Issue no: 1144/177 • APRIL 23 - 25, 2019 • PUBLISHED TWICE WEEKLY PRICE: GEL 2.50

In this week’s issue...

Weekly Entrepreneurial News @entrepreneur.ge NEWS PAGE 2 An Egg Today? Or a Hen Tomorrow? Credit Regulations in ISET PAGE 4 European Experts Publish Report on Georgia’s David FOCUS Gareji Monastery Complex ON HPP CLASHES Following the Pankisi protest this weekend, we take a look at Georgia's HPP conundrum PAGE 9 Source: Ruptly Zelensky’s Presidency is Unlikely to Change Ukraine’s Foreign Policy

BY EMIL AVDALIANI BUSINESS PAGE 7

he polls after the second round Ministry of Economy of presidential elections in Ukraine gave Volodymyr Zelen- Anticipates More skiy more than 70% of the pub- lic's support. Zelensky, 41, chal- Investments, Exports in Tlenged the incumbent president Petro Poroshenko, who has already admitted his Mining Sector defeat. Questions which occupied analysts around BUSINESS PAGE 8 the world were two-fold: how possible is it that a new president will be able to change the internal situation (battle with corruption, QSI International School of etc.) in the country; second, what will happen to Ukraine’s foreign policy? Celebrates Earth Day Continued on page 5 Image source: abc13.com CULTURE PAGE 15

Prepared for Georgia Today Business by Markets Asof19ͲAprͲ2019 STOCKS Price w/w m/m BONDS Price w/w m/m BankofGeorgia(BGEOLN) GBP16.66 Ͳ0,8% Ͳ1,2% GEOROG04/21 103.63(YTM4.83%) +0,1% +0,4% GeorgiaCapital(CGEOLN) GBP10.22 Ͳ4,3% Ͳ4,0% GEORG04/21 105.85(YTM3.76%) +0,1% +0,2% GHG(GHGLN) GBP2.05 Ͳ7,7% +2,8% GRAIL07/22 107.45(YTM5.20%) Ͳ0,0% +0,2% TBCBankGroup(TBCGLN) GBP15.24 Ͳ2,3% Ͳ6,0% GEBGG07/23 102.08(YTM5.44%) +0,3% +2,2%

COMMODITIES Price w/w m/m CURRENCIES Price w/w m/m CrudeOil,Brent(US$/bbl) 71,97 +0,6% +6,4% GEL/USD 2,6960 +0,1% +0,5% GoldSpot(US$/OZ) 1275,52 Ͳ1,2% Ͳ2,4% GEL/EUR 3,0303 Ͳ0,4% Ͳ0,5% GEL/GBP 3,5043 Ͳ0,5% Ͳ1,5% INDICES Price w/w m/m GEL/CHF 2,6553 Ͳ1,2% Ͳ0,9% FTSE100 7459,88 +0,3% +1,9% GEL/RUB 0,0422 +0,7% +1,2% FTSE250 19835,93 +0,6% +1,5% GEL/TRY 0,4638 Ͳ0,6% Ͳ5,3% DAX 12222,39 +1,9% +3,7% GEL/AZN 1,5948 Ͳ +0,8% DOWJONES 26559,54 +0,6% +2,6% GEL/AMD 0,0056 +1,8% +1,8% NASDAQ 7998,06 +0,2% +3,5% GEL/UAH 0,1004 Ͳ0,3% +2,0% MSCIEMEE 172,19 +0,1% +2,2% EUR/USD 0,8893 +0,5% +1,0% MSCIEM 1092,52 +0,3% +2,0% GBP/USD 0,7698 +0,7% +2,1% SP500 2905,03 Ͳ0,1% +2,6% CHF/USD 1,0146 +1,2% +1,5% MSCIFM 2713,76 Ͳ0,9% Ͳ0,7% RUB/USD 64,0162 Ͳ0,4% Ͳ0,5% GTIndex(GEL) 1582,68 ͲͲTRY/USD 5,8110 +0,5% +6,1% GTIndex(USD) 1208,13 ͲͲAZN/USD 1,7001 Ͳ +0,0% GEORGIA TODAY 2 NEWS APRIL 23 - 25, 2019 New Minister of Economy: I Am Lobbying Business & Citizens @entrepreneur.ge Gamarjoba! I’m the Editor-in-Chief of the Georgian edition of BY THEA MORRISON Entrepreneur magazine and I’m here to share the top weekly Entrepreneurial news with you: eorgia’s newly appointed from the Chelti Winery has been named Minister of Economy, Natia among the Best 30 Wines in the World at Europe’s Turnava, says the recent largest wine exhibition ProWein 2019, which took place insinuations about her, in Germany this year. The cellar presented fi ve released after her appoint- different wines at the event, succeeded in the highest Gment, are just speculations. nomination and won fi ve golden medals. Andria “After my appointment, I read a lot of Mirianashvili, the General Manager, notes the Grand unpleasant information about my skills Gold, awarded to the ‘ Qvevri Reserve 2015’, which are totally made up. If you have was the most signifi cant prize. Chelti also saw success a look at my biography, you will see that at the International and Drink Exhibition – I have worked with a lot of businessman Foodex Japan 2019. Of the 14 Georgian wine companies and organizations and I worked in both present at the event, all four of Chelti’s presented wines - private and public fi elds,” Turnava said. were awarded golden medals. The new minister noted that the only side she represents and lobbies is the There’s something new and tasty on the Georgian business and the citizens of Georgia. sweets market: Batona, which is a brand offering a “If I am lobbying anyone, this is a small variety of Gozinaki (chopped nuts boiled in and medium business and ordinary honey). Nana Lekveishvili, the author of the idea, citizens whom I promise I will do my wants to remove the ‘seasonal’ label from the best to help. The Ministry of Economy product. Production started in November and has will be more open, we are dealing with “Kobulia is a professional and a very Cambridge, UK, and Robert Kennedy passed offi cial inspections. The assortment of business circles and also simplifying strong economist…However, Turnava College (Zurich). products includes traditional Gozinaki and a type services for ordinary citizens,” she stated also has very rich experience in this fi eld. In 1994-1996, she worked as a scientifi c dipped in Belgian chocolate, while Christmas when she was presented as a new min- "We need fast solutions now, making worker of the Institute of Democracy jams are among the upcoming plans. At the fi rst ister by the Prime Minister Mamuka decisions in an operational manner that and Politics of Georgia. stage, the products will be presented on the local Bakhtadze. serves the interests of our society and In 1996-2000, she was the Deputy Head market, with export planned for future. Turnava mentioned that the previous entrepreneurs. I am convinced that Natia of the State Chancellery Service; Mem- minister, who stepped down on April 18, will succeed in fulfi lling her obligations. ber of Tbilisi Sakrebulo and Deputy Lopota Lake Resort and Spa is to welcome guests with was very good at elaborating new strat- In my opinion, she has a correct percep- Chairperson of Finance Commission; its own wine. ‘Buera’ is the name of the new Georgian egies. tion of the social reality that is in the In 2000-2005, Turava was the First wine, as is the rare grape variety from which it is "Although we had not worked together country today. The assignments and Deputy Minister of Economy and in 2005 made using European and traditional methods. for a long time, Kobulia was a very strong deadlines, which have to be done by the she became the Deputy Secretary of the Currently, you can only taste it at the resort’s Chateau economist, a powerful analyst, a very Ministry of Economy, are ambitious and Security Council; Buera, but it is set for wider release soon. And it is not strong strategist. We cooperated in devel- strict but Natia has our full support and In 2013-2018, she served as the Deputy the only novelty of Lopota Lake Resort and Spa, as oping a number of strategies and we will will successfully fulfi ll her obligations, Executive Director of the state-led Part- two new locales have been launched on the site: the still continue their implementation, "said Bakhtadze. nership Fund; Member of the Governing fi rst fl oor of Chateau Buera features a restaurant, especially in the energy fi eld,” the new Turnava graduated from the Tbilisi Board of the largest Georgian private while a bar and meeting room are located on the minister said. State University Economics Faculty in industrial group (GIG); Executive Direc- second fl oor. Guests can also enjoy wine tours. While presenting Turnava, Mamuka 1990 and has taken Harvard and Inter- tor of International Energy Corporation Follow the Entrepreneur Georgia Instagram page to get the latest updates from Bakhtadze said that the decision of Kob- national Monetary Fund Vocational of Georgia; Georgian Entrepreneurs. For doing business with Georgian Entrepreneurs, write us on ulia’s resignation was made by him, after Training Courses. She also did a joint From July 12, 2018 to April 18 she was [email protected] the consultations with the ex-minister. master program of the University of the First Deputy Minister of Economy.

