be looking to fi nd ways to make the facilities safer and more effi cient, and Madsen said he is confi dent that the port renovations will accelerate under APM’s watch. The volume of cargo processed by Poti port increased between 2007 and 2010 by 13.5 percent to 210,000 TEU (Twenty-Foot Equivalent Units, the industry standard of mea- sure), according to government statistics. Still, this volume represents a paltry number compared to other ports around the world, with the world leader, Singapore, processing 25.9 million

20 JUNE-JULY 2011 Investor.ge

TEU in 2009, and even the 50th-ranked port, Nagoya, Japan, which processed Trouble Shopping? 2.1 million TEU the same year, accord- ing to the American Association of Port Authorities. Tbilisi has Plans Madsen said that APM’s secondary objective for the port is to fi nd ways The high prices and limited selection of clothes is a to better serve markets in Armenia and common complaint in Tbilisi. But a slew of new malls Azerbaijan. In addition to the 50 ports and western brand franchises are hoping to reshape the APM Terminals currently manages, it city’s shopping. also runs 122 inland logistics facilities, and, while APM is currently taking things MAIA EDILASHVILI “one step at a time,” he said Georgia has the potential to develop into not only a ew malls, new brands, new retail outlets: Tbilisi has regional trade hub, but a hub for trade declared war on its reputation as a tough neighborhood between Europe and Central Asia as well. Nto fi nd a good deal. At the moment Caspian Sea coun- Kote Gabrichidze, a market analyst at the Institute for Poll- tries are developing rapidly and looking ing and Marketing, noted it is “very hard” to convince foreign for routes to export their energy goods. brands to open a branch in Tbilisi, so the success of the stores While most currently export through already in the market – including Motherhood, Dika, Puma, Russia to ports on the Baltic Sea, he said Giordano, and Chicco – is paramount. he would like to see the South Caucasus “[There] is the lack of diversity [of international brands in compete to offer an alternative. Tbilisi],” he said. “However, I see positive trends – recently I Madsen said that Georgia has been hear quite frequently that yet another international brand has doing what it needs to in terms of easing come [to Tbilisi].” customs restrictions and creating the best In May, for example, Bloomberg reported that the French trade environment possible, but much supermarket chain Carrefour announced plans to open a shop more work needs to be done to shore up in Rakeen’s Uptown Tbilisi Mall, which is scheduled to open the region’s infrastructure. later this year. Georgia is already a regional exporter of numerous products including cars Glamour for Fashionistas and food stuffs, and many projects are Some new franchises are targeting the fashion-crazy, in the currently in the works to increase the hope that local shops with high-end brands will keep people effi ciency of transit through the country. from purchasing fashion items online or overseas. Last October, the Georgian govern- Athina Imnaishvili, the director of Georgian Trade Corpora- ment streamlined its border process with tion (GT Corp), opened Style Avenue, a super multi-brand store Turkey and estimates that the new pro- on Tabidze Street, in May to entice shoppers with a local selec- cedures will decrease crossing times by tion from Gucci, Alberta Ferretti, Versace, Stella McCartney 50 percent. The government is currently and other designer labels. working on similar deals with Armenia Visitors to Style Avenue can fi nd mostly semi-casual clothes, and Azerbaijan. Meanwhile, the Baku- though in limited stocks and in medium sizes, which according Tbilisi-Kars railway, which will connect to Imnaishvili, usually “sell the best”. the region to the European rail network, Even with such glamorous labels, GT Corp tries to seduce is slated to become operational in 2012 shoppers with a wide array of prices, ranging from 5 to 750 lari. and Georgian Railways hopes to triple Gabrichidze agreed that identifying consumers’ price ‘soft overall train speeds through the country spot’ can help stores – and shopping centers – survive a fi ckle in the next fi ve years. market.

JUNE-JULY 2011 21 Tbilisi: Ripe for New Retail Investor.ge According to 2010 research by the Kiev office of DTZ, one of the world’s most famous property advisory companies, the retail property market in Tbilisi has been extremely immature and undeveloped by Western and Eastern European standards. As of 2009 the supply was 51 square meters per 1000 citizens. In comparison, in Warsaw it was over 800 square meters, in Prague – over 600 square meters and in Bratislava – 1,800 square meters. DTZ’s projection is that retail stock of approximately 170- 220 square meters per 1,000 inhabitants “may be sustainable in Tbilisi”.

He noted that a range of price op- center. Retail outlets include Milavitsa, a successfully concluded with tenants for tions helps engage the whole spectrum Minsk-based ladies’ lingerie store; Mavi the second fl oor. For the time being, of shoppers. Low end malls, such as Jeans, (Turkey-based); Steve Madden – a however, he said the names of the new Kidobani and the Passage in Didube, US footwear company and Sancho, Le- stores are confi dential. offer lower prices, while new malls are vanto and Sinequanone, which all offer The mall has a total area of 7,000 positioning themselves for the middle to men’s and women’s collections, as well square meters. Daily customer fl ow at high end of the market. as kidsOOLL by Collezione; Roniko, a the Axis Mall reached 2,000 during the Georgian retailer of imported glasses and New Year period and is presently, on The Return of the Mall lenses and many others. average, around 600 people a day. This Gabrichidze, a marketing specialist, The mall is also home to household is considered “normal” for a mall which has helped over half a dozen shopping appliance stores Elit Electronics, Euro- is still under construction. The goal is to malls in Tbilisi develop marketing strate- technics and Beko, and according to the reach 2,000 shoppers a day after one year. gies specifi c to their type of mall. mall’s marketing director, Dea Macha- Customer fl ow is fi ve times higher He stressed the right kind of ten- variani, appliances are one of the biggest than at Tbilisi Central, which also opened ants is critical – for the mall itself, the draws to Tbilisi Central. last year. Located at Vagzlis Moedani, foreign brand entering the market, and Axis Shopping Mall, located on it shares its building with the Central for consumers. He is currently working Kazbegi Avenue, will officially open Railway Station, so not all those passing with Axis, developing a mall in Sabur- in September. To date the fi rst fl oor through are shoppers – but its design talo to target middle-income earners, has already been leased by some world encourages travelers to stop and browse and explains it would be foolish to lure renowned brands, mostly Italian and while waiting for their train, and perhaps high-end brands such as Paul&Shark, French, such as Cop-Copine, Roberto be tempted to make a purchase. an Italian sportswear company because, Bravo, Evita Peroni and Levis. Axis, however, is hoping the draw of he noted, “neither consumers nor the While some tenants have moved “international”, affordable brands – and company would be happy”. into the Axis mall from other locations super sales – will attract shoppers. With a total commercial space of around the city, others are newcomers to “These brands offer huge seasonal 20,300 square meters, in addition to the market including Coincaza, Italy’s sales – with discounts of up to 80%, shops, the mall ‘Tbilisi Central’ offers well-known home decor store. Accord- which people love,” Chikviladze said. fast-food restaurants, bank services and ing to Zura Chikviladze, manager of the “So this would work as a fi lter … and recreational facilities including a bowling Axis Mall, negotiations have also been stimulate sales.”

22 JUNE-JULY 2011 Investor.ge

JUNE-JULY 2011 23 Investor.ge

Privatization Planned for Parliament?

Media speculation over the Parlia- below the 4.0 percent level. ment Building’s possible privatization Despite the media speculations started on May 17, when members of however, the Parliament Building has parliament created a committee to deter- not appeared on the recently published mine the fate of the building. list of properties offered for sale by the Since the Saakashvili government Ministry. The building, constructed over launched a massive privatization pro- 15 years (1938-1953), partly with Ger- gram in 2004, the resulting revenues man POW labor, is considered one of the have been the primary source for fi nanc- best architectural treasures of the Soviet ing the country’s budget defi cit. Union, according to the Parliament web According to the Financial Stability page. Tea Bolkvadze, spokesperson for With the Georgian Parliament Report 2010 issued by the National Bank the Ministry of Economy and Sustainable slated to move to Kutaisi in 2012, of Georgia, in 2006 and 2007 priva- Development, which is in charge of sell- there are lingering questions about tization proceeds made up 17 percent ing state-owned properties, told Investor. what will happen to the parliament and 15 percent of budget expenditure, ge that there were no immediate plans to building on Rustaveli Avenue. respectively. put Parliament up for auction. However, the aftermath of the global The list of state-owned assets current- MAIA EDILASHVILI fi nancial crises together with the August ly on sale includes the former Ministry of war caused a downward trend in 2009 Justice on Rustaveli Avenue, the former tarting in 2012, Tbilisi will share pushing the receipts from privatization Ministry of Finance on Abashidze Street, its duties as the country’s politi- down to 358 million lari, just 5.6 percent a former Publishing House on Kostava Scal capital with Kutaisi, when the of the total budget spending. Street, the former Ministry of Economy Georgian Parliament moves 221 kilome- Privatization proceeds are expected on Chanturia Street, the former Physical ters west to its new home. to decline further over the coming years. Education Institute on Chavchavadze At an estimated cost of 55 million lari According to offi cial fi gures, in 2011 the Avenue and the Clinic Hospital of Ivane ($32.7 million), moving the parliament state budget will receive 150 million lari Javakhishvili Tbilisi State University on is not cheap, but the government hopes in revenues from selling state-owned Aghmashenebeli Avenue. the decision will pay off big in economic assets. The lowest priced building at US$4.5 development in western Georgia, and, In 2010 Georgia’s budget defi cit fell million is the two-story former Finance perhaps, through the sale of the Soviet- to 6.6 percent of GDP from 9.2 percent Ministry, while the former Physical Edu- era building in Tbilisi that currently holds of GDP in 2009. This year the govern- cation Institute has the highest price tag, the legislative body. ment is aiming to bring the budget defi cit at US$15 million.

Selling, selling, sold: Land Plots Privatization continues Tbilisi, Tevdore Mgvdeli Street. An individual pur- Privatization sales continue, especially in the health chased 91.24 square meters of land on April 19. The sector and in the regions. A brief update from Investor. initial list price was 120 thousand lari; the winning bid ge’s Eteri Maisuradze. Information is based on public was 128 thousand lari. records published by the Ministry of Economy and Gori, Shindisi Highway. A legal entity purchased Sustainable Development. a 1258.84 square meter site on May 4. The initial list Tbilisi Endocrinology Center LLC was sold on April price was 36 thousand lari; the winning bid was 40 4. The initial list price was 190 thousand lari; the win- thousand lari. ning bid – from an individual – was 210 thousand lari. Gori, Karaleti Village. An individual purchased a 495.6 square meter site on May 4. The initial list price was 23.5 thousand lari; the winning bid was 24 thou- sand lari.

24 JUNE-JULY 2011 Investor.ge

JUNE-JULY 2011 25 Investor.ge

In Brief A New Plan for Tbilisi A brief synopsis of new investments and The parliament is moving, new shopping malls are going up and business news compiled by Investor.ge’s roads are going down. To help manage the change, City Hall, Eteri Masuradze. Reports are based on together with the World Bank, is working on a strategy to cultivate a briefs published by Georgia Today, The creative, sustainable solution for Tbilisi’s future development. Commercial and The Financial. reating a plan for Tbilisi has never been easy, especially after decades Trains to be built in Rustavi of top-down orders that paid little attention to the realities on the In April Georgian Railway LLC contracted Cground. Locomotive Plant Company to construct and But now the capital is in need of a new vision, according to Zviad Arch- repair 185 train cars, including locomotives. uadze, the head of the Economic Policy Agency at City Hall. This will be the fi rst time trains have been built Archuadze, working in partnership with the World Bank, is creating a new in Georgia, with the 40 million lari investment urban development strategy for Tbilisi – an umbrella plan that will map out creating 600 new jobs. concrete projects and goals to assist the city’s development. People, not plans, are at the heart of the strategy, he stressed. Over the past two years, the city ad- First Credit Union opens in Georgia ministrators have been working with World Bank advisors like Ahmed Eiweida, Starting from April, Georgians now have a sector coordinator for sustainable development in the South Caucasus. They another choice for banking in Tbilisi: a credit have researched the city and created a vision for its development. The analysis union. Members of the union will receive 17 of the city – its people and its problems – is an integral part of the process. percent interest on deposits. There are an es- In May, the partnership offered its vision to the public for their opinion. timated 200 million members of credit unions Over the course of the May 3-5 Tbilisi Local Economic Development Forum, in 100 countries around the world. Archuadze and Eiweida led public discussions about the future of Tbilisi. Bringing people into the process is crucial, Eiweida said, to create a plan ADB loans US$25 million to that is sustainable. He noted that during the Soviet Union, urban planning bolster trade hinged on a city’s master plan – a physical map that outlined a space for ag- The Asian Development Bank will loan riculture and a place for industry. US$25 million to Bank of Georgia and TBC “[There was] no consultation,” he said. “Now we start with the brain, not Bank as part of its Trade Finance Program. the muscles. The brain is the people and the economy.” The program provides guarantees and loans Over the next three months city administrators will meet with people through banks to support international trade to fl esh out the public’s views on how Tbilisi should develop. The city has in developing member countries. some concrete projects for the future: moving the railway track to the Tbilisi Sea, relocating the zoo, renovating Rose Revolution Square. But the vision Air Astana launches Tbilisi-Almaty of the city itself, Archuadze stressed, depends largely on the creativity of the flights Tbiliselebi and the ideas they put forward. On June 2, Air Astana started direct, non- “We must fi nd something new, something innovative for us,” Archuadze stop fl ights from Tbilisi to Almaty. The airline said. “This is the important thing for us, this is the challenge for us: fi nd a new is planning on three fl ights a week: Monday, niche, fi nd a new idea for Tbilisi.” Thursday and Saturday.

