Explainer: Remembering Bob Walsh Georgia’s Hepatitis C the “Larization” Plan Elimination Program 2017

Investor.geA Magazine Of The American Chamber Of Commerce In Georgia ISSUE 55 f e b.-mar.

One Step Closer to Europe february-march/2017 • Investor.ge | 3 Investor.ge content 6 Investment News

8 Remembering Bob Walsh bob Walsh (1940-2017) was a friend to Georgia, a tireless advocate who spent three decades helping Georgians.

12 Georgia’s Hepatitis C Elimination Program: A Search For a Global Solution Georgia, the United States’ Center for Disease Control and Prevention (CDC) and pharmaceutical company Gilead have teamed up to create a pioneering program that could become an international example of how to eliminate Hepatitis C, one country at a time.

15 15 The “Breaking of the Wall” - EU Grants Visa Waiver With a vote of 553 for, 66 against, the European Parliament agreed to waive visa requirements for Georgian citizens traveling to the Schengen Area. Investor.ge spoke with State Minister for EU Integration Viktor Dolidze and political pundits about what this means for Georgia going forward.

18 Georgian Ski Resorts 2.0 the government is investing in major upgrades at many of Georgia’s ski resorts. Investor.ge looks at what is planned for Bakuriani and Gudauri resorts.

20 Record Numbers of Skiers Drive Government 24 Investment four government bodies agreed to invest tens of millions of lari in ski infrastructure in a 2015 agreement. Investor. ge spoke with officials about how the money has been spent.

21 Skiing in Georgia: Advice From Abroad Georgia is spending millions to develop its ski resorts, but Bruce Packard, President of the Alpine Ski Club, notes the country can learn the value of preserving what it already has from the successes of other, developed, ski destinations. 30 24 Explainer: The Government’s Larization Plan 26 Georgian Lari Depreciation in a Regional Context

30 Shopping Sololaki come for the architecture, stay for the food! Central, charming, cobbled and crumbling, Sololaki is a haven for Tbilisi tourists and a hotbed of good dining.

...... 34 34 NEWS

4 | Investor.ge • february-march/2017 february-march/2017 • Investor.ge | 5 Chinese Company Buys 75 Percent of Free Trade Investment Zone The Georgian government and a Chinese company have signed a memorandum of understanding for the purchase of 75 percent of the News ownership shares of the Free Trade Zone in Poti, Georgia, agenda. Investor.ge provides ge reported on 16 January. The company, CEFC China Energy Company Limited, is a lead- a brief update ing international company listed on the Fortune Global 500 list, gov. on investments ge, the Georgian government’s official website, reported. and changes in The deal is part of China’s One Belt, One Road project, the government policy website said, adding the memorandum was signed by Economy Min- that could impact the ister Giorgi Gakharia and Zang Jianjun, the CEO of China Energy business environment. Company Limited. The information in The agreement is part of an effort “to encourage the realization this issue was taken of the potential of the New Silk Road.” CEFC China Energy Company Limited plans to develop the from agenda.ge, Poti Free Industrial Zone by “sharing the best practices of China’s a government- developed industrial zones and attracting investments in the devel- supported website, opment of processing, modern technology, warehouse management, and other sources. and logistics,” the report said.

6 | Investor.ge • february-march/2017 EU visa waiver for Georgia National Bank Launches Loan Calculator The European Parliament voted to waive visa requirements The National Bank of Georgia has created a calculator for Georgian citizens travling to the Schengen area. The new to help people and businesses compare loan terms in lari, rules are slated to go into effect by the end of March and will the national currency, and US dollars, agenda.ge reported on simplify traveling for business and tourism. See page 15 for a February 3. fuller report. The initiative is an effort to support the government’s lariza- tion program, which allows those who took out bank loans in Turkmen Oil Returns to Georgia dollars before January 2015 – and put up real estate as collateral Georgia and Turkmenistan have signed a three-year deal – to convert their dollar loan to lari, the report said. for the transportation of Turkmen oil via Georgia, agenda.ge The calculator is available on the National Bank of Georgia reported on January 13. The $22-million agreement calls for website, www.nbg.gov.ge. 1.5 million tons of oil to be transported through Georgia every year, according to the report. Bank of Georgia Acquires ProCredit Bank’s SME portfolio New Airport Opens in Racha Bank of Georgia has purchased ProCredit Bank Georgia’s Prime Minister Giorgi Kvirikashvili opened Georgia’s new- small and medium sized segments portfolio, agenda.ge reported est airport in Ambrolauri, Racha, in western Georgia, agenda. on February 6. The report noted the deal was signed in Decem- ge reported on January 14. ber 2016. The agreement will add a net value of 120 million lari (about $45 million) in loans to Bank of Georgia’s retail banking External Trade Up 21 percent in 2016 loan portfolio, according to agenda.ge. Georgia traded goods worth $11.9 billion in 2016, up 21 percent from the previous year, according to official statistics. Four Million Bottles of Georgian Wine to 26 The value of exports dropped two percent and imports increased Countries 28 percent, the report stated. Georgia exported 4.3 million bottles of Georgian wine to 26 countries in January, agenda.ge reported, citing official Gulf Air to Launch New Tbilisi Flights statistics. Sales totaled $8.8 million, the report said. Bahrain’s Gulf Air has announced new direct flights to January sales were a 141 percent increase in revenue Tbilisi, agenda.ge reported on 21 January, citing the air com- compared to the same month in 2016; the volume of exports pany’s statement. increased by 184 percent, according to the Georgian National The new, three-times weekly flights will start in the summer. Wine Agency. The top five countries that imported Georgian wine in Janu- Over Six Million Tourists in 2016 ary 2017 were: Russia – 2,861,471 bottles;Ukraine – 402,858 Over six million foreign visitors came to Georgia in 2016, bottles; China – 372,440 bottles; Poland – 156,302 bottles; and according to official statistics. Over two million people spent Kazakhstan – 106,284 bottles. Exports also increased to 11 other more than 24 hours in the country, a 19 percent increase from countries, according to the report: China – 725 percent (372,440 2015. The highest number of visitors came from Azerbaijan bottles); Estonia – 250 percent (48,432 bottles); Russia – 198 -1,523,075, a 9.3 percent increase, followed by Armenia, Tur- percent (2,861,471 bottles); Kyrgyzstan – 186 percent (38,700 key, Russia and Ukraine. bottles); Kazakhstan – 164 percent (106,284 bottles); United The number of visitors from European countries also in- Kingdom – 113 percent (14,328 bottles); Ukraine – 102 percent creased in 2016: according to official statistics, there were 24 (402,858 bottles); United States – 100 percent (32,940 bottles); percent more visitors from Latvia, 16 percent more from Lithu- Latvia – 84 percent (61,128 bottles); Poland – 37 percent ania, 15 percent more from Czech Republic, 12 percent more (156,302 bottles); and Lithuania – 21 percent (54,228 bottles). from Bulgaria and 11 percent more from Germany. Georgian brandy exports were also up by 59 percent, com- There was exponential growth in the number of tourists from pared to the same period last year. Agenda.ge reported that several other countries, including Iran, India, Saudi Arabia, Georgia has sold $21.7 million worth of alcoholic beverages Philippines, Oman and China, agenda.ge reported, citing the in January 2017, including wine, brandy, chacha and others – a Georgian National Tourism Agency. 229 percent y/y increase.