GEORGIA TODAY 4 BUSINESS APRIL 23 - 25, 2019 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. An Egg Today? Or a Hen Tomorrow? Credit Regulations in Georgia

tained solvency analysis (which implies System). According to the World Health sequences possible behind the over- short-term consumer credit (on average, BY DAVIT KESHELAVA a detailed analysis of incomes, expenses Organization (WHO), the average out- indebtedness problem: yearly by 47.3% in the fi rst quarter of and the total obligations of lenders, and of-pocket health expenditure (% of cur- 1. Threats to Financial Stability. Despite 2019). Furthermore, a notable reduction verifi cation of information provided and rent health expenditure) for the Georgian rapid credit expansion, the soundness in installment loans, from the supply round two years ago, ISET- clients’ credit history, etc.) for any insti- population reached 76% in 2011, and of deposit taking institutions was never side, negatively affected the profi tability PI published a blog article tution that issues loans to more than 20 reduced, relatively, to 57% in 2015 under question (non-performing loans of technology and furniture shops, and on the problem of over- individuals, including commercial banks, (although, it remains far higher than the to total loans for commercial banks many people working in these sectors indebtedness in Georgia. MFIs, online lenders and others. Addi- world average - 18% between 2011-2015). remained stable). However, the data dis- have already lost their jobs. While from The article stressed the tionally, the longest duration for mort- Signifi cant out-of-pocket expenditures cerned from microfi nances suggests that the demand side, the regulation has Aidea that due to notably increased access gage loans, consumer loans with real often force poor families to fi nance these fi nancial strain was chiefl y experienced restricted access to refrigerators, TVs to fi nances, an aggressive marketing estate collateral, and transport loans has expenses with borrowing or the sale of by households who did not, for various and other modern facilities. Technology campaign provided by fi nancial institu- been defi ned as 15, 10 and 6 years, respec- household assets - often called “distressed reasons, qualify for a loan from a com- shops additionally started to employ tions, and poor socio-economic condi- tively, while the maximum duration of health care fi nancing” (Damme et al., mercial bank. In addition, the credit score property renting services, and even to tions throughout the country, other consumer loans is only 4 years. 2004,; Joe, 2014). distribution data, from the country’s only develop internal installment systems, (particularly the poorest) are mired in Moreover, it is required that the differ- 4. Gambling Problems, the Casino Busi- credit bureau, covering 88.6% of the although they are often neither experi- a swamp of debt, from which they are ence between a debtor’s net income and ness and Ludomania. CRRC research adult population, indicates that the dis- enced nor effi cient providers. unable to escape. The macroeconomic their loan not to be less than the subsist- conducted in 2015 identifi ed that 6% of tribution is skewed towards the high-risk 2. Mortgage Loans for Real Estate Pur- indicators, which typically measure the ence minimum. The decree has also their respondents admitted to being category. There are notably more MFI chases and Repairs. While regulations expansion of consumer credit, have defi ned the upper ceilings of Payment- involved in gambling activities, and 47% clients in the E3 category (the highest should, potentially, have a negative impact experienced a dramatic increase over to-Income (PTI) and Loans-to-Value of these people were playing not for fun, risk) than bank clients, as banks have on the growth rates of mortgages, accord- the last 6-7 years. For example, the house- (LTV) ratios for various disposable but to win large sums of money. Besides much stricter requirements for provid- ing to the National , the hold debt to GDP ratio has increased income groups. (Source: FactCheck, which, the turnover of gambling busi- ing credit. Such rapid growth in consumer volume of household mortgage loans for from 10.6% in the fi rst quarter of 2011 to GRASS, New Lending Regulations - New nesses exceeded 5.6 billion lari in 2017 credit consequently prompted concerns real estate and repairs have maintained 36.7% in the fourth quarter of 2018. Fur- Barriers for the Consumer and for Busi- (an increase of 1 billion lari compared about the sustainability of credit expan- a rapid growth phase in annual terms. thermore, a households’ debt to a house- ness). to the previous year). Thus, the rapidly sion (Babych, Grigolia and Keshelava, Mortgages taken by households (not holds’ disposable income rose from 25.2% expanding gambling market may well 2018). excluding the exchange rate effect) have in the fourth quarter of 2012 to twice as WHAT ARE THE CAUSES OF be closely linked to over-indebtedness. 2. The Negative Social Consequences increased, on average, by 39.9% yearly much, 57%, by the third quarter of 2018 OVER-INDEBTEDNESS? 5. Other factors include; an aggressive of Over-indebtedness. For the majority for the fi rst three months of 2019. How- (this is also its historical maximum). Economic literature reveals that “a pri- marketing campaign created by fi nancial of over-indebted households the debt is ever, growth in the construction sector Household debt service and principal vate household is over-indebted if its institutions; unstable employment due quite small, thus suggesting that this was restricted in the last quarter of 2018 payments to income ratio have also income over an extended period is not to the liberal labor code and inappropri- form of over-indebtedness represents a (due to regulations and a limited supply experienced a dramatic increase, from suffi cient for servicing debt on time ate law enforcement; unhedged borrow- social issue, rather than a fi nancial sta- of construction permits). Additionally, 9.5% in the fi rst quarter of 2012 to 14.6% (after deducting costs of living expenses) ing (“currency mismatch” - having income bility problem (D’Alessio and Iezzi, 2013; construction companies are planning to by the third quarter of 2018 (Source: despite a reduction of the standard of and liabilities in different currencies); Davit Utiashvili - Overview of the Geor- provide internal loans to supplement Financial Soundness Indicators of the living” (D’Alessio and Iezzi, 2013). Unfor- booms in the construction sector; etc. gian Banking Market, 2018). Over-indebt- these restricted mortgages. ). Although the tunately, there is no empirical literature These demand side factors would never edness often leads to an increased num- 3. Justifi ed Income and the Shadow soundness of deposit taking institutions studying the characteristics of over- have helped produce an over-indebted- ber of properties retained by fi nancial Economy. Although there is no reliable was not under question (microfi nance indebted households in Georgia (to ask ness problem without an initial supply institutions. The value of the real estate data on the proportion of the Georgian institutions, online lenders, and other the relevant questions- Why was a loan of credit. One can identify the following and movable assets retained by MFIs population employed in the shadow non-deposit taking organizations were required? What was the reason for a supply side causes: has increased by more than 7.9 times economy, one can still argue that quite much more fragile however), there were household’s insolvency? What is their 1. MFIs and Online Lenders. According since 2011. Research conducted by Soci- a signifi cant number of Georgians are stories of poor and vulnerable people average income? What is their level of to the National bank of Georgia, there ety and Banks reveals that the number involved in the underground economy whose fi nances collapsed under the bur- education? etc.), nevertheless, it is still were only 15 MFIs in 2007, yet this num- of properties sold by the National Bureau (for example, according to Geostat, the den of expensive loans, causing the loss possible to identify potential causes. The ber had increased to 75 by 2017. Unfor- of Enforcement of Georgia reached 9,378 extent of informal employment of total of their only property. origins of the over-indebtedness prob- tunately, there is no defi nitive informa- between 2011 and 2015. Furthermore, the non-agricultural employment amounted lem can be divided into two groups - tion regarding the number of online data collected from only 2015 indicates to the 33.9% in 2017). More than 50% of WHAT ARE THE TWO WAVES from the demand and the supply side. lenders, however it is widely recognized that 27.1% of the properties were obtained the Georgian population live in villages, OF THE REGULATIONS? One can identify the following demand that their numbers increased dramati- by commercial banks, 16% by MFIs, and, and most are self-employed in subsist- ISET-PI’s article was not alone in high- side causes: cally between 2010 and 2016. It is worth the largest portion, 51% by private lend- ence agriculture. Therefore, fi nancial lighting the threats of over-indebtedness 1. Serious Poverty and Unemployment. mentioning that most MFIs and all online ers. Moreover, over-indebtedness fre- institutions might have signifi cant dif- in Georgia. International organizations According to the Statistics Offi ce of lending companies used a specifi c busi- quently leads to a higher crime rate, high fi culties in conceiving their earnings as also drew much attention to the topic, Georgia (Geostat), the average propor- ness profi le to issue loans (mainly con- employee stress levels (causing low justifi ed income, and properly assessing and ultimately recommended that pol- tion of the total population living under sumer credit) ignoring the fi nancial productivity), mental and physical absen- their credit-worthiness, which leads to icymakers introduce appropriate policy the absolute poverty line, between 2010- health of borrowers (they even offer teeism, and even suicide (we have had restricted access to fi nancing. measures to regulate credit expansion. 2017, amounted to 27.1% (more than one loans to people without a permanent several of such tragedies). 4. Private Lenders. A controlled supply The fi rst wave of credit regulations was fourth), though this number was even source of income – toxic loans), and they 3. The Negative Economic Conse- of credit without restricting its demand introduced in May of 2018, and it aimed greater, 32.4%, for those living in rural typically charged far higher interest rates quences of Over-indebtedness. As for might lead to a disbalance in the credit to restrict borrowing for individuals areas. Moreover, in 2010-2018 the aver- than commercial banks. Considering the the negative economic consequences, market, which raises the opportunity for who might not have enough income to age unemployment rate was a double- much stricter loan standards and condi- over-indebtedness can deprive people non-regulated private lenders (individ- service their debt. A corresponding digit number, 15.4%, but on average 54.8% tions in commercial banks, the type of of the motivation to start a formal job; uals who are lending money to less than amendment was prepared by the National of the employed were in fact, self- credit issued by MFIs and online loan where they prefer to be involved in the 20 people for certain interest [ordinarily Bank of Georgia (NBG), however, the employed, chiefl y in the lowest produc- companies was primarily taken by the shadow economy, and avoid using an higher than offered by other institutions] new initiative also received signifi cant tion, subsistence agriculture. The poor poor and unemployed (Economic Policy offi cial bank account for their salary. payments) to attract clients and charge support from upper-level government and unemployed can be considered the Research Center (EPAC) - Management fairly high interest rates. offi cials (particularly within the minis- groups most vulnerable to falling into of nonperforming loans in Georgia, 2014). WHAT ARE THE To conclude this article, it is worth try of fi nance). The newly imposed the over-indebtedness trap (Economic 2. Increased Financial Resources in SHORTCOMINGS OF THE mentioning that the regulation package regulations restricted issuing loans Policy Research Center (EPAC) - Man- Commercial Banks from Attracting PROPOSED REGULATION? proposed by the National Bank of Geor- without comprehensive analyses of agement of nonperforming loans in Deposits. The National Bank of Georgia It is notable that supply side regulations gia only includes supply-side measures, consumers’ solvency. Commercial banks Georgia, 2014). has revealed that the stock of domestic usually create a tradeoff between the even though over-indebtedness is an were, moreover, only able to issue loans 2. Low Level of Financial Literacy. An currency deposits has increased 3.6 times long-term benefi ts of fi nancial stability extremely complex phenomenon and without a solvency analysis up to 25% ISET-PI survey about levels of fi nancial since 2011 (the growth was notably accel- and the short-term costs of restricted originates from both supply and demand of their supervisory capital. The fi rst literacy in Georgia, conducted in 2016, erated in 2015-2016), while foreign cur- credit. The government needs to tread side factors. Furthermore, a large section wave of regulations was particularly asked four questions measuring fi nancial rency deposits (without considering the lightly between protecting consumers of the empirical literature concludes that restrictive for microfi nance institutions education (relating to (1) simple and exchange rate effect) have grown 2.8 from becoming over-indebted and sup- only policy strategies that contain a bal- (MFIs) and online lending companies, compounded interest rates, (2) infl ation, times in the same period. porting the profi tability of fi nancial anced mix of demand and supply meas- and the number of MFIs reduced from (3) fi nancial risks, and (4) effective inter- The combination of demand and sup- intermediaries to increase access to ures can hope to address indebtedness 73 in May of 2018 to 65 in January of est rates). The results showed that 42% ply side factors has resulted in a much credit (Porteous, 2006). Therefore, it is (Braucher, 2006 [relating to the United 2019, while the number of online lend- of the population fell into the moderate faster increase in domestic credit than necessary to carefully examine the short- States of America]; D’Alessio and Iezzi, ing companies declined from around range (two or three correct answers), in the overall economy, and considering term costs of the regulation: 2013 [South Africa]; Kovács, 2013 [Hun- 75 to a much reduced 30 in the same while 52% exhibited a low level of fi nan- the source of this increasing trend (gen- 1. Reduced Growth Rates of Consumer gary]). Therefore, policymakers should period (there is no proper information cial literacy (one or no correct answers). erally not creditworthy people), the Credit (Short-term Effect). The National work hard to improve fi nancial literacy regarding the number of online lending Low levels of fi nancial education stimu- National Bank of Georgia has decided Bank of Georgia shows that, from the for all of society (particularly the younger companies, thus these numbers simply late reckless borrowing and the use of to restrict credit expansion to minimize fi rst three months of 2019, the average generation and the most vulnerable); represent an estimate from fi nancial higher cost credit, and thus such house- the risks of fi nancial instability. yearly growth rate of total consumer reduce poverty and unemployment using experts). holds regularly have diffi culty paying credit was around 3.2%, while it experi- appropriate economic and social policy The second wave of, more restrictive, their debts (Gathergood and Disney, WHY ARE WE CONCERNED enced 33.0% and 22.5% growth in 2018 measures; introduce certain regulations regulations entered into force in January 2011). ABOUT OVER-INDEBTEDNESS? and 2017, respectively. The main con- to the gambling sector (particularly for 2019. The respective legislative act defi ned 3. Notable Health Expenditures (spe- According to the empirical literature, tributor to such a decline in annual people under 18 years old); improve responsible lending principles and ascer- cifi cally before the Universal Healthcare there are three groups of negative con- growth rates was the rapid reduction of consumer protection; etc. GEORGIA TODAY APRIL 23 - 25, 2019 BUSINESS 5 Special Olympic World Games in Abu Dhabi – Its Symbolic Importance & Objectives

