Panorama Protesters Demand to Meet the PM

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www.georgiatoday.ge Issue no: 822/16 • MARCH 1 - 3, 2016 • PUBLISHED TWICE WEEKLY PRICE: GEL 2.50

In this week’s issue...

Georgian Government Supports Cultural Entrepreneurship PAGE 2 Azerbaijan and Iran to Resume Oil Swap Agreement

FOCUS ON BETTER CONDITIONS The ﬁ ght goes on for fair pay and fair PAGE 3 conditions in the Tkibuli mines PAGE 7 On Education and the Sacred Duty of Defending One Week Countdown: Panorama One’s Motherland Protesters Demand to Meet the PM ISET PAGE 4 Georgia to Sign Free Trade BY EKA KARSAULIDZE Agreement with European

epresentatives of Non-Gov- Free Trade Association ernment Organizations (NGOs) and civil society PAGE 12 activists again protested against the multifunctional Rcomplex Panorama Tbilisi construction. Financial Times Says NATO This time, they asked to meet with the Head of State and representatives of the Vulnerable on Eastern Opposition. The government seems unlikely to change its mind regarding Europe’s Borders the on-going construction work. Continued on page 2 PAGE 15

Prepared for Georgia Today Business by Markets Asof26ͲFebͲ2016 STOCKS Price w/w m/m BONDS Price w/w m/m BankofGeorgia(BGEOLN) GBP19.59 +2,4% +10,3% GEOROG05/17 99.44(YTM7.36%) +0,4% Ͳ GHG(GHGLN) GBP1.53 Ͳ6,1% Ͳ12,1% GEORG04/21 105.59(YTM5.60%) +0,3% +2,2% TBCBank(TBCBLI) US$9.50 +1,1% +4,9% GRAIL07/22 103.56(YTM7.04%) +0,4% +2,5% GEBGG07/17 103.06(YTM5.35%) Ͳ +0,1% COMMODITIES Price w/w m/m CrudeOil,Brent(US$/bbl) 35,10 +6,3% +10,4% CURRENCIES Price w/w m/m GoldSpot(US$/OZ) 1223,46 Ͳ0,3% +9,2% GEL/USD 2,4650 Ͳ0,8% Ͳ0,6% GEL/EUR 2,6988 Ͳ2,4% +0,8% INDICES Price w/w m/m GEL/GBP 3,4195 Ͳ4,5% Ͳ4,1% FTSE100 6096,01 +2,4% +3,1% GEL/CHF 2,4753 Ͳ1,4% +1,4% FTSE250 16567,04 +2,5% +2,4% GEL/RUB 0,0323 Ͳ +1,9% DAX 9513,30 +1,3% Ͳ3,2% GEL/TRY 0,8242 Ͳ2,1% Ͳ0,0% DOWJONES 16639,97 +1,5% +2,9% GEL/AZN 1,5656 Ͳ0,2% +2,0% NASDAQ 4590,47 +1,9% +0,5% GEL/AMD 0,0050 Ͳ Ͳ2,0% MSCIEMEE 108,84 +2,2% +9,8% GEL/UAH 0,0903 Ͳ2,1% Ͳ9,3% MSCIEM 740,02 Ͳ0,1% +4,5% EUR/USD 0,9148 +1,8% Ͳ0,6% SP500 1948,05 +1,6% +2,3% GBP/USD 0,7208 +3,8% +3,4% MICEX 1816,73 +1,3% +6,6% CHF/USD 0,9968 +0,6% Ͳ2,0% MSCIFM 2313,47 +1,3% +8,2% RUB/USD 76,3175 Ͳ0,9% Ͳ3,2% GTIndex(GEL) 886,29 Ͳ +0,0% TRY/USD 2,9955 +1,5% Ͳ0,4% GTIndex(USD) 706,44 +0,1% +0,9% AZN/USD 1,5650 +0,1% Ͳ2,2% GEORGIA TODAY 2 BUSINESS MARCH 1 - 3, 2016 One Week Countdown: Georgian Panorama Protesters Demand to Meet the PM Government Supports Continued from page 1 The Panorama Tbilisi project consists of four Cultural major complexes with tourist and business cent- The edition is designed with foreign guests in mind, ers, high-rise buildings and hotels. According to making it easier for them to choose a colorful the plan, the complexes are to be located in Sololaki high-quality souvenir and be able to contact the Entrepreneurship artist Hills, Sololaki Gardens, Liberty Square and Erekle II Square; and will be connected to each other by cable car. The project will cost USD 500 million this aim, they launched the fi rst Cultural Entre- BY EKA KARSAULIDZE and was created on the initiative of former Prime preneurship Festival in 2015 and conducted Minister of Georgia, Bidzina Ivanishvili. From the various workshops, trainings, and established fi rst day of its presentation controversy raged, but, a Masters League and created a Business Guide- two years later, the authorities remain fi xed and bilisi City Hall and Tbilisi City Assem- line for them. The works of the masters were the construction work has already begun. bly have introduced a souvenirs presented and sold during Tbilisoba 2015 (Day Civil society activists and NGOs occupied the catalogue ‘Gift of Tbilisi,’ as the fi nal of the city Tbilisi). As a result, the ‘Gift of Tbi- streets of Tbilisi to protest the large-scale construc- stage of the Cultural Entrepreneur- lisi’ catalogue is considered as the fi nal stage of tions, arguing that Panorama Tbilisi will spoil the ship Festival 2015. Its creators believe the entrepreneurship support program for folk unique face of the city and worsen the ecological thatT the catalogue will popularize Georgian folk art masters. condition, highlighting expert opinions to support arts and crafts abroad and present Tbilisi’s his- The catalogue is presented in two languages, their position. Civil society activists and NGOs argue that tory in a very accessible form. Georgian and English, and, under each product Panorama Tbilisi will spoil the unique face of the city “Informed people, like archaeologists and experts and worsen the ecological condition The catalogue consists of the works of 32 art- of art you can fi nd the name of the artist and in this fi eld, always join our protests,” said Nata ists who create dolls, fi gurines, jewelry, bags, their contact details. The edition is designed Peradze, representative of the ‘Together’ move- ‘Together’ movement. “We are going to visit each traditional dishes, and pictures. The works are with foreign guests in mind, making it easier for ment. “We have expert assessments from both local politician who plans to participate in the election produced using various materials – ceramic, them to choose a colorful high-quality souvenir and foreign organizations which confi rm the enor- and ask them to sign our memorandum, which has enamel, wax, thick felt, wood, textile and more, and be able to contact the artist. mous environmental damage which the construc- a simple aim – to stop the Panorama Tbilisi project. all of which represent a part of Tbilisi’s history “It’s the very least Tbilisi City Hall and the City tion can cause the city. In this case, we will have a guarantee that if they and show the country in the best possible light. Assembly can do to support cultural entrepre- In addition, the activists have expressed doubts come to power, the construction of the complex “I’m 100% convinced that each product in the neurship in the country. Their oeuvre is directly regarding the closed process of the project, sus- will cease.” catalogue is a unique piece of art. This is a co- connected with the sales of the works within, pecting that Panorama Tbilisi was given a 5th class As yet, the ruling power seems to have no plans production of talent and the hard work of our and I hope that this catalogue will serve as one construction mark (of strategic importance) to to stop the on-going works and has offered counter- masters. This catalogue serves to enliven the component of their better realization and pro- make its consideration only possible at State level, arguments. “Many ecological and economic stud- history of Tbilisi and says more about it than any motion,” said Nino Khtiskatsi, Deputy Mayor of and so less transparent. ies were carried out regarding the Panorama Tbi- other art work or poetry masterpiece,” said Tamar Tbilisi. Besides increasing the transparency of the pro- lisi project which made no mention of the risks Taliashvili, the Head of the Education and Cul- The local government will continue to support ject, protesters, as before, have asked for all con- [protesters complain about],” said Mayor of Tbilisi, ture Commission of Tbilisi City Hall. cultural entrepreneurship and plans to futher struction works to cease- all of which are located Davit Narmania. “Nor is it going to bring negative Taliashvili also stated that the main principle make a special focus on the promotion of Geor- near the historic district of Sololaki and in the social impact or damage cultural heritage. The behind the idea of the local government was to gian designers in the frameworks of the Cultural centrally located Pushkin Square. Panorama Tbilisi project will go ahead.” support the business side of the fi eld of art. To Entrepreneurship Festival 2016. At a protest march on February 27, citizens gave The Mayor highlighted the positive economic the government one week to arrange a meeting benefi ts of the project, noting that around 2,000 to with Georgia’s Prime Minister Giorgi Kvirikashvili. 4,000 people would be employed during the con- In addition, they want to meet with all the politi- struction and, following the opening of the Pano- cians who will take part in the parliamentary elec- rama complexes, the city as a whole will become Georgia to Introduce tions in October 2016. more attractive to the business sector and tourists. “We have elections this year, that is why it is so However, civil society activists insist on their important to know the point of view of each can- demands and claim that if they will not be satis- didate,” said Tsira Elisashvili, representative of the fi ed, the protests will become a permanent fi xture. ‘Innovation Strategy 2020’ from Spring

