The Truth About Germany and France As with Any ﬁ Eld of Human Ac- France Is Among the Highest in the Petitiveness Race to Germa- Only 125,000 in France

This is how much MFO Crystal money it takes for Issued GEL 10 millionaires to be mln bonds happy See on p. 14 See on p. 18 8 January, 2018 News Making Money http://www.ﬁ nchannel.com

Who Pays $1.3 Global economic Million For A Bottle Of Vodka? The Truth growth in 2018 on Nouveau Riche In Former Soviet track to be fastest Republics, That’s About Germany Who since 2011 - PwC Ron SYNOVITZ The FINANCIAL compared to their post-2000 average of around 60%. he theft from a Dan- and France Growth in the Eurozone ish bar of a bottle of As with any fi eld of hu- France’s fertility rate in sarily mean higher potential he global economy is is predicted to be above 2% vodka said to be worth man activity, economics is 2015 was 1.96 per woman, growth. set to grow by almost in 2018, as PwC expects the $1.3 million has raised not immune to myths. In higher than the 1.5 recorded 4% in 2018 in pur- peripheral economies to out- eyebrows around the Europe, many of the most for Germany. Yet, in its lat- chasing power parity pace the core for the fi fth Tworld about the lavish spend- #2 “French produc- persistent relate to Germany est economic forecast, the tivity is higher due (PPP) terms, adding consecutive year. Of the larg- ing habits of the nouveau riche and France – the two biggest European Commission puts Tan extra $5 trillion to global er Eurozone economies, the in former Soviet republics. to higher unemploy- economies of Europe – and German potential growth ment.” output at current values, ac- Netherlands is expected to Danish police say the rare their relationship. Allianz at 1.9 percent for 2017 and The average output per cording to new projections lead the way with economic -- and uninsured -- bottle of Research, in a recent report, 2018, versus 1.2 percent for worker in France is among the in PwC’s Global Economy growth at around 2.5%. By Russo-Baltique vodka was sto- busts seven of the biggest France. highest in the world and has Watch. contrast, uncertainty relating len in the early morning hours myths. More human capital ben- remained so during the recent The main engines of the to Brexit is expected to drag of January 2 from Cafe 33 in efits the potential growth of crises of 2008 and 2011. In global economy - the US, on UK growth, which is pre- Copenhagen, which had a col- The FINANCIAL an economy only if people 2016, for example, productivity emerging Asia and the Eu- dicted to be 1.4% in 2018. lection of 1,200 vodka bottles can actually work. In Ger- in France was 5 percent higher rozone - are expected to on display. many, the employment rate than in Germany. Even after contribute almost 70% of CCTV footage shows the thief #1 “France’s higher for those aged 15-64 reached adjusting for unemployment economic growth in 2018 Continued on p. 10 using a fl ashlight in the dark- birth rate leads to high- 74.7 percent in 2016. In rate, labor productivity remains ness to single out the bottle and er potential growth.” France, it stood at just 64.2 1.4 percent higher in France. snatch it from the shelves of the Population growth can percent, show Eurostat fig- collection -- the only item that benefit economic devel- ures. This shows that higher Release of Georgian was stolen from the establish- opment, but not always. birth rate does not neces- Continued on p. 17 ment: Investigators say they are Prisoner Sparks still trying to determine whether the culprit broke into the vodka museum at Cafe 33 or New estimates show Protest in Sokhumi used a key to carry out the theft. U.S. Muslim population See on p. 6 Continued on p. 9 continues to grow ecent political de- ter estimates that there were And by 2050, the U.S. Mus- bates over Muslim about 3.45 million Muslims lim population is projected immigration and of all ages living in the U.S. in to reach 8.1 million, or 2.1% related issues have 2017, and that Muslims made of the nation’s total popula- prompted many up about 1.1% of the total U.S. tion — nearly twice the share Rpeople to ask how many population. of today. Muslims actually live in the Muslims in the U.S. are not The latest estimate com- United States. But coming up as numerous as the number bines information from our with an answer is not easy, in of Americans who identify as 2017 survey of U.S. Muslims part because the U.S. Census Jewish by religion, according — which reported on the Bureau does not ask ques- to our estimate. At the same prevalence of Muslims among tions about religion, meaning time, our projections suggest immigrants and other demo- there is no offi cial govern- that the U.S. Muslim popu- graphic groups — with of- ment count of the U.S. Mus- lation will grow much faster fi cial Census Bureau data on lim population. than the country’s Jewish the number of people in these Still, based on our own population. By 2040, Mus- groups. survey and demographic re- lims will replace Jews as the search, as well as outside nation’s second-largest reli- sources, Pew Research Cen- gious group after Christians. Continued on p. 17 Trump Suggests Freezing $1.9B in Aid to Pakistan Just the Start

See on p. 2

CURRENCIES New Year’s Weekly Day Sets Jan 6 Dec 23 Record With Market 1 USD 2.5967 2.5342 $300 Million Watch 1 EUR 3.1285 3.0030 in Purchases By Galt & Taggart 100 RUB 4.5524 4.3486 1 TRY 0.6940 0.6632 See on p. 8 See on p. 19

© 2018 The FINANCIAL. INTELLIGENCE BUSINESS PUBLICATION WRITTEN EXPRESSLY FOR OPINION LEADERS AND TOP BUSINESS DECISION-MAKERS 2 HEADLINE NEWS & ANALYSIS ﬁ nancialnancial nnewsews 8 JANUARY, 2018 | FINCHANNEL.COM CURRENT PRICES ON GASOLINE AND DIESEL 8 JANUARY, 2018, GEORGIA

Prices in GEL Prices in GEL Prices in GEL Prices in GEL Prices in GEL G-Force Super 2.52 Eko Super 2.54 Super Ecto 100 2.55 Nano Super 2.50 Efi x Euro 98 2.56 GASOLINE PRICES PRESENTED BY G-Force Premium 2.39 Eko Premium 2.44 G-Force Euro Regular 2.33 Super Ecto 2.39 Nano Premium 2.40 Efi x Euro Premium 2.46 BUSINESSTRAVELCOM 8 January, 2018 Eko Diesel 2.42 Premium Avangard Ecto 2.29 Nano Euro Regular 2.27 Euro Regular 2.34 Euro Regular 2.27 Euro Diesel 2.37 HOTEL AND AIRTICKET BOOKING: G-Force Euro Diesel 2.39 Euro Regular 2.19 Nano Euro Diesel 2.40 Efi x Euro Diesel 2.42 Euro Regular 2.30 Euro Deasel 2.31 Nano Diesel 2.27 Euro Diesel 2.32 2 999 662 | SKY.GE ISSUE: Euro Diesel 2.31 Diesel Energy 2.30 1 (585) CNG 1.55 GNG 1.52 © 2018 INTELLIGENCE GROUP LTD

The FINANCIAL respects the intellectual property of others, and we ask our colleagues to do the same. The material Trump Suggests published in The FINANCIAL may not be reproduced without the written consent of the publisher. All material in The FINANCIAL is protected by Georgian and international laws. The views expressed in The FINANCIAL are not necessarily the views of the publisher nor does the publisher carry any responsibility for those views. Freezing $1.9B in Aid to PERMISSIONS

If you are seeking permission to use The FINANCIAL trademarks, logos, service marks, trade dress, slogans, screen shots, copyrighted designs, combination of Pakistan Just the Start headline fonts, or other brand features, please contact publisher. “&” is the copyrighted symbol used by The FINANCIAL FINANCIAL (The FINANCIAL) is registered trade mark of Intelligence Group ltd in Georgia and Ukraine. Trade mark registration by Sakpatenti - Registration date: October 24, 2007; Registration N: 85764; Trade mark registratrion by Ukrainian State Register body - Registration date: November 14, 2007. ADVERTISING All Advertisements are accepted subject to the publisher’s standard conditions of insertion. Copies may be obtained from advertisement and marketing department. Please contact marketing at: marketing@fi nchannel.com see fi nancial media kit online www.fi nchannel.com Download RATE CARD

DISTRIBUTION The FINANCIAL distribution network covers 80 % of key companies operating in Georgia. 90 % is distributed in Tbilisi, Batumi and Poti. Newspaper delivered free of charge to more than 600 companies and their managers. To be included in the list please contact distribution department at: temuri@fi nancial.ge CONTACT US photo by Japan Times EDITOR-IN-CHIEF ZVIAD POCHKHUA E-MAIL: editor@fi nancial.ge The FINANCIAL our requests,” the offi cial said. “It But Pakistan’s military dis- And the ministry called U.S. editor@fi nchannel.com was a matter of frustration. The missed the U.S. action as a mean- pressure “counterproductive in Phone: (+995 32) 2 252 275 kinds of information that were ingless deterrent that would serve addressing common threats.” HEAD OF MARKETING .S. President Donald coming to him were not satisfy- only to undermine security coop- LALI JAVAKHIA Trump appears to be ing.” eration and regional peace eff orts. E-MAIL: marketing@fi nancial.ge ratcheting up the pres- “There has been ample time for “Pakistan never fought for mon- Trump tweet marketing@fi nchannel.com sure on Pakistan, sug- Pakistan to show that it is taking ey but for peace,” army spokes- Phone: (+995 558) 03 03 03 gesting he would be in our requests seriously,” the offi cial man Major-General Asif Ghafoor The war of words between the CONSULTANT Ufavor of cutting all aid to Islam- added, calling the U.S. requests told VOA. two allies was triggered Mon- MAMUKA POCHKHUA abad over the government’s re- “very clear.” “Unfortunately,we Ghafoor also denied U.S. alle- day, when U.S. President Donald E-MAIL: fi nance@fi nancial.ge fusal to take more decisive action have not seen the type of mean- gations that Pakistan was giving Phone: (+995 599) 29 60 40 Trump threatened to slash fund- against terrorism. ingful action we are seeking.” either the Taliban or the Haqqa- ing for Pakistan, accusing it on HEAD OF DISTRIBUTION DEPARTMENT The president tweeted late Fri- The Trump administration an- nis any sort of safe haven from Twitter of providing a haven to TEMUR TATISHVILI day that ending U.S. assistance to nounced its decision to suspend which they can attack U.S. forces terrorists and playing U.S. leaders E-MAIL: temuri@fi nancial.ge Pakistan would be a “Good Idea,” the aid Thursday, saying it would in neighboring Afghanistan. Phone: (+995 599) 64 77 76 for “fools.” in response to a tweet from U.S. remain frozen until Islamabad Military-led counterterrorism In his Twitter comments, COPY EDITOR: Senator Rand Paul. takes “decisive action” against the operations, Ghafoor said, have Trump said Washington has re- IONA MACLAREN The suggestion of cutting all Afghan Taliban and the Haqqani targeted terrorists “indiscrimi- ceived “nothing but lies and de- funding to Pakistan, a long-time COMMUNICATION MANAGER: network. nately,” including the Haqqani ceits” in return for giving Pakistan EKA BERIDZE ally with a history of uneasy rela- The funding freeze aff ects $1 network at a “heavy cost of blood more than $33 billion in the last Phone: (+995 577) 57 57 89 tions with the U.S., runs counter billion for military equipment and and treasure.” He insisted there 15 years. to the message White House of- another $900 million in payments are no more “organized” terrorist Pakistani offi cials say they PHOTO REPORTER: fi cials were putting out earlier in KHATIA (JUDA) PSUTURI to defray the cost of counterter- sanctuaries inside Pakistan. have received $14 billion and that the day. rorism operations, offi cials said “Casting doubts on our will is Washington still owes the country MAILING ADDRESS: “I just want to be clear that Friday. not good to our common objec- $9 billion. 17 mtskheta Str. it’s been suspended. Nothing has “There has been ample time for tive of moving toward enduring A leading opposition politician, Tbilisi, Georgia been reappropriated,” a senior OFFICE # 4 Pakistan to show that it is taking peace and stability. Pakistan shall Imran Khan, on Friday demanded PHONE: (+995 32) 2 252 275 administration offi cial said of the our requests seriously,” a senior continue its sincere eff orts in the government categorically re- (+995 32) 2 477 549 $1.9 billion in aid. “We’re hope- U.S. administration offi cial said [the] best interest of Pakistan and fuse to accept any future U.S. as- FAX: (+95 32) 2 252 276 ful that we can lift the suspension Friday. peace,” the army spokesman said. sistance in the wake of Trump’s E-mail: info@fi nchannel.com and the aid will be able to go for- “We have made very clear what In a separate statement Friday, on the web: www.fi nancial.ge remarks. daily news: www.fi nchannel.com ward.” our expectations are,” the offi cial Pakistan’s foreign ministry criti- “Despite Pakistan clearing said. “Unfortunately, we have not cized the U.S. for “arbitrary dead- up North Waziristan, still half seen the type of meaningful action lines” and “unilateral pronounce- of Afghanistan is in Taliban ‘A matter of we are seeking.” ments.” It asserted that Islamabad hands. So, who is responsible has fought the anti-terrorism war for this?” Khan asked. “To frustration’ “largely” from its own fi nancial re- make Pakistan the scapegoat of Intelligence Group ltd. 2018 Pakistan: sources. a failed strategy in Afghanistan But the offi cial also warned, “Emergence of new and more is not just a travesty of justice, Member of that the Pakistani government US move deadly groups such as Daesh in it is deeply insulting and hu- had pushed President Trump’s Afghanistan call for enhancing miliating.” patience past its limits. undermines international cooperation,” the “He’s monitoring Pakistan and Pakistani statement said, using an how Pakistan has responded to cooperation Arabic acronym for Islamic State. Continued on p. 10 HEADLINE NEWS & ANALYSIS 3 FINCHANNEL.COM | 8 JANUARY, 2018 ppublicityublicity BSTDB TBC BANK - 25 Increases Financing years of development for Leasing in Georgia