BY H.H. ESSA ALNOAIMI - THE AMBASSADOR OF THE UNITED ARAB EMIRATES IN GEORGIA

n March 2019 Abu Dhabi, the capital of the United Arab Emirates (UAE) hosted the Special Olympic World Games ‘Abu Dhabi 2019’ where around 7,000 athletes with spe- cial needs participated from 192 countries. IGeorgian team actively took part in this global sport event and as the result Georgian athletes competing in table tennis and athletics (run) won in total 6 medals (2 gold, 2 silver and 2 bronze). On this occasion, we would like to express our sincere congratulations to the Government of Georgia, Georgian people and sportsmen on such an out- standing achievement and wish them further accomplishments in sport. Hosting this international event by the UAE as the country of tolerance, assures the symbolic meaning and noble goals of this Olympic, which was organized with participation of 21 000 Emirati and UAE resident volunteers. His Highness Sheikh Mohamed Bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and Dep- uty Supreme Commander of the UAE’s Armed Forces expressed his deep interest on this occasion as it was an opportunity for the UAE to share to the world its values and principles, which stated by His Highness as following: “The values of toler- ance, harmony and coexistence are essential basis which raised the awareness of the audience and of life in the UAE and this global event gives the enhanced relationships. That is what the world chance to 7000 participants of the Special Olympic urgently needs nowadays. World Games to embrace the Emirati cultural her- I would like to mention to the readers that the itage.” fi rst International Special Olympics Summer Games The remarkable opening ceremony at Zayed were held in Chicago, Illinois, US, in 1968, while Sports City was attended by 40 000 spectators and the fi rst International Special Olympics Winter millions of viewers watched it through the media Games were held in February 1977 in Steamboat means. It was an opportunity to spread the solidar- Springs, Colorado, US. ity and partnership principles among humanity Thankfully, this event and human connection through the cultural and entertaining activities, delighted everyone. Zelensky’s Presidency is Unlikely to Change Ukraine’s Foreign Policy Continued from page 1 spectacular rise of national self-consciousness among ordinary Ukrainians will not tolerate any The situation inside Ukraine will require metic- U-turn to the country’s foreign policy. A demo- ulous work on behalf of the new president. The cratically elected Zelensky is also a hostage of elites might be unwilling to accept his propositions Ukrainian public opinion. and policy moves, which could create tensions. The Russian public is watching the peaceful What is clear, though, is that the ordinary popula- changes in Ukraine with great interest and even tion would be supportive of even radical moves to hopes for a similar process inside Russia. The large clear the country of corruption and ineffective neighboring Slavic country, Ukraine, will have a governance. greater infl uence on the Russians than, for exam- On the foreign policy front, Ukraine’s major issue ple, Georgia’s path to democratization. Georgia’s will be the war in Donbas and relations with Rus- successes have been small due to the country’s size sia. There have been fears that with Zelensky at as well as cultural differences. Moscow, therefore, the helm, Ukraine’s foreign policy would radically could easily bend the narrative and argue that change in favor of Russia. In fact, it will be very Georgia’s recent successes are minimal and con- diffi cult for him to do this, as in the last fi ve years temptuous. since the Ukraine crisis broke out following the With Ukraine it is different. While the Russians annexation of the Crimean Peninsula, Ukraine has have been arguing since 2014 that Ukraine’s prob- ratifi ed the Association Agreement with the Euro- lems were the result of a “divorce” with Moscow, pean Union, the non-signing of which actually now they see real results of the democratic changes deposed the former president Viktor Yanukovych, in Kiev. Public debates, peaceful co-existence of and has received visa-free access for its citizens to rival candidates and, most importantly, presiden- the EU (except for the UK and Ireland) and four tial changes; all this is deeply hoped for and other Schengen-associated countries. expected at least in some sections of the Russian Moreover, Kiev has reinforced the Ukrainian army population. amid the ongoing confl ict and contained the confl ict Zelensky’s win also shows that among post-Soviet with Russia to eastern Ukraine and the Azov Sea. Slavic states, Ukraine is in fact the only one which On a cultural level, recently, Ukraine’s Orthodox has regularly changed heads of the state. Thus, this Church gained autocephaly (independence) from development might also have an infl uence on Bela- the Russian Church. On the economic front, too, rus where eventually the time will come when there have been changes, as Ukraine’s trade has long-ruling Alexander Lukashenko will have to been redirected to Europe rather being mostly make a choice between an independent Belarus- dependent on Russia, as was the case before 2014. sian successor or Belarus integrated into Russia Thus, it is highly unlikely that Ukraine’s foreign (and talks about this latter development have policy will change under Zelensky: there are sim- become common in media resources of late). ply too many economic, military and ideological Zelensky’s presidency and the way he was chosen moves made that connect the country to the West. undermines Russia’s narrative, where the success Zelensky may indeed meet Putin and even soften of Ukraine would be against a common cultural, his rhetoric towards Russia, but on a grander level even geopolitical, perception among the Russian of state politics, he will not change Ukraine’s view elites that Kiev has historically been unable to of Crimea and the confl ict in Donbas. A recent achieve anything without Moscow’s support. GEORGIA TODAY 6 BUSINESS APRIL 23 - 25, 2019 g.Vino City Wine Hotel – Interview with Tamta Kikaleishvili