BY ANA AKHALAIA

his spring, Georgia is to introduce a new strategy ‘Innovative Georgia 2020 – Innovation Strategy of Georgia 2016- 2020’, which aims to expand the innovation market in Georgia. After review- Ting the strategy within different circles, it will be sent to the government for approval. According to the Head of Georgia’s Innovation Irakli Kashibadze, Head of Georgia’s Innovation and and Technology Agency, Irakli Kashibadze, the Technology Agency strategy includes objectives which will strengthen cooperation between the scientifi c and business the so-called dualistic model, meaning that voca- communities. tional education should be developed with the The strategy focuses on introducing needed skills requirements of the business sector. in pre-school, primary, vocational and university In terms of higher education institutions, the education. In particular, it is seen as necessary to strategy states that mechanisms should be set up introduce entrepreneurial and professional skills. to ensure the establishment of venture funds for As Kashibadze notes, many countries, including students in which a group of students will be able Korea and the United States, develop similar trends to decide itself whether to invest in a start-up. from pre-school age. The most important component is creating cor- “Learning professional skills should start from responding infrastructure- business incubators, higher grades and if students desire they should technology parks and development Fab Labs, both be able to learn some prospective professions. In inside and outside of the educational institutions. this regard, the training of teachers plays an impor- The strategy also notes that limited access to tant role. It is also important to involve the busi- fi nancing is one of the main preventative factors ness community in the process, which should con- in the development of enterprises in Georgia. tribute to the process of creating specialized Therefore, there is a need for both traditional and laboratories,” the strategy layout informs. innovative mechanisms to be introduced to fi nance As for vocational education, the strategy offers innovation at all levels. GEORGIA TODAY MARCH 1 - 3, 2016 BUSINESS 3 Azerbaijan and Iran to Resume Oil Swap Agreement Minister Janelidze met with the Minister of Economy and Energy of Germany, Matthias Machnig, to discuss the existing economic and trade relations between the two countries BY NICHOLAS WALLER German Experts to

zerbaijan and Iran will in the coming days reinstate Assess Investment a bilateral oil swap agreement after a fi ve year break due to sanctions levied Opportunity in Georgia againstA Tehran, Iran’s Deputy Oil Min- ister Rukneddina Javadi said Sunday. should improve the business environ- BY EKA KARSAULIDZE “After a fi ve year cessation, we will ment and make the country more attrac- resume an oil swap with Azerbaijan. Iran tive in this area. will begin importing oil into our Caspian Especially highlighted was the grow- Sea ports and deliver an equivalent n expert group from Ger- ing potential of Georgia in the fi elds of amount on behalf of our Azeri partners many will visit Georgia to tourism, agriculture, energy and infra- to the Gulf countries. The agreement assess the investment structure. The German side named will come into force in the coming days,” Azeri President Ilham Aliyev and his Iranian counterpart, Hassan Rouhani. Source: AP opportunity for German tourism as the driving force of Georgia’s Javadi said. would turn the endeavor into a transna- since the country’s central bank aban- small and medium-sized economy, which is also proved by a The agreement was signed on Febru- tional, regional project.’’ doned its dollar peg in mid-December Abusinesses. The plan was announced steady increase in the number of tour- ary 23, during a visit to Iran by Azeri Azerbaijan has repeatedly noted that 2015. The Azeri Manat has lost more than during a business trip of the Minister ists. President Ilham Aliyev. During a meet- Baku and Tehran now have several oppor- a third of its value against the greenback, of Foreign Affairs Mikheil Janelidze to The Ministry of Economy and Energy ing with his Iranian counterpart, Hassan tunities to expand their cooperation in due to the collapse of oil prices. Germany. of Germany is already a supporter of Rouhani, Aliyev stressed the regional the oil and gas sector after Iran actively The energy-rich economies of the for- Minister Janelidze met with the Min- the Georgian economy- the program importance of joint Azeri-Iranian coop- participated in major investment projects mer Soviet Union, which enjoyed stabil- ister of Economy and Energy of Ger- for the Professional Development of eration. in Azerbaijan. ity and economic growth over the past many, Matthias Machnig, to discuss the Managers in Georgian is one of them. “The Caspian region is our common The two respective governments have decade on the back of rising hydrocarbon existing economic and trade relations Minister Janelidze visited Germany heritage. We must continue to cooperate made signifi cant recent moves towards revenues, have been ravaged by the sharp between the two countries and the pos- last week. He also negotiated with his in pursuit of regional safety and peace. closer cooperation as Iran prepares to decline in oil prices. sibility of deepening it. Janelidze talked German counterpart Frank-Walter Stein- At present, there is excellent work being re-enter the global market following Azerbaijan, Kazakhstan and Russia about preparing a new package of reforms meier and representatives of the Bun- carried out in the energy fi eld. Coop- more than a decade of international have all seen their economies shrink in in the fi eld of payments, management destag. In addition, he held several eration in this area is not limited to sanctions due to Tehran’s nuclear devel- the last year and their national curren- and professional education. The reforms meetings in different cities throughout Iranian-Azeri cooperation. Our neigh- opment program. cies listed as some of the worst perform- are being developed on the initiative of Germany, meeting with city authorities, boring countries may also join, which Azerbaijan’s economy has been reeling ing on international exchange markets. the Prime Minister of Georgia, which experts and journalists. GEORGIA TODAY 4 BUSINESS MARCH 1 - 3, 2016 THE ISET ECONOMIST A BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS www.iset-pi.ge/blog

The ISET Policy Institute (ISET-PI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). Our blog carries economic analysis of current events and policies in Georgia and the South Caucasus region ranging from agriculture, to economic growth, energy, labor markets and the nexus of economics, culture and religion. Thought-provoking and fun to read, our blog posts are written by international faculty teaching at ISET and recent graduates representing the new generation of Georgian, Azerbaijani and Armenian economists. On Education and the Sacred Duty of Defending One’s Motherland