february-march/2017 • Investor.ge | 7 ian projects, like arranging life-saving operations and sponsoring students so Remembering they could study in the U.S.. Kristin Hayden represented Walsh in Tbilisi from 1999 to 2001. She remem- bers him as a visionary who sought to Bob Walsh “bring further investment and support to Georgia.” Bob Walsh (1940-2017) was a great friend to Georgia, “Bob was a true visonary who taught a tireless advocate who spent three decades helping me that ordinary citizens can create ex- Georgians in immeasurable ways. He died on January traordinary things. He always believed in 23 after contracting a respiratory illness during a trip his dreams and always went after them. to Tbilisi, where he had been again working on behalf He was bold and visonary and ahead of of georgia. Investor.ge spoke with a few of his close his time. He loved Georgia and wanted acquaintances and business partners about the man to share that passion with everyone he and his good works in Georgia. met and bring further investments and support to Georgia,” she told Investor.ge. according to media reports. “Bob’s vision helped re-build Geor- In addition, he partnered with Rus- gia and his humanitarian heart supported sian entrepreneurs to help fund the first many Georgians over the years.” commercial space flight in history, in 1991, the Seattle Times reported. “Georgia’s Great Friend” Prime Minister Giorgi Kvirikashvili A natural promoter honored Walsh for his support for Geor- Walsh was a natural promoter, ac- gia in a statement following Walsh’s cording to people who knew him best. death on January 23. After his first trip to Tbilisi, he returned, “I was extremely saddened to learn again and again, helping Georgians find about the passing of Georgia’s great much-needed investments in the early friend, Bob Walsh, who has been a great years of independence, as well as help- supporter of this country, which he loved ing those who needed medical care or so dearly. He will be always remembered ob Walsh first came to the Soviet education in the U.S.. and missed here. Bob was among the pio- Union in the 1980s, on a trip Steve Rudman, who wrote “Who the neers who took interest in Georgia and to Moscow as one of the four Hell is Bob” about his work, said Walsh invested themselves completely in the B country’s development. He even spent organizers of the Goodwill Games. “immediately fell in love with Georgia” when he arrived in the country in 1991, the last days of his life in Georgia. As Building Peace with the despite the ongoing civil war and unrest. one of the biggest supporters of Georgia Soviet Union “In the ensuing years, he led more in the U.S., Bob Walsh utilized his influ- Walsh started working in the region than 60 investor groups to Georgia to ence at many levels in Washington and before the end of the Soviet Union. introduce them to the economic possi- beyond to further tie the strong bonds of He directed the first Western aid to the bilities in the post-Soviet republic. Ulti- partnership between our two countries,” people of Armenia following the devas- mately, Bob and various investors wound Kvirikashvili said. tating 1988 earthquake, and negotiated up collaborating with Georgian officials “It was due to this very devotion and with USSR Minister of Sports Marat on a variety of projects, including real outstanding contribution to my country Gramov and Deputy Minister Alexander estate development, dairy processing and that led to him being awarded Georgia’s Kozlovsky to permit Lynne Cox’s his- pharmaceuticals,” he said, adding that honorary citizenship. In this time of toric 1987 swim across the Bering Strait, Walsh was also involved in humanitar- mourning and sorrow, our thoughts and