wine bar and wine hotel revolve around phere and a relaxed ambiance. It feels a BY SAMANTHA GUTHRIE – you guessed it – wine. Each room is bit like an upscale, city center guest named after a different Georgian grape house, removed from the stresses of the variety, and guests are given a bottle of world. The couple looks forward to host- n the trendy Chughureti neigh- wine with a note card that briefl y describes ing wine lovers and foodies, who are borhood around Marjanishvili St., that variety. They offer an impressive taken care of by Chef Kikaleishvili. g.Vino City Wine Hotel offers an collection of natural wines, qvevri wines, The relies heavily on locally- upscale yet welcoming boutique and more commercial varieties, paired sourced Georgian products, which keeps experience for hotel guests and with clever twists on Georgian food at the ingredients fresh and the dishes sea- Idiners alike. The restaurant, led by their restaurant. Despite the charms of sonal. Kikaleishvili explains, “whenever reknowned chef Tamta Kikaleishvili, g.Vino City Wine Hotel, they don’t keep I create a menu, I try to get to the roots, serves up her signature playful, creative visitors to themselves. They offer a spec- but also always play with ingredients – take on Georgian . tacular wine tour that explores the best always seasonal, mixed techniques – and Kikaleishvili, who spoke with Georgia wine bars and cellars of Tbilisi. I try to make a complex taste, but not Today for this piece, explained her jour- g.Vino City Wine Hotel and Restaurant too complicated. Georgia is the country ney into : “I started cooking when opened its doors earlier this year, and of wine. Our food is based on drinking tian oil, and a nice, hot piece of Georgian amazing. We will achieve this with the I was 15-16. I loved the idea of people the owners quickly brought their head or curing hangovers, so my task at this . I hope that Georgian food and help of people who love what they do gathering around for nice food and it chef on board. “I have worked in many point is not to forget to pair everything wine will become very popular in the and put their soul into it. So, the future always worked out well. When my guests places, and I never left a job because I with beautiful Georgian wine. I think world because it is authentic and so is ours!” were happy, I felt happy – so I guess didn’t like it there. When you are young, is such an adventure that’s how it started. Luckily, my friend, you have to move on and take up new and so amazing, that even I get surprised very good chef Ramaz Gemiashvili, gave challenges. That’s how I end up in g. when I dig in to the old recipes.” me a chance to start working in a res- Vino…me and the founders of g.Vino, g.Vino City Hotel welcomes both visi- taurant, so by the age of 19 I was already our ideas and vision just clicked, so I felt tors for their fi rst taste of Georgian food, working professionally.” that this was a chance to create some- and those who have had Georgian cuisine g.Vino City Wine Hotel was launched thing new and experiment. We tried to a thousand times. “I can imagine what by Lida Vardania and Mamuka Maisuradze gather young and talented people who kind of celebration it is to taste Georgian as a spinoff of their Sololaki wine bar, love what they are doing, so I can say food for the fi rst time. That’s why I try g.Vino. The popularity of g.Vino among we are blending work and fun!” said to keep Georgian and ingredients both tourists and locals led the couple to Kikaleishvili. as close as possible.” Kikaleishvili has a develop the wine hotel concept. Lida and Lida and Mamuka strive to keep the real passion for Georgian food, and for Mamuka worked in development before family-run feel in everything they do, by sharing it with the world. She exclaimed, entering the hospitality business, and being actively engaged in the business’ “When I was starting to cook, I was a wanted to directly contribute to their day-to-day operations. The restaurant real sweet tooth – now my favorite food country’s economic growth. Both the at g.Vino City has a comfortable atmos- is some Georgian seasonal greens, Kakhe- GEORGIA TODAY APRIL 23 - 25, 2019 BUSINESS 7 European Experts Publish Report on Georgia’s David Gareji Monastery Complex

adding an increase in visitors might lead BY THEA MORRISON to a sense of social pressure, in turn dis- couraging this type of behavior. The group of experts also released uropa Nostra, the most rep- some recommendations that should be resentative heritage organiza- followed in order to slow down the tion in Europe, published a destruction of the 6th century cultural technical report on the reha- site: bilitation of the David Gareji • Prioritize the sites that are at the MonasteriesE and Hermitages in Georgia, greatest risk. With so many sites, each listed among the 7 Most Endangered with its own physical characteristics, heritage sites in Europe in 2018, follow- historical values, archaeological risks, ing a nomination made by the Georgian and limited short-term resources, it Arts and Culture Center. would be impossible to guarantee pro- A special group of experts, who visited tection for each. the complex in November 2018, studied • In the short term, the structural sta- the ancient cave-city complex and had bility of each cave site needs to be assessed several meetings with the locals and through geo-structural analysis. authorities in order to devise a report • Safe access to the sites is needed to on the current state of the site, as well set up preliminary security systems to as recommendations for future actions. both monitor their geographical stabil- The report, published last week, iden- ity and to discourage any unwanted tifi ed two main threats that face the David visitors with bad intentions. Gareji Complex. One threat is degrada- • The erection of a well-rounded visi- tion of the physical structure and art- tor center and museum would allow Source: time2georgia.com works. exhibition of the artefacts that were dis- “Due to seismic risk, water percolation covered and also effi cient servicing of Although the border is disputed and is importance and underlines the urgency by The Secretary-General of Europa and the soft and porous nature of the lime- increasing fl ows of tourism. therefore subject to some political ten- of its preservation,” the organization Nostra, Sneška Quaedvlieg-Mihailovic. stone rocks in which the monasteries were The experts also added that there is a sions, a site visit was agreed between the said. The document names the protection hewn, the structure is liable to crumble lot of potential to develop the area into border authorities at the working level, Georgian President Salome Zurabish- of cultural heritage as a political and when exposed to cycles of heat and cold. a viable destination for sustainable cul- allowing access to the Udabno lavra. vili, who visited the site with Europa individual priority. Those that sign the This has a detrimental effect on the art- tural tourism. The earliest structures have been dated Nostra representatives on April 20, also pledge take the responsibility to protect work on the interior walls once the cavity The David Gareji Monasteries and to the 6th century and are associated called for the urgent restoration of the cultural heritage and set the ground for is no longer sheltered by the overarching associated Hermitages comprise 21 iden- with St David Gareji, or Garejeli. He was David Gareji Monastery Complex. a more peaceful, successful, and inclu- slabs of stone,” the report reads. tifi ed monastery complexes and at least one of the thirteen Assyrian fathers who "It is clear that it is necessary to restore sive Europe. Another threat named by the experts 5000 individual cells and sanctuaries established the cluster of monasteries this monument very quickly. That is why Europa Nostra is the pan-European is vandalism and graffi ti. carved out of the rock across the Lori and developed both the monastic life on Europa Nostra declared Davit Gareji as federation of heritage NGOs which is “Continued unlawful practices such as plateau in south-eastern Georgia. While the site and the Christian Church across a monument in danger. It is necessary also supported by a wide network of souvenir-taking and graffi ti have con- all the structures were historically located the wider region. to start the restoration of the complex public bodies, private companies and tributed to the degradation of the site. in Georgia, changing borders, particu- The David Gareji Monasteries and as soon as possible and we should also individuals. Covering more than 40 The sheer size of the site unfortunately larly in Soviet times, means that one site, Hermitages are under the ownership of urgently solver the border issue," said countries in Europe, the organization is makes this diffi cult to control, since pro- Bertubani, is in Azerbaijan, while two the Patriarchate of Georgia. the President. the voice of civil society committed to viding security for the whole complex monasteries lie between Georgia and “It is still an active monastery center Zurabishvili also signed the ‘Berlin Call safeguarding and promoting Europe’s is rather unrealistic,” the experts said, Azerbaijan. with daily services, and this adds to its to Action’ document which was presented cultural and natural heritage. GEORGIA TODAY 8 BUSINESS APRIL 23 - 25, 2019 Ministry of Economy Anticipates More Investments, Exports in Mining Sector

after which Prime Minister Bakhtadze BY SAMANTHA GUTHRIE promised the government would no longer put its citizens lives at risk and declared the mine would be closed. Doz- ast week, the now-former Min- ens of other deaths and injuries have ister of Economy and Sustain- occurred in Georgia’s mines in recent able Development, Giorgi years. Kobulia, held a meeting with There has also been concern about the representatives of the Georgian environmental and health impacts of miningL sector. The meeting was also Georgian mines. Earlier this month, the attended by Maia Zavrashvili, Head of United Nations Working Group on Busi- the LEPL National Agency of Mines, who ness and Human Rights visited Georgia gave a presentation on the activities and to assess the impacts of business opera- the plans of the Agency for the next year. tions on human rights. At a closing press Investments in the mining sector in Image source: Ministry of Economy and Sustainable Development conference that announced preliminary the fi rst quarter of 2019 amounted to responded to the participants’ concerns, by signaling to investors that the Geor- ticular interest among the public lately: observations, the team expressed con- 30,250,000 GEL ($11.2 million), which saying, “We will take into considera- gian government is sympathetic to the industrial safety. Following a series of cern that in the mining and construction the ministry expects will lead to the tion these recommendations in the interests of big companies and willing deadly accidents on construction sites, sector specifi cally, labor rights are sys- generation of some 350 new jobs. near future. We will work on the licens- to negotiate with them. “The meeting many have expressed concern that safety temically violated. Experts also visited “The mining sector is one of the most ing rules as well as on the simplifi ca- with the representatives of the sector in the mining sector is poorly regulated the Chiatura mines and concluded that important sectors for our economy, not tion of various regulatory and legisla- caused great interest. We shared our and even more poorly enforced. On they create signifi cant environmental only in terms of employment but also tive provisions to make this sector visions and talked about the challenges. March 31, a man was killed in Chiatura pollution, and that measures taken by for exporting and attracting investments,” more attractive to foreign and Georgian We are planning to attract about $200 while working on the cable car system the Georgian government are not ade- said Kobulia. companies.” million in foreign investments this year, that services that town’s mines. On April quate and do not prevent irremediable Kobulia explained that meetings with The ministry plans to take steps that while exports should reach $600-700 5, 2018, six miners died and three were damage to the environment. sector representatives are useful and will drive investments up in the next million. This is a very large sum for injured in Mindeli mine in Tkibuli after Kobulia stepped down in the evening productive, allowing the government a year. Such meetings, Kobulia insists, help Georgia so we are paying special atten- the ceiling collapsed. On June 2, 2018, of April 18, and was immediately replaced chance to hear a variety of recommen- make the Georgian mining sector more tion to the development of this sector,” two more miners died at a private coal by his First Deputy, Natia Turnava. It is dations and perspectives directly from attractive for foreign investors, both by Kobulia noted. mine in Tkibuli. On July 16, 2018, another not yet clear whether Turnava will keep business people. creating a platform to introduce poten- During the meeting, there was no dis- incident in the Mindeli mine left four Kobulia’s policies in place, including his At the close of the meeting, Kobulia tial regulatory and policy change, and cussion of a topic that has garnered par- miners dead and six severely injured, pledges to the mining sector. Shatili’s UNESCO Status Remains in Limbo as Cultural Heritage Preservation Concerns go Unaddressed

