Leading the Way on Georgia-US Relations
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Leading the way on Georgia-US relations APRIL-MAY 2021 Investor.ge | 3 Investor.ge CONTENT 6 Investor news 9 Georgia’s organic wine opportunity 10 Transatlantic leadership: US Ambassador Degnan & AmCham President Sarah Williams talk Georgia-US relations, changing role of women 15 New routes open up for Georgian SMEs as IFIs move to diversify financing options 18 How Georgian literature has made its way into 20 35 languages 20 The Enguri HPP shutdown: how it played out for Georgia and its breakaway Abkhazia region 22 TBC Capital’s macro insights: ‘still restart rather than recovery’ 24 Why Tbilisi’s last Soviet-era ropeway can’t get off the ground again 26 Investor spotlight: Georgian drone startup Raven 26 looks to spread its wings come spring 29 TBC Bank’s strategy to be a leading employer, tech forerunner in the region 30 How public-private sector partnerships have transformed development in Georgia 32 Agricultural startup Kalo disseminating know- how through tech 34 BLC: Law on Entrepreneurs provides new take on capital formation, maintenance and protection 36 US-Georgian partnership proves ‘a woman’s 32 place’ is in tech 38 What Georgia stands to gain from ending food waste 40 Agronavti: USAID-funded mobile application brings innovation, efficiency to Georgian agriculture 38 NEWS ......42 4 | Investor.ge APRIL-MAY 2021 APRIL-MAY 2021 Investor.ge | 5 GEORGIAN GDP DOWN 6.2% IN FDUULHU:L]]$LUUHVXPHGÀLJKWVIURP Investment 2020 .XWDLVL,QWHUQDWLRQDO$LUSRUWDWWKHHQG Real growth of Georgian GDP fell RIWKHPRQWKDQGLVRIIHULQJÀLJKWVWR by 6.2% in 2020, show preliminary data destinations. One airline is entering the News IURPWKH1DWLRQDO6WDWLVWLFV2I¿FHRI PDUNHWIRUWKH¿UVWWLPHZLWK:L]]$LU INVESTOR.GE Georgia (Geostat). While most sectors $EX'KDELRSHUDWLQJÀLJKWVIURP.XWDLVL of the economy were hammered by the WR$EX'KDELWZLFHDZHHN7XUNLVK PROVIDES A epidemic, several continued to grow, $LUOLQHV3HJDVXV8NUDLQH,QWHUQDWLRQDO BRIEF UPDATE such as: health and social work (7.9%), Airlines, Flydubai, Air Arabia and Qatar ON INVESTMENTS DJULFXOWXUHIRUHVWU\DQG¿VKLQJ Airways have also resumed operations. AND CHANGES HGXFDWLRQ 7KHZRUVWKLWVHFWRUV IN GOVERNMENT were accommodation and food service TURKEY, RUSSIA, CHINA WERE DFWLYLWLHV WUDQVSRUWDWLRQDQG GEORGIA’S TOP TRADE PARTNERS POLICY THAT COULD VWRUDJH DQGDUWVHQWHUWDLQPHQW IN JAN-FEB 2021 IMPACT THE BUSINESS DQGUHFUHDWLRQ 7XUNH\ PLOOLRQ 5XVVLD ENVIRONMENT. PLOOLRQ DQG&KLQD INFORMATION IN GEORGIA OPENS AIR BORDERS million) were Georgia’s top trading THIS ISSUE WAS Georgia opened its air borders on partners in total external trade turnover )HEUXDU\DOORZLQJDOOSUHYLRXVO\ LQ-DQXDU\)HEUXDU\VKRZSUH TAKEN FROM IXQFWLRQLQJDLUOLQHVWRUHVXPHÀLJKWV liminary data from the National Statis AGENDA.GE AND Lufthansa has announced it is increas WLFV2I¿FHRI*HRUJLD *HRVWDW ,QWKLV OTHER SOURCES. LQJÀLJKWIUHTXHQF\DQGHYHQDGGLQJ reporting period Georgia’s top trading new destinations to and from Georgia. SDUWQHUVE\H[SRUWVZHUH5XVVLD airBaltic has resumed flights, as has PLOOLRQ $]HUEDLMDQ PLOOLRQ DQG $]HUEDLMDQ¶VORZFRVW%XWD$LUZD\V.D &KLQD PLOOLRQ ZKLOHWRSWUDGLQJ zakh