8 | Investor.ge • february-march/2017 february-march/2017 • Investor.ge | 9 prayers are with Bob’s bereaved family for Georgian businesses. the development of the Marriott Tbilisi and loved ones.” “Bob was one of the pioneers of Hotel, Courtyard by Marriott Hotel, American business in Georgia, one who Mtatsminda restaurant complex an Sante A generous man brought millions of dollars of invest- factory.” Walsh’s efforts to help Georgia were ments to Georgia. He also was one of Tavadze noted that Walsh was instru- also praised by Gary Koeb. He said the most efficient promoters of Georgia mental in introducing Georgia to the rest Walsh helped “at a time with the country in the United States, bringing journalists of the world. He recalled a favorite story was struggling through its most difficult and opinion makers to Georgia for almost of Walsh’s about trying to educate U.S. times.” 30 years, and advocating for Georgia in businesspeople about opportunities in “These activities did not bring him the USA,” Tsereteli said in an e-mail the country. great wealth. But, he continued to heed interview. “This was one of his favorites: Bob “Bob was a very generous and his partner were at a meeting with “Bob was one of the pioneers man: he saved the lives of many potential U.S. investors talking about Georgians, by bringing them to Georgia in one of the U.S. states. While of American business in Georgia, the best hospitals in the Seattle discussing recent developments he men- area; he also organized funding tioned the civil war and his humanitarian one who brought millions for [many Georgians’] education. efforts saying that “I even was there of dollars of investments to Bob had an unconditional love helping them during the civil war.” A for Georgia. confused man in the audience astonish- Georgia.” He said many times, in pub- ingly looked at him asking how old he lic and in private, that people in was, all the time believing that Bob was the call every time a Georgian minister Georgia are unlike anywhere else: warm, selling a business opportunity in Atlanta, or businessman called upon him for in- hospitable, loving, and that is why he Georgia,” Tavadze said. troductions or other assistance. I’m proud never stopped coming to Georgia since “This real-life story speaks for itself to have known him and to have benefited his first visit in the ‘80s. Bob was an and is a good illustration of what tremen- from his kindness and friendship. He was incredible man and he will be missed by dous efforts were needed at the time to a very generous man and always ready to many people in Georgia and the United promote Georgia and put it on the global activate his network to help a friend. He States.” map for investments.” looked for solutions and creative ways Biographer Steve Rudman said “I to solve problems. He never accepted Making the Impossible think I would sum up Bob’s Georgian the impossible,” Koeb said in an e-mail Possible interview. GMT Group CEO George He added that Walsh was a hu- Tavadze said Walsh was a “pow- “During the time of despair and manitarian and arranged “for dozens of erful and tireless promoter” who ravages of the early 1990s, he Georgian children to receive medical “made a real difference in the assistance in the U.S., and not only raised lives of the Georgian people.” was instrumental in restoring funding for these cases, but personally “During the time of despair our faith .” facilitated their medical, transportation and ravages of the early 1990s, and lodging arrangements.” he was instrumental in restoring our faith and hope that together we could legacy this way: Largely what the West “Pioneer of American build successful businesses to help make knows about Georgia, and for every Business in Georgia” this country an attractive destination and Western dollar invested in Georgia today, Mamuka Tsereteli, the President of achieve greater prosperity for its people,” is a direct result of Bob’s enthusiastic the America-Georgia Business Council, he said in an e-mail interview. promotion of the country here in the told Investor.ge that Walsh was a gen- “Through his efforts and facilitation United States for many years. He never erous man and a gifted promoter who one of the first major U.S. investments missed a chance to give Georgia a ringing brought millions of dollars of investment was brought to Georgia, resulting in endorsement in our press/media.”

10 | Investor.ge • february-march/2017 BLB reaching new highs as an outside counsel of Microsoft Corporation in Georgia

It has been already two years since Microsoft developing IP enforcement policy and strategies. Corporation engaged BLB as its outside legal As a follow up to its international recognition, BLB counsel in Georgia. In an unprecedented move, in has already conducted live training course in Vilnius, Lithuania and webinar for colleagues acting in different jurisdictions in Europe and Asia. BLB has also shared its successful Georgian experience with judges in Albania, which has only recently enacted IP laws and tools for civil enforcement. “We are proud to receive this marvelous recognition for the enforcement campaign, which contributed to the decrease of software piracy rate in Georgia. The amazing collaboration achieved by our team enabled us to help our client, Microsoft Corporation, reach a 100% success rate in IP few month from BLB’s selection, BLB undertook enforcement. number of enforcement actions on behalf of Please, mark the Microsoft Corporation in Georgia and achieved occasion, BLB 100% success rate resulted in decrease of software goes international piracy level in Georgia. by sharing its In recognition of valuable contributions to successful enforcement of Microsoft’s IP rights and the very experience with first and most successful campaign for protection of its colleagues and Microsoft’s IP rights in Georgia through civil legal and actions, Microsoft Corporation granted BLB the administrative authorities acting in various Award for Excellence. jurisdictions in European and Asian countries”, says BLB’s Managing Partner, Kakha Sharabidze. BLB, the only law firm to win the prize in the category of Star Achievement, was chosen to share Having this valuable experience under its portfolio, its experience with its international colleagues BLB remains a key player on the Georgian legal representing Microsoft Corporation globally as well market ready and set to offer its services to the local as judicial and administrative authorities and foreign investors.

ABOUT: for more than 20 years, Business Legal Bureau (BLB) has been one of the most widely recognized legal names in Georgia making it the oldest local law firm specializing in all areas of business law. Among the clients of BLB are major local and international companies, financial institutions and wealthy individual investors involved in large cross-border transactions and investment projects. Marjanishvili Street N5/18 0102 Tbilisi, Georgia +995 32 2999755 +995 32 2995797 [email protected] www.blb.ge Georgia’s Hepatitis C Elimination Program: A Search For A Global Solution

How We’re Different No hassle. No stress. See a doctor when and where you want, on your terms.

Photo by George Surguladze Georgia, the United States’ Center for Disease Control and Prevention (CDC) and pharmaceutical company Gilead have teamed up to create a Doctors you’ll recommend Treating you, differently International pioneering program that could European and US physicians Home or Office Visits Direct billing to most insurance groups Preventative and Acute Care More quality time with your doctor Certified Visa centers become an international example All English-speaking staff 24/7 phone or email consults Modern and accessible clinics of how to eliminate Hepatitis C, one country at a time.