at the corners. Now water runs down tion and conservation,” and that past BY RYAN MICHAEL SHERMAN the walls, eroding clay and undermining projects for restoration of historical structural integrity. “They get worse monuments had resulted in “controver- every year,” one young man said. “If they sial outcomes.” It advises that a “cautious hatili has languished on UNE- don’t fall, you’ll take a look, and there is approach is required to the restoration SCO’s tentative list of World another crack.” works to be undertaken on the historic Heritage sites for 12 long years. monuments of the Mtskheta-Mtianeti In the meantime, tourist visits CULTURAL HERITAGE TOURISM region.” to the site have skyrocketed. INTRODUCES NEW JOBS SNew guesthouses open every year. Tours AND NEW BURDENS LIMITED PRESERVATION EFFORTS promising the full medieval experience Khevsureti’s growing popularity as a Khevsureti does enjoy protected status place photos of the internationally famous tourist destination offers livelihood as part of the Pshav-Khevsureti Protected fortress village front and center. With opportunities for local residents to act Area region. This privileged status results Image source: jesper-48.blogspot.com only four hours needed from Tbilisi, a as guides, drivers, guesthouse hosts, and in more serious fi nes for illegal hunting trip up to Shatili makes for the perfect work in restaurants and stores. As was and logging activities in the area. Initia- ignated a UNESCO World Heritage Site. original defensive and residential func- overnight adventure for anyone aching recognized by the World Bank’s 2016 tives targeting the preservation of cul- A disclaimer on the UNESCO site tions. to take in mountain panoramas and SESCHA (Strategic Environmental, Social tural heritage or the implementation of makes clear that inclusion on the tenta- The document also claims that the ancient vistas with less than 24 hours to and Cultural Heritage Assessment) report, management plans for sustainable use tive list does not indicate any protective authenticity of Shatili has been com- spare. “harnessing the tourism potential of [the have remained minimal. status, integrity of the item, or recogni- pletely preserved in its “architectural According to local residents, twenty Mtskheta-Mtianeti] region would help A tower that was being converted into tion by UNESCO: on the contrary, a spot forms, materials, location and other years ago tourists in Shatili were unknown. to provide job opportunities particularly a guesthouse collapsed in 2017 but was on this list should only be considered necessary attributes,” but this claim is Tourists did not start coming in large in mountainous areas and to support restored the following year by a private an expression on intent of the respective becoming less accurate by the year as numbers until a few years ago, they said, rural populations, balancing migrations company in consultation with the National country’s plan to secure UNESCO rec- the towers continue to degrade under a but now the tourist season starts earlier to the lower plains.” Agency of Cultural Heritage Preserva- ognition of the site. lack of management plans and are restored and ends later every year. The tourism industry continues to be tion of Georgia. The rehabilitation sought Tentative UNESCO status for a cultural ad hoc by private companies. Yet locals are more positive about the the fastest growing sector in the Geor- to use the original stones, while the col- heritage site is only the very fi rst step in As things stand, prospects for Shatili changes than one might expect. Tourism gian economy with an incredible annual lapse was attributed to improper drain- a long process. The next step toward to become a UNESCO World Heritage has opened many new opportunities for growth rate of 17.6%, according to the age issues. recognition is an intense nomination Site are not great. Not only is the 2007 local people in an area that has tradition- 2017 government GNTA report. While The most signifi cant development ini- process which, if pursued immediately, proposal skimpy and uninformed, but ally relied on farming in diffi cult condi- no estimation of the number of visitors tiative in the area recently has been the takes about 1.5 years and requires the the acceptance of the proposal to the tions. Many Shatili folk who had moved to Khevsureti has been recorded, visitor 5-year Support Program for Protected country to create detailed plans for tentative list is only the fi rst and easiest down to the lowland are able to return numbers to protected areas like the Areas in the Caucasus (SPPA), which is “adequate protection and management step in a long process. for much of the year to earn extra income. Pshav-Khevsureti Protected Area have set to close out this year. This EUR systems to ensure a properties [sic] safe- The name UNESCO itself carries been in sync with these impressive growth 8.25-million program was funded and guarding.” The UNESCO guidelines state authority: by having a proposal on UNE- SHATILI’S WALLS AND rates, according to the report. partially implemented by organizations that “very high standards are required SCO’s tentative list of heritage sites, one TOWERS ARE DETIORATING Economic growth in Khevsureti has like the German KFW Development in this area. The Inspectorate looks can easily misconstrue UNESCO’s level Shatili remains unprotected by any offi - not been experienced equally. Shatili, Bank in partnership with Georgian gov- closely at legal framework, designation, of involvement with Shatili. Unfortu- cial designation or international recog- for example, offers 16 guesthouses, 60% ernment agencies. In Khevsureti, SPPA’s ownership, commitment of resources, nately, UNESCO may unintentionally nition from bodies like UNESCO, the of Khevsureti’s total number of guest- efforts have included environmental management philosophy, and effective- undermine its own mission: raising the branch of the United Nations devoted houses according to internet listings, protection workshops and contests to ness of on-the-ground measures and profi le of Shatili as a potential World to ensuring the world’s unique sites of making for an overnight capacity of help locals increase guesthouse capaci- public access.” Cultural Heritage site in the context of cultural heritage are preserved and prop- approximately 300 visitors. By compar- ties. These efforts did not include steps The proposal for UNESCO recognition the area’s rapidly growing tourism indus- erly managed. ison, the villages next in total guesthouse to ensure sustainable use of cultural was originally submitted in October of try increases traffi c to a sensitive area According to locals, the condition of numbers are Korsha and Barisakho, which heritage resources or mitigate threats 2007 by the Ministry of Culture, Monu- with vulnerabilities that continue to go Shatili’s towers are increasingly a cause contain only three guesthouses apiece. like those identifi ed by the World Bank ments Protection and Sport of Georgia. unaddressed. for concern and many are liable to col- While the World Bank report touts the Report. This ministry has since undergone sev- The implementation of SPPA’s fi ve-year lapse. Such incident are most likely to cultural heritage of the region as a tour- eral dissolutions and merges, most work plan, available at spa-georgia.org, occur in the spring, after a winter of ist honeypot of job creation, it also warns SHATILI’S TROUBLING recently in 2018 when it became part of began in 2014. It includes under item freeze-and-thaw cycles followed by heavy that ramping up tourism comes with ASSOCIATION WITH UNESCO the Ministry of Education and Science. “1.1.6” plans to conduct a “comparative rains. Visitors are also free to climb in signifi cant risks. Those identifi ed in the For over a decade, Shatili has been touted While the reason for Shatili’s languish- analysis/assessment for nomination of and out of towers and little information Mtskheta-Mtianeti region were: as a potential UNESCO World Heritage ing seniority on the tentative list has World Heritage Site under UNESCO's is available at the site about their history, 1) Little attention is given to carrying Site and has sat on UNESCO’s tentative never been offi cially commented upon, convention.” If the nomination process structure, or traditional use. Unstable capacity of the advertised sites list. Popular Georgian and international the submission document itself suffers for UNESCO recognition has commenced, structures also present safety hazards 2) Management plans are not required travel sites bandy about its UNESCO from worryingly scant detail and accu- this information has not yet been made for visitors. “They go in,” one local said, or used association as part of their promotional racy. Most submissions listed on UNE- public. As the SPPA program is set to “not realizing they are so unstable.” 3) Saturation will lead to a negative material, as will be found in entries on SCO’s site run several pages, however end this year, observers interested in According to the locals, after a poorly impact on visitor experience and harm Tripadvisor.com, Transfersgeorgia.com, the description of Shatili is only 256 Shatili’s future should pay special atten- implemented tower restoration project the heritage sites. Georgiastartshere.com, Visitgeorgia.it, words and is limited to the most general tion to the SPPA program’s 2019 activi- many years ago, changes to the roofs The report notes that natural and cul- to name a few. Many of these incorrectly descriptions of the site, such as its loca- ties with the Agency of Protected Areas caused water to pool rather then drain tural resources are “in a need of restora- assert that Shatili has already been des- tion, and a short blurb describing its of Georgia (APA). Time is of the essence. GEORGIA TODAY APRIL 23 - 25, 2019 BUSINESS 9 55 Injured in Clashes between Police & Hydropower Plant Protestors in Pankisi the area. 93 hectares of natural habitats BY AMY JONES were destroyed during the construction of Shaukhevi HPP, whilst a further 30 hectares were demolished to make way lashes occurred between for access roads, transmission lines and police and local residents job facility areas. A report by the Asso- protesting the construction ciation Green Alternative predicted that of the Khadori hydropower a total of 170 hectares of nature would be plant (HPP) in Birkiani in destroyed, endangering animal species. Georgia’sC Pankisi region on Sunday. As well as devastating natural habitat Several hundred local residents attended and wildlife, the construction of HPPs the protests where clashes broke out. affects the livelihoods of local residents, Protestors reportedly threw stones and as water is siphoned off, causing short- sticks at police offi cers whilst the police ages for farming, drinking, and irrigation. fi red tear gas and rubber bullets. The It also threatens tourism in the area due Ministry of the Interior announced that to the environmental damage and restric- 55 people were injured, including 17 civil- tion of activities such as rafting. ians and 38 police offi cers. In addition, authorities often forcefully The construction of HHPs is contro- resettle residents to make way for the versial in Georgia. Although the power power plants. For example, the CEE they create is essential for a country that Bankwatch Network, an EU-funded net- is becoming ever more dependent on work of grassroots, environmental and electricity, they are often condemned human rights groups, reported that 2000 for damaging the environment and frag- people were resettled for the construc- Image source: The Ministry of Interior Press Offi ce ile eco-systems. tion of the Khudoni dam in Svaneti. Georgia’s hydroelectric potential still The government and investors, keen The World Bank published an Analysis million the fi rst year that the plant cre- and held a meeting with Pankisi’s Coun- remains largely untapped, in which pri- to exploit Georgia’s hydroelectric poten- February 22, 2018, assessing power pur- ates electricity, increasing by 3% for the cil of Elders. The Ministry of Economy vate investors, international leaders, and tial, have struggled to win over local chase agreements that the Georgian following 33 years. Even exporting elec- informed OC Media that construction private investors are increasingly inter- residents in support for HPPs, and pro- government signed for various energy tricity to Turkey will not prevent the works will stop until an agreement is ested. However, the HPPs built in Geor- tests have become common. Authorities products, including hydropower. The state from having to dig into their own reached between the local population gia have negatively impacted local resi- recently announced that they may halt damning report revealed huge fi scal pocket to pay the tariffs. and the construction company. “We have dents. constructions in Machakhela in Ajara costs, such as EUR 1.8 billion for the This weekend’s protest in Pankisi postponed the construction ofthe HPP For example, Shuakhevi HPP, built in following a demonstration, whilst resi- Nenskra HPP. underlines the sensitivity of HPP con- and agree that it will only be built if 90% the Ajara region in western Georgia, dents recently protested in lower and The government agreed to pay the struction. Interior Minister Giorgi Gakh- of the population supports the idea,” wreaked havoc on the environment in upper Svaneti. developer of the Nenskra HPP $90.6 aria and various offi cials visited the scene stated Gakharia. GEORGIA TODAY 10 BUSINESS APRIL 23 - 25, 2019 Georgia’s Challenges & Opportunities