TBC buys 80 percent of Analyzing Investment: How Cities Constanta Bank Georgia’s second largest bank purchased Position themselves for FDI a controlling stake in Constanta Bank in On May 3-5, Tbilisi hosted its Good Data, Good Decisions April. Constanta will continue operations as fifth annual Local Economic ata, and good analysis, are at the an independent bank, while TBC Bank will Development Forum (LED). heart of attracting investment, Investor.ge interviewed Dr. use its experience and resources to help the according to Dr. Ronald Wall, Ronald Wall, a panelist during D bank expand. The remaining shares belong to the conference, on the best an economic geographer and a specialist OikoCredit (13 percent) and individual inves- practices for a city to attract in urban development at the Institute for tors (7 percent). investment. Housing and Urban Development Stud-

26 JUNE-JULY 2011 ies at Erasmus University Rotterdam. Wall, a speaker at the LED conference in GEORGIAN E-HEALTHCARE Tbilisi, has made an in-depth study of the invest- EDUCATION AND TRAINING: ment infl ows – and outfl ows – of two municipali- ties in the Netherlands. Leveraging Investment Opportunities A city government needs to understand its own social, economic and environmental “indicators” – and how they are related to the larger picture of global investment. The key is GEORGE W. MCGURN comprehensive research and data, Wall noted. “Too many cities make important policy What is the Demand? decisions based on very local, piecemeal and eorgia’s chosen path toward economic development often incidental data and analysis,” he said in relies on securing private investment and attracting an email interview. Gforeign investment fl ows as witnessed by its prog- “In a globalizing world it becomes essential ress in the fi nancial, energy and telecommunications sectors. to understand how a city’s local qualities (supply Georgia has been less successful in attracting investment – or what a city has to offer) relate to the needs for its privatization, rehabilitation and construction of hospi- of global and regional investors (demand – what tals though notable efforts have been made and a foundation fi rms are looking for).” laid for signifi cant and rapid progress. The legacy of Soviet For instance, a city’s market size is only healthcare still permeates the entire health- care system. relevant, he noted, if the investor is looking to If, however, the right choices for e-health technologies sell locally. and human capital investment are built on recent achieve- ments Georgia’s healthcare system can jump-start the fragile Know Thy Competition, gains it has achieved and become a 21st century model for Know Thyself other emerging economies. Wall pointed out that one of the most impor- tant issues city governments need to consider is What is the Constraint Analysis? the competition - which cities are their competi- A rare and coveted decision to sustain Georgia’s de- tors, and why. velopment momentum was made on January 5, 2011. The Competitor cities do not have to be in the Board of the US Millennium Challenge Corporation desig- same geographic region, and do not have to be nated Georgia eligible to elaborate proposals for a second completely the same. MCC compact. In April the GoG released a fi nal draft of Wall explained that cities are competitors its Constraints Analysis - a solid look at current economic if they attract the same types of investors, the constraints that hinder the country’s future development. investors are the same size and the sector break- It is the government’s fi rst offi cial step toward a 2nd MCC down in the city is similar. Compact. This analysis is important, he said, because Infrastructure and human capital were identifi ed as the it allows cities to identify potential investors two binding constraints. In the case of healthcare each of and focus on how to improve their ability to these constraints apply signifi cantly with many ramifi ca- attract them. tions. For example, foreign investment that requires ex-pats to relocate families to Georgia is less likely due to real con- The Larger Picture cerns over ex-pat access to widespread, quality healthcare. A city cannot compete, however, if it does not Tourism is a major growth sector but without access to understand how it fi ts into the larger neighbor- quality healthcare its potential will not be realized. hood and region, he said. “[City] administrators most importantly need What Has Been Done? to know that local knowledge is not enough,” Georgia has two prominent centers for medical educa- Wall stressed. tion: Tbilisi State Medical University (TSMU) and AIETI “They need to know the “relative” impor- Higher School of Medicine. The former is a full-fl edged tance of their city amongst all other cities of the medical institution that has benefi ted from several interna- region, or in fact, the world.” tional partnerships, especially the one with Emory Univer- Investor.ge

sity. This partnership has brought about What Could Be Done? protocols and guidelines are document- revised curricula, the establishment of Georgia has invested substantial in- ed, the appropriate education programs nurses’ training and the professional re- tellectual, fi nancial and political capital implemented, and the human capital spect traditionally lacking, the retraining in the reform of its healthcare system. and other resources properly managed, of administrators and Soviet-educated The fi nal outcome of such long-term e-health can catapult Georgia to the fore- doctors, and the introduction of emer- reforms involving so many public, pri- front of leading edge healthcare delivery. gency medical and administrative pro- vate, local and international participants GFC is committed to do just that.” cedures to current healthcare operations. is diffi cult to envision and communicate AIETI is an undergraduate medical to a reform weary citizenry. Can Georgia Invent a school that places its most successful In several in-depth market surveys Replicable Model for 21st graduates in US internships for eventual Georgians continue to express formally Century Healthcare Education accreditation. In many respects its results and informally dismay with their health- and Training? are exemplary but its vision of establish- care system. Yet, an interesting and The GoG Economic Constraint ing an American Hospital in Tbilisi is as consistent fact emerges – 90% of Geor- Analysis declared that innovation is yet unrealized. gians are satisfi ed with their personal negligible and unlikely to contribute to Its sixty-fi ve plus graduates currently physicians. Georgian economic development. One practicing in the States are reluctant to The ingredients for real and rapid can agree with this statement as it refl ects return to a healthcare environment that is improvement in Georgia’s healthcare the present situation but it overlooks the foreign to their present professional real- system seem to be in place. existing potential for innovation. Georgia ity. It is often inimical to the few AIETI The addition of recent developments could design and launch educational and graduates who have returned. in e-healthcare delivery, the leveraging of training programs that would place it in In March the Central Public Health past healthcare initiatives and Georgia’s the forefront of 21st century e-healthcare Reference Laboratory opened a new US- relatively advanced communications delivery. funded $100 million facility in Georgia infrastructure will benefi t Georgia as it It will take the promotion of the ap- that is closely allied to the celebrated contends with healthcare delivery, cost propriate vision, the mobilization of the Atlanta-based National Centers for Dis- and fi nancing. above named public/private entity, and ease Control and similar US promoted fa- Envision a Georgian public/private, the sourcing of private and international cilities in Bangkok and Nairobi. This new revenue-generating entity that joins all donor funding. facility is steered by three US-trained the previously mentioned stakeholders If it succeeds Georgia can provide Georgian healthcare professionals. in the provision of e-healthcare technol- an e- healthcare system to benefi t the Georgian insurance and pharma- ogy and provides training for healthcare Georgian citizen, the ex-pat, the potential ceutical companies along with Czech, professionals and consumers. tourist and, most importantly, re-energize German, Polish and British businesses This entity would foster a Georgian the dedicated professional who has la- and entrepreneurs operating within the healthcare community able to unite all bored under diffi cult conditions without country have participated in the govern- Georgians, including the contractual ever losing the confi dence of patients or ment’s privatization and construction involvement of the Georgian medical the Georgian healthcare diaspora’s com- projects and opened new clinics. diaspora that prospers abroad. mitment to return home. Insurance schemes are slowly im- Within Georgia such an entity would Faced with similar challenges and proving services for those living below greatly improve healthcare delivery constraints, many dynamic emerging the poverty level. As new and renovated while increasing employment and reduc- economies will be watching the Georgian hospitals and clinics become operational ing the incidence of poverty. experiment closely. emergency service delivery is improving. Beyond Georgia such an entity Georgia’s remarkably stable and well- could provide consulting services in George W. McGurn is an interna- developed NGO sector has provided e-healthcare to the region and to other tionally recognized Professor of Man- very good and reliable recommendations emerging economies. agement and innovative entrepreneur to Georgia’s healthcare stakeholders. Iveri Kutsnashvili, General Director in transitional economies. He is Dean Especially notable is the Curatio Founda- of Golden Fleece Capital, has envisioned emeritus of Boston University’s School tion whose insight and advice Georgian such a future for Georgia’s healthcare of Management and former Visiting Pro- decision-makers and several regional and system. fessor of Globalization at Moscow State global clients prize. He asserts: “After the appropriate University’s Business School.

28 JUNE-JULY 2011 Investor.ge

JUNE-JULY 2011 29 Investor.ge

the organization is huge it is a very pain- Health: A New Frontier ful and hard process.” Despite the challenge, medical edu- For Investors cation is a priority for the government, stressed Health Minister Andrew Uru- Investor.ge is starting a new series of sector overviews to provide shadze – especially creating a cadre of background, summaries, and analysis of priority industries for investors in modern nurses. the Georgian economy. This is the second of three articles dedicated to the “[N]urses’ qualifi cation improve- health industry. For more information, please contact Molly Corso, editor, ment is one of the main priorities of [email protected]. health reform,” he was quoted as saying during a speech to mark International Nursing Week in May. ew private clinics, hospitals, in pilot programs to fi ll the gaps in the “I think nurses have a leading role in and training centers underscore Georgian medical fi eld, namely nurses, the health sector.” Nthe growing role for private health administrators and emergency Outsourcing new trainings and con- medical universities to provide cutting care. tinuous education to the private sector edge skills and the latest methodologies. Private schools are a logical starting is one way the government is trying to The government’s plan to create 100 new point for innovative change in medical make an immediate impact. hospitals, largely through its cooperation education, noted Dr. Levan Tvildiani, Urushadze was speaking at a gradu- with insurance companies, creates a the rector of AIETI Medical School in ation ceremony for nurses who received demand for highly trained medical staff Tbilisi. training at the Archil and Sergo Ko- and health administrators. While the government works to baladze Center for Research and Expe- In its second article in a series about change the curriculum at state run medi- riential Learning. business opportunities in the health sec- cal universities and institutes, the private The center was founded by Dr. tor, Investor.ge focuses on education, sector can quickly adapt the international Kenneth Walker, together with Emory and the role private medical schools and programs and methodologies needed. University and Partners for International education centers are playing to help Tvildiani said, given the proper edu- Development, in 2009 to introduce new Georgian doctors and nurses learn the cation, Georgian physicians are able to skills and methodology to Georgian latest methodologies and skills. compete at an international level. nurses and doctors. A 2009 World Health Organization AIETI Medical School uses Ameri- Over 1100 nurses have been trained performance assessment of Georgia’s can textbooks and prepares students to by the center, which has received sup- health sector found that Georgians are pass the United States Medical Licensing port from the Georgian government and largely satisfi ed with the level of care Examination (USMLE). Approximately USAID. Educating nurses is a basic step and attention they receive from doctors. 33 percent of the school’s graduates have to providing more effi cient health care Nearly two decades of training and edu- gone on to study in the United States – for Georgian patients.. cation programs have had a “positive” many staying on as practicing physicians Nurses trained at the center will be impact on how Georgian physicians do in American hospitals. able to take a more active role in health their job: recovery rates for tuberculosis “Education … is a continuing process care, freeing up doctors to spend their rose from 40 percent in 2003 to 65 per- and without good education, it is impos- time on diagnosis and treatment, Dr. cent in 2007. The report noted, however, sible to make a good practice,” he said. Walker noted. that “[the] development of human re- “[Making] changes in the curricu- “[I]f you want to really improve the sources, training and ongoing education lum is not easy and it means the staff health care of a country you not only have yet to achieve modern standards.” changes, the student number changes need to have well trained physicians, While the government continues to and the budget changes. ..we are a small but you need to have well trained nurses work on strengthening the curriculum university with a small staff and we are who fi ll this larger role,” he said. “This at state-run medical schools, private really compliant with any changes we is the kind of thing the government is businesses – and donors – are investing need to make in the curriculum…when supporting for nurses.”