carriers Air Astana and FlyArystan SDUWQHUVE\LPSRUWVZHUH7XUNH\ have also begun offering flights to PLOOLRQ &KLQD PLOOLRQ DQG &HQWUDO$VLDZKLOH+XQJDULDQORZFRVW 5XVVLD PLOOLRQ 2YHUDOO*HRU gia’s external trade turnover amounted to ELOOLRQLQ-DQXDU\)HEUXDU\ ZKLFKLVORZHUWKDQFRPSDUHGWR WKHVDPHSHULRGRIODVW\HDU7KHWUDGH GH¿FLWRI*HRUJLDLQ-DQXDU\)HEUXDU\ DPRXQWHGWRPLOOLRQZKLFK LVRIWRWDOWUDGHWXUQRYHU7KH YDOXHRIH[SRUWVGHFUHDVHGDQG WRWDOOHGPLOOLRQZKLOHLPSRUWV DOVRGHFUHDVHGDPRXQWLQJWR ELOOLRQ GEORGIAN CENTRAL BANK RECOGNIZED AS MOST TRANSPARENT CENTRAL BANK IN 2020 7KH1DWLRQDO%DQNRI*HRUJLDKDV won the transparency nomination at the Central Banking Awards, which 6 | Investor.ge APRIL-MAY 2021 recognizes the outstanding performance WHFKQLFDODFWLYLWLHV±*(/ WKH86 8NUDLQH and achievements of individuals and DQG¿QDQFLDODQGLQVXUDQFHDFWLYLWLHV DQG7XUNH\ PXFKRIZKLFKLV organizations within the central banking *(/ attributable to wire transfers and other community. ,Q4RIWKHDYHUDJHHDUQLQJV electronic means of remittance. 7KHWUDQVSDUHQF\QRPLQDWLRQLQ IRUZRPHQUHDFKHG*(/ZKLOH 2YHUDOOWKHYDVWPDMRULW\ RI cludes three components: education, PHQHDUQHGDQDYHUDJHRI*(/ all money transfers from abroad came success in targeting a full range of SHUPRQWK7KHDQQXDOJURZWKRIHDUQ IURPFRXQWULHV stakeholders, and communication across LQJVIRUZRPHQDPRXQWHGWR*(/ various platforms. ZKLOHIRUPHQLWGHFUHDVHGE\*(/ SAKURA 2020: GEORGIAN WINES “When the National Bank of Georgia WIN ONE SILVER, 13 GOLD unveiled its new financial education GEORGIA, EU CONSIDER HIGH- MEDALS IN JAPAN website, FinEdu, last year, it represented VOLTAGE TRANSMISSION LINE the latest step in a series of initiatives ALONG GEORGIA’S SEABED TO aimed at revolutionizing transparency at CONNECT GEORGIA-EU ENERGY the central bank. Many of these changes SYSTEMS IROORZHGWKHDSSRLQWPHQWRI.RED Georgia and the European Union *YHQHWDG]HDVJRYHUQRULQ0DUFK´ are discussing the possibility of laying &HQWUDO%DQNLQJZURWH,QUHFHQW\HDUV a high voltage transmission line along the transparency award has been granted Georgia’s Black Sea seabed to connect to the central banks of New Zealand, the Georgian and EU energy systems, &]HFKLD&DQDGD,UHODQG,VUDHODQG *HRUJLDQ(FRQRP\0LQLVWHU1DWLD7XU Sweden. QDYDDQQRXQFHGLQPLG0DUFK 7XUQDYDVDLGWKDWWKLVZDVRQHRIWKH HOW MUCH WERE GEORGIANS LVVXHVGLVFXVVHGDWWKHWK(8*HRUJLD An international wine competition EARNING IN Q4 2020? Association Committee meeting in MXGJHGH[FOXVLYHO\E\-DSDQHVH Brussels, and that the World Bank may female wine specialists has awarded EHUHDG\WR¿QDQFHDWHFKQLFDODQGHFR *HRUJLDQZLQHVZLWKRQHVLOYHUDQG nomic study for the project. gold medals this year, announced the *HRUJLDQ1DWLRQDO:LQH$JHQF\7KH MONEY TRANSFERS TO GEORGIA winning Georgian wine companies were: UP 17.5% IN FEBRUARY 2021 GWS Winery with four golds; Chateau *HRUJLDUHFHLYHGPLOOLRQ 0XNKUDQLZLWKWKUHHJROGV.LQG]PD IURPDEURDGLQ)HEUXDU\ZKLFKLV rauli Corporation Winery with two golds; PRUHWKDQWKHDPRXQWUHFHLYHGLQ Mtevino with two golds; Schuchmann February 2020, says the National Bank Wines with one gold; Vaziani Company Average monthly nominal earnings of Georgia. with one gold; and Pavillion Wines with LQ*HRUJLDGHFUHDVHGE\*(/ ,WDO\ PLOOLRQ *UHHFH one silver. LQWKHIRXUWKTXDUWHU 