investment will improve connectivity OP-ED BY FRANCOIS and reduce transportation costs, sup- PAINCHAUD, IMF RESIDENT porting Georgia’s aspiration to become REPRESENTATIVE IN GEORGIA a transport and logistics hub connecting Europe and Asia. Implementing a com- prehensive education reform would eorgia has a remarkable enhance skills development, labor pro- track record of economic ductivity, job creation, and generate bet- reforms. Starting in the ter opportunities for all. mid-2000s, it successfully Mobilizing savings and developing defeated widespread cor- local capital markets will help fi nance Gruption, introduced sweeping tax reforms, needed investments while reducing and signifi cantly reduced burdensome external vulnerabilities. The funded regulations. This bolstered economic pension scheme will improve living activity and improved Georgia’s overall standards of future retirees and promote ranking in the World Bank’s Doing Busi- savings and businesses’ access to long- ness (from 112th in 2004 to 6th in 2019). term Lari funding. The upcoming legis- Prudent policies have also supported lation on investment funds, improving macroeconomic and fi nancial stability. trading infrastructure, and the new PPP Fiscal defi cits have been contained and framework would also help mobilize public debt remains relatively low. The savings for investment. infl ation targeting regime has become Despite remarkable progress, the busi- more credible and a fl exible exchange ness environment can be further improved rate has helped protect Georgia against to enhance the role of the private-sector external shocks. The banking sector, in generating growth and jobs. The which has been soundly regulated and planned corporate insolvency reform supervised by the National Bank of Geor- will be critical to bolster the business gia, is well capitalized, liquid, and prof- environment by maximizing recovery itable. values and allowing for timely rehabili- Despite the reforms and prudent pol- tation. Efforts to improve tax adminis- icies, Georgia’s economic growth has tration, including the VAT refund system, been decelerating and has not generated and a judiciary reform that would lead suffi cient opportunities for all Georgians. to a modern, effi cient, and transparent Average annual growth has slowed from judiciary system would help improve 9.7% (2003–07) to 5.6% (2010–14) and the business environment and support 3.6% (2015–17). This refl ects weaker investment. external demand and productivity growth Georgia’s strong commitment and following the 2008-09 global fi nancial reform record provide hope that it will crisis and the 2014-16 external shock succeed in dealing with these new chal- caused by the effects of lower oil prices lenges and delivering meaningfully higher on the region’s economies. Progress in living standards for all Georgians. Achiev- reducing poverty and inequalities has ing higher and more inclusive growth stalled, with the share of population in will require persevering with structural absolute poverty broadly fl at since 2015. reforms that would unleash the growth Robust economic growth is projected upon implementation of structural reforms growth after the introduction of new of foreign-exchange reserves. potential of the private sector. over the medium term, but there are many and subject to risks, including weaker regulations. This calls for persevering Georgia’s structural challenges also dark clouds on the horizon. Our growth trading partner growth, global trade ten- with prudent macroeconomic policies, require renewed reform efforts going First printed in The Economist’s The World in projection, of about 5%, is contingent sions, and a sharper-than-projected credit exchange rate fl exibility, and a buildup forward. Judicious public infrastructure 2019 Georgian edition. GEORGIA TODAY APRIL 23 - 25, 2019 BUSINESS 11

Presentation of Renewed Natakhtari Beer Held at Publica Art House

eral. Based on the trends in the modern market, BY MARIAM MERABISHVILI we decided to create a new design for the whole line, label and logo of Natakhtari. Important fac- tors are that Natakhtari as a leading brand also he company Natakhtari has presented responsible for developing the beer industry. On the renewed Natakhtari Beer. the reverse of the new label the whole process of Natakhtari General Director Cuneyt beer production is written so as to increase aware- Arat and the Director of the company’s ness of beer. We are really proud to produce a high Corporate Affairs, Nikoloz Khundzak- quality Georgian product, using natural ingredients Tishvili, introduced the news and other implemented and natural Natakhtari water.” projects to invited guests in an informal and pleas- "We tasted the renewed beer Natakhtari presented ant environment at Publica Art House. and I can say with pride that the quality is no less The Natakhtari beer was renewed for the fourth than that of German or Czech production. I think time in existence this year. This time, special it is an interesting and attractive product on the attention was paid to the improvement of the Georgian market. Today is confi rmation that brand symbols, with the topography of the word Natakhtari develops at a very fast pace and increases Natakhtari and its main symbol, the crown - which the quantity and volume of concrete products on united the original name and the concept of the the market,” said Giorgi Katcharava, Executive beer, both altered. Because the brand concept is Director of Georgia-EU Business Council. 100% beer, the description of beer production “Natakhtari has good communication with cus- process now has a special place on the packaging. tomers; has done for years. Such an approach The premiere of a new promo video was also held determines that Natakhtari, as a Georgian brand, at the event. holds an important place on the country's market. “At Natakhtari, we believe that beer is not just a It also has loyal customers as it possesses a very “drink” and we are not just brewing a product to high level of trust,” says Deputy Business Ombuds- consume, we believe that part of our job is to cre- man Levan Kalandadze. ate ‘pleasure moments in life,” Cuneyt Arat told The brand’s history and an installation of beer the guests. “Natakhtari is one of the oldest beers brewing simulation were also presented at the in Georgian market that has been consumed with event. The audience had an opportunity to get full that pleasure by most of the Georgian consumers information about the professional tasting and and honored as the leader of the beer market for assessment of beer. so many years.” Nodariko Khutsishvili with a band provided music “Natakhtari beer was fi rst made 14 years ago, and at the event. we have been the market leader since,” Nikoloz The fi rst Natakhtari beer was fabricated in 2005. Khundzakishvili noted. “To match that important In 2009, the company became the leader of the status, we feel we have greater responsibility towards Georgian beer market and for ten years has main- consumers and the Georgian beer industry in gen- tained its stable leadership position. GEORGIA TODAY 12 BUSINESS APRIL 23 - 25, 2019 In ECA Boardrooms, Where are the Women? Five Ways to Accelerate the Pace of Change