BY ERIC LIVNY 50 WAYS TO LEAVE YOUR LOVER, AND 21 WAYS NOT TO SERVE YOUR COUNTRY Georgia prides itself on the simplicity of its tax EORGIA’S ‘DEAD SOULS’? system. Simplicity and fairness, however, are not Rati, Lasha and Irakli are fi rst year the most prominent features of Georgia’s “Military engineering students at the Georgian Duty and Military Service Law”. Nominally, all Technical University (GTU). Rather Georgian men aged 18 to 27 are “subject to per- unusual students, one should add. forming compulsory military service” of 18 months. GAt 22-23, all three are very much alive. Yet, they As straightforward as it gets. Yet, Article 30 (Defer- never attend classes and are not taking exams. ment of Conscription) contains no less than 21 legal BSc in engineering would be their third educa- excuses to defer military service: tional degree, yet neither one of them has any • Poor health condition (including mental health intention of completing his studies at GTU. And issues); one more interesting detail: their ‘studies’ at GTU • Being an only child; are paid for by the Georgian taxpayers because • Having one small child, or more than two kids engineering (as well as mathematics and natural of any age, sciences) is considered to be a priority subject by • Having a dependent sibling; the Georgian government. • Having a disabled family member To avoid any misunderstanding, Rati, Lasha • Registering for the Unifi ed National Examina- and Irakli are not enrolled in a distance learn- tions; ing program offered by Georgia Tech. The trio • Studying in a college or university (in Georgia simply found a hassle-free way to avoid the or abroad); sacred duty of serving in the Georgian mili- • Being a priest of studying in a “theological An excellent illustration of young men wasting their time instead of getting proper training to serve the tary. school” (does not require taking the Unifi ed National country. Source: Wikimedia/Commons

Examination!) With so many holes in the law it is clear that the • Working as a teacher/doctor in a village; only people unfortunate enough to serve in the • Having a doctoral degree and being engaged in Georgian military are under-educated village boys academic research activities; who are not quick enough to reproduce. It is also • Registering as a candidate for membership in quite obvious what kind of morale these boys have the Parliament of Georgia when they come to perform their duties. Of particular interest is clause 30(n) which allows one to buy his freedom for a fee, currently set at THE WORST LAW EVER? 2,000 GEL per 18 months (payable until one reaches It is increasingly common across the OECD coun- the age of 27). This option practically guarantees tries (and not only) to use the so-called Regulatory that no kid from Vake is ever forced to wear mili- Impact Assessment (RIA) technique to critically tary uniform. assess laws and regulations. What one would nor- Finally, if, for some reason, none of the above mally do as part of a RIA exercise is analyze the legal excuses are applicable, one can be set free by costs and the distortionary effects of a regulation decree (of the Georgian Prime Minister). (say, licensing procedures for new medications) to its beneﬁ ts (improved health outcomes). A back-of-the-envelope RIA of the Georgian Law on Military Duty and Military Service would inev- itably conclude that this law is extremely ineffective. Generally, the main advantage of compulsory military service is that it enables countries to eas- 50 Ways To Leave ily muster a large force (including reservists who went through military training as part of their Your Lover: by Paul compulsory service) in the event of a crisis. Addi- tionally, one may argue that military service pro- Simon and Art vides individuals with useful skills such as team- work, discipline, stress management, etc. Garfunkel. The irony of it all is that Georgia’s Law on Military Duty and Military Service does NOT Just slip out the back, serve the very purposes for which it had been ostensibly drafted. The Georgian Armed Forces Jack do not have much use for the vast majority of the poorly motivated village boys who end up Make a new plan, being recruited. According to Defense Minister Tina Khidasheli, very few conscripts go through Stan proper military training, comprising no more than 10% of total military personnel. Rather than You don’t need to be readying for future combats or jobs, the remain- ing 90% are employed as free (unqualiﬁ ed) labor coy, Roy to guard Georgian prisons, military bases and government buildings. Just get yourself free Now, while failing to meet Georgia’s military needs, this law comes at a tremendous cost for Hop on the bus, Gus Georgia’s national security, its human and social capital, and, ultimately, its economic develop- You don’t need to ment. • First, it goes almost without saying that an army discuss much of illiterate and poorly motivated peasants is ill suited for the military and technological challenges Just drop off the key, of the 21st century: counter-terrorism, electronic warfare, drones, robots, long-range missiles and Lee precision-guided weapons. And get yourself free Continued on page 6 BUSINESS GEORGIA TODAY 6 BUSINESS MARCH 1 - 3, 2016 On Education and the Sacred Duty of Defending One’s Motherland