Kyiv: +38 (044) 490 76 00 Tbilisi: +99 (532) 250 00 20 / 11 D. Arakishvili Street, Vake 12 | Investor.ge • february-march/2017 Lviv: +38 (032) 253 70 00 Batumi: +99 (555) 548 41 46 / 114 Gorgiladze Street Odessa: +38 (048) 701 40 00 www.amcenters.com Inge Snip the global disease burden, as it causes Georgia, which negotiated free medi- “chronic, life-long infections, resulting cation from pharmaceutical company very morning he woke up tired. in progressive liver damage that leads to Gilead, is trying to tackle the infection Not just tired, but exhausted. “I cirrhosis and hepatocellular carcinoma,” rate in the country. The five-year strate- Eused to love going out to meet a report by the World Health Organiza- gic plan, which started in 2015, aims to with friends,” says Levan Ekseulidze, 51, tion states. With a high level of hepatitis- eliminate Hepatitis C countrywide and while sitting at a colorful din- serve as a worldwide example ing table surrounded by exotic by doing so. plants and Georgian paintings. “A new revolutionary program in Ekseulidze took part in the “I was quite active, but I did Georgia, which negotiated free program and was cured after not like anything anymore. I just three months of treatment. did not want to go anywhere,” medication from pharmaceutical company “The change in my life has the former dentist says, as he been major,” Ekseulidze ex- explains to Investor.ge about the Gilead, is trying to tackle the infection plains, whom was diagnosed years he had Hepatitis C, a liver rate in the country.” in the early 2000s, but could disease affecting an estimated not afford the medication to 6.7% of Georgia’s population, treat it. one of the highest rates in the world. related mortality worldwide, the easily Gregg Alton, Executive Vice Presi- Fatigue and depression are some of the preventable infection is very costly to dent of Corporate and Medical Affairs few symptoms in the later stages of the cure; one treatment round costs about at Gilead Sciences, tells Investor.ge that viral infection. $85,000 per person. providing Georgia with free medication Hepatitis C is a major contributor to But a new revolutionary program in was an easy decision: it seemed the per-

advertisement How We’re Different No hassle. No stress. See a doctor when and where you want, on your terms.

Doctors you’ll recommend Treating you, differently International European and US physicians Home or Office Visits Direct billing to most insurance groups Preventative and Acute Care More quality time with your doctor Certified Visa centers All English-speaking staff 24/7 phone or email consults Modern and accessible clinics

Kyiv: +38 (044) 490 76 00 Tbilisi: +99 (532) 250 00 20 / 11 D. Arakishvili Street, Vake Lviv: +38 (032) 253 70 00 Batumi: +99 (555) 548 41 46 / 114 Gorgiladze Street Odessa: +38 (048) 701 40 00 www.amcenters.com laws on drug abuse: the other 50% of the participants at their lab were infected through unsafe and shared needles. This concern is widely held. Paata Sabelashvili, who has been advocating for the decriminalization of drug use for several years, says the program is falling short on recognizing the effects of law enforcement aiming to imprison anyone using drugs. “We want to have patients to be able to get medication at the harm reduction centers, or mobile ambulances. But patients have been harassed by the police; they searched the bus twice, ex- pecting to find drugs, scaring away the people who need the Hepatitis C program Photo by George Surguladze the most.” fect place to do a test case to show other nificant healthcare burden for Georgia,” But both Butsashvili and Sabelashvili countries that Hepatitis C could be cured Alton tells Investor.ge, and who says believe the Ministry of Health is slowly countrywide with their new medication. Gilead will not give the medication for recognizing it needs to have a stronger “You have a manageable population free in other countries, but sees it as an position in the drug decriminalization in terms of a study size, and you have example to show other countries that the discussion to ensure the success of the a high prevalence of the disease. It re- investment in the medication is worth it. program. Alton notes that Gilead is work- ally struck me as a great opportunity “And we are talking with possible donors ing closely with the government to advise for us to do a demonstration project of who could support governments in elimi- them how to deal with this situation. “At how you can actually, in a poor country, nating Hepatitis C as well.” the advisory board that meets several eliminate Hepatitis C if you bring in all But there are some concerns from ex- times a year in Georgia, we have experts the elements of screening, treatment, of perts when it comes to the sustainability from all over the world, and we also building the clinics, of reducing stigma, of the project. have representatives from the drug-using and on working on prevention. And that Maia Butsashvili, infectious disease population,” he says. For Ekseulidze, seemed to be something [govern- who got infected in the 1990s while ment leaders] were very committed But there are some concerns from injecting himself with “all kinds to do,” Alton says. of drugs,” says two of his friends Currently, over 8,500 people experts when it comes to the who were in the program tested (of those approximately 285,000 positive a few months after they Georgians with Hepatitis C) have sustainability of the project. were cured. He, however, blames been treated, of which 90% have it on the large amounts of alcohol been cured. The aim of the program is to specialist and HRU director at Neolab, they consumed afterwards. “You need a have 90% of the patients infected with one of the first participating medical lab- healthy diet after you are cured, but we Hepatitis C virus screened and 95% of oratories, says “the reinfection rate might Georgians don’t always believe wine and the patients treated and cured after four be quite high if the government does not fatty foods are bad for us.” years. take enough measures in the health sec- It is obvious there are a lot of hurdles If the program is successful, it could tor to prevent Hepatitis C infections.” to overcome to achieve the goal of elimi- have major implications for the elimina- About 50% of Neolab’s participants in nating Hepatitis C, but the program is tion of the disease worldwide. the program were infected through un- making some important and crucial steps “I am hopeful that in five to ten years safe procedures in the healthcare system. necessary to defeat the disease, with a the infection will no longer be a sig- Butsashvili is also worried about harsh potential global impact.