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President Barack Obama and Russian President Dmitry Medvedev Attend the U.S. - Russia Business Summit Stock Photograph by White House Public Domain Medvedev seen to target capital flight as election bid evolves

return as president in 2012. way in spurring economic development, “The assessment by the president in spite of pledging early in his presi- is that we did not have real progress dency to root out graft and diversify the in improving the investment climate,” economy through innovation. Arkady Dvorkovich, Mr Medvedev’s Instead, Russia has slid to its lowest top economic adviser, told the Financial rating on Transparency International’s CATHERINE BELTON AND CHARLES Times in an interview. “We need progress corruption index, at 154th out of 178 CLOVER IN MOSCOW, now in the short term. Investment is very countries, while remaining ever more low and capital fl ight is high.” dependent on oil and gas. ussia has failed to improve its Mr Dvorkovich said the president “Some kind of enduring reform of the investment climate amid grow- would soon unveil new measures to im- fi nancial and judicial system is needed Ring capital fl ight, a top aide to prove the situation for investors. because currently the rate of capital Dmitry Medvedev has said, as the presi- Central bank data showed a net $21bn outflow is unsustainable,” said Chris dent draws up economic reform plans on fl ed Russia in the fi rst quarter of this year, Barter, co-chief executive of Goldman which to base a possible re-election bid. in spite of near-record oil prices. Fresh Sachs in Russia. Mr Medvedev came to power in central bank data on Thursday showed a Mr Medvedev began his investment 2008, following his mentor, Vladimir further $1.6bn left last week, bringing climate drive last month, with measures Putin, who became prime minister after total outfl ows in April to $5.3bn, up from including the replacement of government hitting the constitutional limit of two $4.3bn in March, according to estimates offi cials from the boards of state compa- successive presidential terms. by Goldman Sachs. nies, a move that aimed to strike at the In recent weeks Mr Medvedev has The increased capital fl ight is blamed heart of the system of state capitalism begun laying markers for a re-election by investors on mounting uncertainty built under Mr Putin. campaign, upsetting assumptions that over who will contest the 2012 election. he might clear the path for Mr Putin to Mr Medvedev has made little head- (c) 2011 The Financial Times Limited

32 JUNE-JULY 2011 Investor.Investor.gege

Microsoft’s Skype gamble

RICHARD WATERS IN SAN FRANCISCO icrosoft took a bold step AND TIM BRADSHAW AND MAIJA in the battle for control PALMER IN LONDON Mof the consumer internet on Tuesday with a $8.5bn (€5.9bn) acquisition of online telephone service Skype, its biggest acquisition and a deal that broadens its competition with Google and Apple.

JUNE-JULY 2011 33 Investor.ge

The sale of one of the world’s latest windfall. Microsoft and Skype best-known internet brands will hand a suggested that the deal could give the windfall profi t of some $5bn to a group software company a bigger foothold of investors who bought the company software platforms such as Apple’s in the booming social networking only 18 months ago, making it one iOS, which is used in the iPhone business, using Skype’s list of contacts of the biggest paydays in the buy-out and iPad, and Google’s Android and status updates as the foundation for industry. smartphone operating systems. a network to link users. The sharp increase in price in such The acquisition follows a late “Skype is that inner circle of a short period prompted warnings move by Microsoft after Skype held friends - 8 to 10 folks they talk to from some analysts that a new preliminary discussions with Google every day,” said Tony Bates, Skype’s internet bubble was building, though and other companies about possible chief executive, who will head a new Microsoft’s share price slipped only deals, according to people familiar with division that Microsoft is creating marginally on the news. the discussions. to house the business. “How that Putting together Skype, which has However, those talks did not lead intersects with social [media] is really 145m active users in an average month, to any offers and separate talks with exciting for us.” However, other with users of its existing devices and Facebook were limited to extending companies, notably Google, have software platforms would boost the a partnership between the two struggled to build wider services on top attractions of Microsoft’s products, companies, these people said. of online communications networks, said Steve Ballmer, Microsoft’s chief The acquisition follows the late- analysts cautioned. executive. Customers of devices such 2009 buy-out of Skype from online Microsoft said it would place as the Xbox games console, as well as retailer Ebay by a group led by Silicon more video advertising in Skype to people who use Windows Phone and Valley investment fi rm, Silver Lake. boost revenues at the business. The Outlook e-mail software, would be able The company fi led for an initial acquisition follows a spate of IPO to communicate more easily with each public offering late last year but the fi lings from other internet companies other and people on the wider Skype share sale was delayed as it discussed that have raised the valuation level for network, he added. possible deals with other companies. consumer internet companies. However, he promised that Skype Ebay retained a 30 per cent stake in would continue to be available on rival the company, giving it a share of the (c) 2011 The Financial Times Limited

34 JUNE-JULY 2011 Investor.ge

JUNE-JULY 2011 35 Investor.ge

Fifa hit by new bribes claim over World Cup bid

the governing body’s committee. Last year, a Fifa investigation into “There were some things put to me other Sunday Times allegations led to which in my view didn’t represent proper two of the 24 members, Amos Adamu and ethical behaviour on the part of and Reynald Temarii, being banned. exco [executive committee] members,” Speaking in Zurich, Sepp Blatter, ROGER BLITZ IN LONDON, he said. Fifa president, said he would send any The committee said it would publish evidence from the parliamentary hearing ootball’s governing body was hit new evidence submitted last week by to the body’s ethics committee. by fresh bribery allegations after the Sunday Times, a British newspaper “I cannot say they are all angels or Fthe former chairman of England’s that last year carried out an undercover they are all devils,” he said of the accused failed 2018 World Cup bid accused four investigation into the World Cup bidding members. “We must have the evidence members of Fifa’s executive committee process. and then we will act immediately against of unethical behaviour. The MPs said that Qatar, which ended all those [who] would be in breach of the Speaking before a parliamentary up winning the 2022 vote, paid two other ethical code rules.” committee on Tuesday, Lord Triesman Fifa members $1.5m each. Mr Blatter is seeking re-election next provided details of conversations that Under UK law, members of parlia- month, but is challenged by Mohammed took place during England’s campaign ment cannot be prosecuted for claims bin Hammam, who led the Qatar bid. to gain support from the 24 members of made during parliamentary proceedings. (c) 2011 The Financial Times Limited

36 JUNE-JULY 2011 BDO, the Georgia Member Firm of BDO Network, is the fourth largest audit and advisory firm in the country. With over thirteen years of experience and qualified professional staff, BDO provides the local and international companies with high quality services in:

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hails revolution in 3D chip technology

cycle of chip improvements on which a chip could be doubled roughly every the modern computing and electronics two years. industries are founded. That exponential rise in processing The impact of Intel’s attempt to push power has formed the basis for the steady ahead of the rest of the industry was felt advances in electronics since, though more widely on Wednesday, as Applied many in the industry fear that the chip- ntel has claimed the biggest break- Materials, which supplies Intel with makers are approaching the limits of their through in microprocessor design in manufacturing equipment, announced a ability to continue the improvements. Imore than 50 years, potentially rais- $4.9bn acquisition to keep up with the “For years we have seen limits to how ing the stakes signifi cantly for rivals in new technology. small transistors can get, this change in the increasingly capital-intensive global The US equipment maker said it the basic structure is a truly revolutionary chip industry. would buy Varian Semiconductor Equip- approach,” said Mr Moore in a statement. The world’s biggest chipmaker ment to give it the capability to handle “Amazing, world-shaping devices will said on Wednesday that it would begin chips of greater complexity than those be created from this capability as we producing chips later this year using a whose circuits are only 22 billionths of a advance Moore’s Law into new realms,” revolutionary 3D technology that has metre wide - the scale at which Intel said said Paul Otellini, Intel chief executive. been nearly a decade in the making, and it would begin manufacturing before the Applied Materials announced that which it said would act as the foundation end of this year. its agreement to acquire Massachusetts- for generations of computing advances Intel called its new chip design based Varian for $63 per share in cash - a to come. the most signifi cant advance since the 55 per cent premium to its closing price The new technology represents one introduction in the 1950s of the silicon on Tuesday - was aimed at helping it of Intel’s biggest gambles in the race transistor, the building block in electron- solve the problems of ever increasing to maintain and even extend its long- ics. It said the breakthrough would also chip complexity, transistor scaling and standing lead over other chipmakers in extend Moore’s Law - the accurate 1965 3D designs. Intel shares were trading making chips smaller and faster, while prediction by Intel co-founder Gordon 0.91 per cent higher at $23.26 breathing fresh life into the remorseless Moore that the number of transistors on (c) 2011 The Financial Times Limited

38 JUNE-JULY 2011 Investor.ge

Overcoming the Lack of Cooperation – Social Capital in Georgia

GAVIN SLADE & The propensity to collaborate for collaborative potential. HANS GUTBROD, CRRC mutual benefi t is referred to as social Georgians are generous in their capital – people working together to solidarity between each other, often ocieties thrive most where achieve common aims. putting the needs of others before individuals collaborate best. So how does Georgia fare in terms their own, especially in immediate SThe positive impact of such of this collaboration? The Caucasus social circles. To the extent that they collaboration across society is linked Research Resource Center (CRRC) move outside these circles, Georgians to economic prosperity, a more has recently completed a report on much prefer to keep things personal sophisticated democracy, better social capital in Georgia that provides and informal. However, this can have education, safer neighbourhoods, and an assessment and outline of the main negative effects, stifl ing the growth of even health and happiness. challenges to unlocking Georgia’s collaborative organisations of wider

Georgians have more friends than Armenians or Azerbaijanis, but turning friendship into cooperation remains a challenge. Data from the Caucasus Barometer, 2010

JUNE-JULY 2011 39 Investor.ge

use beyond personal relationships. leaders are essentially ‘in it’ for fee-payers. There are also areas in Those familiar with Georgia will personal gain, and so feel less inclined which government intervention could be aware of the symptoms of this to join. This is particularly true where make collaborative association less in everyday life. Tbilisi’s neatly- government is involved. Leaders will costly. For example, currently the tax appointed apartments contrast sharply need to be thick-skinned, successfully structure discourages the establishment with the dark, often semi-derelict organize and implement projects and of agricultural co-operatives; communal areas found beyond their demonstrate hard work to build trust. A reorganization in this sphere would steel doors. Farmers with small realistic timescale here is months and remove one barrier outright. landholdings fail to co-operate, years, not days or weeks. Utilising the propensity of strangling productivity. Parents Thirdly, people might see joining Georgians towards sociability in cannot be persuaded to engage with an association as a way to access increasing levels of social capital school boards of trustees. Professional the resources and work of the group is itself a complex collaborative associations so far do little to set without pitching in themselves – undertaking. Yet Georgia has produced standards in their fi elds. otherwise known as free riding. successful social entrepreneurs in fi elds There are, in other words, few areas When this occurs it can act as a as diverse as wine tasting, banking and of economic, political and social life strong disincentive on potential promoting Georgian tea. These can that are not affected by low levels of social entrepreneurs to be proactive. provide powerful role models for those formalized collaboration. In improving According to the World Values seeking to bring other people together. the situation in Georgia, four key Survey, though, Georgians maintain a Georgians repeatedly defi ed skeptical challenges stand out. strong sense of fair play, which social stereotypes, and have shown that Firstly, disillusionment with harsh entrepreneurs can draw on in ensuring they could get electricity distribution post-Soviet realities and the trauma of enforceable rules for membership. organized, street corruption eliminated, forced collaboration under communism Fourthly, Georgia is a relatively seatbelts worn, to name just a few fuel apathy. poor country. Forty-two percent of unexpected changes over the last If people do not care about or do employed Georgians claim to only few years. Arguably, the same might not believe in the potential benefi ts make enough money for food, but be possible in organizing successful that collaborative action could bring, not enough for clothes, according to collaboration, for mutual benefi t, and this makes it much more diffi cult a 2009 CRRC survey. A reluctance for the benefi t of Georgia as a whole. for potential social entrepreneurs to take on the costs of collaborative This is the fi rst in a series, with – those who actually bring others action deters people. What is more, a future articles focusing on the role of together to achieve change – to fear of failure also puts off potential business and government in promoting succeed. Increasing awareness of the social entrepreneurs while an social capital. The longer reports are activities of collective associations, aversion to jeopardizing relationships available on request from CRRC. Write demonstrating and publicizing with friends and family through to [email protected]. This research success will be crucial in meeting this engagement in long-term activities was made possible through the support challenge. As the head of a recently- with mere acquaintances compounds of the United States Agency for founded agricultural organization this. However, using start-up money International Development (USAID). said, “I force people to talk about their provided by donor organizations The contents are the responsibility of problems, I beg to help them”. can give collaborative associations CRRC and do not necessarily refl ect Secondly, potential association breathing space to prove their worth to the views of USAID or the United members are inclined to think that potential members and thus to attract States Government.