Continued from page 4 most Georgian students are also learn- experience of other countries in using A key point is that education and in the world – America being a strong ing very little because Georgian uni- their military to jump start economic military service can go hand-in-hand. example in this case – require their • Second, this law harms Georgia’s versities and colleges are not facing and social development. Some of the best professional armies offi cer corps to have an education. In national ethos by incentivizing thou- competitive pressure to improve and the US, colonels have to have a master’s sands of Georgian youth to cynically deliver a good educational product. The degree and the highest-ranking gener- game the system (through useless stud- product they happily sell (and students als have PhDs. By funding the education ies, early reproduction, or fake suicide buy) consists of a piece of paper of its offi cers, not only would the Geor- attempts). Horace, who thought that (“diploma”) certifying that its holder is gian military become on the whole dying for one’s country is “sweet and not as bad as underprivileged village smarter and more capable, it would also beautiful”, would have never approved boys and girls, and a legal excuse not be seen as an employment destination of a law teaching young people that to serve in Georgia’s peasant army. LAW OF GEORGIA ON MILITARY for some of the brightest young men civic duties are not to be taken seriously. • Finally, the threat of military service and women. Yet, this is what the Georgian Law on provides young people with the wrong DUTY AND MILITARY SERVICE Moreover, this model doesn’t have to Military Duty and Military Service does. motive to acquire a degree (any). It apply only to aspiring battlefi eld com- • Third, by segregating the Georgian occurs to me that 18 months of military Article 9 – Age of persons subject to manders. A good military has excellent people into ‘haves’ and ‘have nots’ the service (especially of the kind that I engineering, healthcare, diplomatic, and law misses a huge opportunity to bol- went through in Israel) are, in fact, a compulsory military service legal structures as well. For example, ster the country’s scarce social capital. very small price to be paid compared Israeli military’s IT and elite intelligence Having immigrated to Israel at 13, I to 4 years of being lectured by Soviet- “Citizens of Georgia aged from 18 units have long become recognized as started feeling a proud Israeli citizen trained professors pretending to teach hotbeds of technological talent, as only when I wore the military uniform marketing or management, and/or being to 27, who are registered or are refl ected in headlines like ”From Israeli of an elite paratrooper unit. Given its stuck in the wrong profession for the Army Unit 8200 To Silicon Valley”. On complicated ethnic and social mosaic, rest of one’s life. obliged to be registered for the one hand, these units recruit the Georgia could also use its military (and/ Fundamentally, Georgia faces the best young minds through a very com- or an obligatory civil service) as a melt- choice of going for a compulsory Israeli- conscription and who have no petitive process (people, both men and ing pot in which people from all walks style national military (or civic) service women, compete to get in, not to get of life would learn to live with each or opting for a small American-style grounds to be released from out!). On the other, they supply Israel’s other and form broader social and pro- professional army of volunteers. Both Start Up Nation with whole teams of fessional networks. This is not some- options have their pros and cons. One conscription into compulsory military experienced developers, professional thing to be taken lightly. Georgians tend thing is clear, however: Georgia cannot networks, and ideas. to cluster in family groups and clans, afford staying with the current law, service, or to enjoy deferment from Georgia certainly has the raw indi- and many of the country’s challenges which fails to achieve its stated objec- vidual talent, but to make good on its – in business, politics and government tives while undermining Georgia’s great conscription, shall be subject to promise as a nation it has to urgently – stem from people’s limited ability to nation-building and modernization fi x ineffective laws and institutions, let go of these primitive parochial bonds. project. performing compulsory military such as its military and universities. • Fourth, the purely economic costs of this law go well beyond a few lari ARMY AS A HOTBED service.” The author is President at Tbilisi’s Interna- pocketed by Georgian Technical Uni- OF INNOVATION tional School of Economics (ISET) and Advi- versity. Rati, Lasha and Irakli in our As Georgia is thinking through its future Law of Georgia No 2554 of 29 July sor to Georgian Minister of Economic and example are learning nothing at all, but strategy, it may just as well look to the 2014. Sustainable Development. GEORGIA TODAY MARCH 1 - 3, 2016 BUSINESSBUSINESS 7 Georgian Miners’ Dig In as Protest Enters Second Week Over 1,000 miners from the Dzidziguri and Mendeli coal mines near the western Georgian city Tkibuli have refused to work protester told the Western media. as they claim the document is not legally BY NICHOLAS WALLER Saqnakhshiri’s parent company, Tbilisi- binding because the signatures of GIG’s based Georgian Industrial Group (GIG) representatives were forged. has thus far refused to meet the demands Kozhoridze has rebuffed GIG saying eorgian coal miners of the protesters, only conceding that the company’s claim that the signatures demanding better pay and they will review the possibility of revis- are forgeries is ridiculous, as the man- improved working condi- ing the miners’ salaries by mid-April. agement never questioned their authen- tions appear to be digging Further infuriating the miners was a ticity in the fi ve years since being signed. in. government decision to revoke the so- He has consistently demanded that the GOver 1,000 miners from the Dzidziguri called ‘highlander status’ that the mines’ company meet the protestors’ requests. and Mendeli coal mines near the western 14 surrounding villages had previously Local NGOs and human rights observ- Georgian city Tkibuli have refused to enjoyed. ers have also lined-up in support of the work, saying their wages have not The new law suspending the Imereti miners, saying the company’s disingen- increased despite the rising cost of liv- region’s mountainous areas of their uous overtures to the protestors are ing and precipitous devaluation of the privileged status went into effect on 1 meant to table the issue as they will not national currency, the Georgian Lari. January. The result forced the Tkibuli 25 February. “We’re only talking about…a couple be subject to legally binding agreements. The Lari has lost nearly half of its value miners to pay an income tax that exceeded Despite the federal government’s hundred people who are on strike. The “The problems that workers in Georgia against the Dollar since late 2014, which 20 per cent. attempt to calm the situation, the pro- other 1,300 that we employ need to get experience today arose from the lack of has caused a severe spike in infl ation Georgia’s Finance Minister Nodar Kha- testors again stormed and briefl y occu- back to work immediately. Regarding an an effective government labor policy. and cut the value of the coal miners’ duri announced on 25 February that the pied Saqnakhshiri’s administrative offi ces increase in salaries, we will review the No adequate standards to protect work- salaries to an average of $225 per month. government would meet the miners’ on 26 February. They continue to demand matter in two months and do everything ers’ rights were ever created. Most The exchange rate of the Lari against demands to cancel the law on highland an immediate 40 per cent increase in to optimize the wage system and provide importantly, there are no mechanisms the greenback opened Monday at 2.48 status. their salaries and direct government some improvement.” for monitoring their implementation,” Lari = $1.00, down from 1.74 Lari = $1.00 “We’ve prepared an amendment to the action The protestors have frequently cited Human Rights Education and Monitor- on 1 March 2014. original bill that suspended tax breaks Both the government and GIG have a 2011 agreement, endorsed by Georgia’s ing Centre’s legal counsel Lina Gvinia- The protests grew violent on 24 Febru- for those individuals working and living fl atly rejected the miners’ demands, say- Labor Union Chair Irakli Petriashvili, nidze told the Western media. ary when hundreds of miners stormed in mountainous regions. Specifi cally, this ing both are unrealistic and fi nancially which obligated the company to increase With support for the miners’ plight managing company Saqnakhshiri’s head- deals with the demands of the miners, unattainable in the short term. their salaries based on the current infl a- spilling over into a weekend protest by quarters in Tkibuli. who will keep the benefi ts they received GIG’s chief fi nancial offi cer Zurab tion rate. Tbilisi students, the current government “None of our petitions or statements before 1 January. We are already consult- Gelenidze has openly disparaged the Kakha Kozhoridze, an advisor to Geor- fi nds itself in a position where it may has brought results. The administration ing with members of parliament on how protestors and has demanded that they gian President Giorgi Margvelashvili need to act swiftly, with concrete legal simply laughed at us and they aren’t to revise the law. The bill will be brought need to return to work or face conse- and an acting emissary between the min- solutions, in order to avoid further labor going to respond to any of our demands,” to a vote sometime in the near future,” quence if the company’s contractual ers and GIG’s management, said Sunday unrest as the economy continues to fal- said Dmitry Khuskivadze, one of the Khaduri said at a press conference on obligations are not met. the company rejects the 2011 agreement ter. GEORGIA TODAY 8 BUSINESS MARCH 1 - 3, 2016 Georgia to Sign Free Trade Agreement with European Free Trade Association

Procurement, Competition, Trade and cultural products, all four countries’ BY ANA AKHALAIA Sustainable Development and Legal and markets are sensitive to the issue, but Institutional Issues (including Dispute that Georgia has reached an unprece- Settlement, General and Final Provi- dented agreement with them by which eorgia is set to sign a Free sions). there will be zero tariffs placed on Geor- Trade Agreement (FTA) The Georgian delegation was led by gia’s most important export products. with the European Free Genadi Arveladze, Deputy Minister of Some of the products also have almost Trade Association (EFTA) Economy and Sustainable Development, halved in cost and are being given min- on 27 June, 2016 during the while the EFTA Spokesperson was Jan imum rates. GEFTA Ministerial Meeting in Bern, Swit- Farberg, Director-General of the Minis- The fi rst international agreement for zerland. try of Trade, Industry and Fisheries of Georgia signed with Iceland and Liech- The third and fi nal round of negotiations Norway. tenstein, this FTA with the EFTA will on an FTA between the EFTA States (Ice- “We have reached an agreement with open another highly effi cient market of land, Liechtenstein, Norway and Switzer- the EFTA that industrial products are to four countries and 14 million customers From Left. Mr Genadi Arveladze, Deputy Minister of Economy and Sustainable land) and Georgia was held from 24th to be completely exempt from tariffs, which for Georgia. Development and Mr Jan Farberg, Director-General of the Ministry of Trade, Industry and Fisheries of Norway 26th February, 2016 in Tbilisi, Georgia. means that all kinds of industrial prod- The positive decision on launching The Agreement will comprise the fol- ucts will be exported to the four coun- FTA negotiations with Georgia was made of commodity trade between EFTA States in Georgia’s economy originating from lowing: Trade in Goods, Rules of Origin, tries without additional customs duties,” at the EFTA ministerial meeting in Geneva and Georgia has more than doubled since EFTA States has also grown signifi cantly, Trade in Services, Establishment, Intel- Arveladze announced. on November 17th, 2014. 2009, reaching USD 60 million in 2014. and stood at approximately USD 400 lectual Property Rights, Government Arveladze added that regarding agri- According to the EFTA, the total value The stock of foreign direct investment million in 2012. Turkish-Romanian Company SU MARKETS to Enter Georgia