The FINANCIAL

SSTDBTDB eextendedxtended itsits fourthfourth lloanoan inin thethe amountamount ofof UUSDSD 5 millionmillion toto TBCTBC LLeasing,easing, a lleadingeading pproviderrovider ofof fi nancialnancial Blleaseease servicesservices inin Georgia.Georgia. TheThe 33-year-year facilityfacility willwill bebe usedused toto fi nancenance leasesleases ofof productionproduction eequipmentquipment andand commercialcommercial vvehiclesehicles toto small-small- andand medium-medium- ssizedized locallocal enterprisesenterprises (SMEs).(SMEs). BBSTDB’sSTDB’s ppreviousrevious ffacilityacility waswas uusedsed toto fi nancenance overover 130130 lleasingeasing ttransactionsransactions forfor GeorgianGeorgian ccompaniesompanies throughthrough TBCTBC Leasing,Leasing, aandnd BSTDBBSTDB eexpectsxpects a similarsimilar iimpactmpact fromfrom thethe newnew facility.facility. TThehe previousprevious threethree successfullysuccessfully uutilizedtilized facilitiesfacilities werewere providedprovided iinn 22007,007, 22011,011, aandnd 22014.014. TThehe ccumulativeumulative fi nancingnancing providedprovided byby BBSTDBSTDB ttoo TTBCBC LLeasingeasing rreachedeached UUSDSD 1515 million.million. SSinceince thethe startstart ofof itsits ooperations,perations, BSTDBBSTDB hhasas TBC BANK is celebrating its 25 years jubilee. Vakhtang Butskhrikidze, TBC Bank CEO talked to The FINANCIAL ddisbursedisbursed overover EUREUR 267267 millionmillion iinn GGeorgia,eorgia, mainlymainly focusedfocused about the most signifi cant dates of the bank history. oonn supportsupport forfor SMESME andand thethe scan QR code to watch interview in your mobile phone. fi nancialnancial ssectorector development.development.

Advertiser: Terma. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com 4 HEADLINE NEWS & ANALYSIS fi anancialanancial nnewsews 8 JANUARY, 2018 | FINCHANNEL.COM Blockchain Gambling Machine Placed in the Land-Based Casino The FINANCIAL ing forward, so I give my thumbs up and hope everybody can join as well,” says Philipe Comini, CEO of n the network appeared news the Gimmer project, an algorithmic that one of the offl ine casinos has trading platform for Bitcoin and placed a test model of the world’s other cryptocurrencies, “it’s a very fi rst slot machine, fully working revolutionary technology introduc- on blockchain technology. The ing the blockchain on gambling, and Ifuturistic style terminal developed I’m really watching for SmartBox.” by SmartPlay.tech represents the The preliminary success of the de- hardware realization of classical Eu- cision is conditioned, among other ropean roulette table. things, by the doubtless benefi ts for Many online casinos have already the casino. After all, the gambling switched to cryptocurrencies and in- establishment signifi cantly reduces vest millions of euros in the rapidly the cost of maintaining staff , auto- developing bitcoin market. For ex- mating the processes with the help ample, the PlayAmo platform spent of smart contracts. SmartBox does $ 2.5 million to expand its services not need an accountant, a cashier, or to include bitcoin payments off ering a croupier, which saves large struc- attractive promotions and bonuses tures at least $ 200,000 a year. By to its customers. saving money, the casino will be able According to the international to pay higher winnings, attracting a analytical resource TheBitcoinStrip, greater fl ow of visitors. about 60% of the current transac- Now in the course of closed test- tions in the Bitcoin network are oc- ing, players do not spend real mon- cupied by gambling bets, and the ey and do not receive real rewards. number of transactions made by However, after the full-scale launch gamblers per second has exceeded of SmartBox, bets and winnings the mark of 337. will be available not only in cryp- Such popularity of the cryptocur- tocurrencies, but also in shares of rency in gambling is caused by the SmartPlay.tech in the form of RLT absence of additional commissions, tokens. security of funds and unlimited By the way, RLT is automatically withdrawals. But can the appear- added as a bonus to each bet made ance of bitcoin completely reverse regardless of the outcome of the the view of how we used to see the game. Thus, each player becomes casino? a partner and gains profi t from the The SmartPlay.tech company an- growth of the company’s capitaliza- swered this question, challenging tion and the cryptocurrency rate. At the traditional gambling. the moment, SmartPlay.tech has al- “In order to completely revolu- ready paid more than $ 300,000 to tionize the gambling industry, it is to which other games can be con- connecting cryptocurrency wallets. to measure the performance in- players, and the rate of the RLT to- necessary to integrate new genera- nected, for example, online slots, The gambling software is developed dicators of blockchain technology ken, which is traded on the LiveCoin tion technologies such as Blockchain blackjack, bingo or poker. Now the on the technology of blockchain, in the real economy of a gambling exchange, just the day after the an- and Lightning Network, which will company is at the stage of negotia- which has been successfully tested in establishment. Within the testing nouncement of the SmartBox launch make casino activities more profi t- tions with the game design studios SmartPlay.tech products. In particu- it is planned to obtain actual data, increased by 7 times. able for the operator and attractive and slot machines developers. For lar, a model of operational effi ciency including game time, average spend- As for the market share claimed to the player. We have a technical the purpose of expanding the pres- which ensures that casino profi ts are ing, turnover, number of players, by SmartPlay.tech, the game market solution based on the ready-made ence in the market is undergoing the always higher than its costs by opti- and also make a portrait of the target volume is 88% in land-based casino software, which we can off er to big process of legal registration of proj- mizing transaction commissions to consumer. In the case of a success- versus 12% for online platforms. players in the offl ine market in the ect activities. a minimum market price of a few ful experiment, mass production of This means that the launch of the form of full-fl edged equipment. “ The basic confi guration of Smart- cents was proved in practice. full-fl edged SmartBox machine will world’s fi rst slot cryptomachine and The project team has already an- Box machine includes a touch screen The fi rst sample of the machine be launched. RLT tokens have great prospects nounced its intention to launch a gaming table, a terminal for deposit- has already been put on closed test- “SmartBox looks pretty reliable compared to analogues on the online full line of new SmartBox machines, ing fi at money, and a QR scanner for ing in a land-based casino in order and I can see the technology is go- casino market. Second-largest cryptocurrency ripple may have run ahead of itself

“Defi nitely the ripple ecosys- ments network for fi nancial institu- fi nancial institution to use XRP, in tem is defi nitely going to have tions. XRP is the name of the coin this case for U.S.-Mexico transac- to get a lot bigger to justify participants can use for transactions. tions. No other fi rms were named. where XRP is right now,” said The company announced in October Cuallix has main offi ces in Mexico, Michael Graham, an analyst that more than 100 fi nancial institu- the U.S. and Hong Kong, according at Canaccord Genuity who has tions are using its network in some to its website. covered internet stocks since way. These include Bank of Tokyo- “While it’s not required for banks the late 1990s. Mitsubishi UFJ, Mizhuho, Credit to use XRP, as the native digital as- When asked which fi rms are Agricole and Nordic bank SEB. set to the XRP Ledger it adds further using XRP, a Ripple spokes- In November, Ripple said Ameri- value to customers in sourcing low- person pointed only to an Oc- can Express FX International Pay- cost, on-demand liquidity,” a Ripple tober announcement that said ments and Santander would use representative said in a statement to a bank called Cuallix is the Ripple’s network for cross-border CNBC. fi rst fi nancial institution to use payments between the U.S. and the Bitcoin, the largest digital cur- XRP, in this case for U.S.-Mexi- U.K. Several Japanese and South rency by market capitalization, is co transactions. No other fi rms Korean banks are also testing Rip- up more than 25 percent this year were named. ple’s systems for cross-border pay- to about $17,000, or 1,500 percent However, Ripple said in a ments. If all goes well, the banks over the last 12 months, according to tweet Thursday that 3 of the eventually plan to send money using Coinbase. top 5 global money transfer XRP, according to a Nikkei report. In contrast, XRP climbed 35,000 companies plan to use XRP in “Defi nitely the ripple ecosystem is percent to $2.30 last year and has payment fl ows in 2018. defi nitely going to have to get a lot soared nearly 67 percent since to an bigger to justify where XRP is right all-time high of $3.84 on Thursday, (CNBC) – Digital currency ripple now,” said Michael Graham, an ana- according to CoinMarketCap. The has blown past its cryptocurrency lyst at Canaccord Genuity who has coin remains the second largest by rivals largely because it is working be about. whole idea of crypto is you don’t covered internet stocks since the late market cap, but fell to trade near with large institutions, which give it “The reason ripple is surging need banks.” 1990s. “But clearly the use case for $3 on Friday after leading U.S. digi- an aura of legitimacy and practical- so much is it’s a bubble,” said Erik It’s “not interesting from a fi nan- XRP is quite clear. That sets it apart tal currency marketplace Coinbase ity. Voorhees, CEO of digital asset ex- cial innovation perspective,” Voor- from other crypto assets.” pushed back against rumors it would However, cryptocurrency enthu- change ShapeShift and a vocal advo- hees said. When asked which fi rms are using launch XRP trading. siasts say that centralization is the cate for bitcoin as a way to separate Ripple is offi cially the name of a XRP, a Ripple representative point- exact opposite of what the technol- money and the state. “Testing crypto fi ve-year-old start-up based in San ed to an October announcement that ogy of the digital currencies should with banks doesn’t make sense. The Francisco that is developing a pay- said a bank called Cuallix is the fi rst Continued on p. 10 HEADLINE NEWS & ANALYSIS 5 FINCHANNEL.COM | 8 JANUARY, 2018 ppublicityublicity

Advertiser: Axis Towers. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com 6 HEADLINE NEWS & ANALYSIS cconflonfl iictct zzonesones 8 JANUARY, 2018 | FINCHANNEL.COM Release of Georgian Prisoner Sparks Protest in Sokhumi