ative that yields broader benefi ts over women to ease back in. “The optics of tokenism are worse the long term. than if there were no women on the How can we accelerate the pace of 3. PROMOTE FEMALE board at all.” change, to upend long-held traditions MANAGERS INTO and help ECA companies thrive over the FRONT-LINE ROLES long term by increasing the number of The lack of experienced women with women’s heads that tells them they are women in leadership? Here are fi ve sug- the qualifi cations to ascend to board not up to the task is a monumental chal- gestions. positions means that when there is an lenge. At IFC, we’ve seen fi rst-hand that external push for greater diversity—say women—even the most accomplished 1. ADDRESS GENERATIONAL as the result of a regulatory requirement and experienced—need training and SHIFTS IN WHAT or a demand from an activist share- coaching on how to assert themselves, WORKERS VALUE holder—the risk increases that the result- how to tap into their own strengths to Estimates suggest that millennials will ing board appointments are simply tokens. build their personal leadership style, and represent 46 percent of the workforce The designated women might not be how to communicate in high-powered, by 2020. And younger workers—who up to the task. It’s not necessarily because male-dominated settings. We have eventually become the seasoned talent they lack the smarts, skills or business teamed with local organizations in Bos- pool from which managers are selected— savvy. Rather, it could be that their career nia and Herzegovina, Kazakhstan, Kos- are accustomed to a different reality than trajectory didn’t give them the hands-on ovo, Macedonia, Serbia and Ukraine to their parents’ generation. They are used exposure to core operations that would offer workshops specifi cally designed to working in collaborative and diverse enable knowledgeable contributions to to prepare high-potential women for teams as they likely did at university, board discussions on strategic direction. board service. The feedback from par- have repeatedly shown that companies and they expect a similar level of diver- Frankly, the optics of this situation are ticipants has been remarkably positive, OP-ED BY MERIMA ZUPCEVIC with gender-diverse management teams sity at work as well as equal pay for equal worse than if there were no women on with many noting a greater degree of BUZADZIC, IFC CORPORATE and boardrooms achieve better fi nancial work. They are more attuned to work- the board at all. self-confi dence that has stayed with them GOVERNANCE LEAD, ECA results on average than companies with life balance and more concerned about To address this issue, heightened atten- well after the training. homogeneous management and boards. environmental and social stewardship. tion should be on the career trajectory A 2016 OECD report showed that com- They will tailor their job searches accord- of mid-career female managers. In East- 5. RAISE THE VISIBILITY OF hen I fi rst began advis- panies with gender-diverse executive ingly, meaning that companies that fail ern Europe, the talent pool clearly exists, FEMALE CANDIDATES ing companies from committees outperformed those without to place a greater priority on such issues with women representing 25–40 percent In meetings with company representa- Eastern Europe and women in senior-level positions, achiev- could be at risk of losing out on top tal- of the mid-senior level management tives I often hear a common refrain when Central Asia on corpo- ing an average of 47 percent higher return ent—including capable women who have ranks in countries throughout the region. I raise the issue of board diversity: “We’d rate governance some on equity and 55 percent higher gross the potential to become future leaders. But a look beneath this statistic reveals like to appoint a woman, but the nomi- yearsW ago, the degree of uptake on issues income. A 2018 Harvard Business Review clear stratifi cation by gender and job nating committee doesn’t have any around gender diversity in the boardroom survey of 1,700 companies in eight emerg- 2. FIX THE “LEAKING PIPELINE” function: Female managers typically qualifi ed female candidates.” It’s not that was minimal. Today, it’s a different story. ing and developed markets found a “sta- OF FEMALE TALENT supervise departments that support core the candidates aren’t there, though. It’s Often, when I meet with representatives tistically signifi cant” relationship between In many countries and in certain indus- business functions, while male manag- that they might not be visible to those of companies with which IFC works, they diversity in leadership and increased try sectors, there’s a nearly equal divide ers oversee key operational and fi nancial with power over the nominations pro- acknowledge the importance of diversity. innovation. between the number of male and female units. The ILO study cites a recent sur- cess who may be relying on their own They readily volunteer information about In Eastern Europe and Central Asia, entry-level workers. As workers transi- vey of 100 companies by the Montenegro male-dominated social or business net- the number of women on their boards and studies such as a 2018 report by Sabanci tion into mid-career managerial posts, Employers Federation, which found that works to identify prospective directors. their path to improving gender diversity University’s Corporate Governance gender imbalances become more appar- around 80 percent of these fi rms’ female Pulling together information on qual- throughout the organization. Forum also have connected gender- ent, due in part to the number of women managers work in human resources, ifi ed candidates who fall outside of these Some of this attitude shift can be attrib- diverse leadership with an increased who drop out of the workforce or slow communications, or public relations. networks and making this information uted to the increased global spotlight on focus on ethical conduct and risk miti- down their career development paths to Important as these functions are, female easily accessible helps address this issue. gender inequality. It’s also a result of see- gation. This represents an important role focus on the family. This causes leaks in managers should be encouraged to seek Such a seemingly simple fi x is having ing fi rst movers reap the benefi ts from for female leaders in a region character- the pipeline of women with the potential out—and be given equal access to—addi- demonstrable results. For example, the the presence of women on their boards. ized by a comparatively under-developed to ascend through the senior-most ranks tional challenging assignments and key database created by Turkey’s Independ- There’s another dynamic at play as private sector in the early stages of of management. And, since management operational responsibilities. This will ent Women Directors at Sabanci Uni- well. Companies in the region are faced growth. experience is a key criterion for board increase their exposure to the broader versity is helping Turkish companies tap with a new reality: Investors care about Taken together, such fi ndings should qualifi cations, the drop-off reduces even range of experience and better prepare into a pool of candidates previously this issue. And it will become increas- represent a powerful motivating force more the number of women with the them fora future that might include board unknown to the companies’ nominations ingly diffi cult to raise funds without for ECA companies to prioritize diver- skills and expertise to ascend into the directorships. committee. demonstrating commitment to diversity. sity in leadership. Yet, progress remains boardroom. Beyond tokenism and merely ticking IFC, for instance, has mainstreamed a slow. It’s a global problem that also affects 4. INVEST IN WOMEN’S the diversity box, such databases ensure focus on environmental, social, and gov- In fact, it seems as if company deci- ECA. Only 20 percent of fi rms in the PROFESSIONAL DEVELOPMENT that companies committed to increased ernance considerations—including sion makers themselves remain puzzled region have female top managers, IFC In my role as corporate governance pro- female representation can identify can- boardroom diversity—into its core invest- by this disconnect. After one recent research from 2013 has found. And, while fessional, I have presented on the value didates who meet the company’s busi- ment due diligence, part of its overarch- presentation on the business case for there are countries in the region, such of diversity in leadership to hundreds of ness needs. ing mission to create markets and equal diversity in the boardroom and C-suites as Belarus, where the share of fi rms with male and female business leaders. The Other efforts such as the global “Ring opportunity. Progress towards aligning of ECA companies, an audience mem- women in top management is among the single most common thing I hear from the Bell for Gender Equality” events with international good practices in these ber—a principal in a fi nancial institu- highest in the world, there are also places the women—regardless of age, experi- associated with International Women’s areas is now a condition of IFC fi nanc- tion—approached me with an interest- like Kosovo, which has almost no com- ence level or industry—is that they are Day are raising the profi le of female ing. Women currently represent 30 per- ing observation. “We don’t need to be panies with women at the top. not comfortable when they reach that leaders as well. Last year, such events cent of directors we place on the boards persuaded of the business case. We Encouraging women to remain on the long-wanted directorship. The reasons were held at 65 stock exchanges around of our investee companies worldwide, know it’s there,” he said. His point: it is job and work their way up the corporate vary. Some do not feel accepted as an the world, including those in Istanbul, and we are pushing toward a goal of full one thing to appeal to the rational side ladder to grow the pipeline requires equal to their male colleagues and worry Tbilisi, and Bucharest, highlighting the parity by 2030. of human nature. That will only go so action on multiple fronts: implement- that they got the position because of push for more gender diversity on boards. While investors are looking for more far, and there will always be skeptics. ing women- and family-friendly work- their gender and not their qualifi cations. transparency on the diversity issue as It is another thing entirely to persuade place policies such as fl ex-time arrange- Others are insecure about their skills MORE WORK NEEDED they conduct their investment due dili- people that changing the status quo— ments, providing child-care benefi ts, and capabilities. Still others simply feel I am encouraged by the successes I have gence, activist shareholders and proxy one that is often rooted in a complex and encouraging women to return to lonely, since most are the only female witnessed: a woman-founded small advisors also are putting pressure on of gendered societal, cultural and work after stepping off the career track member and therefore feel like the odd enterprise that grew into a signifi cant their portfolio companies, demanding family expectations—to achieve a new by rewarding alternate experience and (wo)man out. market player under her leadership; a more on the gender front. and more equitable normal is an imper- offering transitional opportunities for Conquering that little voice inside board chairman who told me that add- Despite the heightened awareness, the ing women to his board opened his eyes situation in boardrooms throughout the to unaddressed risks and new opportu- region is only slightly better than it was nities; male business leaders who are a few years ago. Consider this: In Eastern speaking to large audiences of their peers Europe, women held about 8.5 percent about the benefi ts of gender diversity. of board positions as of 2016, according Yet, much work remains, particularly in to the International Labour Organiza- a region with tremendous potential but tion—just a small uptick from the aver- very real economic and social challenges— age of 7.9 percent in 2012. In Turkey, including high youth unemployment—and about 61 percent of companies listed on where key industry sectors such as man- the Borsa Istanbul reported having female ufacturing and energy remain predomi- board members at year-end 2018, with nantly male. Accelerating the pace of women representing about 15 percent of women joining the boards of companies directors of large Turkish company in all industry sectors stands to make a boards. Here, the overall trend is posi- real difference, tive, with a 27 percent increase in the contributing to number of women on large Turkish private sector company boards since 2014. On the other growth, expanded hand, in countries such as Czech Repub- economic oppor- lic, Latvia, and , there are fewer tunity, and job women on boards today than in the past. creation.