“The article “Walk and Chew Gum” of April-May 2011 issue on page 39 incorrectly stated Dana Marca’s position as a Romanian Deputy Minister of Foreign Affairs. Dana Marca is not a Deputy Minister of the Ministry of Foreign Affairs of Romania . She was representing Women in International Security-Romania.”

40 JUNE-JULY 2011 JUNE-JULY 2011 41 Investor.ge

Economic Crime and the Spirit of Capitalism: Georgia in the Late Soviet Period

GAVIN SLADE demand for conspicuous consumption in the legitimate goods intended for the a deeply status-conscious society with state shops and instead sold them for extile factory number four was the supply-side ineffi ciencies of the drab private profi t. The authorities discovered opened in Tbilisi in 1960. By and sluggish Soviet planned economy. an example of such a tsekhi in 1978 T1968 large-scale embezzlement Of course, Georgia was in no way when one group, operating at a fruit juice was taking place at the plant. That year, unique in fostering a burgeoning second works in the Terjola region, made over 33 workers were tried for the misap- economy, often with the connivance of half a million rubles through falsifi ed propriation of over one million rubles local communist authorities. However, documents by which they procured fruit, worth of state property. The conspira- the best estimates of historians suggest created a fake juice product and sold it tors included the directors, engineers, that Georgia indeed had the largest through a trade network. Meanwhile, accountants, the warehouse foreman and second economy of any of the Soviet the Lazishvili brothers in Tbilisi became supervisors of various units. The method republics proportionate to its size. By some of the richest people in the Soviet of embezzlement involved false account- 1970, the average Georgian’s savings Union through producing textiles from ing and the misappropriation of cloth- were twice as large as the Soviet average fi bres misappropriated on a vast scale. ing made at the factory. Of the 33 who while in rural Georgia as much as 32% Certainly, these examples suggest that a were brought to trial, 12 were so-called of personal income was derived from the propensity for spotting gaps in the mar- del’tsi, businessmen or speculators, who second economy. ket and the capacity to meet demand are grouped at the factory. According to Gregory Grossman concurs with traits that Georgians could turn to their the prosecutor’s report, the del’tsi were these fi gures in his 1977 article entitled advantage in the current atmosphere of connected to networks of salesmen who The Second Economy of the USSR. Ac- de-regulated markets – the tsekhoviki of could sell the misappropriated goods on cording to Grossman, in Georgia second Terjola would fi nd a large market for a the black market in order to realise the economy activities were carried out on an cheap local fruit juice in today’s Georgia. profi ts. ‘unparalleled scale and with unrivalled However, in Soviet times the spirit Narrowly focusing on such cases as scope and daring’. of capitalism mainly manifested itself, economic crime misses the incredible In the later Soviet period then, pos- of necessity, as economic crime from level of coordination, division of la- sibly more than anywhere else in the generation to generation. bour, entrepreneurialism and risk-taking Soviet Union, the entrepreneurial spirit Reports on the fi ght with crime for involved – features of illicit economic was again blowing through Georgia. In 1984 include analogous cases of em- activity that had become commonplace the second economy, many Georgians bezzlement as those committed at the within Georgia in the later Soviet period. sharpened their business acumen, per- Tbilisi textile plant in 1968 in the towns Under communism, private economic haps unaware of just how useful this of Samtredia and Kutaisi among others. activity was by defi nition criminalised, would be in the decades ahead. By this time however, the reports note yet the fading legitimacy of the Soviet Long before the offi cial coming of that the Georgian del’tsi had made tight state in the last decades of its existence a market economy, many Georgians, ‘“business” connections’ in other Soviet blurred any moral notion of wrongdoing known as tsekhoviki, had successfully republics where they engage in ‘various in misappropriating state property. Black engaged in setting up their own small ruses and dubious trade deals.’ In the marketeers then, though technically private enterprises known as tsekhi that late Soviet period, then, Georgian black criminals, made up an entrepreneurial either produced illegal goods on legiti- marketeers were expanding outwards, class born out of the collision of a high mate production facilities or siphoned off engaging in activities ahead of their time.

42 JUNE-JULY 2011 Investor.ge

JUNE-JULY 2011 43 Investor.ge

Georgia’s Summer Capital Festival. Even more festivals are planned t night, Batumi appears to be for later in the season, including the all lights, glitter and sparkle – a Golden Key talent contest. Earlier this Ashimmering island of cutting- year, the government even announced Viva edge architecture, dramatically lit parks plans to host a MTV concert in Batumi and the red-white streak of passing cars. over the summer. A city for hipsters and jetsetters set Over the past few years, notes club Batumi against the backdrop of mountains and owner Giorgi Bochorishvili, Batumi has the sea. become the place to be. Casinos dot the boulevard, and – “I was going to Batumi every year The Conference City of the with looming cranes and the pounding for 15 or 20 years because it is our local Caucasus, the Las Vegas of the of construction – the boulevard throbs resort and stuff. This last fi ve years it has Black Sea, the Garden of Georgia: with activity. completely changed. It is really getting Batumi is a city teeming with The line-up of concerts and events very nice,” he said. superlatives. While growing pains The construction boom along the are plainly present, the official for this summer adds to the image. The dream to remake Adjara’s port town season kicks off on July 3 when Chris Black Sea shoreline has produced a chain into a regional resort appears to be Botte and Sting will perform at Piazza of stunning hotels, casinos, cafes and taking off, one casino, concert and Square. Later in the month, Macy Gray walking parks that wrap around the coast festival at a time. is headlining the annual Black Sea Jazz like a chain of bright pearls.

44 JUNE-JULY 2011 Investor.ge

The atmosphere of fun and sun sells: resorts down the coast. compared to the same period last year. in 2010 there were 950 thousand local “If you go ten times to Turkey, you Diasamidze said the regional authori- and foreign tourists to Batumi and the have to fi nd some other place to go. So ties are partnering with foreign tourism surrounding region, according to offi cial we will be part of the resorts,” he said. agencies to promote the city – and sur- statistics. Investors from Turkey, Azer- “You cannot make Las Vegas in fi ve rounding area – as an all-year, all-season baijan, the United States and others are years or in ten years. You defi nitely need vacation spot. building even more – side by side with a good plan, good investments and you They created Expo Batumi, a tourism government projects for the aquarium can reach your goal.” exhibition, to promote the region and its and dolphinarium. Part of that plan, according to Giorgi potential for eco-tourism, wine tourism, The city is also launching a velo-bi- Marr, a director with SRG Investments, culinary tourism – and historic tours. cycle for rent – program this summer and should be marketing Batumi as a city a city pass card to entice visitors to step destination – a place for conferences, Planes, Trains and away from the beach for an afternoon and sporting events and cultural festivals Automobiles…and Cruises enjoy the city’s famous botanical garden that can attract tourists from around the But the current number of hotels – and collection of museums. region. and restaurants, cafes, fl ights and other The transformation has not been SRG Investments, part of the Silk tourism services – is not enough to sup- cheap: offi cials estimate the state has Road Group, is opening the Radisson in port large scale growth, tourism analysts spent 300 million lari on government- Batumi this summer and recently signed and event planners say. led projects to improve roads and infra- a licensing deal with The Trump Orga- Mikheil Giorgadze, the director of structure. nization to build a Trump Tower on the Eastern Promotion – the event organiz- Hundreds of millions more has gone Batumi Boulevard. ers responsible for the Chris Botti/Sting into private projects, like the InterCon- While casinos are pulling in gamblers show and the Black Sea Jazz festival – tinental Hotel, Sheraton – and the new from Turkey, Azerbaijan and elsewhere said Batumi is a great venue for concerts Radisson, scheduled to open in July. in the region – and the beach brings and festivals. Promotion for the region is also not tourists in the summer -- Batumi needs But, while demand for events is high, cheap: the autonomous region has a to attract events and large conferences to logistics is still a headache. 2.5 million lari budget for marketing in bring large crowds all year round. Diasamidze said the government is 2011 – up from just 100 thousand lari a “The biggest challenge is to create working on all fronts: encouraging in- few years ago. something that will attract people outside vestors to build hotels – in Batumi and Bochorishvili, who is part owner of the high season to Batumi,” Marr said. elsewhere -- and building new roads for of The Bamba Rooms, a night club in “It is not purely a sun and beach type car traffi c and arranging for more fre- Tbilisi, was impressed with the number of resort. It is more a city destination.” quent train and bus routes. In addition, of people coming – and the investment they are investigating how to bring in the government is making the city. He Launching Destination more fl ights, at better rates. opened a Batumi version of The Bamba “Batumi” Offi cials from Adjara also recently Rooms last year to check the market. Vaja Diasamidze, the acting director traveled to Miami to discuss bringing Open for just a month last season, of the Adjarian Department of Tourism, large cruise ships to Batumi. The Bamba Rooms averaged between agrees that the future of development for More options for travel to Batumi 200-400 clubbers a night – and some the tourism sector lies in promoting the is vital for its success as a destination, nights pulled in as many as 800. region through Batumi – and creating a Giorgadze stressed. This season Bochorishvili plans to year-round image for the seaside town. “[W]hen these kinds of names come open earlier and keep the club going “We are paying more attention to to Georgia, it is a direct message to the into September, the tail end of the sum- Batumi because Batumi is more famous, world that this country is okay, its cool,” mer season. more people know about Batumi than he said. He said that Batumi has the potential Adjara,” he said, noting that the infl ux “When we talk about international to pull in tourists – local and foreign – of tourists from Iran has already pushed tourism, we have to give these interna- despite the more established Turkish the number of visitors up 75 percent, tional tourists a way to come here.”

JUNE-JULY 2011 45 Investor.ge

fi gure. This is a big challenge for us.” The Batumi Miracle – for Investors Negotiations on the potential zone are Over the course of 2004-2010, the government spent 294.5 million lari to facilitate still ongoing, but Tsmalashvili noted that Batumi’s miraculous make-over. New streets, new water and sewer pipes…new with nearly every major hotel brand pres- investors. Now they are laying the groundwork for a Free Trade Zone in Adjara, ent in, or planning to enter Adjara, the a new investment agency in Batumi and a regional “bank” to promote small and medium business, says the region’s Deputy Economic Minister. government is looking at how tourism- related industries can be developed. he list of investors pursuing Tsmalashvili said. “Of course our concern is growing projects in Batumi is impressive: The goal, he explained, is to create more and more towards not building TSheraton, Radisson, Hilton and jobs. “We realized that tourism is the hotels because we can say this goal has the Ritz Carlton – to name a few. Tour- major industry for development in the already been achieved…The bigger ism is defi nitely at the heart of Adjara’s region.” concern is how to provide these hotels development, stressed the autonomous “About 50 percent of investments in with food,” he said, adding, “We are region’s Deputy Economic Minister, the region go to the tourism sector, about now looking for investors who will cre- Giorgi Tsmalashvili. 20 percent go to construction and about ate more agriculture products… Also But the authorities’ plans do not stop 25 percent of investments last year went we want to develop good conditions there. A new investment agency – Ba- to industry,” he added. for tourists who come here, apart from tumi Invest – launched in May, and ne- “[But] there is about 20 percent un- the hotels we want to fi rst of all have gotiations for a possible Free Trade Zone employment in region; after Tbilisi we better infrastructure – transportation not far from the port city are underway, are in second place in Georgia in this infrastructure.”

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46 JUNE-JULY 2011 Investor.ge

Team Georgia: Baseball Catches On

The Georgian National team practices all winter in a boiler room, breaking bats and wearing out balls over hours of drills every week.

Far from the cries of fanatic fans, excited to be out on the fi eld after months the principal that the strength of the the World Series and foot-long hot of cramped, winter workouts in their team came from the players’ ability to dogs, America’s favorite pastime is makeshift, boiler room batting cages. work together, not from just one or two going strong, thanks to a Georgian Kapanadze, a swimming coach and superstars. enclave of enthusiastic players and dedicated coaches. all-round athlete, was one of the So- He was inspired to learn the game viet Union’s fi rst baseball players and, and, despite the fact he did not speak he said, his love for the game has not English and there was no baseball in the wavered since the fi rst time he saw the Soviet Union, he managed to get a copy MOLLY CORSO game – a moment in a French fi lm that of “The Dodger Way to Play Baseball” made it past the Soviet censors. and translated it word for word. n a makeshift fi eld, high in the “The fi rst time I saw baseball was in a Kapanadze was the fi rst to sign up Tbilisi suburbs, the Georgian French fi lm…other than that I had never when Chikhradze created the fi rst Soviet ONational Baseball team is go- seen anything about baseball,” he said. baseball team in 1986 and he hit the fi rst ing through its drills. “And when I saw the photograph of ball of the fi rst Soviet baseball game – Their warm-up run covers the fi eld’s the pitcher [in a newspaper ad calling for Tbilisi vs. Kyiv in 1987. parameters: a wall of broken car parts tryouts], I simply liked the way he stood. To learn the game – initially encour- borders the fi rst base line; a rusted soccer That pose.” aged by the Soviets because it became fi eld goal marks the end of the outfi eld; an Olympic sport – the men recruited a deep ditch for rainwater delineates the Olympic Aspirations foreign exchange students from Cuba, end of left fi eld. Baseball came to Georgia by way of Central America – and even one from the The boys – a dozen or so hardcore an alpinist and champion fencer named United States – to teach them. enthusiasts aging from 15 to 25 – pair Gela Chikhradze . The game even took them to Ameri- off for a quick round of calisthenics as Chikhradze,now the head of the ca, and in 1991, a retired Major League Coach Nugzar Kapanadze digs holes Georgian YMCA, heard about the game player, Randy Brown, traveled to Tbilisi for the team’s bright, white, American- around a campfi re during a mountain to help. bought bases. climb in the mid 1980s. From the se- Brown, a former pitcher, said he was “Stop your chattering,” he yells at the cluded world of Soviet Georgia, he was “blown away” by the two men’s passion boys, who are giggling and cutting up – attracted by the game’s exoticness – and and commitment during his fi rst trip.