(Civil Georgia) Pardoning and the was serving a 20-year prison term subsequent release of Giorgi Lukava in Tskhinvali) were released “in ex- from Abkhazia’s Dranda prison has change for Roland Zhiba, who was stirred public protest in the region, hiding in Georgia and who is sus- with members of the Sokhumi legis- pected in the murder of B. Kvitsinia lature convening an emergency ses- (Sokhumi authorities had previously sion yesterday amid heavy opposi- claimed Zhiba was arrested on May tion criticism. 5, 2017).” 51-year-old Lukava, native of Ab- The Amtsakhara party, which held khazia’s easternmost Gali district, a political council meeting early on was arrested by Sokhumi authori- January 3, said in its statement after ties in 2012, and was sentenced the meeting that Khajimba’s deci- to 20 years in prison in 2013 (the sion was “a betrayal of the country’s penalty was reduced to 16 years in national interests,” and that the po- accordance with the region’s law on litical party still had questions over prison terms). Lukava’s release. The party called Sokhumi authorities claimed on the “parliament of Abkhazia” to Giorgi Lukava committed a number gather for an emergency session and of off ences in 1994, including mur- issue its “political and legal assess- der and kidnapping of Abkhaz offi - ment of Khajimba’s decision.” cials, when he was allegedly a mem- Questions over Lukava’s release ber of the Forest Brothers, an armed were also voiced at an outdoor rally group consisting of residents of the in front of the “presidential admin- predominantly ethnic Georgian- istration,” with several hundred populated Gali district (the group protesters accusing the authorities ceased to exist in 2004). Lukava, of making a “a behind-the-scenes” however, denies the accusations. decision, and demanding offi cial ex- That Lukava was freed from custo- planations from the authorities. dy was fi rst announced by the State Later on January 3, the protesters Security Service of Georgia, which calling the decision “a betrayal” and reasons.” “Subsequently, when these to issue his clarifi cations on the moved to the region’s “parliament,” said in its brief statement on Decem- “a blasphemy” over the memory of reasons expired, Lukava was handed matter. The “president’s” press of- which convened for an emergency ber 25 that the prisoner was released those “who died for freedom of Ab- over to the Georgian authorities,” fi ce stressed in its late-night state- session, and established a seven- “as a result of months-long negotia- khazia.” reads the statement. ment on January 3 that Lukava was member commission for investigat- tions,” and that “the decision of the The Abkhaz security service com- The response failed to address transferred to Tbilisi “as part of the ing the details of Lukava’s release. de facto [Abkhaz] authorities” was “a mented on the “discussion” on De- the opposition concerns, with the prison exchange process initiated The commission held its fi rst positive step” that would add “posi- cember 29, saying Lukava’s release main opposition Amtsakhara party by the authorities of the Republic meeting immediately after its es- tive dynamics” to the Gali Incident was part of a tripartite prisoner (a political movement uniting vet- of South Ossetia,” and called on the tablishment, and heard several Prevention and Response Mecha- exchange process, which was ini- erans of the 1992-93 war which sup- public to “demonstrate patience and representatives of the region’s nism meetings. tiated “in response to the request ported ex-Abkhaz leader Alexander refrain from following provocative “ministries,” “the presidential ad- Lukava’s release was, however, of the authorities of the Republic Ankvab) calling a political council appeals.” ministration,” “the pardon commis- strongly condemned by opposi- of South Ossetia,” and “the active meeting on January 2, and also an- Khajimba reiterated that Lukava sion” and others, but decided that it tion groups in Sokhumi, with Amt- phase of which, took place in March nouncing a rally in front of the re- was “in the list of those who were to needed additional time for deliver- sakhara, Kyarazaa and Ainar par- 2016.”The security service clarifi ed gion’s “presidential administration” be exchanged, but his transfer was ing its fi nal opinion on the legality of ties slamming Raul Khajimba, the that Lukava “was in the list” as well, on January 3. stopped at that moment.” He then Giorgi Lukava’s pardoning. Moscow-backed leader of the region, but noted that “his transfer at that The announcement prompted noted that Giorgi Lukava and Giorgi for pardoning “the terrorist,” and time did not happen for a number of the region’s leader Raul Khajimba Giunashvili (an ethnic Georgian who Source: Civil Georgia rreal-estateeal-estate iinn UU.K..K. aautosutos Cheltenham tops the table Toyota is the of 2017 house price winners number one retail 13% annual house price growth for spa town is nearly fi ve times UK average selling brand Bournemouth and Brighton com- plete top three with 11% growth each TThehe FINANCIALFINANCIAL ---- TToyotaoyota MMotorotor oonn a volumevolume basisbasis andand downdown 10.610.6 Perth replaces Aberdeen as home NNorthorth AmericaAmerica (TMNA)(TMNA) onon JanuaryJanuary ppercentercent onon a DSRDSR basis.basis. ForFor thethe year,year, of largest annual house price fall 3 rreportedeported DecemberDecember 20172017 salessales ofof LLexusexus salessales ofof 305,132305,132 werewere downdown 2222,98522,985 vvehicles,ehicles, a ddecreaseecrease ofof 8.38.3 77.9.9 ppercent,ercent, accordingaccording toto Toyota.Toyota. The FINANCIAL – The Glouces- ppercentercent fromfrom DecemberDecember 20162016 onon a ““WithWith anotheranother veryvery successfulsuccessful De-De- tershire town of Cheltenham saw vvolumeolume basis.basis. ccemberember toto Remember,Remember, LexusLexus closedclosed the highest percentage rise in house WWithith oonene lessless sellingselling dayday inin De-De- ooutut 20172017 withwith moremore thanthan 300,000300,000 prices of any major UK town or city ccemberember 20172017 comparedcompared toto Decem-Decem- vvehicleehicle sales,”sales,” saidsaid LexusLexus GeneralGeneral in 2017, according to new research bberer 2016,2016, ssalesales werewere downdown 4.84.8 per-per- MManageranager JeJeff Bracken.Bracken. ““InIn 22018,018, by Halifax. ccentent onon a dailydaily sellingselling raterate (DSR)(DSR) LLexusexus dealersdealers willwill havehave eveneven moremore The average house price in the bbasis.asis. ooptionsptions forfor customerscustomers asas wewe bringbring 1515 town that’s located on the edge of FForor thethe year,year, TMNATMNA reportedreported salessales aall-newll-new andand specialspecial editionedition modelsmodels the Cotswolds and is famous for its ooff 2,434,5152,434,515 vvehicles,ehicles, a 00.6.6 ppercentercent ttoo thethe market.market. We’reWe’re lookinglooking forwardforward horse racing and cultural festivals, ddecrease.ecrease. ttoo anan amazingamazing year.”year.” was 13% higher than in the previous TToyotaoyota divisiondivision postedposted Decem-Decem- CCamryamry postsposts best-everbest-ever DecemberDecember year, increasing from £277,118 to bberer salessales ofof 187,524187,524 units,units, downdown ssalesales ofof 43,33143,331 units;units; best-everbest-ever quar-quar- £313,150 in 2017; nearly fi ve times 77.2.2 ppercentercent onon a volumevolume basisbasis andand tterlyerly salessales ofof 104,574104,574 units;units; the 2.7% increase in the UK as a 33.6.6 ppercentercent onon a DSRDSR basis.basis. ForFor thethe TTMNAMNA lightlight truckstrucks downdown 5.65.6 per-per- whole. yyear,ear, TToyotaoyota divisiondivision reportedreported salessales ccent;ent; upup 9 percentpercent forfor a best-everbest-ever The seaside town of Bournemouth ooff 2,129,3832,129,383 vvehicles,ehicles, a 00.5.5 ppercentercent yyear;ear; on the south coast experienced the iincrease.ncrease. TToyotaoyota divisiondivision SUVSUV postsposts 70,94570,945 second biggest rise, with an increase port in the North West (8.2%) and now belonging to Cheltenham in ““WeWe fi nishednished 20172017 onon a highhigh note,note, uunitsnits inin December;December; postsposts a best-everbest-ever of 11.7%, while Brighton, on the Swansea in Wales (7.7%) are the the South West, and towns in East rreefl ectingecting thethe continuedcontinued strengthstrength ofof qquarteruarter aandnd yyear;ear; south east coast completed the top top performers outside London and Anglia, East Midlands, North West, oourur productproduct portfolioportfolio andand establish-establish- RRAV4AV4 ssalesales ooff 32,54232,542 uunits,nits, a bbest-est- three with an 11.4% rise in the past the South, making the top 20 this Wales and Yorkshire and the Hum- iingng ToyotaToyota asas thethe numbernumber oneone retailretail eeverver quarterquarter andand yearyear withwith moremore year. year. ber also making the list.” bbrandrand fforor thethe sixthsixth yearyear inin a row,”row,” tthanhan 400,000400,000 uunits;nits; Fifteen of the 20 top house price Russell Galley, Managing Direc- House price growth in cash terms ssaidaid JackJack HHollis,ollis, ggrouproup vicevice presi-presi- 44RunnerRunner ssalesales werewere upup 4 per-per- performers are in London and tor, Halifax commented: “A number over £40,000 in past year. The aver- ddentent andand generalgeneral manager,manager, ToyotaToyota ccentent forfor a best-everbest-ever month;month; upup 14.614.6 southern England – these include of towns and cities have recorded age house price in the London bor- ddivision.ivision. ““WeWe areare wellwell positionedpositioned ppercentercent forfor thethe yearyear withwith best-everbest-ever Crawley (10.4%), Newham (10.2%), signifi cant rises in house prices over oughs of Richmond upon Thames ttoo continuecontinue ourour retailretail leadershipleadership inin yyear;ear; Peterborough (10.1%), Gloucester the past year, with all of the top 20 and Barnet have grown in cash terms 22018,018, ddrivenriven bbyy a ggrowingrowing economy,economy, HHighlanderighlander salessales ofof 21,04121,041 unitsunits (9.5%) and Exeter (9.1%). performers recording growth of at by over £40,000 since 2016. In cconsumeronsumer conconfi dencedence andand segment-segment- fforor December;December; postsposts best-everbest-ever yearyear Huddersfi eld (9.3%) in York- least double the national average. Richmond upon Thames, the aver- lleadingeading productsproducts likelike RAV4RAV4 andand uupp 12.712.7 percent;percent; shire and the Humber, Nottingham “Unlike last year, the top perform- age house price has risen by £45,463 CCamry.”amry.” (8.9%) and Lincoln (8.4%) in the ers are not exclusive to London and (or 7.6%) to £646,112 and in Barnet LLexusexus postedposted DecemberDecember salessales ofof East Midlands along with Stock- the South East, with the top spot - £41,697 (or 7.7%) to £584,049 335,4615,461 vvehicles,ehicles, ddownown 13.913.9 ppercentercent Continued on p. 10 HEADLINE NEWS & ANALYSIS 7 FINCHANNEL.COM | 8 JANUARY, 2018 ppublicityublicity

Advertiser: M2. Contact FINANCIAL Ad Dep at marketing@ﬁ nchannel.com 8 HEADLINE NEWS & ANALYSIS ﬁ nancialnancial nnewsews 8 JANUARY, 2018 | FINCHANNEL.COM New Year’s Day Sets aautosutos Record With $300 Million in Purchases