The $5.1 billion Black Sea Pearl project Foreign Investors to Carry Out $5 Bln Project in Adjara Turkish-Romanian consortium SU MARKETS plans to enter the Georgian agribusiness industrial zone (FIZ), free information istic this project is. Representatives of and logistics market in the near future BY ANA AKHALAIA and technological zones, free tourism the group have held a number of meet- Partnership Fund representatives dis- and high-class residential zones, as well ings not only in the (Adjara) Region, but BY ANA AKHALAIA cussed the investment potential of devel- as establishing stock exchange, insur- also at the Ministry of Economy in Tbi- oping a Tbilisi Logistics Center and AE, American and Czech ance and leasing companies and inter- lisi. Specifi c activities will be revealed refrigerator facilities. Turkish-Romanian investment groups plan national fi nance institutions on 315 hec- shortly,” Batumi City Council member, urkish-Romanian company consortium SU MARKETS plans to enter to invest in the former tares of land. The project also aims to Levan Kintsurashvili stated. SU MARKETS has the Georgian agribusiness and logistics military range territory of create a FIZ zone on 98 hectares land in The Black Sea Pearl project was fi rst expressed its interest in market in the near future. the Gonio settlement, a Khelvachauri, Adjara region, and an announced in 2015. The companies developing a logistics The JSC Partnership Fund was estab- Upopular Black Sea resort in Adjara. The agro-industrial zone on 500 hectares in expected to obtain the status of ‘free center and fruit and vegeta- lished by the Government in 2011. The $5.1 billion Black Sea Pearl project was the Guria Region, in Western Georgia. industrial zone’ in September, but that Tble refrigeration industry in Georgia. State owns 100 percent of the Fund revealed by the head of the Business and “The near future will show how real- agreement has yet to be signed. The Partnership Fund’s Executive and it has assets exceeding 5 billion Tourism International Center, Archil Director, Davit Saganelidze, who is cur- GEL. The Fund holds shares of Geor- Dolidze, to Georgian media outlet The rently on an offi cial visit to Romania, gian Railway, Georgian Oil and Gas Business Contact, though no specifi c met with the heads of the Romanian Corporation, Georgian State Electric companies were named. logistics center and leading Romanian System, Electricity Commercial Oper- A brief conceptual description and urban companies of the agricultural sector. He ator, and Telasi, distributor of electric planning were introduced at the presen- also inspected refrigeration facilities in power in Tbilisi. One of the main tation of the Black Sea Pearl project, held Romania and met with SU MARKETS objectives with investment directions in Batumi on February 25th, 2016, attended management and leading specialists in is the proper corporate management by Adjaran government members. agriculture. of these shares. The project aims to develop a free

Tel: (995 32) 2 45 08 08 10 Galaktion Street E-mail: [email protected] BUSINESS GEORGIA TODAY 10 BUSINESS MARCH 1 - 3, 2016 Villages in Russia’s Dagestan McCain’s Kramer and to Receive Hi-Speed Internet Former US Ambassador Access to Georgia Courtney Agree: the West Needs to Do More

which lead to frustration among Georgians and a BY ANNA KALANDADZE, resurgent Russia. VOICE OF AMERICA “At this point, there is a need on the part of Geor- gians to see more recognition of its efforts by NATO. The West, including the US, at the same time need he progress and failures of 25 years to say that Georgia’s membership in the Alliance is independence, as well as ongoing chal- also within our interests. All post Soviet countries lenges in democratisation and rule of have achieved independence and maintained it to law spheres for former USSR countries this day. Russia invaded Georgia and still occupies have been discussed in Washington. 20% of its territory. Georgia has long standing sep- Khasavyurt, Buinaksk and Derbent, the communi- GeorgiaT was singled out as a relative leader among aratist confl icts yet it continues to develop on a BY NICHOLAS WALLER cations ministry said. the South Caucasus countries, while Armenia was Euro-Atlantic path. The US should help it more. I “High-speed Internet access will provide our viewed as a direct target of Russian infl uence, and hope we can get talking about the Western integra- schools, hospitals, postal offi ces, and government Azerbaijan continues to regress in its human rights tion of all Soviet countries in the next 25 years.” t least 350 villages in Russia’s volatile agencies the opportunity to carry out activities in record. In Central Asia, Kyrgyzstan was said to be North Caucasus republic of Dagestan an effi cient electronic form that will cut both costs doing better than any other regional state. VoA WILLIAM will for the fi rst time receive hi-speed and time for the local population. It will also reduce Georgia spoke to two experts on the issues. COURTNEY, internet access by 2018, the republic’s the risk of corruption and increase our authorities’ FORMER US transport, energy and communications ability to combat extremism in the republic,” Dag- DAVID KRAMER, AMBASSADOR ministryA said in an offi cial statement on Monday. estan’s Interior Ministry said in a statement. MCCAIN TO GEORGIA According to the ministry, only 70 per cent of the The ministry was also quoted as saying the total INSTITUTE FOR “Most visibly, Geor- Muslim republic’s 3 million-strong population have cost for the implementation of the project would INTERNATIONAL gia has achieved two Internet access. exceed USD 14 million, or in excess of 1 billion LEADERSHIP main things in the The local government’s communication expan- Russian Rubles. AND FORMER last 25 years: it sion, dubbed ‘Bridging the Digital Divide,’ envis- Dagestan is a Scotland-sized republic located in PRESIDENT secured independ- ages providing a third of Dagestan’s population Russia’s North Caucasus, home to dozens of iso- OF FREEDOM ence, maintained it with fourth generation (4G) technology by 2018. lated ethnic groups. The impoverished mountain- HOUSE and conducted dem- Russia’s main mobile companies are actively ous region has been plagued by a low level Islamic “The US needs to ocratic reforms. building a network to immediately expand 4G insurgency that has killed hundreds since emerging pay more attention Georgia and Ukraine technologies beyond the capital Makhachkala to in the wake of the outbreak of the Second Chechen and provide more regularly conduct the republic’s main settlements Kizilyar, Kaspiysk, War in 1999. help to countries in elections, and have the post-Soviet viable opposition players. However, the West should space, especially in continue its engagement since the challenges are the fi elds of rule of substantial. For example, Russia will remain as a law, institutional resilience, media, party building threat. But I would say the major challenge is devel- and civil society. oping economic reforms and raising the standard “Russia constantly blocks Georgia’s Euro-Atlan- of living for Georgians: given the per-capita qual- tic aspirations and its Western integration. In this ity of education of Georgians, agriculture potential context, the US should express a Presidential-level and key positioning of Georgia as a transit country interest towards the region and stay more active, between East and West, this challenge should not more present in the regional developments. Geor- be hard to overcome.” gia’s integration with the West is an important aspect. We have to make sure the upcoming NATO Full article in Georgian: http://www.amerikiskhma. Summit in Warsaw does not result in similar out- com/a/kramer-courtney-on-25-years-since- comes to the NATO Summit in Bucharest in 2008 indep/3211871.html World Class Bankers to Head TBC Capital