JUNE-JULY 2011 47 Investor.ge

started two new little league teams in Tbilisi to develop new players who will, eventually, be the next generation of the national team. Zura Talakvadze, a former member of the national team, said Kapanadze “is like a father” for ball players in Georgia. “Our head coach – I don’t know how to describe all of his positive [traits],” Coach Nugzar Kapanadze teaches the boys the warm up stretches and drills he learned at spring training sessions in the US. he said. “We just love him; he is like a father for us.” “They were playing in the middle of government, explaining that the lack of But support and enthusiasm is not a horse track. They had two bats, balls a baseball fi eld would be an insult to the enough to create a successful ball team, older than me, gloves they had from American president. Talakvadze noted, adding that the team Cuba – real, real thick leather…The kids is underfi nanced and largely ignored by were having a blast,” he said. A Second Chance the ministry of sports. The secret to their success, Brown In July, the Georgian National team “You can’t win games and you can’t stressed, has been Kapanadze and will be on the road again, after more practice seriously by only fun, you know. Chikhradze’s “passion” for the game. than a year of not competing, to play in You should have something else beside “They respect baseball – they respect the European Baseball Championships your passion and besides your love for how hard it is to play and they respect qualifi ers in Tel Aviv. the game.” how much work it takes to be good at it,” Kapanadze admits the team’s cur- Americans – Peace Corps volunteers he said, noting that Kapanadze is teach- rent conditions are a “minus” – with no and Jackie Koney, a co-author of the ing the boys “professional baseball”. uniforms and no-one to play against, baseball book ‘It Takes More Than Balls: “They don’t know how to play bad the boys practice six on/six off, pick-up The Savvy Girls’ Guide to Understanding baseball.” game style. and Enjoying Baseball,’ are hoping some Brown helped them to create a Little The outfi eld, he laughed, is “wide homegrown ingenuity and a little funding League and start the Georgian YMCA – open” but the experience feeds on the can help sustain the game. and the nascent league is expanding to boys’ ability to play multiple positions Peace Corps volunteers secured a include softball, a rare chance for Geor- – and keeps egos to a minimum. grant from USAID to repair the girls’ gian girls to play a competitive sport. If the team triumphs in Tel Aviv, it softball fi eld in Tbilisi and hold a series Gia Kemoklidze, a coach at QSI will not be the fi rst time they have come of clinics to give them a chance to play. School in Tbilisi, has been working to from behind to topple better fi nanced Koney is working with Kemoklidze to develop softball in Georgia ever since. baseball clubs. build a family entertainment center, the For Kemoklidze, also one of the fi rst In 2009, the team – then playing as proceeds of which would be used to Georgian baseball players, the sport’s a little league ball club – outclassed bet- fi nance the game. limited funding in Georgia – now that it ter fi nanced European teams to compete Continuing the game and making the is no longer an Olympic sport, baseball in the fi nals at the Grosseto tournament sport sustainable so younger generations is not a priority for the government – in Italy. can learn is important for Kapanadze and has forced him to fi nd creative ways to The team is a labor of love for his colleagues. convince offi cials that the kids deserve Kapanadze, who volunteers his time The game’s “philosophy” has hit a resources to play. to recruit and coach every boy on the chord with the nation, Kemoklidze said, The girls have a small diamond to roster – some of them for 15 years as he since it is reminiscent of so much of play on near the Tbilisi Sea because, developed the latest national team. Georgia’s history. in 2005 when the then US President Today, members of the first So- “When you are leaving home, you George W. Bush was coming to Geor- viet Georgian team – Kapanadze, Ke- try to pass through many problems and gia, Kemoklidze petitioned the local moklidze and Giorgi Broladze – have return home,” he laughed.

48 JUNE-JULY 2011 CONTENT

Farewell – and Thank you!

50 H.E. Philip Dimitrov: Changes 52 CSR Specialist Molly Hall 53 Welcome, New Executive to Georgia “Impressive” Meets AmCham, BAG Director George Welton Companies 50 Davit Bakradze: New 54 Member Profile: Philip Morris Relationship with Business “a 52 Georgian Wine and Tourism International Two Way Street” Industry Delegation to the USA – NY/California 55 Member Profile: ISET 50 New Board Members Elected 52 New Coalition to Advocate for 56 New Members 51 Storage and Import Independent Judiciary Substitution Vital for Georgian 57 Resource Page: a directory to Agriculture 53 IT and Telecom Committee flights, emergency numbers, Discuss AmCham IT Skill local transportation and more 51 The Economist Plans Tbilisi Demand Inventory 58 Membership Directory Summit 53 Trade and Transport 60 Social 51 Farewell – and Thank you! Committee Meeting with the Head of the Revenue Service 52 AmCham and BAG co-host a presentation by McKinsey & Company

JUNE-JULY 2011 49 H.E. Philip Dimitrov: New Board Members Elected Changes to Georgia “Impressive”

H.E. Philip Dimitrov, the head of the delegation of the European Commission in Georgia, spoke to AmCham members about his impressions of the country as a new appointee during an exclusive lunch at the Radisson. Dimitrov, a former prime minister of Bulgaria and a former ambassador Neil Dunn Badri Japaridze to the United States, visited Georgia in BP Georgia General Manager Neil A general election for the president of 2004. He said that the changes over the Dunn was elected to the AmCham Geor- the board, the offi cers and seven direc- past seven years are “impressive.” gia Board of Directors during the General tors, is planned for next year. The June 8 During his tenure in Bulgarian Assembly Luncheon on June 8. vote was held for two director positions politics, Dimitrov oversaw Badri Japaridze, the deputy chairman that fall on an alternative schedule. controversial reforms, including of the Supervisory Board of TBC Bank, agriculture and land reform - an was re-elected during the vote, as well. For more information about the Am- experience that gives him a unique Japaridze – a long time director of the Cham Board of Directors, please contact board – also serves as the vice president AmCham Georgia: of Georgian Glass and Mineral Water Co. [email protected].

Davit Bakradze: New Relationship with Business “a Two-Way Street”

Parliamentary Speaker Davit perspective on the challenges, and Bakradze told AmCham members that shortcomings, of the Georgian the government is committed to a new government. policy of “partnership” between the Dimitrov responded to member state and business during the monthly questions on free trade regime talks luncheon on April 5. with the European Union, and visa Speaking to AmCham members requirements, as well. at the Sheraton Metechi Palace Hotel, AmCham President David Lee Bakradze noted that the new policy is introduced the new executive director being conducted in “the spirit of part- of AmCham, George Welton, to the nership” - a level of openness that the membership. business community should benefi t from, Other announcements included but not take advantage of. a special member offer for Besiki During the question and answer Business Center and a reminder from period, Bakradze spoke about the gov- Union. Irina Sak, the CEO Publicis Cau- TBSC to fi ll out a survey to provide ernment’s priorities for education and casus, announced the Golden Talent 2011 insight for the strategic development of job growth, as well as free trade talks event in Batumi - an international TV Marjanishvili Theater. with the United States and the European competition of pop music performers.

50 JUNE-JULY 2011 Storage and Import The Economist Plans Tbilisi Summit Substitution Vital for Georgian Agriculture The Economist Group is planning a a copy of the presentation. Deputy Minister of Agriculture summit on investment and business in Dr. Alexander G. Tvalchrelidze, a Malkhaz Akishbaia detailed the govern- Georgia this November, AmCham mem- professor of Geology & Mineralogy, of ment’s plans for developing leasing, bers were informed during the monthly the Georgian Academy of Natural Sci- fi nancing, insurance and investment in roundtable meeting at the Courtyard ences, and the executive director of the agriculture during the May 4 AmCham Marriott. Ambassador John Bass opened IFSD, spoke about the latest trends in roundtable at Holiday Inn. the meeting with his monthly overview to Georgia’s economic and social develop- Akishbaia, and the ministry, is work- AmCham members. He spoke about the ment over the past 20 years. ing with international donor organiza- United States’ latest human rights report, He highlighted disturbing trends in tions - like USAID’s Economic Prosper- the parliamentary elections planned for the agriculture, mining and industry sec- ity Initiative (EPI) program - to create 2012 and other aspects of US-Georgia tors - and proposed possible government a strategy of development for farmers relations. solutions, including access to inexpen- and potential investors. The agriculture Scott Munday, a representative of sive loans for businesses - during his sector employs over half the working The Economist Group in charge of Busi- brief presentation. population of Georgia. Dennis Zeedyk, ness Development in the CEE, Russia, Dr. Tvalchrelidze stressed that re- Agriculture Sectors Component Leader, CIS and Central Asia, spoke to members opening mines and industry that fl our- EPI, outlined the program’s plans for about the group’s planned summit in ished during the Soviet Union could the sector. Research indicates that the November. He stressed that the summit alleviate some of Georgia’s chronic un- market is primed for import substitu- - which is not sponsored by the govern- employment and trade defi cit problems. tion, especially in the spring when the ment - is an opportunity to meet with Wings & Freeman Capital also made local products are unavailable. For more potential investors from countries around a short announcement during the meet- information, visit www.amcham.ge for a the region, including Western Europe and ing: OPIC has agreed to a $58 million copy of the presentation. the Middle East. fi nancing deal for Mtkvari HPP. The deal Additional announcements were The event will be a “dialogue” be- is the largest single fi nancing agreement made by member company Sky Travel, tween government offi cials, think tank from OPIC in Georgia - and the fi rst a full service travel agent and Alliance analysts, specialist from The Economist time the U.S. investment agency has Group Holding. QSI and the American Group, and business leaders. For more fi nanced a renewable resource project Academy also presented their annual information, visit www.amcham.ge for in the country. summer schools.

Farewell – and Thank you!

On Friday, May 13, AmCham Georgia hosted a farewell reception for members of the U.S. Embassy’s political and economic team. The event, a champagne cocktail party, gave AmCham a chance to thank the dedicated embassy employees who have worked closely with the board and members over the past several years. AmCham President David Lee and Vice President Sarah Williamson presented the team with gifts of appre- ciation, especially Erika Olson, the Ex-Offi cio Member for the AmCham board during her term at the embassy. For more photographs of the event, please go to page 60.