Record production figures for Volkswagen Commercial Vehicles in 2017

The FINANCIAL -- Volkswagen Commercial Vehicles (VWCV) pro- Amarok and duced around 495,000 vehicles (exact fi gure: 494,511) in 2017, thus set- Crafter successful ting a new record. 208,427 T6 vehicles were pro- Compared to the previous best duced at the sites in Hannover fi gure in 2016, the brand succeeded (175,290) and Poznań, Poland in increasing the number of vehicles (33,137) in 2017 – in total the high- The FINANCIAL -- App Store cus- tion to the new App Store and to ber 21 with the introduction of new made by around another 3.8 per tomers around the world made apps see so many customers discovering augmented reality features, built on est number produced for 44 years. cent. A signifi cant increase in pro- Compared to the record prior year and games a bigger part of their and enjoying new apps and games,” Apple’s ARKit framework for more duction numbers was recorded by holiday season in 2017 than ever be- said Phil Schiller, Apple’s senior detailed and realistic gameplay. the new fi gure means an increase the T-series and Caddy and also by once again of 4.5 per cent. fore, culminating in $300 million in vice president of Worldwide Mar- Customers are now enjoying close the Amarok pick-up. purchases made on New Year’s Day keting. “We want to thank all of the to 2,000 ARKit-enabled apps span- There was considerable growth in Dr Josef Baumert, Member of the Caddy production as well: in 2017, 2018. creative app developers who have ning every category on the App Store. Board of Management of Volkswa- During the week starting on made these great apps and helped to Among the most popular AR titles are the Poznań plant turned out 164,668 gen Commercial Vehicles respon- vehicles – the highest number since Christmas Eve, a record number of change people’s lives. In 2017 alone, games such as CSR Racing 2, Stack sible for Production and Logistics: customers made purchases or down- iOS developers earned $26.5 billion AR and Kings of Pool; shopping apps Volkswagen Poznań was set up in “The fi gure of around 495,000 ve- 1993. The year-on-year increase in the loaded apps from the App Store, — more than a 30 percent increase like Amazon and Wayfair; education hicles built and thus the renewed spending over $890 million in that over 2016.” apps including Night Sky and Thom- number of Caddy vehicles produced increases in production volumes are in 2017 was thus another 3.8 per cent. seven-day period. Pokémon GO went back to the top as & Friends Minis; and social media indicative of highly effi cient sites “We are thrilled with the reac- of the App Store charts on Decem- apps including Pitu and Snapchat. Another vehicle to record a clear and motivated employees around increase in production numbers in the globe. Digital transformation 2017 was the Amarok, with 81,177 and close integration, further im- vehicles produced (+28.1 per cent). proved working conditions for our Of these 25,501 vehicles (+52.6 workforce and increasing automa- per cent) were made in Hannover, tion are visibly raising production 54,813 (+ 17.5 per cent) in Pacheco and logistics to a new level.” Bau- (Argentina) and 863 at the new Qui- mert stressed that the new record to site in Ecuador (using CKD pro- was thus also the result of continu- duction methods). Turkey’s economy ously optimised manufacturing pro- 36,348 Crafter vehicles were processes at all VWCV production sites. duced in the fi rst year since the start The Września plant had also recently of production, with 3,891 MAN TGE been crowned ‘2017 Factory of the vehicles also being made. Year’ in Poland. At the main plant in Hannover to grow by 4.8 pct in The development of further pro- 200,826 vehicles were produced in duction sites as part of the interna- 2017 (up +5.9 per cent year-on-year tionalisation strategy was progress- and the highest fi gure in 44 years). ing well, he emphasised. Following This included the fi rst e-Crafter ve- Caddy production in Algeria, manu- hicles, production of which began at next five years: Fitch facture of the Amarok had recently the plant late in the year. begun with a local partner in Ecua- Excellent fi gures were also dor. Negotiations were on the agen- achieved at the Polish site in Poznań: The FINANCIAL -- Turkey’s econo- da for 2018 with partners in further in total in 2017, 197,805 vehicles my is expected to grow by 4.8 percent countries. were produced there (up +6.8 per annually on average in the next fi ve Despite the increased level of pro- cent on the year before and a new years, state-run Anadolu Agency re- duction, the impact on the environ- record). ported on Jan. 5, citing global ratings ment from the manufacture of vehi- agency Fitch Ratings. cles had been reduced in the period In its report titled “Investment and from 2010 to the end of June 2017 by Production at the Demographics Key to EM Growth almost 45 per cent in Hannover and Potential,” Fitch provided a list of the at all factories in total by nearly 38 new Polish site in 10 largest emerging markets in the per cent, added Baumert, according Wrze nia totalled world, in which Turkey ranked third to Volkswagen. ś in its forecast economic growth rate. over 40,000 units The agency said Turkey is set to see continued robust growth in the MODEL The workforce in Pacheco built working-age population in the next OVERVIEW: 54,813 Amarok vehicles, a year-on- fi ve years, which supports its GDP year increase of 17.5 per cent, in Qui- growth potential. T-series, Caddy, to 863 Amarok. Fitch said Turkey has seen an impressive rate of capital accumulation per worker, but noted this has been funded externally and is associated with some downside risks. The country’s strong growth rate “hinges crucially on continued high investment rates, which could be vulnerable to a sustained slowdown in capital infl ows,” the report said. “Turkey’s estimated potential growth is just below 5 percent, but the assumed growth trend in labor productivity is predicated entirely on a high investment rate that could be a potential growth rate of 6.7 percent GDP growth potential is anticipat- vulnerable to a withdrawal in foreign in the next fi ve years. ed to be the weakest in South Africa, funding fl ows,” it added. China and Indonesia jointly ranked Brazil and Russia, at 1.9 percent, India came on top among the 10 second, both with a projected poten- 1.8 percent and 1.2 percent, respec- emerging markets in the report with tial growth rate of 5.5 percent. tively. HEADLINE NEWS & ANALYSIS 9 FINCHANNEL.COM | 8 JANUARY, 2018 fi nancialnancial nnewsews Who Pays $1.3 Million For A Bottle Of Vodka? Nouveau Riche In Former Soviet Republics, That’s Who Ron SYNOVITZ

he theft from a Danish bar of a bottle of vodka said to be worth $1.3 million has raised eyebrows around the world about the lavish spending Thabits of the nouveau riche in former Soviet republics. Danish police say the rare -- and uninsured -- bottle of Russo-Bal- tique vodka was stolen in the early morning hours of January 2 from Cafe 33 in Copenhagen, which had a collection of 1,200 vodka bottles on display. CCTV footage shows the thief using a fl ashlight in the darkness to single out the bottle and snatch it from the shelves of the collection -- the only item that was stolen from the establishment: Investigators say they are still trying to determine whether the culprit broke into the vodka museum at Cafe 33 or used a key to carry out the theft. Nouveau Riche, Big Spending So why does a bottle of vodka cost $1.3 million, and who is willing to He said he prefers to use the word Fire Extinguisher, for 500,000 eu- by Russia’s then-Prime Minister diamond fi lters or exotic products pay such an exorbitant sum? “opulence” to describe the compa- ros ($650,000). Vladimir Putin as people who “all of like whale spermaceti used in pro- Cafe 33 owner Brian Ingberg told ny’s products, which are designed to One of the Fire Extinguisher bot- a sudden got rich very quickly but duction of vodkas, but all this is Denmark’s TV2 that the bottle was stimulate the ostentatious spending tles was featured in an episode of the cannot manage their wealth without beyond our understanding and so on loan from the privately owned habits of the richest of the rich in the popular television series House Of showing it off all the time.” vague,” Dartz says. Riga-based Dartz Motor Company, former Soviet Union. Cards: Indeed, the bottle stolen from Cafe “This vodka brand is not for drink- which was founded by the Latvian- In this niche market, Dartz sells Both bottle designs were created 33 reportedly was fabricated using 3 ing because it is the brand of vodka born businessman Leonard Yan- custom-built armored SUVs for pric- in 2008 to mark the centennial of kilograms of pure gold melted down to be received by succession,” pro- kelovich. es that start at about $1.5 million. the Russo-Balt car company’s Riga from Tsar Nicholas II “chervonets” motional materials say. “It is vodka Dartz produced a limited num- Several Hollywood fi lmmakers factory -- a facility built when Riga coins minted from 1908 to 1912 and that will be part of the family art- ber of the pricey bottles in 2008 have featured Dartz vehicles in their was in the Russian Empire and 3 kilograms of pure silver. work collections. Why should we and continues to build the world’s movies, including the Sacha Baron where Dartz now has its workshops The bottle cap was made from drink vodka that is regarded as an most expensive armored cars, Cohen fi lm The Dictator. and offi ces. white and yellow gold and embla- artwork?” primarily for the ultrawealthy in Ingberg reportedly told TV2 that A total of 625 Russo-Baltique zoned on top with a diamond-en- UPDATE: Danish police said the former Soviet republics, although the stolen bottle was one that repli- vodka bottles were made, Dartz says. crusted Russian imperial eagle. bottle was found intact, but empty, oil-rich royalty from the Middle cated the shape of the front grill of a That’s the same number of Russo- The centennial vodka project was on January 5 at a villa that was un- East also have bought Dartz ve- Russo-Balt automobile produced in Balt automobiles that were built fi nanced by Regina Abdurazakova, dergoing renovation on the north hicles. Riga from 1908 to 1912. at the Riga factory from 1908 until who was described in Dartz’s promo- side of the Danish capital. Yankelovich told the BBC in 2015 Dartz was selling one of those bot- 1912, when the fi rm’s automobile tional materials as “the extravagant that “luxury is too common a word” tles in 2008 for 1 million euros ($1.3 production was moved elsewhere. daughter of an oil tycoon from Ka- About author: Ron Synovitz is a to describe Dartz cars or Russo-Bal- million). Russo-Baltique vodka bottles zakhstan who decided to fi nd a use senior correspondent for RFE/RL tique vodka because “luxury you can It also was selling another bottle were designed to appeal to Russia’s for her father’s money.” Reprinted with the permission of buy in a supermarket.” design in 2008, known as a Vodka nouveau riche -- described in 2009 “We can tell stories about special RFE/RE Trump Suggests Freezing $1.9B in Aid to Pakistan Just the Start matter of frustration. The kinds of “For all the talk of how the U.S. a risk, and say there have been some to tighten on Pakistan, then Paki- Continued from p. 2 information that were coming to him may fi nally be taking its pressure preliminary talks with other allies in stan may be compelled to take some were not satisfying.” to a new level to get the results it the region about providing lethal aid modest measures to appease the Pakistan’s reluctance to undertake wants, pushing harder could back- to coalition forces. U.S. in the short term.” Wavering ties? counterterrorism operations, spe- fi re in a big way,” cautioned Michael “I’m not saying it would be impos- cifi cally in the Waziristan region, has Kugelman, deputy director of the sible, but it would not be easy,” the Despite the tough talk, some U.S. of- been a major irritant in relations with Asia Program at the Wilson Center, senior administration offi cial said. For now, though, fi cials are hopeful Washington and Is- the U.S., which sees the area as a train- a Washington-based foreign policy lamabad can resolve their diff erences. ing ground for Taliban and Haqqani think tank. it’s the frustration “We are still working with Pakistan militants. “If Pakistan feels suffi ciently pro- The U.S. has been and we will restore the aid if we see U.S. offi cials say such safe havens voked by tough U.S. measures, it that has come to decisive movements against the ter- remain intact, allowing the Taliban could retaliate in ways that damage forced to find rorists, who are as much of a threat and Haqqani to conduct attacks in U.S. interests in South Asia,” Kugel- the fore. against Pakistan as they are against Afghanistan, such as a May 31, 2017 man said. “The most likely scenario alternate supply us,” U.S. Defense Secretary Jim Mattis bombing that ripped through Kabul’s is that Pakistan could shut down Pakistani Foreign Minister Kha- told reporters Friday. diplomatic quarter, killing more than NATO supply routes on its soil, routes before. waja Asif, in an interview with the lo- Senior U.S. offi cials also said some 150 people. which would make America’s diffi - cal Geo News television, said the U.S. of the suspended funding could be cult war eff ort in Afghanistan all the In 2011, Pakistan shut down U.S. was “now neither a friend nor ally made available on a case-by-case basis more challenging.” supply routes through its territory but a friend who always betrays.” He in order to protect U.S. national secu- Still, the Trump and airspace for months after U.S. went on to say that Islamabad will rity interests. airstrikes that mistakenly hit and have to review its ties to Washington A senior U.S. offi cial warned, how- administration’s Risk killed 24 Pakistani border forces. and to strengthen relations with key ever, that the government in Islam- “We haven’t exactly entered un- regional patterns, including China, abad had pushed President Trump’s hard line with acknowledged charted territory in U.S.-Pakistan Iran and Russia. patience past its limits. relations,” Kugelman said, noting “He’s monitoring Pakistan and Pakistan is not The Pentagon sought Friday to both countries have found ways to VOA’s Pentagon correspondent how Pakistan has responded to our downplay such concerns, but Trump forge ahead in the past. “There’s a Carla Babb contributed to this re- requests,” the offi cial said. “It was a without risk. administration offi cials admit that is good chance that if the screws start port. 10 HEADLINE NEWS & ANALYSIS fi nancialnancial nnewsews 8 JANUARY, 2018 | FINCHANNEL.COM Second-largest cryptocurrency Did you also have problems ripple may have run ahead with noisy neighbours? of itself Continued from p. 4