14 | Investor.ge • february-march/2017 The city also hosted a free concert in the center of town to celebrate the vote. “breaking of “Congratulations to all with this day, congratulations to the whole Georgia!!!,” one Tbilisian told Investor.ge. “I would like to express my gratitude the wall” -Eu to all the people who have contributed to this process...Many people dedicated a lot of work and power behind the scenes. Do you know what makes me happy? In place of the connection with the Soviet grants Visa Union, the saying ‘Eh, there was a time when we could fly to Moscow for 24 rubles,’, now we can say “We started travelling to Europe for 25 lari without Waiver visas.’ We started the return to a large European family. This day is ours!” investor.ge spoke with state minister “europeanization of Georgians” for EU integration Viktor dolidze and Tbilisi State University Professor political pundits about what this means Kornely Kachachia told Investor.ge that for Georgia going forward the biggest benefit from the waiver “is the opportunity Georgian citizens might have after visa-free travel, as it could enhance the Europeanization of the country by exposing ordinary Georgians Lika Jorjoliani “This day is ours!” to European culture, politics, business The reaction in Tbilisi was jubilant. ethics, etc, as well as potentially, it could fter a historic vote in Brussels City landmarks, like the TV antenna also strengthen political and economic on February 2, Georgians are and the Peace Bridge over the Mtkvari links,” he said. Anow looking forward to closer River, were bathed in blue and yellow “However, I’m afraid it will have an relations with the EU. lights, in honor of the EU flag. effect only in the long-term.”

“historic day” Georgian Prime Minister Giorgi Georgia’s EU Visa-Free Regime Kvirikashvili said the EU vote was “historic.” Citizens of Georgia who have a biometric passport will have the opportunity to President Giorgi Margvelashvili also travel without a visa for short visits (90 days of stay within six months) in all 26 praised the EU vote, saying it will “reap country members of the Schengen Agreement: Belgium, Italy, Denmark, France, results” for both Georgia and Europe. Portugal, Sweden, Germany, Spain, Finland, Luxemburg, Greece, Iceland, Neth- MP Giorgi Kandelaki of the opposi- erlands, Austria, Norway, the Czech Republic, Estonia, Lithuania, Latvia, Malta, tion European Georgia called the visa Poland, Slovakia, Slovenia, Hungary, Switzerland, and Lichtenstein. waiver a “breakthrough” and a “benefit In addition, the visa-free regime will apply to four future member countries of that will change the lives and work of the Schengen Agreement: Bulgaria, Cyprus, Romania, and Croatia. many of our compatriots, many young Citizens of Georgia desiring to travel to Ireland and Great Britain will need to people, students and businessmen.” receive a visa for these two EU member states..

february-march/2017 • Investor.ge | 15 Georgia’s Visa- Vano Chkhikvadze, a specialist on A Four-Year Process European integration issues who works The path to achieve visa-free status Liberalization for Open Society Georgia, told Investor. started in 2013, noted Chkhikvadze. ge that the visa waiver is important both “Earlier we expected that Georgia with the EU politically and economically. could receive a visa regime in 2016. “It represents a message,breaking However, the main obstacle was bun- To minimize the risk of being pro- of the wall that was preventing contact. dling the question of Georgia’s [visa- hibited from entering the territory of the Of course, these restrictions only had regime status] with other countries, from EU by European Border Police, citizens a partial impact, but they affected the which there was a high risk of an in- of Georgia, who very soon will be able development of relations. And, in order creased number of asylum seekers,” he to travel without a visa in Europe, must to completely break down the wall, told Investor.ge. follow the following recommendations Georgia must become a member of the In particular, he noted the cases of to use the visa-free regime: EU,” he said. Turkey and Ukraine. “From its side, Georgia fulfilled all One must have have a distinct Final stage its obligations according to the Action aim of one’s visit (a business trip, The State Minister of the Issues into Plan on Visa Liberalization and received tourism, visit to friends or relatives, European and Euro Atlantic Structures, a positive report as being ready in De- education for up to 90 days) and be Viktor Dolidze, told Investor.ge that cember 2015,” he said. ready, upon the first demand of the Georgia is “in the final stage” to receive He added that the EU’s decision Border Police, to inform them of the visa-free travel to the EU. to improve the EU’s mechanism for traveler’s aim of arrival, planned “I don’t want to speak about terms suspending the visa-free regime, which travel route, and approximate term and dates, but I expect of stay; completion of the process “The most important thing that people A traveler should carry all docu- in early spring, in March ments confirming the aim of his/ or April,” he said, add- should know is that this doesn’t her aim trip, which may be required ing that the government enable them to work in Europe,” by the Border Police: invitation, air is planning a “broad in- ticket in both directions, hotel book- formational campaign” Chkhikvadze said. ing reservation number, a copy of the - designed to run across ID card of the person who invited the all major media outlets traveler and the telephone number and on public transport and in public was caused by the increasing number of and contact information of the invit- areas - to educate Georgians about what refugees and migrants over the past few ing party, and medical insurance; the new status means. years, also played a role. “In addition, we plan to conduct A traveler must possess a biometric active informational campaigns in the No License to Work passport valid for a period of not less regions. I personally plan to visit all the “The most important thing that than six months; regions of Georgia. people should know is that this doesn’t We will conduct meetings with the The lawful period for staying in enable them to work in Europe,” Chkh- population by segments. For example, the EU without a visa, consists of ikvadze said. we will devote one day to meeting stu- 90 days per six months; “They may receive medical treat- dents; the next day - with pensioners, ment, education, and travel in Europe. The possible penalty for remaining and then with members of the business But they can’t work there. PEOPLE WHO KNOW, in the EU upon the expiration of the community. Opening of borders enables us to indicated lawful term of stay is a fine We will focus our attention on the travel in Europe and to understand what of of 3000 Euros and being banned regions occupied by national minorities, the Europe is. KNOW BDO from entering the Schengen zone for and the high mountainous population,” As for the EU, this makes it more five years. he said. popular.”