JUNE-JULY 2011 51 Georgian Wine and New Coalition to Advocate for Independent Judiciary

Tourism Industry Prominent lawyers and heads of three articles from international media Delegation to the legal aid non-government organizations outlets slamming the Georgian judicial celebrated the offi cial opening of the system for biased rulings and low cred- USA – NY/California Coalition for an Independent and Trans- ibility. parent Judiciary on April 29. “Our members have had numerous Ted Jonas, a member of the board of problems with these same issues in the From May 30 to June 8, 2011 a the American Chamber of Commerce courts,” he said. “AmCham is ready to 15 member delegation of Georgian in Georgia, and its representative to the help in this effort, and go the distance to wine company owners and heads coalition, said it must push for a fair, get it done.” of prominent Georgian Tourism independent and clean court system from The event was organized by the companies will be visiting the US as civil society. In addition, he noted that the Eurasia Partnership Foundation and part of a wine tourism development coalition needs to support the training of was supported through the USAID- project. The project was initiated judges and work with offi cials on top to funded Judicial Independence and by AmCham Georgia’s Tourism create framework for – and the reality of Legal Empowerment Project, which the Committee, chaired by Betsy Haskell, -- a fair and independent court system. Foundation is implementing through a and the Georgian Wine Association, Jonas noted that – just in the week of partnership with the East-West Manage- headed by Tina Kezeli and organized April 25 – local newspapers published ment Institute. by the U.S. Department of Commerce and USAID’s Economic Prosperity Initiative. AmCham and BAG co-host a presentation by The group will visit the Finger Lakes region of New York State, McKinsey & Company New York City and Sonoma and Lodi Information and communication survey. There are several mechanisms counties in Northern California. technology (ICT) is critical for the eco- through which ICT boosts economic The purpose of the trip is to nomic growth of a country, according to growth, among them: fostering innova- illustrate how cooperative efforts McKinsey’s Sergio Sandoval. tion, reducing transaction costs, and on the part of the wine industry, Direct and indirect effects of ICT creating access to new markets. educational institutions and local impact GDP, employment, trade and The American Chamber of Com- governments can enable a region investment. merce in Georgia and the Business to provide an unforgettable tourist However, even though ICT has been Association of Georgia co-hosted a experience. Commenting on the growing strongly in Georgia at ~16% presentation by McKinsey & Company, project, David Lee, the President annually, penetration levels remain low a global management consulting fi rm of AmCham, said “Wine tourism and global reports indicate signifi cant op- listed in the top 10 on Fortune magazine’s in Georgia is relatively under- portunity to further leverage the potential World’s Best Companies for Leaders. developed and will remain so until of the sector. The meeting took place at the Holiday the winery owners understand what Of almost 20 various sectors, ICT is Inn Hotel on May 10. is needed to attract international the fourth most positive contributor to AmCham members can request a tourists. AmCham, through its society after healthcare, agriculture and copy of the presentation by email. Please Tourism Committee and our member, utilities, according to a global consumer call Bella Makaridze: 2305426. Georgian Wine Association, is doing everything it can to assist the development of wine tourism in CSR Specialist Molly Hall Meets AmCham, Georgia”. On Thursday, June 2nd, AmCham BAG Companies will host the First Offi cial Tasting On May 10, American Chamber of American University, UGT, TBC Bank, of the fi nest Georgian wines in New Commerce in Georgia, Business As- Financial Brokers Georgia, The Financial York City at the Baryshnikov Arts sociation Georgia and Global Compact and the Ministry of Environment Protec- Center. In the evening of the same Georgia Network held a special Cor- tion of Georgia. day, American Friends of Georgia, in porate Social Responsibility meeting. Ms. Hall is visiting Georgia through collaboration with CORUS Imports Specialist Molly Hall discussed CSR the U.S. Department of State funded and the Georgian Wine House, will and Environmental Sustainability. The U.S. Speaker program. The meeting was also host a Georgian wine reception meeting was attended by the representa- hosted by the Public Affairs Section of for 150 invited guests. tives from BP, Wissol Georgia, Georgian the U.S. Embassy at the Holiday Inn.

52 JUNE-JULY 2011 New Executive Director IT and Telecom George brings a range of experi- Committee ence in business, research and public policy to the role. Following a degree in Discuss AmCham economics, George trained in business with KPMG before returning to school IT Skill Demand to complete a Masters degree and PhD Inventory in International Relations. He moved to Georgia in 2004 on an The AmCham IT and Telecom academic fellowship program, but for the Committee has drafted a skills last 5 years he has worked as a profes- demand inventory – a survey that sional research consultant. In this capac- will analyze potential shortage in IT- ity he has worked for the private sector as professional skills, based on member AmCham is pleased to introduce well as large not for profi t organizations. companies’ experience, to present to George Welton as its new Executive He started his own research company, the government and NGOs. Director. called GeoWel Research, in 2009. Committee Chairperson Wouter Metz facilitated the meeting on May Trade and Transport Committee Meeting with the 25 about the document. All feedback from the survey should be submitted Head of the Revenue Service before the end of June. The Co-Chairs of the Committee members also spoke about their con- If any AmCham member wishes John Braeckeveldt, and Ivo Bakhuijzen, cerns regarding the customs and trade to join the monthly committee facilitated a discussion about the differ- regulations. For details, contact Gigi meetings – or for more information ent cases with Jaba Ebanoidze, the head Liluashvili, policy advisor and commit- about the survey --please contact Gigi of the Revenue Service. Other AmCham tee coordinator. Liluashvli, [email protected].

JUNE-JULY 2011 53 Today tobacco industry in Georgia and Bond Street from EU and Ukraine. is one of the most competitive and agile L&M and Chesterfield cigarettes are among Fast Moving Consumer Goods produced in Georgia by local company sector. All major International tobacco OGT under license manufacturing agree- players are operating in the country. They ment with PMI. were the fi rst among other international companies who entered the Georgian At a glance market during 90’s and brought here their PMI is the leading international international expertise and standards in tobacco company, with products sold in sales, marketing, general business man- approximately 180 countries. In 2010 agement and manufacturing. PMI held an estimated 27.6 percent share Philip Morris International (PMI) has of the international cigarette market ex- been operating in Georgia since 1996. As cluding the People’s Republic of China of 2002 PMI local partner OGT started and the U.S.; Comparing to 2009 PMI net license manufacturing of PMI brands revenues increased by 9.1% and reached Philip Morris L&M and Congress. Currently Philip $67.713 billion, excise taxes on products Morris Georgia is the market leader - by 9.3% to $40.505 billion and operat- International: holding up to 26.4 percent market share ing income - by 11.6% to $11.2 billion. within tobacco industry*. With its Operations Center based in A Pioneer in Following the development of Geor- Lausanne, Switzerland, PMI owns 7 of gian economy, signifi cant improvements the top 15 brands in the world and has a the Georgian in fi ghting against contraband, customs mix of international and local products, Tobacco procedures simplifi cation and decrease which are produced in more than 60 of number of taxes as of 2010 Philip factories around the world. PMI employs Market Morris Georgia has started importa- more than 78,000 people worldwide. tion and wholesale of tobacco products PMI’s main brands are Marlboro, under trademarks owned by PMI. The Parliament, L&M, Philip Morris, Mu- company operates from a state of the art ratti, Bond Street, Chesterfi eld, Lark, warehousing facilities in Lilo1 terminal. Multifi lter and Virginia Slims. Marlboro Currently Philip Morris Georgia is the world’s number one selling brand. imports Parliament, Marlboro, Muratti *Data AC Nielsen retail audit Tbilisi

Bidzina Gamtsemlidze Work Experience: 08.1996-07.1999 Rothmans International Georgia - Business Manager 08.1999-07.2001 British American Tobacco Georgia - Distribution Manager 08.2001-08.2003 Philip Morris Estonia - Sales Manager 09.2003- 01.2005 Philip Morris Ukraine - Key Account Manager 02.2005-10.2007 Philip Morris Ukraine - Sales Manager 10.2007-04.2010 Philip Morris Ukraine - Marketing Manager Caucasus and Moldova Since 05.2010 Philip Morris Georgia - Field Manager

54 JUNE-JULY 2011 zations, universities and governments for capacity building, outreach and training purposes. In order to support Georgia as its progresses towards a fully functioning market economy and to meet local busi- ness needs, ISET will be expanding and diversifying its research, training and “ISET: Creating a Better outreach activities. Currently, ISET successfully partners Georgian Economy” with public agencies, private sector fi rms and international organizations for train- In 2005, the Government of Georgia deter talented students from receiving an ings, research and analysis needs as well collaborated with the World Bank and excellent education and subsidizes 90% as job placement for our students. These Tbilisi State University (TSU) to create of attending students. organizations include: the National Bank and implement a modern economics Through its academic curriculum of Georgia, Ministry of Labor, Health university modeled upon the graduate as well as policy relevant research and and Social Affairs, the Foreign Relations “centers of excellence” in Moscow, Kiev, outreach activities, ISET fi lls the gap Department for the Ministry of Finance Budapest and Prague. This partnership between the skills and knowledge of lo- in Georgia, ProCredit Bank, ACT Re- resulted in the creation of the Interna- cal economists and complex economic search, TBSC Consulting and VTB tional School of Economics (ISET) at issues within Georgia. ISET is creat- Bank among others. In addition, ISET Tbilisi State University in 2006. Since its ing a new generation of economists for now enjoys partnerships with a variety inception, ISET has promoted economic Georgia through education, research and of international organizations, such as growth, integration and the capacity partnership building through a variety of the World Bank and the European Bank building within the Southern Caucasus programming including: for Reconstruction and Development, to region. ISET provides high-quality eco- A two year Master’s Program in ensure its students have rewarding and nomic training and research facilities to a Economics with all concentrations taught benefi cial internship experiences. new generation of economists including by international PhD economists with ISET welcomes the opportunity to policymakers, academics, researchers, instruction in English. support and partner with the Georgian business leaders, and government of- A research program providing stu- business community through internship ficials with a thorough grounding in dents with practical experience in apply- and job placements as well as trainings market-based economics. ing their studies to “real life” scenarios. and provision of research and analysis. ISET students are citizens of Arme- Multiple partnerships with like- For more information, please visit our nia, Azerbaijan, and Georgia and come minded stakeholders, non-governmental web-site at www.iset.ge or contact Ms. from a variety of backgrounds such organizations, community based organi- Ariela Shapiro at [email protected]. as: graduates from local universities; young professionals from the Central Banks, the Ministries of Finance, and ISET can also serve the Georgian business community by providing research and other government agencies in Georgia, training activities through its new think-tank: the South Caucasus Institute for Armenia, and Azerbaijan; and junior Business and Economic Research (SCIBER). The SCIBER think-tank will ad- faculty from local universities. To gain dress the major gaps in policy research and training in Georgia while also meeting private sector consulting and training needs. SCIBER will support the Georgian admission, students must pass rigorous government and local businesses to implement revenue generating and lucrative admission exams in mathematics and business plans to navigate these current economic times. The analysts and faculty English as well as demonstrate their com- at ISET-SCIBER have expertise in the following areas: institutional reforms (im- mitment to advancing their knowledge pact on economic growth, equity and effi ciency), competition and regulation in of economics. ISET makes every effort particular sectors of the economy, and trade policy and economic integration with to ensure that its program costs will not Europe (benefi ts from greater openness, free trade zones, infant industry protection).

JUNE-JULY 2011 55 MobiPay Holiday Inn Goodwill Ltd MEMBERS

OpenRevolution provides mobile The hotel is conveniently located Since 2004, the Goodwill Company transaction solutions that enable its on 1, 26 May Square, in the heart of the has been a leading brand on the Georgian

NEW partners and clients to deliver optimized business and commercial district of the retail market. On the top of expanding the payment services across m-commerce capital and easily accessible by car and range of products and sales, Goodwill is ecosystems and value chains. public transportation. Everything is de- increasing its own production capacities. www.openrev.com signed to meet and exceed your expecta- tions, including an immense parking lot dedicated for 200 vehicles. www.hi-tbilisi.com

GOVERNMENT ADDRESSES

Investor.ge is publishing a list of government addresses and contacts as a reference. If there are other government agencies or state organizations you are looking for and cannot find, please let us know: [email protected].

State Minister for European and Euro-Atlantic Minister of Economic and Sustainable Development Integration, Vice Prime Minister VERA KOBALIA GIORGI BARAMIDZE www.economy.gov.ge www.eu-nato.gov.ge 12 Chanturia Str. Tel: 99 77 77 7 Ingorokva Str. Tel: 93 28 67 Minister of Energy Minister of Regional Development and Infrastructure ALEKSANDRE KHETAGURI RAMAZ NIKOLAISHVILI www.minenergy.gov.ge www.mrdi.gov.ge 2 Baratashvili Str. Tel: 35 78 00 12 Al. Kazbegi Ave. Tel: 51 05 91, 51 06 88 Minister of Justice Minister of Finance ZURAB ADEISHVILI KAKHA BAINDURASHVILI www.justice.gov.ge www.mof.ge 24 Gorgasali Str. Tel: 40 52 02 16 V. Gorgasali Str. Tel: 26 14 44 Minister of Foreign Affairs of Georgia Minister of Education and Science GRIGOL VASHADZE DIMITRI SHASHKIN www.mfa.gov.ge www.mes.gov.ge 4 Sh. Chitadze Str. Tel: 28 47 47 52, D. Uznadze Str. Tel: 43 88 19 Minister of Agriculture Minister of Environmental Protection BAKUR KVEZERELI and Natural Resources www.moa.gov.ge GIORGI KHACHIDZE 6 Marshal Gelovani Str. Tel: 37 80 13, 37 80 09 www.moe.gov.ge Minister of Labour, Health and Social Affairs 6 Gulia Str. Tel: 72 57 00, 72 57 20 ANDRIA URUSHADZE www.moh.gov.ge 144 A. Tsereteli Ave. Tel: 36 90 26