“I think a lot of retail investors think that by investing in XRP they’ll be able to own a part [of the business], but they’re not a stock,” said Dan Ciotoli, software engineer and blockchain analyst at Bespoke In- vest. “I’m kind of on the side that XRP itself is not going to be used by banks,” Ciotoli said. However, Ripple said in a tweet Thursday that 3 of the top 5 global money transfer companies plan to use XRP in payment fl ows in 2018. Like many of the alternatives to bitcoin that have emerged, XRP of- fers far faster speeds than bitcoin, which was the fi rst application of blockchain technology when it launched nine years ago. Bitcoin transactions takes at least an hour to settle, ethereum more than 2 minutes and XRP about 4 seconds, according to Ripple’s website. All that is faster than traditional systems, which can take days. But there are fi ntech start-ups such as TransferWise that already allow consumers to send money overseas more quickly and cheaply than most traditional means. In a November report, Bernstein Senior Research The FINANCIAL rienced problems with noise from problems with noise from their Analyst Lisa D. Ellis said a test their neighbours or the street tends 1 in 4 persons suffer neighbours or the street in Malta found using bitcoin to send money to decrease with the number of per- from neighbourhood (26.2%), Germany (25.1%) and the overseas was nearly 10 times more 17.9% of the population of the Eu- sons in the household. While almost Netherlands (24.9%). They were expensive than using TransferWise ropean Union (EU) reported suff er- 20.8% of single persons claimed to noise in Malta, followed by those living in Por- and also slightly slower. ing from noise from neighbours or have been disturbed by neighbour- tugal (23.1%), Romania (20.3%), CNBC reported, however, that bit- the street in 2016. Unsurprisingly, hood noise, this aff ected 17.8% of Germany and the Greece (19.9%) and Luxembourg coin did prove useful for big-ticket this proportion is more than twice two-adult households and 16.6% (19.7%). items such as school tuition when as high for people living in cities of those made up of three or more Netherlands At the opposite end of the scale, both the buyer and seller held the (23.3%) than for those in rural areas adults. Similarly, the share is higher the lowest proportion was recorded digital currency. (10.4%). for households without dependent Across the EU Member States in Ireland (7.9%), ahead of Croatia “One of the things we all have to Moreover, the proportion of children (18.4%) than for those with in 2016, about a quarter of the (8.5%), Bulgaria (10.0%) and Esto- remember is the value of a token people that reported having expe- dependent children (17.5%). population reported experiencing nia (10.4%). over the long term is really going to be driven by its utility,” Ripple CEO Brad Garlinghouse said on Dec. 27 on CNBC’s “Squawk Alley.” “There’s no question there’s a lot of hype in this system.” XRP isn’t quite there yet in terms of actual usage, but then again, nei- Global economic growth in 2018 on ther is bitcoin. track to be fastest since 2011 - PwC The FINANCIAL Toyota

he global economy is set to grow by almost 4% in 2018 is the in purchasing power parity (PPP) terms, adding an extra $5 trillion to global output Tat current values, according to new number projections in PwC’s Global Econo- my Watch. The main engines of the global one economy - the US, emerging Asia and the Eurozone - are expected to contribute almost 70% of economic growth in 2018 compared to their retail post-2000 average of around 60%. Growth in the Eurozone is predicted to be above 2% in 2018, as PwC expects the peripheral economies selling to outpace the core for the ﬁ fth consecutive year. Of the larger Eurozone economies, the Netherlands is ex- brand pected to lead the way with economic growth at around 2.5%. By contrast, uncertainty relating to Brexit is ex- Continued from p. 6 pected to drag on UK growth, which is predicted to be 1.4% in 2018. “In 2018, we expect global eco- ously, but in line with expectation. 2018, the highest level on record and etary policy in Japan is unlikely. TToyotaoyota divisiondivision pickupspickups upup 1.81.8 nomic activity to grow at its fastest Amongst the 17 economies that will double that of 1980. India and China Across the G7, the unemployment ppercentercent inin December;December; rate since at least 2011, with the three grow faster than China are India, alone are expected to consume 30% rate is predicted to hit a 40 year low, TTacomaacoma uupp 6.86.8 percentpercent forfor a best-best- main engines of the global economy— Ghana, Ethiopia and the Philippines, of global energy. at around 5% or 19 million workers. eeverver DecemberDecember andand yearyear sincesince intro-intro- the US, Eurozone and Asia—growing pointing to broader based growth in Despite this, PwC’s outlook pre- Wage growth will post a modest dduction;uction; upup 3.43.4 percentpercent forfor year;year; in tandem. However, there are some Africa and Asian economies. Eight dicts oil prices are set to remain uptick in some advanced economies TTundraundra ppostedosted salessales ofof 10,88610,886 downside risks businesses should of the ten fastest growing countries broadly stable in real terms, with where spare capacity is limited but uunitsnits inin December;December; monitoring including the progress of in 2018 could be in Africa according OPEC and its allies extending its 1.8 remain below pre-crisis levels. LLexusexus divisiondivision LUVsLUVs ddownown 4.34.3 the Brexit negotiations, key elections to PwC’s analysis. million barrels per day supply cut An extra 80 million people are ppercentercent forfor December;December; upup 2.92.9 per-per- in large economies and protectionist With the fastest level of growth for until the end of next year. likely to be added to the world’s pop- ccentent forfor a best-everbest-ever year;year; tendencies in some nice sectors of the several years, 2018 is predicted by Other inﬂ uences and factors to ulation in 2018, but as a percentage NNXX upup 0.50.5 percentpercent inin December;December; a economy”, Barret Kupelian, senior PwC to be the most energy hungry watch in 2018 include PwC’s Global increase this would be the slowest bbest-everest-ever month,month, quarterquarter andand year;year; economist at PwC, commented. on record too. Economy Watch include: since 1950. For every 10 people add- RRXX postsposts monthlymonthly salessales ofof 13,95113,951 China, the world’s largest econ- Almost 600 quadrillion British The European Central Bank could ed to the world’s population, PwC uunits;nits; omy in PPP terms, could grow by Thermal Units of energy could be reduce its monthly asset purchases predicts nine will be located in either GGXX postsposts monthlymonthly salessales ofof 3,3253,325 6-7% in 2018, slower than previ- consumed by the global economy in in 2018, but a dramatic shift in mon- Africa or Asia. uunits;nits; uupp 8.18.1 percentpercent forfor thethe year;year; HEADLINE NEWS & ANALYSIS 11 FINCHANNEL.COM | 8 JANUARY, 2018 ppublicityublicity

Advertiser: ProCredit Bank. Contact FINANCIAL Ad Dep at marketing@ﬁ nchannel.com 12 HEADLINE NEWS & ANALYSIS FFactCheckactCheck 8 JANUARY, 2018 | FINCHANNEL.COM Auto Executives, Consumers Skeptical Giorgi Kvirikashvili: of the Viability of PRIME MINISTER OF GEORGIA Pure Battery Electric “We have significant progress Vehicles: KPMG Survey in agriculture today.”

Veriko SUKHIASHVILI 2.7%. in agriculture was registered in In order to obtain a detailed 2013. It was also in March 2013 FactChek analysis of processes in agri- that the Preferential Agro-Cred- culture, it is important to over- it Programme was launched he Prime Minister of view the production dynam- in order to provide aff ordable Georgia, Giorgi Kviri- ics of animal products as well. long-term loans for farmers. kashvili, attended the Production of milk has been A total of 154 new enterprises European Neighbour- characterised by a tendency of were established and 700 oth- hood Programme for decline in the last few years. In ers were enlarged between TAgriculture and Rural Devel- the same period, the production 2013 and 2016 as a part of the opment (ENPARD)’s fi nal of meat and eggs either grew or programme. Preferential loans conference of its fi rst phase dropped. The production of ani- amounting to USD 197,874,322 (2014-2017) together with the mal products decreased in 2016 and GEL 690,662,461 were also Minister of Agriculture of Geor- as compared to the previous issued in the same period of the gia, Levan Davitashvili, and the year. The production of meat, programme. Ambassador of the European milk and eggs also decreased The volume of co-funding Union (EU) to Georgia, Janos in the third quarter of 2017 as within a co-funding project Herman. In his speech, the compared to the same period of for processing and storage en- Prime Minister emphasised the the previous year. Specifi cally, terprises amounted to USD meat production dropped by 6,710,445 by 2017. development of agriculture and The FINANCIAL cell (67%). In conjunction with the 18%, milk production by 12% An agricultural insurance noted: “We have proclaimed More than three-quarters executive survey, KPMG also and egg production by 7%. project was launched in Sep- that the development of agri- of executives (77% global; In order to assess progress in tember 2014. A total of 29,719 surveyed 2,100 consumers culture and villages are one of espite the hype 85% U.S.) say they believe the fi eld of agriculture, a look insurance policies were opened from 42 countries (182 from our priorities. Today, we indeed and massive au- fuel-cell electric mobility will at the area of cultivated land is with the total amount of premi- the United States) to com- have signifi cant progress in this tomotive OEM be the real break-through for also important. ums paid by the insurance agen- pare their perspectives. Only fi eld.” investment in electric mobility. According to the data of the cies reaching GEL 14,658,868. 13% of consumer respon- FactCheck verifi ed the ac- battery electric “There is no question that National Statistics Offi ce of The Small Farmer Spring dents outside the United curacy of the statement. Dvehicles (BEVs), more than automakers are adapting States and 5% in the U.S., A country’s economic growth Georgia, the area of cultivation Work Assistance Programme half (54%) of global auto ex- of spring and autumn crops has took place between 2013 to stricter vehicle effi ciency said they would buy a pure is measured by changes in its ecutives say they believe these standards around the world, real added value. In order to been declining since 2013. The and 2016. A total of 827,332 battery electric vehicle over vehicles will fail commercially and electrifi cation is a big the next fi ve years. see progress in the agricultural area of agriculture land was hectares of land was culti- due to infrastructure chal- 22.8% less in 2016 as compared vated in this period with the part of that equation even as Instead, 50% of consumers sector, we have to compare the lenges while 60 percent say manufacturers continue to real added value produced in to 2013. The largest decrease total amount of benefi ciary outside of the United States excessive recharging times squeeze MPG out of internal indicate they would opt for that fi eld to the same fi gure of (by 30.5%) is seen in the area of benefi t having reached GEL will do them in, according to spring crops. 340,265,800. In spite of subsi- combustion engines,” said a hybrid -- hybrid electric the previous year. This method the 2018 KPMG Global Auto- Gary Silberg, Automotive helps to avoid the growth of val- It is also important to high- dies (vouchers, diesel and min- (33%) or plug-in hybrid elec- motive Executive Survey. Sector leader at KPMG LLP. ue as a result of price increase light those projects which have eral fertilisers) issued for the tric (17%) vehicles -- over the U.S. auto execs are far more “What’s unclear is the value (infl ation). Agriculture’s growth been carried out for agricultural cultivation of agricultural land next fi ve years, or internal skeptical than their global proposition for consumers, rate was 0.3% in 2016 and 1.5% development with the support the area of cultivated land has combustion engine (18%). counterparts, with two-thirds especially on vehicles outside in 2015. Real production in ag- of the state. been declining annually since U.S. consumers, on the other saying BEVs will fail com- of the high-end, premium riculture this year (in the fi rst As illustrated by Graph 1, the 2013. The programme ended hand, say they’ll stick with mercially as a result of these market. Given the multi-bil- three quarters) decreased by highest real growth rate (11.3%) in 2017. ICE vehicles (54%), followed charging challenges. Consum- lion dollar investments (espe- by hybrid electric (24%). ers are equally skeptical of cially in China), the complex Table 1: Area of Cultivated Land in 2013-2017 (thousand hectares) “The internal combustion pure electric, indicating that global regulatory environ- engine is not perfect, but Year 2013 2014 2015 2016 2017 they prefer hybrid technology ment and rapid technological or a traditional internal com- disruption, there will be clear U.S. consumers will continue Total Area of Cultivated Land 310.7 274.9 263.7 240.0 215.1 bustion engine. winners and losers in this EV to stick with what they know Autumn Crops (wheat, barley) 52.5 58.4 56.2 60.5 51.1 For all their skepticism, game.” and have come to rely on,” says Silberg. “Until the value Spring Crops 258.2 216.5 207.5 179.5 164.0 however, OEMs have an- When asked which OEMs nounced multi-billion dollar propositions for alternative Legumes and Cereals 183.8 154.6 142.7 119.5 111.3 they think will lead the fi eld investments in battery elec- of electric vehicles in 2025, powertrains become crystal Corn 150.4 129.1 114.1 95.5 84.9 tric technology. The KPMG executives outside the United clear to them, consumers Potatoes and Vegetable-Melon Crops 48.6 41.2 43.8 38.9 36.2 research, which polled nearly States most frequently cited will make decisions based on convenience and the overall Other Crops 25.8 20.8 21.0 21.1 16.6 1,000 executives (including BMW (21%) and Tesla (14%). 90 in the United States) from U.S. respondents see things economics of owning a car – Source: National Statistics Offi ce of Georgia leading automotive compa- a bit diff erently, rating Tesla and right now a traditional nies, found that automak- No.1 at 20% and BMW second vehicle still comes out on ers are bullish on investing at 15%. Ford was third at 8%, top for the vast majority of across the electric powertrain and GM and Toyota were tied people.” CONCLUSION spectrum. When asked where in 4th at 7%. Meanwhile, 67 percent of they would invest beyond the all consumers surveyed say IN SPITE OF CERTAIN INTERVENTIONS OF THE GOVERNMENT OF GEORGIA IN THE internal combustion engine they don’t care about drive- FIELD OF AGRICULTURE, THE REAL GROWTH RATE OF AGRICULTURE HAS BEEN train technology, they just DECREASING SINCE 2013. IN 2017, THE VOLUME OF AGRICULTURE (IN REAL VALUE (ICE) over the next fi ve years, Consumers execs most frequently cited want the most durable, cost- FORM) FURTHER DECREASED. competitive solution that IN THE THIRD QUARTER OF 2017, THE PRODUCTION OF ANIMAL PRODUCTS ALSO hybrids and plug-in hybrids Also Skeptical DECREASED AS COMPARED TO THE SAME PERIOD OF THE PREVIOUS YEAR. (72%), followed by pure bat- gets them from point A to SPECIFICALLY, MEAT PRODUCTION DROPPED BY 18%, MILK PRODUCTION BY 12% tery electric (69%) and fuel- of BEVs point B. AND EGG PRODUCTION BY 7%. IN ADDITION, THE AREA OF CULTIVATED LAND ALSO HAS A TENDENCY OF DECREASE. EVEN THOUGH THE GOVERNMENT OF GEORGIA HAS CARRIED OUT SEVERAL PROGRAMMES TO SUPPORT AGRICULTURE, THE FIELD HAS FAILED TO BECOME A DRIVING FORCE BEHIND THE COUNTRY’S ECONOMIC GROWTH AND REMAINS DEPENDENT ON SUBSIDIES. FACTCHECK CONCLUDES THAT GIORGI KVIRIKASHVILI’S STATEMENT IS FALSE. FALSE