16 | Investor.ge • february-march/2017 WWW.BDO.GE Moldova’s Experience to analyze the situation. number of spheres connected with issu- “The visa-free regime will decrease The visa-free regime is a very serious ing secure documents, managing borders the cost and level of the existing bu- element for citizens residing in Abkhazia and migration, mobility and asylym, reaucracy. as well. and other issues, including fighting cor- Liberalization of the visa regime It means that after receiving a bio- ruption and organized crime, protecting will provide citizens of Georgia with metric passport from the Ministry of human rights and minority rights, and significant advantages and it creates new Justice of Georgia, our citizens living in eliminating discrimination. opportunities for business. Abkhazia may automatically travel in the In December 2015, the European This bilateral obligation is a large countries of the EU. Commission submitted a report stating step forward from a political point of that Georgia had fulfilled all of the terms view, as well as for Georgia’s economic Background for the liberalization of the country’s visa integration with the EU,” Dolidze said. The EU started a dialogue about the regime with the EU. Dolidze noted that in Moldova, liberalization of the visa regime with Georgia expected that the EU would which was granted visa-free status in Georgia in 2012. implement a visa-free regime in the 2014, the status has encouraged residents In February of 2013, the European summer of 2016, but the decision was of breakaway region of Transnistria to Commission presented an Action Plan postponed in June. get Moldovan passports. “The experi- for the liberalization of the visa regime Georgia entered into an Association ence of Moldova gives us the possibility with Georgia. This plan combined a Agreement with the EU in July 2016.

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WWW.BDO.GE Georgian Ski Resorts 2.0

18 | Investor.ge • february-march/2017 Investor.ge explores the investments the government is making in the country’s ski resorts, including Bakuriani resort. Photo courtesy of snow.ge website.

february-march/2017 • Investor.ge | 19 Under the terms of the agreement, the government promised Record Numbers of to invest 48 million lari, financing the construction of ski lifts in Kokhta, a mountain in Bakuriani, and Mitarbi, while the Skiers Drive Government Georgian Development and Reconstruction Company signed on to spend an additional 70 million lari for real estate develop- Investment ment within the project. Sandro Onoprishvili, head of the Ministry of Economy’s Four government bodies agreed Mountain Resorts Development Company, told Investor.ge the to invest tens of millions of lari government has already spent 48 million lari purchasing and in ski infrastructure in a 2015 installing the ski lifts. agreement. Investor.ge spoke with “In total, we installed five ski lifts, three in Mitarbi and two officials about how the money on Kokhta, covering eight kilometers of ski lines. Currently we has been spent. are focused developing infrastructure in the village of Mitarbi, which is 10 km from Ba- kuriani. The government Sandro Onoprishvili, Nino Bakradze took on the responsibility to finalize the roads and head of the Ministry 2015 deal called for major investment in one existing other infrastructure lead- of Economy’s ski resort, Bakuriani, as well as the development of ing to apartments and a Mountain Resorts AMitarbi, a nearby resort. hotel by the end of 2017,” said Onoprishvili. Development Company, advertisement A private company ,New Mitarbi LTD, one told Investor.ge of the signatories to the the government has memorandum, hired French specialists to already spent 48 make a general plan for million lari purchasing development of Bakuriani and the surrounding area. and installing the ski “The company has started lifts. building a hotel and apart- ments in Bakuriani and the village of Mitarbi,” the company’s marketing manager, Salome Lekishvili, told Investor.ge. She added that more than 600 apartments and a hotel com- plex will be built in the first stage of the project and “completely new infrastructure will be ready” for guests by the end of 2017. “We already spent 10 million GEL on this area,” Lekishvili said, noting that the company is obligated to spend 100 million lari on the construction of hotels and apartments in Bakuriani and Mitarbi by the end of 2019.

Beyond the memorandum Other government-financed projects include a Mountain Resorts Development Company plans to development biathlon infrastructure in Bakuriani for public use, not just for training athletes.