4 RIDV PLOOLRQ DQG5XVVLD 0RUHWKDQZLQHYDULHWLHV compared to the same period of the pre million) were the largest sources of re IURPFRXQWULHVZHUHUHSUHVHQWHGDW YLRXV\HDUDQGDPRXQWHGWR*(/ PLWWDQFHVLQ)HEUXDU\ the eighth Sakura Japan Women’s Wine UHSRUWVWKH1DWLRQDO6WDWLVWLFV2I¿FHRI (8FRXQWULHVDFFRXQWHGIRURI $ZDUGV Georgia (Geostat). DOOUHPLWWDQFHVWR*HRUJLDDQGRIWKH 7KHKLJKHVWPRQWKO\HDUQLQJVZHUH JURZWKLQLQÀRZYROXPH,QÀRZVZHUH 2020 DATA: FOREIGN DIRECT REVHUYHGLQWKHIROORZLQJ¿HOGVLQIRU GRZQIURP5XVVLD WKH8. INVESTMENTS DOWN 52.9% IN PDWLRQDQGFRPPXQLFDWLRQ±*(/ DQG3RODQG &RXQWULHV GEORGIA \\ FRQVWUXFWLRQ±*(/ UHSUHVHQWLQJVLJQL¿FDQWVRXUFHVRILQ )RUHLJQGLUHFWLQYHVWPHQWV )', LQ SURIHVVLRQDOVFLHQWLILFDQG ÀRZVWKDWSLFNHGXSLQ)HEUXDU\LQFOXGHG *HRUJLDDPRXQWHGWRPLOOLRQLQ APRIL-MAY 2021 Investor.ge | 7 GRZQIURP*HRVWDW provement in the government spending cumulation will support the further reports. VFRUH*HRUJLDLVUDQNHGWKDPRQJ development of the following sectors 7UDQVIHUVRIRZQHUVKLSIURPQRQUHV countries in the Europe region, and its in Georgia: textiles, furniture manufac ident to resident units in several compa overall score is above the regional and turing, construction products, plastic nies is considered to be the main reason ZRUOGDYHUDJHV´WKHLQGH[UHSRUWUHDGV products, steel products and paper and IRUWKHGHFOLQHRI)',ZKLFKUHGXFHGWKH mentioning that the Georgian economy cardboard. value of foreign direct investments by suffered “only a small setback this year ³,QJHQHUDOWKHLQWURGXFWLRQRIGLDJR PLOOLRQ7KHWRSWKUHHFRXQWULHV in its long progression to the upper ranks nal cumulation will increase the range of that invested the most in Georgia in 2020 RIWKHPRVWO\IUHHFDWHJRU\´ produce that can be exported to the EU, ZHUHWKH8QLWHG.LQJGRPZLWK ³0XOWL\HDUUHIRUPVWRUHGXFHFRU as well as it will encourage investments PLOOLRQ WKH1HWKHUODQGVZLWK ruption, cut regulation, and simplify IURP7XUNH\LQWKH*HRUJLDQHFRQRP\ PLOOLRQ DQG7XUNH\ZLWK taxes have led to upward movement in all will help to establish joint companies PLOOLRQ aspects of economic freedom. Achieving DQGFUHDWHQHZMREV´*HRUJLDQ(FRQRP\ 7KHODUJHVWVKDUHRI)',VZDVUHJ DWRSUDQNLQJKRZHYHUZLOOUHTXLUH 0LQLVWHU1DWLD7XUQDYDVDLG LVWHUHGLQWKH¿QDQFLDOVHFWRUUHDFKLQJ even more intensive efforts to improve Diagonal cumulation will not ap PLOOLRQLQWKHPLQLQJVHF perceptions of government integrity ply to agricultural produce, as customs WRUZDVWKHVHFRQGZLWKPLOOLRQ DQGMXGLFLDOHIIHFWLYHQHVV´WKHUHSRUW DJUHHPHQWVEHWZHHQWKH(8DQG7XUNH\ which was followed by the real estate continues. does not cover agricultural produce. VHFWRUZLWKPLOOLRQ Georgia scored highest in fiscal KHDOWK WD[EXUGHQ DQGWUDGH UNEMPLOYMENT INCREASED BY GEORGIA’S NEW RULES ON IUHHGRP ,WKDGLWVORZHVWVFRUHV 3.8% TO 20.4% IN GEORGIA IN INTERNATIONAL TRAVEL in property rights (66.9), government Q4 2020 *HRUJLDHDVHGHQWUDQFHUHTXLUHPHQWV LQWHJULW\ DQGMXGLFLDOHIIHFWLYH ,QWKHIRXUWKTXDUWHURIWKH for international travellers as of February QHVV XQHPSOR\PHQWUDWHLQFUHDVHGE\ )RUHLJQWUDYHOHUVPXVWQRZSUHVHQWD as compared to the same period of last FHUWL¿FDWHSURYLQJWKH\KDYHXQGHUJRQH GEORGIAN PRODUCTS WITH \HDUULVLQJWRVKRZGDWDIURP DFRPSOHWHFRXUVHRI&RYLGYDF TURKISH INPUTS TO BE EXPORTED WKH1DWLRQDO6WDWLVWLFV2I¿FHRI*HRUJLD