National Endowment for Democracy

The views expressed in this website are those of FactCheck.ge and do not reﬂ ect the views of The FINANCIAL or the supporting organisations HEADLINE NEWS & ANALYSIS 13 FINCHANNEL.COM | 8 JANUARY, 2018 FFactCheckactCheck KfW-ifo SME Barometer: business climate in Irakli Germany down slightly Abesadze: PARLIAMENTARY MINORITY after record year SESSION, MP The FINANCIAL

fter shattering one record after another through- out 2017, small and medium- Asized enterprises’ confi dence dipped slightly towards the end of the year. The key in- “Unemployment dicator of the KfW-ifo SME Barometer dropped by 0.7 points in December to now 30.6 balance points. This was due to minor decreases in sit- increased and jobs uation assessments (down 0.4 points to 43.9 balance points) and expectations. SMEs’ expectations remain very op- decreased in 2016 as timistic despite the minor decline by one point to 17.6 balance points. (+3.9 points to 45.8 balance rupted upward trend, the The business situation of points). Over the year 2017, cyclical outlook for the new large enterprises is the best it manufacturing saw a particu- year is good”, said Dr Jörg compared to 2015.” has been since surveys were larly steep rise in confi dence Zeuner, Chief Economist of fi rst conducted for unifi ed compared with December KfW Group. “For 2018 we Germany in January 1991 2016 (industrial SMEs: +16.3 expect continuing high real (+3.0 points to 46.4 balance points; large-scale industry: growth of 2.5%. For all the points), according to KfW. +13.9 points). optimism in the business sec- Business expectations for the SMEs’ sales price expecta- tor, however, we must also coming six months dropped tions increased noticeably keep an eye on the down- slightly (-3.0 points to 16.5 in December (+2.7 points), ward risks. These include US Egnate SHAMUGIA working on household farms the number of employed per- (self-employed) are also cat- sons did not increase but, on balance points), but that is confi rming the upward trend foreign and trade policy and FactChek not surprising given what is seen in the course of the year the situation in China, where egorised as being employed. the contrary, dropped from currently a very good business (+10.9 points). The current private-sector debt has seen The unemployment rate 1,779,900 to 1,763,300. cycle. Overall, the business level of 15.6 balance points huge increases. We expect the t a Parliamentary is defi ned as the share of un- The number of employed climate in the large enterprise signals that a much higher Trump administration’s tax Minority session, employed persons in the total individuals did not increase sector remains extremely number of enterprises expect cuts to have hardly any eff ect MP Irakli Abe- workforce. The workforce is in 2015-2016 in spite of the good (down 0.1 points to 31.2 an increase than a decrease on demand. They will primar- sadze spoke about comprised of both employed decrease in the unemploy- balance points). in sales prices in the period ily benefi t enterprises and joblessness and and unemployed individuals. ment rate. This means that Towards the end of the year, ahead – a refl ection of the wealthy households, which Anoted that unemployment in- A person is considered as un- the number of people who do only little has changed across strong demand from consum- are likely to save most of their creased in 2016 because the employed if he has not worked not belong to the workforce individual sectors. Confi dence ers. additionally disposable in- number of those employed during a week (even for an and are economically inac- rose above average levels “The mood in the German come instead of spending it”, decreased. He also stated that hour) prior to the National tive, have not worked during in large construction fi rms economy is on an uninter- said Zeuner the unemployment percent- Statistics Offi ce of Georgia the seven days prior to the age fi gure published by the survey, has been looking for a National Statistics Offi ce of National Statistics Offi ce of job during the last four weeks Georgia’s survey and were Georgia does not give a pre- and was ready to start work- not looking for job during the cise picture because a person ing in the next two weeks. last four weeks is on the rise. is considered employed if he Therefore, all other individu- This is the very factor behind has worked at least one hour als (including persons under the decrease in the unemploy- during the last seven days. the age of 15 years, conscripts, ment rate and in fact this does Can you afford to FactCheck took interest prisoners and everyone else not indicate a growth in the in the accuracy of Irakli Abe- not looking for a job) do not number of employed indi- sadze’s statement. belong to the workforce and viduals. The National Statistics Of- changes in their numbers are In accordance with the fi ce of Georgia (NSOG) de- not refl ected in the statistical data of the National Statistics heat your home? termines the unemployment data produced by the National Offi ce of Georgia, the coun- rate in accordance with the Statistics Offi ce of Georgia. try’s population decreased International Labour Orga- According to the data of the by 2,200 and the workforce nization’s (ILO) methodology National Statistics Offi ce of dropped by 23,200 during which stipulates that a person Georgia, the country’s unem- the period verifi ed by Fact- who has worked at least one ployment rate decreased by Check. This factor indicates hour during the last seven 0.2 of a percentage point in that the decrease in Georgia’s days is considered to be em- 2016 as compared to 2015 and workforce is not correlated to ployed. In addition, persons constitutes 11.8%. However, the amount of its population.

CONCLUSION IN SPITE OF THE FACT THAT THE UNEMPLOYMENT RATE DECREASED FROM 12% TO 11.8% IN 2016, THE NUMBER OF EMPLOYED PERSONS DROPPED BY 16,600 IN THE SAME PERIOD. IN FACT, THE DECREASE IN THE UNEMPLOYMENT RATE IS CAUSED BY A DECLINING NUMBER OF ECONOMICALLY ACTIVE PERSONS IN THE COUNTRY AS 23,200 PERSONS LEFT THE WORKFORCE. FACTCHECK CONCLUDES THAT IRAKLI ABESADZE’S STATEMENT IS MOSTLY TRUE.

MOSTLY TRUE The FINANCIAL -- 9% of the EU population said in a 2016 survey that they could not aﬀ ord to heat their home suﬃ ciently. After peaking in 2012 (11%), this share has fallen continuously.

National Endowment People who cannot afford to heat their home for Democracy The situation in the Member States varies. The largest share of people who claim to be unable to heat their home was recorded in Bulgaria (39%), followed by Lithuania and Greece (both 29%), Cyprus (24%) and Portugal (22%). At the other end of the scale, less than 2% of the population face this problem in Luxembourg The views expressed in this website are those of FactCheck.ge and do not reﬂ ect the views of and Finland. The FINANCIAL or the supporting organisations 14 HEADLINE NEWS & ANALYSIS ﬁ nancialnancial nnewsews 8 JANUARY, 2018 | FINCHANNEL.COM Household spending on clothing and footwear close to €400 billion The FINANCIAL

n 2016, households in the Europe- an Union (EU) spent 4.9% of their total consumption expenditure on clothing and footwear. This represents a total expenditure of I€395.4 billion, equivalent to 2.7% of EU GDP or €800 per EU inhabitant. Households’ annual expenditure on clothing and footwear is therefore slightly higher than the amount they spent on their health. Weight of household expenditure for clothing and At the opposite end of the scale, the most in footwear highest in the lowest proportions were recorded in Bulgaria (3.2%), Romania Lithuania, Greece Estonia, lowest in (3.4% in 2015), the Czech Republic and Hungary (both 3.6%), Greece and Spain Bulgaria and France (both 3.8%), Ireland (3.9%) and Slovakia (4.0%). Between 2006 and 2016, the expenditure in 2006 to 5.9% in penditure increased between 2006 In 2016, households in Estonia share of clothing and footwear in 2016, or a decrease of 1.9 percent- and 2016 in seven Member States, (6.8%) devoted the largest share of total household expenditure de- age points – pp), ahead of Greece and most strongly in Poland (from their total expenditure to clothing Share of expenditure creased in the vast majority of (-1.3 pp), Spain (-1.1 pp), Ireland, 4.6% in 2006 to 5.2% in 2016, or an and footwear, followed by those in Member States. France, Cyprus and Malta (all -0.8 increase of 0.6 pp), Latvia and the Portugal (6.3%), Italy (6.2%), Aus- on clothing and The largest fall over this 10-year pp). United Kingdom (both +0.5 pp), tria (6.1%), Lithuania (5.9%) and period was recorded in Lithu- In contrast, the share of clothing Hungary and Luxembourg (both Latvia (5.8%). footwear decreased ania (from 7.8% of total household and footwear in total household ex- +0.4 pp). JSC MFO Crystal has successfully issued GEL 10mn unsubordinated unsecured bonds The FINANCIAL – JSC MFO Crystal, rated B by Fitch Rat- ings, successfully completed an inaugural GEL 10 million off ering of notes due Decem- ber 2019 (the Notes). The annual coupon rate was set at 4.5% over the National Bank of Georgia’s refi nancing rate. Senior unsecured Notes were issued and sold at an issue price of 100.00%. Galt & Tag- gart acted as the lead manager for the issuance. The Notes are expected to be listed on the Georgian Stock Exchange. The issuance is the fi rst local currency bond off ering in the microfi nance sector in the country. This issuance represents a landmark transaction for Georgia and was very well received by local and foreign utes to the de-dollarization of on this landmark transac- investors. The issuance was Georgia’s fi nancial sector. The tion. I believe this transaction nchannel.com ting@fi oversubscribed by more than proceeds will be utilized for underpins Crystal’s leading 2 times. on-lending to Crystal’s micro- position on the market and This transaction enables entrepreneurs and farmers further strengthens the Com- Crystal to establish an alter- across Georgia,” commented pany’s ability to attract fund- native source of GEL funding. Archil Bakuradze, Chairman of ing in local currency. I would The funds raised will allow Supervisory Board of Crystal. also like to congratulate the the Company to further en- “I am pleased to highlight Galt & Taggart team on an- hance its leading position on the role of Galt & Taggart in other successful transaction. the Georgian market through the successful issuance of JSC Galt & Taggart has become portfolio growth. MFO Crystal’s bonds. This is the leading provider of invest- “We are pleased with Crys- the fi rst public placement of ment banking services in the tal’s successful debut on the a fi xed income instrument in country to private and public corporate bond market. This the Georgian microfi nance companies, as well as interna- Lari-denominated bond is an sector. The placement was tional fi nancial institutions,” important step toward the di- very well received by our in- commented Otari Sharikadze, versifi cation of the company’s vestor community. I would Managing Director of Galt & funding sources and contrib- like to congratulate Crystal Taggart. Advertiser: Radui Commersant. Contact FINANCIAL Ad Dep at marke Advertiser: Radui Commersant. Contact FINANCIAL HEADLINE NEWS & ANALYSIS 15 FINCHANNEL.COM | 8 JANUARY, 2018 fi nancialnancial nnewsews Smart speakers are the fastest- growing consumer tech