20 | Investor.ge • february-march/2017 A ski jump is also planned. Both proj- Bruce Packard ects are slated to be completed in 2018 Skiing in and the initial cost will be 10 million lari, ne of Georgia’s successes over Onoprishvili said. the last few years has been the There are also plans to build ice rinks, Georgia: Ogrowth in tourism. In the first an ice hockey arena, a modern cinema 11 months of 2016, government figures and a bowling alley in Bakuriani. show that total international arrivals Advice From were up 8% year-over-year to 5.6 mil- Gudauri - the most popular lion people, while the number of tourists ski resort of Georgia Abroad increased 19.3% year-over-year to 2.5 There are also government plans for million people. Gudauri, Georgia’s most popular ski Georgia is A key part of this has been the devel- resort. spending millions opment of the trekking and ski industry. Kozen, a Canadian company, has A recent ski lift in Mestia was followed finished working on the general develop- to develop its ski by a six-man “poma” chairlift on the ment plan for Gudauri, a scheme for the resorts, but Bruce slopes of Mount Tetnuldi in Svaneti. future of the resort that fits its current Packard, President According to the state budget, over the environment. next two years, 111 million GEL is to be Onoprishvili noted the importance of the Alpine Ski invested in Georgian ski resorts. of the plan, which is intended to reduce Club, notes the When I visited Mestia a few years the chaotic urbanization of the resort and country can ago on an Alpine Ski Club trip, the make it more attractive for investors. learn the value of chairlift was far from the main town. So The government also plans to con- the announcement of the construction of struct a new 7.5 km-long gondola line preserving what it the Mestia–Hatsvali lift (at a cost of 20 that would run between Gudauri and already has from million GEL), which will lift up people Kobi, a nearby village, in 2017. the successes of from the town to the ski area makes The ski lifts could ease transportation some sense. problems for locals as well as visiting other, developed, skiers since the road between Gudauri ski destinations. Realistic Ambitions and Kobi is often closed in the winter. Now we have plans for an artificial The gondola line will cost over 30 mil- lake, biathlon track, ski jumps and lion euros, Onoprishvili said. expensive snow machines in Gudauri, In addition, three new ski lifts were Bakuriani and Mestia. Let’s hope that installed in Gudauri last year, which has the ambitious plans do not come at the helped improve the ski infrastructure in expense of improving existing infra- the resort and provide services to the structure. growing number of visitors there. Adventurous skiers who leave the Over a million international visitors well-groomed pistes of the Alps don’t traveled to Georgian ski resorts in 2015- expect the standard of resort infrastruc- 2016, according to official statistics. ture of Zermatt or Val D’Isere. The number of visitors to Bakuriani They understand the risks and incon- and Gudauri has increased by 40 percent veniences of going to less-developed re- since 2014, and Bakuriani alone hosted sorts. In fact, that is part of the attraction. 53 percent more visitors in 2015-2016 Rather than expensive hotels and foreign than the previous year, according to chairlifts that are hard to get spare parts the Mountains Resorts Development for, perhaps there are smaller, simpler Company. projects. For instance, before the collapse of these huts still exist. For instance, when after it. It is harder to achieve this cultural the Soviet Union, the Caucasus had a I visited, we spent all day dragging our change, in which people see their local network of mountaineering huts on both 25-kg packs up the Mazeri valley and environment as valuable, but in the long the Russian and Georgian sides of the camped near one such hut, in the shadow run, it is worth the trouble. border. The advantage of these huts was of Mount Ushba. But they are not in To develop Georgian mountain usable condition. When the resorts into competitors that will rival Soviet Union collapsed, local those in Switzerland or Norway is an “Let’s hope that the ambitious people failed to maintain the ambitious goal. The good news is that plans do not come at the huts. No one owned them, and this isn’t an “either/or” situation. The it was hard enough just to sur- government can continue to spend large expense of improving existing vive through those bad times. sums on more eye-catching projects. infrastructure.” But this was a short-sighted But if a small fraction of the announced mistake, for the huts brought money went toward rebuilding huts and tourists—and tourist dollars— adding to existing infrastructure, that that each of consisted of a warm, dry, into the mountain areas. would be a success. wooden building located in the heart of Now that Wizzair flies to Kutaisi, the mountains, which meant that one Valuing the Invaluable many of my friends are interested in didn’t need to carry a heavy tent, food In one sense, it is easier for the gov- the skiing potential of Georgia. And the and cooking equipment on one’s back. ernment to spend millions on foreign- number of adventure tourists is likely to All over the Alps, Pyrenees and made ski lifts, artificial lakes and snow increase. Let’s hope that all the invest- Scandinavia, these huts provide infra- machines, as the hut system requires the ment pays off. structure for tourists. They also provide support and commitment local employment for those building and of ordinary local people. It maintaining them. Often they are left requires people to change Adventurous skiers who leave the unattended over the winter. Sometimes a the way they think about well-groomed pistes of the Alps “guardian” stays there, looking after the what is valuable. building, cooking for guests, and provid- When we visited the don’t expect the standard of resort ing weather updates and good knowledge beautiful mountain town infrastructure of Zermatt or Val of local conditions. of Mestia, we were sur- In fact, I can think of several devel- prised at how unattractive D’Isere. oped-country resorts that I have been to some parts of town were. that do not have chairlifts, artificial lakes, Local people seemed to or snow machines at all, for example, throw their plastic bottles and rubbish in Jotunheim in Norway and Benaques in the river. This is not a wealthy area, so Bruce Packard is President of the Spain. But these resorts are still popular perhaps it is unfair to compare the Svans Alpine Ski Club. For a full account with tourists all year round because of to the Swiss or the Norwegians. But if of Bruce Packard’s trip to Mestia and the hut system. your greatest wealth is your mountain Mazeri, see the Alpine Ski Club at http:// In the Caucasus, the foundations of environment, then it makes sense to look www.alpineskiclub.org.uk/newsletters/.

22 | Investor.ge • february-march/2017 february-march/2017 • Investor.ge | 23 Another component of the larization Explainer: The Government’s plan involves measures to support the currency by restricting citizens from taking out foreign currency loans in the Larization Plan future. According to the plan, starting from Jan. 1, 2017, loans worth amounts Joseph Larsen would be recalculated in lari at a rate up to 39,500 U.S. dollars are issuable in which is lower than the current by 20 lari only. From January 2018, the same hatever the reason for the points … For example, if the rate today policy will apply to loans worth up to Georgian lari’s depreciation is 2.5 lari per dollar, the credit will be 79,000 U.S. dollars. Win recent times, one thing calculated at a rate of 2.3 lari per dollar.” In sum, the larization plan is aimed that isn’t up for debate; thousands of in- The difference between the market at reducing the financial system’s depen- dividuals and families around the country value of the GEL at time of conversion dence on the U.S. dollar, propping up the are in tough financial straits. Since most and the rate that the mortgage holder will lari in the short term and preventing cur- mortgages in Georgia are held in dollars, receive will be subsidized by the govern- rency crises in the future. The plan also middle class families have seen their ment—which will contribute 65 million includes restrictions on borrowers’ taking mortgages dramatically increase in local lari from the 2017 budget—and the cen- out loans from online credit platforms, currency terms. From the USD/GEL rate tral bank, which is ready to provide banks another activity seen as a cause of the of 1.75 that existed in September of 2014 with roughly 400 million U.S. dollars in country’s current financial difficulties. to the 2.78 low point reached on 22 December 2016, a fixed mort- Not Popular with gage repayment had increased by In sum, the larization plan is Everyone 59% in local currency terms. It should be noted that the As Central Bank President aimed at reducing the financial government’s plan isn’t welcomed Koba Gvenetadze said in an in- system’s dependence on the U.S. by everyone. Some economists terview with the Georgian Public and opposition politicians have Broadcaster, as of late November, dollar, propping up the lari in criticized the plan. roughly 75,000 people across Much of the criticism comes the country held loans repayable the short term and preventing from the government’s use of in U.S. dollars—loans that are currency crises in the future. public funds to subsidize the re- becoming increasingly difficult payment of loans. That has been to repay. a talking point of the opposition Responding to this depreciation, the liquidity for the conversion of loans. The United National Movement party. During newly-elected Georgian Dream govern- threshold for each loan stands at 40,000 a parliamentary debate on December 14, ment took decisive action. On November U.S. dollars, meaning that any debt over 2016, its members referred to this plan 29, 2016, Prime Minister Giorgi Kviri- that amount can still be converted into as “embezzlement” due to the fact that kashvili unveiled an ambitious plan to lari but will not be subsidized. it allocated taxpayer money to the loan reduce the dollarization of the Georgian Debt holders are eligible for this conversion program. currency and make the population less program if they meet the following con- The measure has also been criticized dependent on currency fluctuations. ditions: they took out the loan prior to as unfair, with the argument being that The most prominent part of that plan January 1, 2015; the loan to be converted it privileges irresponsible individuals— was an incentive scheme to encourage is collateralized by real estate; their total those who knew the risks, but chose to USD debt holders to convert that debt debt doesn’t exceed 100,000 U.S. dol- borrow in a foreign currency anyway—at to GEL: lars; and they earned less than 100,000 the expense of their more responsible “According to our plan, loans which lari in income in 2015. The government neighbors. had been disbursed to individuals before estimates that roughly 33,000 loans meet Other misgivings center on the in- Jan. 1, 2015, and supported by real estate, those requirements. crease in excise taxes on select imported