56 JUNE-JULY 2011 CTC FoundationIntourist Palace Hotel CaucasTransExpress MEMBERS

Centre for Training and Consultancy Over nearly 70 years our staff has Caucastransexpress (CTE) started (CTC) is a Georgian foundation working built a depth of reliability, trust and con- operating as an international freight

since 1999. CTC wants to contribute to nection with our guests. Located in the forwarder in Tbilisi, Georgia in 1999. NEW social and economic development in middle of Batumi, opposite the beauti- Nowadays the company expands into all Georgia by strengthening local human ful sea side boulevard on the Black Sea mode of land, sea and air transport and and organizational capacity and promote coast. Hotel has 3 conference rooms, 2 Central Asia and many ports of Black the ideas of best practice management restaurants, 2 bars, nightclub, spa center sea, including Poti, Batumi, Illichevsk, and good governance. and casino. Odessa and Istanbul. www.ctc.org.ge www.intouristpalace.com EMBASSIES Embassy of Armenia Embassy of German Federal Republic Embassy of the United Kingdom in Georgia; 4 Tetelashvili Street 20 Telavi St, Sheraton Metechi Palace Hotel Tel: + (995 32) (2) 951 723, 959 443 Tel: + (995 32) 447 300 51 Krtsanisi St, 0114, Tbilisi, Georgia Fax: + (995 32) (2) 964 287 Fax: + (995 32) 447364 Tel: + (995 32) 274 747 E-mail: [email protected] E-mail: info@tifl is.diplo.de Fax: + (995 32) 274 792 URL: www.tifl is.diplo.de E-mail: [email protected] Embassy of Azerbaijan VISA Application: URL: ukingeorgia.fco.gov.uk/en 2 Kipshidze Street, Building 1 166 Agmashenebeli Ave, 0112, Tbilisi, Georgia VISA Application: Tel: + (995 32) 252 639, 253 523 Tel: + (995 32) 435 399 Tel: + (995 32) 274 775 Fax: + (995 32) 25 00 13 Fax: + (995 32) 911 651 Fax: + (995 32) 274 779 E-mail: [email protected] E-mail: [email protected] URL: www.azembassy.ge Embassy of Italy VISA Application: 3A Chitadze Street, 0108, Tbilisi, Georgia Embassy of the United States of America Tel: + (995 32) 253 526 Tel: + (995 32) 996 418 Fax: + (995 32) 996 415 11 G. Balanchine St, 0131, Tbilisi, Georgia Embassy of France E-mail: [email protected] Tel: + (995 32) 277 000 15 Gogebashvili Street URL: www.ambtbilisi.esteri.it Fax: + (995 32) 277 701 Tel: + (995 32) 999 976, 934 210; URL: georgia.usembassy.gov Fax: + (995 32) 953 375, 987 115 Embassy of Russian Federation VISA Application: E-mail: [email protected] Tel: + (995 32) 277 724 URL: www.ambafrance-ge.org Embassy of Switzerland Georgia, Consular service American Citizen Services: askconsultbilisi@ VISA Application: at the Russian Federation Interests Section state.gov Tel: + (995 32) 922 851, 922 850 Tel: +995 32 91 27 82, 91 26 75 Non-Immigrant Visas: [email protected] Immigrant Visas: [email protected]

EMERGENCY CALLS AND ADDITIONAL INFO Fire 01 are 50 tetri fl at fare irrespective of the length of the are not fast. Emergency Medical Service: 033 journey. Passengers should have the exact amount Tel:54 47 60, 56 62 60, www.georgianrailway.ge Gas Emergency- 04 as no change is given. Plastic swipe cards can Electric Emergency, Telasi- 25 52 11 also be used on buses; they are available on sale Flying - Tbilisi Airport Airport Information Bureau-433141 at cashier’s offi ces of any Metro station in Tbilisi, Tel: 31 02 61, 31 04 61, 43 32 22 Railway Station- 564,760,566,253 see “Metro” for more information. Booking offi ce 18 10 01 Technical Aid on Roads-899305503 www.airport.ge Taxi- 511, 74- 74-74, 929, 201-201 Metro- www.info-Tbilisi.com/usefulinfos/un- Flights: timetable: http://www.airport.ge/Tbilisi- City Telephone-Informational bureau- 08, 09 dergorund Airport-Seasonal-Timetable.html International Phone Calls, Long-Distance phone Trains run roughly every fi ve minutes. Passengers Trains from the airport run to the railway station calls- 07. can buy a plasti token for 50 tetri, or buy a swipe and back 4 yimes each 24 hours. There are no fi xed Tbilisi Water – hotline, 931111 card issued by th Bank of Georgia, available at hours for the trains Fire Departement Alarm 011 metro stations and other places, for 2 GEL and Natakhtari Airport is located in the village of Na- Police 022; 99 55 79 recharge as necessary. The swipe cards, using the takhtari, Mskheta Disctrict. Mediclub Ambulance- 25 19-91 same system are valid on both metros and buses. Tel. 42 74 27, 42 94 29, 899 45 25 25 City Hall Special Situations 45 74 79 Gas Works 93 64 42 Trains-International trains run regulary from the Taxi 09 Electricity Works 92 22 01, 92 03 16, 93 55 27, Central Railway Station to both Baku( Silk Road GAG Taxi 78 78 78 98 85 79, 25 52 11 Express) and Yerevan. Destinations in Georgia in- Toyota Taxi 511 clude Mtskheta, Gori, Zestaponi, Kutaisi, Batumi, Information offi ce : 62 15 10 City Buses – www.info-tbilisi.com/usefulinfos/ Poti, Borjomi, Akhaltsikhe and Zugdidi. There general cost 5-7 GEL, city centre to airport 25 GEL busroutes are both day and night trains to Batumi. Day train Yellow buses run to most parts of Tbilisi. Tickets departure time is 08.50, arrival time, 15.30. Trains

JUNE-JULY 2011 57 AmCham Company Members as of June 2011

PATRON MEMBERS Caucasia Trading Iberia Refreshments, JSC Salford Georgia 5/7 Navtlugi St., Offi ce #1 Tetri Khevi Hesi District, Orkhevi 44 Leselidze St. BP Exploration Georgia Tel: 277323; Fax: 277377 Tel: 241091; Fax: 241090 Tel: 505400-03; Fax: 505406 38 Saburtalo St. www.caucasiatrading.com www.pepsi.ge www.salford.com.ge Tel: 593400; Fax: 593488 Imedi L International www.bp.com SEACOR Environmental Caucasus University 20 Chavchavadze Ave. Services International (SESI) 77 Kostava St., Bld.6, 4th fl . Tel: 223520; Fax: 293075 9 Khvichia St. Tel: 941691; Fax: 253814 www.imedi-l.com.ge Exxon Azerbaijan Ltd www.cu.edu.ge Tel: 244141, 386673 Landmark Suite 300, 95 Nizami St., www.ses.seacorholdings.com Baku, AZ1010 Azerbaijan KPMG CIS Ltd. Tbilisi Branch Tel: (994-12) 4982460; Fax: (994-12) Chartis Europe S.A. Georgia 3rd Floor, Besiki Business Center, Branch 4Besiki St., 0108 SEAF Management LLC 4982472 7, Niko Nikoladze St. II Floor. www.exxonmobil.com 7 Bambis Rigi St., 0105 Tel: 935713; Fax: 982276 Tel: 439025; www.kpmg.ge Tel: 998115; Fax: 923533 Fax: 439026 www.seaf.ge PricewaterhouseCoopers www.chartisinsurance.com Levon Travel Sheraton Metechi Palace Hotel 7 Bambis Rigi St., 0105 20 Chavchavadze Ave. 20 Telavi St. Tel: 508050; Fax: 508060 Chemonics International Tel: 250010; Fax: 232399 Tel: 772020; Fax: 772120 www.pwc.com/ge 6a N. Ramishvili St., 0179 www.levontravel.ge www.sheraton.com/tbilisi Tel: 234311; Fax: 234309 www.chemonics.com Maersk Georgia LLC UGT 6 Khetagurov St. T&K Restaurants (McDonald’s 17a Chavchavadze Ave., 7th fl oor Georgia) Deloitte Tel: 200800; Fax: 200815 Tel: 220211; Fax: 220206 1 Dzmebi Kakabadze St. 36a, L. Asatiani St., 0105 www.maerskline.com www.ugt.ge Tel: 921246; Fax: 251422 Tel: 244566; Fax: 244569 Magticom www.mcdonalds.ge www.deloitte.ge 5 Politkovskaya St. Tel: 171717; Fax: 171171 TBC Group CORPORATE A MEMBERS Diplomat Georgia www.magticom.ge 7 Marjanishvili St. 65, Kakheti Highway Tel: 272727; Fax: 228503 ABRIS Distribution AG. Tel: 984950 Marriott Hotels, Resorts & Suites www.tbc.com.ge 21 Liubliana St. www.diplomat.ge 13 Rustaveli Ave. Tel: 527271; Tel: 779200; Fax: 779210 TBSC Consulting www.abrisdc.com DLA Piper Georgia LP www.marriott.com 6 Marjanishvili St. 10 Melikishvili St. Tel: 959019; Fax: 420215 Advanced Engineering Tel: 509300; Fax: 509301 Metromedia International Group www.tbsc.ge Associates Georgia www.dlapiper.com 8000 Tower Point Dr., Charlotte, NC Apt 3, 20 Kipshidze St., 0162 28227 Tel: 913892; Fax: 252762 Tel: 171201; Fax: 210101 Ernst & Young www.aeai.ge www.metromedia-group.com CORPORATE B MEMBERS 44 Leselidze St. Alliance Group Holding, JSC Tel: 439375; Fax: 439376 Microsoft Georgia LLC AGV Czech Republic Ltd 47/57 M. Kostava St., 0179 www.ge.ey.com 6 Marjanishvili St. 63 Kostava St. Tel: 424181; Fax: 998112 Tel: 424478 Tel: 242559; Fax: 242549 www.agh.ge Georgian American University www.microsoft.com www.agv-czech.com 21a Chavchavadze Ave., 2d Arch #3 Mobipay (OpenRevolution Avon Cosmetics Georgia LLC Tel: 915003; Fax: 915004 Georgia) Aliance Georgia Ltd 117 Tsereteli Ave.. www.gau.ge 19 T. Abuladze St. 0162 33 Samurzakano St. Tel: 226805; Fax: 226806 Tel: 235403 Tel: 243773 www.avon.com www.groupaliance.com Georgian Audit & Consulting www.mobipay.ge F H Bertling Georgia Ltd. Company Motorola Alioni-99 Holding Company 9 Tarkhnishvili St. 47 Kostava St. Suite 29 19 Gamrekeli St. 12a Kazbegi Ave., 0160. Tel: 443356; Fax: 443376 Tel: 984039; Fax: 438352 Tel: 253371; Fax: 253371 Tel: 922993; Fax: 389737 www.bertling.com www.gacc.com.ge www.motorola.com www.alioni99.ge Betsy’s Hotel / Prosperos Books GMT Group MSD (Schering Plough Central GZ American Academy in Tbilisi 32/34 Makashvili St. / 34 Rustaveli 4 Freedom Square East AG) 37a Chavchavadze Ave. Ave. Tel: 988988; Fax: 988910 44 K. Abkhazi St. 0105 Tel: 227441; Fax: 227889 Tel: 987624, 923592; Fax: 923592 www.gmt.ge Tel: 438978 www.aat.ge www.betsyshotel.com.ge www.merck.com Greco Group Booz Allen Hamilton, Inc. Bagebey City Group 1 Nutsubidze St. Philip Morris 7 Bambis Rigi St., 0105 49b Chavchavadze Ave. Tel: 393138; Fax: 311107 7 Bambis Rigi Str., 0105 Tel: 439072; Fax: 439059 Tel: 913152; Fax: 290169 www.greco.ge Tel: 439001; Fax: 439005 www.boozallen.com www.philipmorrisinternational.com www.bagebeycity.com

British American Tobacco GT Group ProCredit Bank Baker Tilly Georgia Ltd. 71 Vazha Pshavela Ave. 48 B. Cholokashvili St. 154 Agmashenebeli Ave. Meidan Palace, 44 Kote Abkhazi St. Tel: 399103/01/02; Fax: 399104 Tel: 740740 Tel: 202222; Fax: 202222-2226 Tel: 505353; Fax: 505353 www.bat.com www.gtgroup.ge www.procreditbank.ge www.bakertillyinternational.com

Catoni & Co. Georgia HSBC Bank Georgia JSC Radisson BLU Iveria Hotel Bank of Georgia 3 Lesia Ukrainka St. Apt.7 15 Rustaveli Ave. 1 Rose Revolution Sq. 3 Pushkin St. Tel: 989230; Fax: 922264 Tel: 177777 Tel: 402200; Fax: 402201 Tel: 444134; Fax: 983269 www.hapag-lloyd.com www.hsbc.com www.radissonblu.com www.bog.com.ge