BC Bank has appointed Levan Sha- nidze and Avtandil Gigineishvili as managing directors to co-head TBC Capital, an investment banking arm of TBC Bank offering Corporate Advi- Tsory, Research and Brokerage solutions in Georgia. fl agship macro fund. Prior to taking asset manage- Both, Shanidze and Gigineishvili are highly expe- ment responsibilities he held various capital mar- rienced professionals, each with 20 years at global ket positions in Hong Kong at Nomura, Lehman investment banking institutions in London and Brothers, JP Morgan and Jardine Flemings. His Hong Kong. roles included building equity derivative business, Avtandil Gigineishvili, former Managing Director heading India equity trading, proprietary trading and Head of Asset Management at Jefferies Inter- with global coverage among others. Levan holds a national in London, initially a key member and Master of Business Administration in Finance and subsequently leader of the team who build a suc- Corporate Accounting from the Simon Graduate cessful business managing $3 billion assets for School of Business Administration, University of institutional and retail clients in Europe and US. Rochester, USA, and a B.Sc in Biophysics from the Throughout nearly 20-year long track record nav- Tbilisi State University, Georgia. igated several critical periods in the market and TBC Capital is committed to playing an active was involved in every aspect of the business devel- role in the development of capital markets in Geor- opment and operation from the start. Before that gia and supports both institutional and strategic he served at Jefferies International Limited as a investors in exploring investment opportunities in Research Analyst, producing global convertible Georgia while at the same time giving access to bonds research and generating trading ideas for additional forms of fi nancing to domestic compa- the international equity-linked desk. Avtandil Gig- nies – currently dominated by traditional bank loan ineishvili has MBA from Tulane University (New fi nancing. Orleans, LA) and a B.Sc in Electrical Engineering TBC Capital was established in 1999 and provides from the Georgian Technical University (Tbilisi). services tailored for the Georgian market. Levan Shanidze served as a Managing Director Its Parent company, TBC Bank is the leading at Silverhorn Investment Advisors in Hong Kong fi nancial institution in Georgia, listed on the Lon- before joining TBC Capital where he managed a don Stock Exchange (LSE: TBCB LI). GEORGIA TODAY MARCH 1 - 3, 2016 BUSINESS 11 Top 5 Gadgets at MWC 2016

• CPU - Dual-core 2.15 GHz Kryo & dual-core 1.6 Specifi cations • 6th Gen Intel® Core™ m processor, dual core BY BEQA KIRTAVA GHz Kryo • Display - OLED up to 3.1GHz • GPU - Adreno 530 • Resolution - 2160 x 1200 • OS - Windows 10 Pro or Home • 32 GB internal storage with 4 GB RAM + expand- • Refresh Rate - 90 Hz • RAM - 4GB/8GB LPDDR3 he 2016 Mobile World Congress able storage (SD card up to 200GB) • Steam VR platform • Storage SSD - 128GB/256GB/512GB (MWC), which took place in Barce- • Primary camera - 16 MP (f/1.8) + 8 MP (f/2.4), • 15 x 15 feet tracking area • Front camera - 5 MP, fi xed focus lona from February 22-25, brought to laser autofocus, OIS, LED fl ash • Accelerometer, gyroscope, laser position sen- • 33.7Wh([email protected]) battery light numerous incredible wonders • Video - 2160p@30fps, 1080p@60fps, HDR, ste- sor, front-facing camera Huawei is not settling only for the smartphone of the latest hi-tech and we’ve got all reo sound rec. MWC is not all about phones. And this year was business. Their latest release – the Huawei Mate- Tyou need to know about the fi ve that got everyone • Secondary camera - 8 MP, f/2.0, 1080p@30fps a clear confi rmation of that fact, as HTC’s virtual Book - is set to rival the Microsoft Surface Pro 4, talking. • Removable Li-Ion 2800 mAh battery reality (VR) headset stole the show. HTC and as it is the company’s fi rst 2-in- 1 Windows convert- If you’re looking for drastic changes, look no fur- Valve’s collaboration has been lauded by critics, ible. The MateBook is designed to be used as both SAMSUNG ther than the latest smartphone from LG as some- calling it “the future of gaming” and a “match made a tablet and a laptop at your convenience and boasts GALAXY S7 thing you probably haven’t seen before. G5 is a in heaven.” pretty impressive specs. The company has yet to AND S7 EDGE modular phone, meaning you can remove the lower The VR will cost around $800 and will go on sale make any announcements about the price and Specifi cations side of the phone and attach a new slot. For exam- sometime this April, competing against its main release date. • Dimensions - 142.4 ple, the LG CAM Plus expansion module adds an rival the Oculus Rift, which is $200 cheaper. So, which of these devices stole your heart? Or x 69.6 x 7.9 mm; 150.9 x 1100 mAh additional battery and physical camera are you waiting for the iPhone 7 and HTC One M10 72.6 x 7.7 mm (Edge) controls. HUAWEI MATEBOOK to arrive? Head over to our Facebook page with • Corning Gorilla Although customers have been demanding a Specifi cations your comments and check out the brands’ web- Glass back panel removable battery for a long time, many tech experts • Size - 278.8 x 194.1 x 6.9 mm pages for additional details about release and avail- • Single or dual SIM have expressed doubts about whether people will • 12-inch 2160 x 1440 IPS TFT LCD display ability. (Nano-SIM) want a phone with so many different modules to • Samsung Pay (VISA, attach and remove in different situations. MasterCard) • Dust proof and water resistant under 1.5 SONY XPERIA X meters for 30 minutes • Super AMOLED capacitive touchscreen, 16 million colors • 5.1 inch; 5.5 inch (Edge) screen with 1440 x 2560 pixels • Corning Gorilla Glass screen protection • Android 6.0 Marshmallow • Chipset - Qualcomm MSM8996 Snapdragon 820, Exynos 8890 Octa • CPU - Dual-core 2.15 GHz Kryo & dual-core 1.6 GHz Kryo, Quad-core 2.3 GHz Cortex-A53 + quad- core 1.6 GHz Cortex-A53 • GPU - Adreno 530, Mali-T880 MP12 • 32/64 GB internal storage with 4 GB RAM + expandable storage (SD card up to 200 GB) • Primary camera - 12 MP, f/1.7, 26mm, dual pixel autofocus, OIS, LED fl ash • Video - 2160p@30fps, 1080p@60fps, 720p@240fps, HDR, dual-video rec. • Secondary camera - 5 MP, f/1.7, 22mm, dual video call, Auto HDR • Non-removable Li-Ion 3000; 3600 (Edge) mAh battery It’s pretty obvious that Samsung chose quality over drastic changes. The fl agship’s design is very similar to its predecessor’s, while the specs aren’t much different either. However, Samsung did make some important changes: added a micro SD slot, which users have been demanding for a very long Specifi cations time, provided an extra GB of RAM for more mul- • Dimensions - 142.7 x 69.4 x 7.9 mm titasking and made the phone water resistant. The • Single or dual SIM (Nano-SIM) primary camera has seen an MP decrease, but • IPS LCD capacitive touchscreen, 16 million boasts even faster dual pixel auto-focus and a 95% colors increase in light capture compared to the S6. • 5.0 inch screen with 1080 x 1920 pixels • Scratch-resistance glass with oleophobic coat- LG G5 ing • Android 6.0.1 Marshmallow • Chipset - Qualcomm MSM8956 Snapdragon 650 • CPU - Dual-core 1.8 GHz Cortex-A72 & quad- core 1.4 GHz Cortex-A53 • GPU - Adreno 510 • 32/64 GB internal storage with 3GB RAM + expandable storage (SD card up to 200GB) • Primary camera - 23 MP, f/2.0, 24mm, phase detection autofocus, LED fl ash • Video - 1080p@30fps • Secondary camera - 13 MP, f/2.0, 22mm, 1/3” sensor size, 1080p • Non-removable Li-Ion 2620 mAh battery Sony’s latest release is the death of the Z line. The new Xperia X, which tops the list of the three new X smartphones, is defi nitely a beautiful gadget with full metal body and solid display, outperforming its predecessor – the Z5. That said, the company is not planning to release it either in the US or Europe, thus Georgian customers will probably not be able to lay their hands on this device.