The FINANCIAL -- The global smart speaker market is poised to grow to 56.3 million shipments in 2018, as the technology prepares itself for ac- celerated adoption in the consumer market. Amazon and Google are expected to remain in the lead with their Echo and Home products respectively, but will face increased competition as new vendors enter the race. The US will remain the single most important market for smart speakers in 2018, as shipments are expected to reach 38.4 million units, with China a distant second at 4.4 million units, according to Canalys. “2018 will be the defi ning year for smart speaker adoption,” said Canalys Research Analyst Lucio Chen. “Smart speaker uptake has grown faster than any other consumer technology we’ve recently encoun- tered, such as AR, VR or even wear- ables. While 2017 has been a banner year for smart speakers in terms of hardware sales, especially for Google and Amazon, smart speakers in 2018 will move beyond hardware, with strategic attempts to monetize the growing installed base in the US and beyond. The possibilities to do this are endless, be it discreet advertising, content subscription bundles, premium services or enterprise solu- tions. The technology is still in tran- sition, and increased investments from multiple players of the ecosystem will fuel growth.” The US takes the majority share of the worldwide smart speaker market and will remain the largest market through 2020, based on Canalys forecasts. High broadband penetra- tion, a keen proclivity to adopt new technologies and the lowering price barriers of smart speakers has ac- celerated adoption in the US market. “Consumer acceptance of the smart speaker has been positive overall, despite a few shortcomings,” said Canalys Analyst Vincent Thielke. “Vendors have begun off ering successful upgrades to their latest consumers of the smart speaker and lyze a healthy local market where viders and operators join the game dors have been cautious at the be- models, and a key element driving fuel sales in 2018.” vendors, such as Alibaba, JD.com just in time to capitalize on the grow- ginning, but with deep-pocketed this stickiness are the smart home Despite tasting success in the US and Xiaomi, have already launched ing consumer awareness of smart Alibaba ramping up investment in partnerships. Alexa’s multiple smart and Western Europe, China will con- smart speakers to test the waters. home and artifi cial intelligence. the category, and Xiaomi launch- home integrations, Google’s partner- tinue to elude the two smart speaker The market will see a huge boost in “Market dynamics in China can ing lower priced skews of its XiaoAI ship with Nest and Apple’s HomeKit giants, Amazon and Google. The re- 2018 as hardware vendors, software change very quickly,” said Lucio smart speaker, the market will be ig- initiatives will continue to excite strictions on their services will cata- developers, voice recognition pro- Chen. “Traditional hardware ven- nited in no time.” EU: e-commerce marketplaces most popular in Italy, Germany, Austria

The FINANCIAL Highest share of

16% of all enterprises located in web sales through the EU and employing at least 10 their own website or people received orders via a website or apps (web sales) in 2016. apps in the Czech Using their own website or apps Republic, Slovakia largely prevailed among these EU est shares were observed in Slovenia Use of e-commerce market- and Germany (52%), followed businesses. More than 8 in 10 en- and Finland (64%), Germany and Luxembourg places for web sales most popu- by Austria and Poland (both terprises with web sales (85%) (both 75%). lar in Italy, Germany, Austria 47%). Only 14% of enterprises sold through their own website or Among the EU Member States, and Poland. with web sales used e-commerce app and almost 4 in 10 enterprises the highest shares of enterprises Regarding the number of en- (39%) sold via an e-commerce mar- with web sales that used their own Enterprises selling terprises that sold their goods or marketplaces in the Czech Re- ketplace. Web sales include both website or apps were reported in through their own services through an e-commerce public, Croatia and Finland. On sales to individual consumers and the Czech Republic (98%), Slovakia marketplace, the highest shares average in the EU, the share was to other enterprises. and Finland (both 97%). The low- website or apps were recorded in Italy (54%) 39%. 16 HEADLINE NEWS & ANALYSIS ppublicityublicity 8 JANUARY, 2018 | FINCHANNEL.COM

Advertiser: King David. Contact FINANCIAL Ad Dep at marketing@ﬁ nchannel.com HEADLINE NEWS & ANALYSIS 17 FINCHANNEL.COM | 8 JANUARY, 2018 wworldorld New estimates show U.S. Muslim population continues to grow

ecent political debates over Muslim immigration and related issues have prompted many people to ask how many Muslims actually live Rin the United States. But coming up with an answer is not easy, in part because the U.S. Census Bu- reau does not ask questions about religion, meaning there is no offi cial government count of the U.S. Mus- lim population. Still, based on our own survey and demographic research, as well as outside sources, Pew Research Cen- ter estimates that there were about 3.45 million Muslims of all ages living in the U.S. in 2017, and that Muslims made up about 1.1% of the total U.S. population. Muslims in the U.S. are not as numerous as the number of Americans who identify as Jewish by religion, according to our estimate. At the same time, our projections suggest that the U.S. Muslim population will grow much faster than the country’s Jewish population. By 2040, Mus- lims will replace Jews as the nation’s second-largest religious group after Christians. And by 2050, the U.S. these groups. Since our fi rst estimate of the size lion adults). Since then, the Muslim while about one-in-fi ve American Muslim population is projected to Muslims are not evenly distrib- of the Muslim American popula- population has continued to grow at Muslim adults were raised in a dif- reach 8.1 million, or 2.1% of the uted around the country. Some tion, the number of U.S. Muslims a rate of roughly 100,000 per year, ferent faith tradition and converted nation’s total population — nearly metro areas, such as Washington, has been growing rapidly, albeit driven both by higher fertility rates to Islam, a similar share of Ameri- twice the share of today. D.C., have sizable Muslim com- from a relatively low base. When among Muslim Americans as well as cans who were raised Muslim now The latest estimate combines in- munities. Likewise, certain states, we fi rst conducted a study of Mus- the continued migration of Muslims no longer identify with the faith. formation from our 2017 survey of such as New Jersey, are home to lim Americans in 2007, we esti- to the U.S. U.S. Muslims — which reported on two or three times as many Muslim mated that there were 2.35 million Religious conversions haven’t had About author: the prevalence of Muslims among adults per capita as the national Muslims of all ages (including 1.5 a large impact on the size of the U.S. Besheer Mohamed is a senior immigrants and other demographic average. But there are also states million adults) in the U.S. By 2011, Muslim population, largely because researcher focusing on religion at groups — with offi cial Census Bu- and counties with far fewer Mus- the number of Muslims had grown about as many Americans convert Pew Research Center. reau data on the number of people in lims. to 2.75 million (including 1.8 mil- to Islam as leave the faith. Indeed, The Truth About Germany and France As with any fi eld of human ac- France is among the highest in the petitiveness race to Germa- only 125,000 in France. exports (16.1 percent). tivity, economics is not immune to world and has remained so during ny.” Yet, in terms of profi t margins, France has been losing impor- myths. In Europe, many of the most the recent crises of 2008 and 2011. The basis of this belief is that high- France’s small and medium enter- tance as a trade destination for Ger- persistent relate to Germany and In 2016, for example, productivity er labor costs in France make the prises (SMEs) outperform those in many, but it is far from alone. In France – the two biggest economies in France was 5 percent higher than country less competitive than Ger- Germany. In France, the profi t mar- 2000, about 46 percent of German of Europe – and their relationship. in Germany. Even after adjusting for many. But measured in terms of unit gin is 3.1 percent; in Germany, it is exports went to the eurozone, by Allianz Research, in a recent report, unemployment rate, labor produc- labor cost (ULC), the gap has been only 2 percent. French SMEs come 2016 this had declined to 37 percent. busts seven of the biggest myths. tivity remains 1.4 percent higher in clearly narrowing in recent years. out better on other counts too. For France. A signifi cant ULC gap did emerge example: in France, the return on #7 “Because it is grow- The FINANCIAL This debunks the myth that unem- between the two countries after capital employed is 22.4 percent and ing faster, Germany must ployment is driving the productivity 2000, when the Hartz reforms, in Germany, it is only 15.3 percent, be investing more than of French workers versus their Ger- tough labor market changes, moder- while the cash position is 4.9 percent France.” #1 “France’s higher birth man counterparts. ated German labor costs. From 2002 versus 4.1 percent. You would think so, but the op- rate leads to higher poten- to 2012, labor costs rose 9 percent To be fair, the diff erences could posite is true. Since 2002, the total tial growth.” #3 “Fiscal austerity is in Germany versus 21 percent in be because of the defi nition of SMEs investment-to-GDP ratio in France Population growth can benefi t stronger in Germany than France. However, between 2012 and in the two countries and because of has been consistently above that of economic development, but not al- in France.” 2017, after France decided to tackle data availability. Financial informa- Germany. ways. France’s fertility rate in 2015 The world tends to see the German its lagging competitiveness, the in- tion is available for 100 percent of The investment-to-GDP ratio in- was 1.96 per woman, higher than government as thrifty, or at least not crease in German labor costs was German SMEs but only 47 percent of dicates how much a country is in- the 1.5 recorded for Germany. Yet, as profl igate as the French. Yet, since nearly three times as large (9 per- French SMEs. This can lead to data vesting in new equipment, technol- in its latest economic forecast, the 2013, German public spending has cent) as that of France (3.4 percent). distortion. ogy and research. A high fi gure can European Commission puts German increased at a pace more than twice This is narrowing the competitive- indicate a country is trying to catch potential growth at 1.9 percent for that of France (cumulative 13.6 per- ness gap. #6 “France is Germany’s up to other nations, or that it is try- 2017 and 2018, versus 1.2 percent cent versus 6 percent). In 2016, the Whether the two continue to con- main trading partner.” ing to increase its international com- for France. German government’s expenditure verge will depend on policies ad- Germany is France’s leading bi- petitiveness. More human capital benefi ts the rose 4 percent, partly due to the ref- opted by the respective governments lateral trade partner, accounting for In 2016, the ratio stood at 22 per- potential growth of an economy only ugee infl ux, compared with just 1.1 concerning labor law reforms, tax 16.5 percent of all import and export. cent for France and at 20 percent for if people can actually work. In Ger- percent in France. credits and minimum wage require- But France is not Germany‘s top bi- Germany. Both the French public many, the employment rate for those Germany, far from being close- ments. lateral trade partner. It’s China at 7.9 and corporate sectors have higher aged 15-64 reached 74.7 percent in fi sted, seems to be switching to percent; France comes in second at investment ratios than their German 2016. In France, it stood at just 64.2 an expansionary fi scal course and #5 “German SMEs per- 7.7 percent. counterparts. This suggests Ger- percent, show Eurostat fi gures. This France is not quite the spendthrift it form better than French France is the second destination many faces a signifi cant investment shows that higher birth rate does not is made out to be. France seems to ones.” for German exports (8.4 percent) backlog. necessarily mean higher potential be comfortably meeting EU bench- Germany’s famous Mittelstand after the U.S. (8.9 percent) and only growth. marks that require government (small to mid-sized companies) the third supplier for imports after About Allianz spending growth to be at or below a are praised for providing the back- China (9.8 percent) and the Nether- The Allianz Group is one of the #2 “French productivity is country’s potential economic growth bone for the world’s fourth largest lands (8.8 percent). In comparison, world’s leading insurers and higher due to higher unem- rate. economy. They certainly create an Germany clearly remains France’s asset managers with more than ployment.” impressive export engine. There are most important source of imports 86 million retail and corporate The average output per worker in #4 “France lost the com- 300,000 exporters in Germany, and (16.9 percent) and destination for customers 18 HEADLINE NEWS & ANALYSIS ppublicityublicity 8 JANUARY, 2018 | FINCHANNEL.COM This is how much money it takes for millionaires to be happy

The FINANCIAL you spend the money you do have that can make you happier. For example, according to two of n the pursuit of happiness, being the researchers on the Harvard hap- a millionaire won’t necessarily piness study, Donnelly and Michael serve as a shortcut. Norton, “giving to others leads to A recent study from Harvard greater happiness than spending on Business School asked more oneself,” they write in an article for Ithan 4,000 millionaires of varying The Wall Street Journal. degrees of wealth to rank their life You can also use some of your satisfaction and happiness levels, as cash to purchase your way out of well as the source of that wealth. an unpleasant task. That way, you The fi ndings reveal that making spend more time doing things you it as a millionaire doesn’t necessar- enjoy, ultimately leading to happi- ily buy you happiness, and even the ness. super-rich aren’t always satisfi ed. “Spending money on time saving purchases — like housecleaning, lawn-mowing and task outsourcing Even — promotes happiness by protect- ing people from the time-famine millionaires of modern life,” Ashley Whillans, aren’t totally a professor at Harvard Business School and author of a study on happy money and happiness, tells CNBC Make It. Harvard’s new research reveals “Both the most and least wealthy that the price of happiness is pretty individuals we studied derived ben- steep: It seems to be around $8 mil- efi ts from spending money to buy lion to $10 million. Only at these time,” meaning it has “broad ben- levels “are wealthier millionaires efi ts for well-being,” she says. happier than millionaires with lower The study also found that across a marginal increase in wealth can After all, “What matters for your levels of wealth,” says the study, re- all wealth levels, millionaires said increase happiness. But they predict Maximize well-being is what you’re doing with vealing that in one group, million- that to be 100 percent happy they they would need so much more,” the minutes and days of your life,” aires who hit the $8 million mark would need to grow their fortune by lead researcher Grant Donnelly tells the money University of British Columbia psy- reported higher life satisfaction than leaps and bounds — just a bit more Money. chology professor Elizabeth Dunn those with $7.9 million or less, and wealth wouldn’t be enough. Respon- But it wasn’t just the amount of you do have tells CNBC Make It. “If you have a in another, those with a net worth of dents most frequently said that they wealth millionaires had that impact- lot of money and a lot of nice stuff , over $10 million were signifi cantly would need to increase their wealth ed their happiness, it was also the to achieve but you’re spending your time do- happier than those with lower levels by a whopping 1,000 percent, fol- source of that wealth. Researchers happiness ing things that you dislike, then of wealth. But even then, it is only lowed by 500 percent for total hap- found that people who earned their your minute-to-minute happiness associated with “modestly greater piness. wealth were happier than those who Even if you don’t have $8 million, and overall happiness is likely to be well-being.” “What seems to happening is even inherited it. you can be strategic about the way pretty low.”