BOARD DIVERSITY This editorial was CONTRIBUTES TO BETTER first published in COMPANY PERFORMANCE Ethical Boardroom Merima Zupcevic Business studies on gender diversity Winter 2019 issue. Buzadzic

GEORGIA TODAY 14 BUSINESS APRIL 23 - 25, 2019

Georgian Churchkhelas: Thinking Out of the Traditional Box in the number of visitors taking a drive BY ERIC LIVNY just to visit these rest station”. In some cases, even the actual build- ings themselves have become attractions. hese are Georgian “Oguni-Yu Station lies along National churchkhelas, a kind of Route No. 387 in Oguni-machi, Kuma- national candy made from moto Prefecture and is a unique conical a string of walnut halves building whose framework is made of dipped in grape juice thick- locally produced cedar wood. The build- Tened with fl our (Tatara or Pelamushi), ing's entire surface is covered with glass, and dried in the sun. There are essen- which refl ects views of the surrounding tially 2-3 kinds of Churchkhela. Some- scenery and it looks just like a spaceship body may be better at making them, in a SF movie. In addition, there are many somebody worse, but all in all, it is the other examples of individual designs same stuff sold all over Georgia. that interweave the character of the local These are the Turkish analogs. If you region, such as facilities that look like have been to Istanbul’s Bazaar, you samurai houses from the outside; facili- will know fi rsthand that there is a much ties in the shape of a pottery vessel; greater variety – both in terms of nuts facilities with a giant water wheel as a and the fruit one uses to make the “”. landmark; and so on.” Also, the shapes are much more diverse Georgia and Japan may be worlds apart, and imaginative. but there is nothing wrong in learning Churchkela is just one example of how from the Japanese experience how to little “product innovation” there is in think out of the traditional box and har- Georgia. One will most likely fi nd a very ness local skills and traditions to rural similar pattern in many other spheres development objectives. With a little of economic activity in Georgia. Walk A sweets market in Istanbul nudge from Georgian government, local into any Georgian restaurant, and you authorities and donors, including the will be offered the same, rather limited not “plugged into” the global knowledge Japan has invested in the creation of as unique operations. Some use muse- Japanese International Cooperation menu of (delicious) traditional dishes: exchange (be it internet, international special roadside stations called “Michi- ums as an attraction to introduce the Agency (JICA). fi ve types of khinkali, four types of TV and newspapers). But Turkey is next no-Eki”. There are close to 1,000 of them culture and nature of the region. Others and , three types of door, what holds somebody back from spread all over Japan, catering to more develop a resort around a hotel.” ABOUT THE AUTHOR: mtswadi, etc. People know how to make producing a different kind of churchkhela? than 500 million people a year. Rather “Many Michi-no-Eki are turning into Eric Livny is Founder and President at Tbilinom- products their grandparents used to than selling identical products (BigMacs tourist hubs, with hot springs and play ics Policy Advisors and Chair of Economic make. They may try to improve the pro- INNOVATION IN THE SERVICE or Wendy’s), as is the case with rest sta- facilities, workshop practice sessions, Policy Committee at the International Chamber duction process, but would not move OF RURAL DEVELOPMENT: tions in the US or Europe, Michi-no-Eki and museums etc., and there is an increase of Commerce (ICC Georgia). very far outside the traditional domain. THE JAPANESE PERSPECTIVE emphasize innovation and uniqueness: In fact, the growth diagnostics study the Selling traditional agricultural products local tourist information, local culture ISET Policy Institute conducted back in and handcrafts along Georgia’s roads is and entertainment, locally produced and 2012, identifi ed a lack of product innova- a major source of income for many Geor- locally branded food, arts and crafts. For tion as a symptom of Georgia’s slow gian households. Over time some village instance, a Michi-no-Eki may specialize economic development. communities have become specialized in apples, yet instead of just selling whole The Georgians’ unwillingness or inabil- in certain products. Examples are Shro- apples it would venture into a whole ity to think out of the traditional box is sha’s clay, Khashuri’s hammocks, Mana- range of derivatives such as jams, apple rather puzzling. Georgians are certainly vi’s churchkhela and tkhlapi (fruit chips, apple pies, apple-shaped memo- not lacking in the creativity department. leather), Surami’s nazuki (sweet bread), rabilia, etc. Discipline is surely a problem, but crea- etc. However, even these “specialized” The concept of Michi-no-Eki is very tivity is not. Georgian artists, sculptors villages are doing relatively little to cul- well described on Trends in Japan web- and fi lm directors, to take one example, tivate their local brands and innovate. site. “As of April 2013, there are 1004 such have been renowned for their highly The lack of dynamism characterizing facilities, most of which are located in original style back in the USSR days. So Georgia’s rural entrepreneurship is at scenic mountainous regions, or along why is it that we don’t see many people stark contrast with what one observes the coast. Using a mechanism whereby in Georgia venturing out of the tradi- in Japan, whose culture and traditions the local government constructs the tional? are as strong as ours. In Japan, villagers building and private organizations man- Is it that a typical Georgian has no way also often sell their products along the age the facility, the content of the services of knowing what kind of things may exist highways, yet the way they do is very is left to local creativity and ingenuity. and, more importantly, may sell? Are we different. While building new roads, Consequently, the rest areas stand out SUBSCRIBE!

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[email protected] +995 32 229 59 19   Tel: (995 32) 2 45 08 08 10 Galaktion Street E-mail: [email protected] GEORGIA TODAY APRIL 23 - 25, 2019 SOCIETY 15 QSI International School of Tbilisi Celebrates Earth Day and raising awareness at stands. BY GABRIELLE COLCHEN The student association ‘Roots and Shoots’ helps coordinate such projects, raises awareness and works alongside bilisi’s Quality School Inter- partner organizations. They are currently national (QSI) is a private, working with 12 partners organizations non-profi t institution that for which they raise awareness and money opened in August 1995. It and from which they receive support in offers a high-quality educa- exchange. WWF, Sabuko, Hummusbar, Ttion in the English language for elemen- UCMAS, Kera, Zero Effect and D.O.G tary and secondary students. The school are some of them. is located in a 5,000-square-meter pur- In QSI, at the beginning of each year, pose-built facility located a few kilom- students have the opportunity to choose eters from the U.S. Embassy, to the north from among different projects and pick of the city in a very green environment. one they would like to get involved in. QSI has made it one of its priority to Many projects are connected with other educate students on the social and envi- children and schools in Georgia which ronmental issues facing Georgia and need support. ‘Roots and Shoots’ often today’s world in general, and on Friday helps to raise money and give schools April 19, the students celebrated Earth supplies or books. For example, QSI’s Day in the school gymnasium and pre- 7-year-olds are currently fundraising for sented the social projects they are the Ninigori school situated in north-east involved in, with musical performances Georgia. They sold their own books to and partner organizations selling food be able to buy new ones for the Ninigori students and participated in the decora- tion of the school. The 10-year-old stu- dents are helping the Dvani school situ- ated at the border with by providing science lab materials, books and teaching materials to support the teaching of English, mathematics calcu- two years and has worked 42 years in to understand their needs,” she stated. ers. That’s why we decided to present In today’s world, lators, photocopiers and electric heaters. the global education system. She “Our students are able to understand different projects to the students so that Last week’s Earth Day event was hosted explained that what differentiates QSI that they are lucky, that their parents are they could choose which they wanted when you are in a very familial and energetic atmos- from other schools is the fact that it tries educated, and that they are privileged. to get involved in. We have to create a phere. People were free to roam the to be “more conscious.” Then they can understand that other culture where we care about others. In privileged, it is stands, enjoying food and listen to the “We need to be conscious of who we children lack food, money, school sup- today’s world, when you are privileged, musical performances. GEORGIA are and what our responsibility is. We plies or books. Our responsibility is to it is too easy to be blind.” too easy to be TODAY had the chance to meet Karin are not just expats in Georgia, we have educate our kids on these subjects, it is The school unites 42 different nation- Noll, the director of the school. She has a connection with the Georgian com- a major focus for our school.” alities and provides $500,000 scholar- blind been the director of the QSI school for munities across the country and we try “QSI’s basic philosophy is to help oth- ships to Georgian students. The 4GB Electronic Music Festival The fi rst 4GB festival was headlined the details and so always aim to host the by Michael Mayer, the German electronic audience in a venue suited to electronic musician and an iconic performer for music. DJ Gio Bakanidze, who brought together The Electronauts Music Awards has 1,000 listeners. The legendary fi gure has fi ve times recognized the 4GB festival since become the permanent host of the as the Best Event of the Year. festival, taking to the stage for over 20,000 2019 is to be no exception and the 4GB visitors in 2017. organizers are all set to offer unforget- One of the unique features of the 4GB table performances in an incredible festival is the ever-changing location. environ to thousands of visitors once The organizers know everything is in again.

most outstanding. gettable event for the country, as well as BY KETEVAN KVARATSKHELIYA 4GB is an annual international electronic the Caucasus, and raising the bar of local music festival launched in 2011. At the festival culture to a new level. beginning, the festival was small, organ- The festival carries a number of impor- bilisi has made major steps ized as a tribute to the Georgian pioneer tant messages. First of all, it demonstrates forwards in terms of devel- DJ Gio Bakanidze by his friends. However, how the unity of like-minds and striving oping its night life offerings with the dedication and hard work of the for mutual aspirations can turn a small in recent years and is suc- organizers and their partner institutions, memorial party into a festival of impres- cessfully following the the festival has grown, becoming ever- sive scale, while maintaining the initial Tworld trends in this respect today, with more colorful and offering the best elec- values. In addition, 4GB is a non-profi t- numerous events organized year-round tronic music to guests, transforming the able event and all income is donated for for music lovers, 4GB being among the memories of their friend into an unfor- the development of the idea.

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