HTC VIVE

Speciﬁ cations • Dimensions - 149.4 x 73.9 x 7.7 mm • Single or dual SIM (Nano-SIM) • IPS LCD capacitive touchscreen, 16 million colors • 5.3 inch screen with 1440 x 2560 pixels • Corning Gorilla Glass screen protection • Android 6.0.1 Marshmallow • Chipset - Qualcomm MSM8996 Snapdragon 820 GEORGIA TODAY 12 BUSINESS MARCH 1 - 3, 2016 Tbilisi to Develop JMK Consulting Wins Legal Bicycle Lanes Battle to Protect Partners Interests in Entrepreneurs Law

who will invest money in Georgia on BY TAMAR SVANIDZE the condition that only he carries out funds in the authorized capital, while other minority partners, without their court case in the contributions, will receive at least as Tbilisi Court of much benefi t as they received before Appeal has been entering partner into the business,” said won by JMK Con- Gia Kavtaradze, former Minister of Jus- sulting group tice and partner of JMK Consulting. Awhich aimed to change an arti- In order to protect business interests, cle of the Entrepreneurs Law the company appealed to Court to can- of Georgia which the company cel changes to the Entrepreneurs Law believes is ‘offensive’ for busi- carried out in 2012. nesses. The Tbilisi Court of Appeal According to the statement decided in favour of JMK Con- released by JMK Consulting, sulting and satisfied its the court process has been on- requests. As a result, the com- going since 2013, the aim of pany states, the development which was to cancel changes of entrepreneurship and in 5/2 paragraph of Article 3 of business partnership project treatment documents for the the Entrepreneurs Law of Geor- has become reasonable BY ANA AKHALAIA inaugural routes, after which a budget gia that cancels any registered once more in Geor- and deadlines will be determined,” said right of a Partner or assigns to gia. Jokhadze. such Partner any obligation that “5/2 paragraph of eorgia’s Urban Manage- According to the concept, the bike net- directly and immediately affects the Article 3 of the Entre- ment and Development work project will be carried out in sev- registered rights of said Partner. preneurs Law was clearly Group is working on a plan eral stages to create safe biking routes, According to the Article, a share contrary to the essence and principles to create a network of bike parking places, equipping above-ground belonging to a Partner could not increase of Commercial Law, creating a signifi - lanes in Tbilisi in an public transportation with bicycle grips; or decrease without his/her consent. cant obstacle to the business commu- Gattempt to curb the city’s endemic traf- and gradual reorganization of traffi c in This would mean that the minority nity’s economic development and hin- fi c problems and promote eco-friendly favor of bicycles. shareholder had absolute veto power dering investment in Georgia,” JMK transportation, the group’s head Vakh- The initial stage of the project will over the fi nancial issues of the enter- Consulting said. tang Jokhadze said. cover major routes in the city’s central prise, including changes in the author- Regarding this issue, JMK Consulting “The project currently exists at the core, focusing on both banks of Tbilisi’s ized capital. group will have one further court case conceptual level. We are working on the Mtkvari River. “It is diffi cult to imagine an investor in the Supreme Court in future. GEORGIA TODAY MARCH 1 - 3, 2016 BUSINESS 13 Georgian Wine Corner Opens in Marseille National Museum

BY ANA AKHALAIA

Georgian wine corner has been opened in the Museum of European and Mediterranean Civilisations in Mar- seille, France. The corner will feature as a permanent promotion of Georgian Awine to the 20,000 daily museum visitors, along- side a number of traditional items historically used to make Georgian wine. The opening of the Georgian Wine Corner in the museum was made possible with the cooperation of the national museums of Georgia and Marseille. “Georgia is on its way to European integration, included in the list of Intangible Cultural Heritage. therefore it’s important to promote Georgia in The Museum of European and Mediterranean Europe as a country of ancient civilization, wine Civilisations is devoted to European and Mediter- culture, history and tradition. This will help to ranean civilisations. With a permanent collection increase awareness of Georgian products in the charting historical and cultural cross-fertilisation European market,” Georgia’s Minister of Agricul- in the Mediterranean basin, it takes an interdisci- ture, Otar Danelia, stated at the opening ceremony. plinary approach to society through the ages up to Vice Mayor of Marseille, Jean-Francois Soigne, modern times. emphasized the importance of representing Geor- Presented with the traditional Qvevri wine ves- gia in the Museum of European and Mediterranean sels, on the Georgian stand are various Georgian Civilizations “as an integral part of this civilisation.” wine cellar attributes including historical artefacts It was noted at the event that Georgia is one of and important information. the oldest wine-making centers in the history of According to the National Statistics Offi ce of Mankind and wine has been made in Georgia for Georgia (Geostat), France was one of the top Euro- more than 8,000 years. The traditional Georgian pean countries to import Georgian wine in 2015. Qvevri (clay earthenware vessel) wine-making Georgia exported 37,956 bottles of wine to France, method was approved by UNESCO in 2013 to be which was 190 percent more than in 2014. Georgia’s Solidarity Fund Presents Project and Future Plans larly the banking industry. More than 55,000 civil BY ZVIAD ADZINBAIA servants, 24 private companies and 53 student organizations have joined the Fund. Georgian Prime Minister Giorgi Kvirikashvili, he Solidarity Fund, a governmental who serves as the Funds’ Chair, spoke glowingly agency for socially vulnerable people of the project as successful and said the govern- in Georgia, has provided resources ment should expect the Fund’s activities to expand worth 7.9 million GEL to cover the in the coming years. healthcare costs of 215 children and Jashi also emphasized the critical role the Fund Tadolescents, the Fund’s head Marian Jashi said at plays concerning innovative fi nancing and coop- a meeting of Georgian government offi cials and eration with the United Nations. European representatives. The Solidarity Fund of Georgia was launched as Jashi presented a list of activities and priorities a common platform for philanthropy, innovative for 2016 at the Fund’s fi fth session of its supervisory fi nancing and corporate social responsibility ini- board last week. tiatives to support individual patients and the most Since July 2014, 5.7 million GEL has been raised vulnerable families in need of high-cost life-saving as contributions from the private sector, particu- treatment or social assistance. GEORGIA TODAY 14 BUSINESS MARCH 1 - 3, 2016 Asian Development Tbilisi to Open Cheese Museum

Naturally, this gives us a reason to take BY ANA AKHALAIA Bank Expands an honorable place among the world’s cheese museums,” said Mikadze-Chik- vaidze. Cooperation in Georgia cheese museum is to open Cheese production in Georgia dates in Tbilisi later this year, back nearly 3,000 years. Mikadze-Chik- according to cheese vaidze has gone to great length to pre- researcher and serve various artifacts, including 2,800 museum curator, year old ceramic milk vessels AAna Mikadze-Chikvaidze. from Georgia’s ancient cap- “I travelled all over Georgia and ital, Mtskheta. started collecting information on dif- The Ministry of Culture, ferent types of indigenous cheese from Tbilisi City Hall and the Tour- different parts of the country. I looked ism Department are currently taking for information in the museum stores. part in developing the Museum.