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OPEN YOUR TRAVEL AGENT ACCOUNT HEADLINE NEWS & ANALYSIS 19 FINCHANNEL.COM | 8 JANUARY, 2018 marketsmarkets Weekly Market Watch WEEKLY MARKET WATCH EXCLUSIVELY PROVIDED TO THE FINANCIAL BY GALT & TAGGART

Current account Key macro indicators Real GDP growth, % Georgia sovereign credit ratings International ranking, 2016-17

ECONOMY 2017 2016 2015 de¿ cit stood at 2.9% (1) Ease of Doing Business GDP (% change) 4.8% 2.8% 2.9% Real GDP growth of GDP in 3Q17 GDP per capita (ppp) … 10,044 9,601 # 9 (Top 10) GDP per capita (US$) … 3,865 3,767 was 3.7% y/y in No- Current account de¿ cit nar- Population (mn) 3.7 3.7 3.7 Economic Freedom Index Ͳ ĂϮ Ͳ vember 2017 rowed to 2.9% of GDP in 3Q17 Inflation (eop) 6.7% 1.8% 4.9% ^ƚĂďůĞ ^ƚĂďůĞ ^ƚĂďůĞ # 13 (mostly free) from 8.6% of GDP in 3Q16, de- Gross reserves (US$ bn) 3.0 2.8 2.5 Georgia’s economy expanded creasing 63.6% y/y in nominal ĨĨŝƌŵĞĚ ĨĨŝƌŵĞĚ ĨĨŝƌŵĞĚ CAD (% of GDP) 7.1%(2) 12.8% 12.0% EŽǀͲϮϬϭϲ ^ĞƉͲϮϬϭϳ Global Competitiveness Index 3.7% y/y in November 2017, terms to US$ 120.4mn, accord- DĂƌͲϮϬϭϳ Fiscal deficit (% of GDP) … 4.1% 3.7% # 59 (improving trend) according to GeoStat’s rapid ing to NBG. Merchandize trade Total public debt (% of GDP) … 44.6% 41.4% estimates. Overall, in 11M17 de¿ cit, traditionally the major real GDP growth was 4.8% contributor to de¿ cit creation, Source: O௻ cial data, IMF Source: GeoStat Source: Rating agencies Source: World Bank, Heritage decreased 1.4% y/y to US$ (1) As of 10M17 Foundaition and World Economic Forum y/y (growth was 2.4% y/y in (2) As of 1H17 11M16). In November 2017, 984.2mn, as exports increased the growth was recorded in 19.4% y/y, while imports were 9.2% y/y to US$ 281.0mn. Net The annual CPI inÀ ation was es were driven by price increases was 0.8% inÀ ation in December hotels and restaurants, real up 7.7% y/y. Positive balance FDI, signi¿ cant item for ¿ nanc- 6.7% in December 2017 down in food and non-alcoholic bever- 2017. Price increases in food and estate operations, trade and in services was up 27.7% y/y to ing the current account de¿ cit, from 6.9% inÀ ation in previous ages (+7.3% y/y, +2.2ppts), trans- non-alcoholic beverages (+1.4% transport sectors, while growth US$ 857.9mn. Among services, amounted to US$ 525.6mn month, according to GeoStat. port (+14.9% y/y, +1.94ppts), and m/m, +0.42ppts) and transport was down in construction and tourism had the largest posi- (6.2% of GDP, up 75.4% y/y). Core inÀ ation was 4.7% in De- alcoholic beverages and tobacco (+1.5% m/m, +0.2ppts) cat- manufacture of food products tive balance, increasing 31.0% cember compared to 5.1% in pre- (+17.5% y/y, +1.12ppts) catego- egories were the major drivers of and basic metals. Monthly rap- y/y to US$ 929.0mn (11.0% of vious month. Annual price chang- ries. On a monthly basis, there InÀ ation was 6.7% monthly InÀ ation dynamics. id estimates are based on VAT GDP). Net current transfers, turnover, ¿ scal and monetary the second largest positive item y/y and 0.8% m/m in statistics. of the current account, were up December 2017 Nominal Effective Exchange Rate and Real Effective Exchange Rate NPLs at 3.4% in November 2017 Exports by commodities, 11M17 Imports by commodities, 11M17 In November 2017, the banking sector loan portfolio increased 16.2% y/y after growing 16.6% y/y in previous month, excluding the exchange rate eɣ ect. In unad- justed terms, loan portfolio was up 24.1% y/y and 5.0% m/m to GEL 22.1bn (US$ 8.1bn). Deposits were up 17.6% y/y excluding the exchange rate eɣ ect. In unadjust- ed terms, deposits were up 23.4% y/y and up 4.9% m/m to GEL 19.9bn (US$ 7.3bn). Deposit dollarization reached 67.5% (-3.7ppts y/y and +1.1ppts m/m). NPLs Source: NBG stood at 3.4% in November 2017 Source: GeoStat Note: Index growth means appreciation of exchange rate, decline means depreciation of (-0.5ppts y/y and +0.1ppts m/m). exchange rate.

FIXED Georgia Eurobonds, YTM (%) EQUITIES TBC Bank Group (TBCG LN) Georgia Healthcare Group (GHG LN)

INCOME BGEO Group PLC (BGEO LN) Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 4.9% yield, trading at 105.2 (+0.8% w/w). Bank of Georgia GEL-denominated Eurobonds (GEBGG) were trading at 100.5 (unchanged w/w), yielding 10.7%. GOGC Eurobonds (GEOROG) were trading at 107.9 (+0.3% w/w), yielding 4.2%. Geor- gian Railway Eurobonds (GRAIL) traded at a premium at 112.7 (+0.3% Source: Bloomberg Source: Bloomberg w/w), yielding 4.6%. which BGEO is a constituent, gained 13k in the last 4 weeks. Georgian Sovereign Euro- Source: Bloomberg bonds (GEORG) closed at 112.1 Source: Bloomberg 0.84% w/w and gained 5.18 m/m. Georgia Healthcare Group (-0.2% w/w) at 3.0% yield to maturity. The volume of BGEO shares traded (GHG LN) shares closed at GBP BGEO Group (BGEO LN) shares was at 0.49% of its capitalization. 3.58/share (+0.85% w/w and closed at GBP 36.32/share (+2.11% TBC Bank Group (TBCG LN) +2.03% m/m). More than 39k shares Local bonds Eurobonds w/w and +9.33% m/m). More than closed the week at GBP 16.74 (-4.34% were traded in the range of GBP 3.45 *:3 05( 1LNRUD 1LNRUD */& *(%** *(252* %*(2/1 *(25* *5$,/ 194k shares traded in the range of w/w and +0.72% m/m). More than – 3.60/share. Average daily traded GBP 34.72 – 36.50/share. Average 37k shares changed hands in the volume was 10k in the last 4 weeks. $PRXQW86 daily traded volume was 42k in the range of GBP 16.20 – 17.66 share. The volume of GHG shares traded PQ last 4 weeks. FTSE 250 Index, of Averaged daily traded volume was was at 0.03% of its capitalization. ,VVXHGDWH 0DWXULW\GDWH

&RXSRQ 7.33% (up 0.24ppts from previous issue). )LWFK6 3 %%%% %% QD %%%D %%% %%% %%+ MONEY MARKET Ministry of Finance Treasury Bills: 91-days GEL 0RRG\ V %D 40.0mn (US$ 15.4mn) T-Bills of Ministry of Finance were sold 0LGSULFH86 QD Re¿ nancing loans: National Bank of Georgia (NBG) at the auction held at NBG on January 3, 2018. The weighted 0LG\LHOG QD issued 7-day re¿ nancing loans of GEL 1,190mn (US$ average yield was ¿ xed at 7.443%. The nearest treasury security auction is scheduled for January 10, 2018, where GEL 40.0mn =VSUHDGESV QD QD QD QD QD 459.4mn). Certi¿ cates of deposit: NBG sold 91-day, GEL 20mn nominal value 2-year T-Notes and GEL 20.0mn nominal value * Source: Bloomberg (US$ 7.8mn) certi¿ cates of deposit, with an average yield of 182-days T-Bills will be sold. *GWP 12/21 bonds and GEBGG 06/20 bonds are in Georgian lari **Coupon rate 3.5% over the NBG’s re¿ nancing rate T-bills / T-notes, yield curve Monetary policy rate

Eastern European sovereign 10-year bond performance $PRXQW 5DWLQJV ,VVXHU &RXSRQ 0DWXULW\GDWH 0LG\LHOG 86PQ )LWFK6 30RRG\ *HRUJLD %%%%%D $]HUEDLMDQ %%%%%D %XOJDULD %%%%%%DD &URDWLD %%%%%D +XQJDU\ %%%%%%%DD 5RPDQLD %%%%%%%DD 5XVVLD %%%%%%D 7XUNH\ %%%%%D Source: NBG Source: NBG Source: Bloomberg *Note: As of latest auction.

WEEKLY MARKET WATCH EXCLUSIVELY PROVIDED TO THE FINANCIAL BY GALT & TAGGART Investments (or any short-term transactions) in emerging markets involve signi¿ - GALT & TAGGART cant risk and volatility and may not be suitable for everyone. The readers of this document must make their own investment decisions as they believe appropri- Address: 79 D. Agmashenebeli Avenue, Tbilisi 0102, Georgia ate based on their speci¿ c objectives and ¿ nancial situation. When doing so, such Tel: + (995) 32 2401 111 recipients should be sure to make their own assessment of the risks inherent in Email: [email protected] emerging market investments, including potential political and economic instabil- ity, other political risks including without limitation changes to laws and tariɣ s, and nationalization of assets, and currency exchange risk. 20 HEADLINE NEWS & ANALYSIS ppublicityublicity 8 JANUARY, 2018 | FINCHANNEL.COM

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Continued on p. 22 22 HEADLINE NEWS & ANALYSIS ppublicityublicity 8 JANUARY, 2018 | FINCHANNEL.COM

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Divan Suites Betsy’s Hotel Batumi Best Address: Western 32-34 Makashvili Street, Jordania/Z. 0108, Tbilisi, Georgia Tbilisi Gamsakhurdia Str. 8/15 Tel.: 293 14 04, Fax: 299 93 11 № 1 Kheivani street 12/13; Tbilisi, Georgia (422)255 522 Phone: (+995 32) 2 24 23 21; [email protected] Addr: 11, Apakidze str. Phone: (+995 32) 2 24 23 22 Tel.: 2 300 777 www.betsyshotel.com [email protected] E-mail: [email protected]

275 Agmashenebeli Ave., Kobuleti, Georgia 6 Kavsadze Str. Tel: 2242400 Tel: 2 25 15 45 Hotel GEORGIA PALACE Fax: 2242403 2 55 44 55 “Tiﬂ is Palace” HOTEL www.lottravel.ge 4 Freedom Square 3 Vakhtang Gorgasali St, Tel: 2988 988, Fax: 2988 910 (+995) 32 2000245 E-mail: [email protected], www.gph.ge E-mail:[email protected], www.gmt.ge reservation@tiﬂ ispalace.ge

HOTELS & PREFERENCE HUALING TBILISI Tel: 5 Chavchavadze Ave. 2 50 50 25; 2 97 32 97 The tickets are available at tbilisi Fax: 2 50 50 26 international airport freedom square 4 Email: Tel.: 222 44 17 courtyard marriott hotel, 1st ﬂ oor [email protected] 577 22 99 22 For advertising plasticsurgerygeo.com Tel: 2400 400; 2400 040 Addr: Hualing. Tbilisi Sea New City please contact: 558 03 03 03 marketing@ﬁ nchannel.com Tel: 277 00 40/50 Addr: 20 Address: 1/3 Melashvili Street 6000 Metekhi str. Batumi,Georgia | +995 422 225790 LEOGRAND HOTEL & CASINO http://www.tbilisiinn.com/ www.batumiworldpalace.com Tel: 0422 24 20 20; [email protected] [email protected] [email protected] Addr.Gogebashvili Str. 60; Batumi 24 HEADLINE NEWS & ANALYSIS ppublicityublicity 8 JANUARY, 2018 | FINCHANNEL.COM

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