58 JUNE-JULY 2011 Bank Republic Education and Training Mgaloblishvili, Kipiani, Teliani Valley JSC 2 Gr. Abashidze St. International Ltd. Dzidziguri (MKD) Law Firm 2 Marshal Gelovani Ave. Tel: 925555; Fax: 925544 4 Kuchishvili St. 24 Suite, IV Floor, Tel: 313245; Fax: 313249 www.republic.ge Tel: 250945; Fax: 250945 71 Vaja-Pshavela Ave. www.telianivalley.com www.educatrain.ge Tel: 973880; Fax: 973884 Basis Bank JSC www.mkd.ge VD Capital 1 Ketevan Tsamebuli Ave. 77 Kostava St., 0175 Geocell Tel: 922922; Fax: 986548 Tel: 363672; Fax: 364302 www.basisbank.ge 3 Gotua St. Mina JSC Tel: 770100, ext. 7435; Fax: 770119 4 Besiki St. Wimm-Bill-Dann Georgia Ltd Batumi Oil Terminal www.geocell.com.ge Tel: 449981/82/83; Fax: 449980 Village Ponichala, Tbilisi 0165 GMT Plaza, 4 Freedom Sq. www.mina.com.ge Tel: 475290 Tel: 241818; Fax: 241817 GeoEngineering LLC www.wbd.ru www.batumiport.com 15a Tamarashvili St. Navigator Ltd Publishing House Tel: 311788; Fax: 311787 34 Anton Katalikosi St. Wings and Freeman Capital BDO LLC www.geoengineering.ge Tel: 923615 Green Building, 6, Marjanishvili St. 42 Kazbegi Ave. www.navigator.ge Tel: 940051; Fax: 940053 Tel: 545845; Fax: 399204 Georgian Airways www.wfcapital.ge www.bdo.ge 12 Rustaveli Ave. New School - Int-l House Wissol Georgia Tel: 999730; Fax: 999660 35 Tskneti Highway, Bagebi 74b Chavchavadze Ave. BG Capital www.georgian-airways.com 23 Chavchavadze Ave, 3rd fl . 0179 Tel: 231728 Tel: 915315; Fax: 915615 www.newschoolgeorgia.com www.wissol.ge Tel: 444687; Fax: 235804 Georgian Lottery Company LLC www.bgcapital.ge 34 Chavchavadze Ave. Orifl ame Georgia BGI Advisory Services Georgia Tel: 649649 www.georgianlottery.com 57 Uznadze St. NON PROFIT ORGANIZATIONS 18 Rustaveli Ave., II fl . Tel: 911064; Fax: 911068 Tel: 997292; Fax: 996615 www.orifl ame.ge American Friends of Georgia Globalink Logistics Group www.bgi.ge 77 Nutsubidze St. 14-A Shartava St, 2nd fl , Suite 7 Tel: 397174; Fax: 388495 Tel: 253262; Fax: 439002 Overall Management Group BLC Law Offi ce www.afgeorgia.org 4 Gudiashvili Sq. www.globalinkllc.com (OMG) Inc. Tel: 922491; Fax: 934526 12 M. Javakhishvili St. American Institutes for Research www.blc.ge Goodwill Tel: 436052; Fax: 436052 Apt 28, 42 Abashidze St. 1 Parnavaz Mepe Ave. 0131 Tel: 290644; Fax: 290644 Casino Adjara Tel: 243673; Fax: 243673 Poti Seaport Corporation www.vep.org.ge 1, 26 May Sq. www.goodwill.ge 52 D. Aghmashenebeli St., Poti Tel: 335519; Fax: 334520 Tel: 293-20660; Fax: 293-20688 East West Management Institute, www.casinoadjara.com Gosselin Georgia www.potiseaport.com Inc (EWMI) 3 M/D, Didi Digomi 3rd Floor , 5 Marjanishvili St. CaucasTransExpress Tel: 505404; Fax: 202441 Tel: 596601/02/03; Fax: 596600 Publicis Hepta 10a Tashkent St. 0160 www.gosselingroup.eu www.ewmi-gpac.org Tel: 375715 4 Kuchishvili St. www.cte.ge Tel: 443474; Fax: 443474 The Eurasia Partnership Holiday Inn www.publicishepta.com Foundation 1, 26 May Sq., 0171 Caucasus Online LLC 3 Kavsadze St., 0179 Tel: 300099 Rakeen Development LLC Tel: 223264; Fax: 223264 71 Vaja-Pshavela Ave. www.hi-tbilisi.com Tel: 480048; Fax: 480048 2 Baratashvili St. 0105 www.eurasia.org.ge www.caucasus.net Tel: 933393; Fax: 933993 HRG Georgia “Sky Travel LLC” www.rakeen.ge Foundation - Centre for Training Meidan palace Business Center, and Consultancy Château Mukhrani, J.S.C. 44 Kote Apkhazi St. 34 Al. Kazbegi Ave., Plot #3, 0177 III fl oor, Didube Plaza, Tel: 438958 Rentals Ltd. Tel: 206774 116 Tsereteli Ave. www.hrgworldwide.com 46 Rustaveli Ave. www.ctc.org.ge Tel: 201878; Fax: 201878; Tel: 454566 www.mukhrani.com www.rentals.ge Georgian Wine Association Intourist Panace Hotel 5 Marjanishvili St. 11 Ninoshvili St., Batumi Citadines Apart’Hotel Tel: 505456 4 Freedom Sq. 0105 Tel: 75525, Fax: 76606 Rompetrol Georgia Ltd. www. intouristpalace.com Tel: 547030; Fax: 547040 39 Navtlugi St. International Relief and www.citadines.com/en/georgia/tbilisi/ Tel: 910727; Fax: 910763 Development Inc. freedom_square.html Kor-Standard Bank JSC www.rompetrol.com 75 Paliashvili St. 43 Chavchavadze Ave. Tel: 250106; Fax: 224837 Development Solutions LLC Tel: 507700, Fax: 507707 37 Rustaveli Ave. Silknet Ltd. International School of Tel: 241555; Fax: 241552 Kutaisi Free Zone, Georgian 95 Tsinamdzgvrishvili St. Economics at TSU www.ds.com.ge Int-l Holding Ltd Tel: 910345; 16 Zandukeli St. 6 Shio Mgvimeli St. www.silknet.com Tel: 507177; Fax: 984815 Dika Ltd. Tel: 232997, Fax: 232997 www.iset.ge 40 Rustaveli Ave. Statoil Azerbaijan AS Tel: 990994; Fax: 990994 96 The Landmark Building, Nizami QSI International School of Liberty Bank JSC Georgia 74 Chavchavadze Ave. Street, Baku AZ 1010. Donut Stop Cafe Tel: +994 (50) 2168981; Fax: +994 Village Zurgovani, Tbilisi 10/12 Abashidze St. Tel: 555500; Fax: 912269 Tel: 537670; Fax: 322607 www.libertybank.ge (12) 4977 340 Tel: 251466; Fax: 999252 www.statoil.com www.qsi.org Dutch Design Garden Madneuli JSC The Salvation Army 20 km, Agmashenebeli Alley 3/5 Kazbegi Street, 0179 Tbilisi Airport City 16 Ikalto St. Tel: 530779 Tel: 474545, ext. 55 7 Bambis Rigi. Tel: 333786; Fax: 330227 www.dutchdesigngarden.com www.madneuli.ge Tel: 890-185000; Fax: 439328 www.salvationarmy.org

JUNE-JULY 2011 59 SOCIAL PAGE

AmCham hosted a farewell party for U.S. Embassy staff in May

Sheraton Metechi Palace celebrated its 20th anniversary in May

60 JUNE-JULY 2011 SOCIAL PAGE “Georgia for Japan” raised approximately 65 thousand GEL to aid recovery in the wake of the earthquake and tsunami that hit Japan in March. All funds raised will be distributed among those affected by the earthquake and tsunami through the Japanese Red Cross Society.

The event committee-- Michele Dunn, Sarah Williamson-Chirakadze, Charlotte Emborg, Betsy Haskell, Nana Keinishvili, Fumi Marata and Teona Natsvlishvili -- worked with Mrs. Junko Kamohara, wife of Masayoshi Kamohara, Ambassador of Japan to Georgia, who donated her personal collection of rare and beautiful Japanese art to raise funds at the April 14 auction at Marriott Tbilisi.

As honorary hostess, Sandra E. Roelofs, First Lady of Georgia, was very supportive to Mrs. Kamohara and the fundraising effort. Neil Dunn, BP Georgia General Manager, emceed the event. A special thank-you to Georgia Red Cross Society “Fundraising Campaign to Help Japan”, CARITAS Georgia, Tbilisi I.W.A., Child and Environment, New School International School of Georgia, Parnas Café, and “Sing for Japan” karaoke fundraiser in Zugdidi, Georgia.

JUNE-JULY 2011 61 Board Of Directors 2011

David Lee, PRESIDENT Sarah Williamson, David Lee is the General Director of Magticom, the First Vice-President largest telecommunications operator in Georgia and In Tbilisi since June 1998, Sarah Williamson is took up his position March 2004. David is also the the co-owner and Vice President of United Global Chairman of the Eurasia Partnership Foundation Technologies (UGT), the largest IT company in and is a Chartered Accountant with an MBA from Georgia. Warwick Business School. A Russian speaker, he has worked extensively in the former USSR and served as a Royal Naval Offi cer for 9 years.

R. Michael Cowgill, Irakli Baidashvili, Director Irakli Baidashvili is the Senior Vice President of Vice-President & Treasurer GMT Group. The company is one of the largest US In his 12th. year in Georgia, Michael Cowgill is direct investments in Georgia, the owner of two currently the President and co-founder of Georgian Marriott hotels, production facility SANTE and American University’s business and law schools in several major real estate sites in Tbilisi . Tbilisi, Georgia.

John Braeckeveldt, Director Esben Emborg, Director John Braeckeveldt arrived in Georgia in 2003 Esben Emborg has been in Georgia since 1999. He as the General manager for GOSSELIN in the has worked a General Manager for Caucasus Region Caucasus region. In recent years John also started for Cadbury Schweppes and Nestle until 2008. Now up a customs brokerage company, building new he is working as Principal Partner for an Investment European style warehouse in Tbilisi for freight Fund (SEAF) that is currently managing a 30 mil forwarding/storage solutions and customs bonded USD portfolio of investments all over Georgia. warehousing for diplomatic goods.

Neil Dunn, Director Badri Japaridze, Director Neil Dunn is the general manager of BP Badri Japaridze has been the Deputy Chairman of Georgia. He has 28 years of experience in the the Supervisory Board of TBC Bank since 1999 oil and gas industry with Amoco and BP, having and the Vice-President of various engineering and operations assignments. Georgian Glass and Mineral Water Co. (GG&MW) Neil has most recently been the North Slope since 1995. Infrastructure Manager

Steve Johnson, Director Ted Jonas, Director Steve Johnson is the proprietor of Prospero’s Books Ted Jonas is the Managing Partner of DLA Piper’s and the General Manager of The Hotel Betsy. Tbilisi offi ce. He advises clients on international Prospero’s Books and Caliban’s Coffee House is business transactions, energy and infrastructure the leading English language bookstore in Georgia. projects, government relations, and dispute resolution.

Ivo Bakhuijzen, Director Erika Olson, Ex-Officio Member Ivo Bakhuijzen spent 9 years in the military, 5 of Erika Olson is the Deputy Political Economic which as an offi cer within the airborne infantry; Chief, and senior Economic/Commercial Offi cer, with missions in the former Yugoslavia and at the U.S. Emb. She has also served at the U.S. Afghanistan. Embassy in Bishkek, Kyrgyzstan, U.S. Embassy in Ivo has been in Georgia since 2008 as the director Tashkent, Uzbekistan (where she was an ex-offi co of Dutch Design Garden, a sister company of the member of the AmCham Board of Directors) and at famous Dutch landscape architect Martin Veltkamp. the State Department in Washington, D.C.

Betsy Haskell, Founding Advisor George Welton, Exe. Director Betsy Haskell is an 18 year resident of Georgia George Welton came to Georgia as a university who started four successful businesses, and is lecturer in 2004. Soon after arriving he started currently developing a resort hotel and villas in working as a professional researcher and founded the wine country. For the past 15 years, she has GeoWel Research in 2008. His company conducts been the Georgia Contractor for Metrica, Inc, a US research and analysis for non-profi ts like KfW, Treasury Department sub-contractor. GIZ, UNDP, DfID, CARE International and some private companies.

62 JUNE-JULY 2011 JUNE-JULY 2011 63 LOCAL FOCUS GLOBAL REACH

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Ted Jonas – Office Managing Partner ([email protected]) | Otar Kipshidze – Partner ([email protected]) 10, Melikishvili Street, Tbilisi 0179, Georgia | T +(995) 32 509 300 | F +(995) 32 509 301

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