Ses And Panasonic Avionics Sign Milestone The Asian Development Bank’s (ADB) Director General for Central and Western Asia Department, Sean O’Sullivan and Prime Minister Giorgi High Throughput Capacity Agreements Kvirikashvili ne of the world’s leading HTS capacity to serve growing mari- maximizing throughput for Internet and he Asian Development support Georgia’s development.” satellite operators, S.A. time markets and oil and gas operations video streaming traffi c. Both satellites Bank’s (ADB) Director ADB also works closely with the gov- (NYSE Euronext Paris throughout the region. will be launched in 2017.” General for Central and ernment to implement second-generation and Luxembourg Stock “These major agreements are another David Bruner, Vice President of Global Western Asia Department, structural reforms, such as pension Exchange: SESG) and step-change in the highly dynamic and Communications Services at Panasonic Sean O’Sullivan, met with reforms, capital market development, PanasonicO Avionics have announced buoyant aeronautical connectivity mar- Avionics said, “With our communica- Toffi cials from the Government of Geor- and the establishment of an effective two major, multi-year, High Throughput ket,” said Ferdinand Kayser, Chief Com- tions service expanding rapidly across gia last week to discuss ADB’s operations framework for public-private partner- Satellite (HTS) capacity agreements mercial Offi cer of SES. “Our new high several vertical markets, we are always in the country. ships. serving aeronautical, maritime, and oil throughput satellites, SES-14 and SES-15, looking for innovative high throughput ADB commended the government’s O’Sullivan met Prime Minister Giorgi and gas markets across the Americas. are poised to dramatically change the satellite designs that help us deliver the efforts to utilize the country’s borrowing Kvirikashvili; Minister of Finance and Panasonic Avionics is a leading provider airline passenger experience and intro- best connectivity service to our custom- capacity in the most strategic and impact- ADB Governor, Nodar Khaduri; Minister of infl ight entertainment and connec- duce a new era of infl ight connectivity. ers. Working with SES, it was clear that oriented manner. ADB will continue to of Regional Development and Infrastruc- tivity systems. These contracts, for SES- SES-14 and SES-15 are designed for their SES-14 and SES-15 satellites were support those efforts through its country ture, Nodar Javakhishvili; and Deputy 14 and SES-15, represent their highest mobility; they are able to dynamically the best option for us to supplement program, which focuses on water supply Minister of Energy, Mariam Valishvili, bandwidth commitment to date of high- tailor power allocation and bandwidth our existing HTS capabilities and ensure and sanitation, roads, urban transport to discuss the current and future part- powered HTS spot beam and wide beam to maximize capacity. This enables a true broadband experience over the and energy. nership. Ku-band capacity. delivery to aircraft across different US, Canada, Mexico and the Caribbean. “ADB’s partnership with the govern- ADB, based in Manila, is dedicated to SES’ HTS coverage will enable airlines geographies and time zones. The design Given their vision and conviction, Pana- ment has been robust since Georgia reducing poverty in Asia and the Pacifi c to offer next-generation infl ight Wi-Fi allows for easy transition from one sonic is very excited to collaborate with joined ADB in 2007, with USD 1.9 billion through inclusive economic growth, and live television services to passen- region to another, from one gateway to SES, and we look forward to offering in approved support to date and an active environmentally sustainable growth, and gers travelling on air routes throughout another, and from one satellite to the these ultra-high throughput services to project portfolio of over USD 925 mil- regional integration. Established in 1966, the Continental U.S., Alaska, Hawaii, other. The unique designs of both sat- our air transport, business aviation, oil lion,” O’Sullivan stated. “ADB is ready it is owned by 67 members—48 from the Canada, Mexico, and the Caribbean. ellites include video broadcast beams and gas, energy and maritime markets to further deepen our partnership to region. Panasonic Avionics will also utilize the which complement the spot beams, in 2017.” GEORGIA TODAY MARCH 1 - 3, 2016 BUSINESS 15 Financial Times Says NATO Vulnerable on Eastern Europe’s Borders

establishment in a month. BY ZVIAD ADZINBAIA “A RAND corporation paper modelling dozens of war game scenarios in con- sultation with the Pentagon and published he Financial Times Friday in late January, found that Russia’s forces reported that the US-based would overrun NATO in the Baltics and Atlantic Council stated that capture Tallinn and Riga in a maximum there are continuous warn- of 60 hours, with a ‘catastrophic’ defeat ings to NATO that the alli- for defending Alliance forces,” the arti- Tance cannot defend Europe’s eastern cle reads. border against an increasingly aggressive Non-credible defense efforts will not Russia. impress Putin,” said François Heisbourg, The FT publication says six defense former French government Defense experts — including former Secretary- Adviser and now Chairman of the Inter- General Jaap de Hoop Scheffer, Deputy national Institute for Strategic Studies. Supreme Commander, Sir Richard “Putin only takes symbolic moves seriously if the symbolism has a weight of its own,” NATO’s current plans, Mr Heisbourg said, do not appear to have any such gravity. According to the publication, NATO’s greatly increased range and pace of military war-games, for example, still Russia’s forces pales in comparison to Russia’s now routine “snap” and sprawling, planned would overrun military drills. Last year’s center-piece for NATO, dubbed Noble Jump — the NATO in the alliance’s largest war game in years — involved a core of 5,000 men, with Baltics and 10,000 involved in afﬁ liated exercises elsewhere and 300 or so tanks. Russia’s capture Tallinn “centre 2015” drill in September mobi- lised 95,000 troops and 7,000 tanks and and Riga in a artillery. The FT cites Heisbourg that the danger maximum of 60 of a strategic miscalculation by Moscow are higher so long as NATO’s posture is hours, with a seen to be uncertain. “It has to be about soldiers being permanently present there ‘catastrophic’ and rather more equipment than is currently planned . . . we need a tripwire force defeat for like we had in West Germany during the Cold War.” defending Shirreff, and former Italian Defense Min- to the AC report, warning of a grave cow’s invasion of Ukraine in 2013. It is still unclear just how far the alli- ister and NATO Military Committee “lack of progress” in the Alliance’s plans It is the third serious caution for NATO ance will go in its package of measures Alliance forces Chair, Giampaolo di Paola, contributed to reinforce itself in the wake of Mos- from members of the western defense due this year.” New Reservoir to Be Built for Kulevi Oil Terminal

“All environmental risks associated BY TAMAR SVANIDZE with the construction and operation process of a facility should be assessed and controlled. One of the steps to obtain- o expand the storage capac- ing an environmental permit is through ities of the terminal, a new the public discussion of Environmental reservoir is to be built at the Impact Assessment,” Kulevi Oil Termi- Kulevi Oil Terminal, located nal administration said. in the Khobi District, on the The idea to build Kulevi Oil Terminal easternT Black Sea coast in Georgia. began in 1998. According to special sur- The Kulevi Oil terminal management vey forecasts, between 2010-2015 Geor- announced that the Institute of Azerbai- gian ports would become unable to jan’s State Oil Company SOCAR has handle the expected volumes of oil and prepared a project for the construction oil products. Thus, in 1999, under the of an additional storage tank which will late Georgian President Eduard Shevar- create opportunities for a more ﬂ exible dnadze, the Georgian government signed response to the requirements of the cur- an order to construct Kuveli Oil Termi- rent petroleum market. nal and port. Construction work will begin as soon Construction began near the village as the company receives an environmen- of Kulevi in 2000 by Terminal 2000 Ltd. tal permit for the construction of the Two years later, the project was inter- new reservoir. rupted due to environmental concerns On February 29th, a public discussion raised by the local community, as well over the environmental impact of the as due to insufﬁ cient funds, but in 2004 Black Sea Terminal’s new project was it was resumed under an international held at the administrative building in consortium of investors led by late Geor- Khobi Municipality. gian tycoon Badri Patarkatsishvili.

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