24 | Investor.ge • february-march/2017 products, which is expected to result their mortgages. much of that owes to the larization plan in higher prices for certain household The plan also has its supporters, and can’t be known for certain. However, re- goods. not just among those who might directly ducing the financial sector’s dependence Then, there is the simple argument benefit. on the U.S. dollar should have positive that the unveiling of the larization plan In a statement issued a few days long-term effects for Georgia’s economy. hasn’t immediately restored confidence prior to announcement of the program, Moreover, there are reasons to expect in the lari. At the time of writing, the of- the International Monetary Fund lauded better things in 2017. ficial exchange rate stood at 2.66 lari per government plans to “expand the use of The World Bank projects Georgia’s U.S. dollar, the currency having lost five the lari in the economy.” GDP to grow by 5.2 percent, exceeding percent of its value since the plan was The ratings agency Moody’s expects the government’s official projection of 4 announced on Nov. 29, 2016. the plan to help restore health to the percent and significantly higher than the Gvenetadze defended the plan in an country’s banking sector, stating that 2.4 percent growth that occurred during interview on December 6, 2016, saying “Georgia’s plan to convert dollar-de- the first 11 months of 2016. that it was a one-off initiative to ease nominated mortgage loans into the local The government expects stronger the burden on households in temporary currency is credit positive for banks.” growth to ease pressure on the lari. In financial crisis, and is not intended to a January interview with Bloomberg, become a long-term policy. All Eyes On 2017 Finance Minister Dimitri Kumsishvili He also reminded critics of the “great The lari has regained some of its val- called a stronger economy “the answer grief” felt by families struggling to repay ue after falling to its December low. How for the lari rate.”

advertisement Georgian Lari Depreciation George Welton he movements of the Georgian in a Regional Context currency are a minor national Tobsession at the moment, and with good reason. Depreciation has been AmCham Executive so dramatic that the same dollar expendi- Director George ture (or debt repayment) costs 54% more today than it did in 2014. Welton analyzes In addition to increasing the price the trends in the of imports, this hits a large and signifi- devaluation cant section of the Georgian economy directly. As much as 10% of Georgian of Georgia’s households have significant dollarized national debt and, since you need a reasonable currency, the income to take on that debt, this is prob- lari, compared ably concentrated in the small ‘middle class’. As this group is Georgia’s ‘con- to neighboring sumer’ base, the devaluation of the dollar currencies and the resulting reduction of money in their pockets is likely to hit domestic consumption and, through that, growth. As many people have mentioned, one

Figure 1

26 | Investor.ge • february-march/2017 of the key drivers of this devaluation has decline to the same degree. While the external forces. Georgia’s biggest export been a decline in exports, which has in ruble saw an initial and dramatic decline markets have seen weakening economies turn been driven by weakness in most of at the end of 2014 and the beginning of and depreciating currencies that have, the other regional markets. It is, there- 2015, recovering briefly and then de- until recently, outpaced the problems fore, worth considering for a moment clining again, it has seen significant and Georgia has faced. The summer up-tick exactly how this has worked. The dia- sustained recovery since the spring of in currency value mostly matches dol- gram (figure 1) shows the composition 2016. This is more or less consistent with lar weakening in the developing world of Georgia’s exports by country in 2014. the time frame of the fall and recovery of generally (after being historically strong) As a result, the most important the price of oil, with Brent crude hitting and the re-weakening that occurred in national currencies for comparison are a low point of around $30 per barrel in late summer reflects the dollar strength- early 2016, but recovering ening following Brexit, and around the to over $50 per barrel now time of Donald Trump’s election, as well It is not the case that the (again, with quite a bit of as the further weakening of Turkish and Georgian GEL generally strengthens variability in the meantime). Azerbaijan currencies. It is unclear why Azerbaijan That said, the most recent deprecia- in the summer because of has not recovered in a similar tion does not seem to reflect any recent increased tourism and weakens in way. significant worsening of the trade situa- After that, the Turkish tion. While balance of trade is formally the winter. Lira is now doing worse than $2 billion worse in 2016 than in 2015, the Russian Ruble, seeing its that is almost entirely accounted for by those of Azerbaijan, Armenia, Russia and decline accelerate in recent months. This $2 billion increase in medicine imports, Turkey. Therefore, in the graph (figure 2) is a result of a fairly recent dramatic slide which is probably the free medicine we show the decline in their currencies that started in August, when the extent provided under the hepatitis program. in percentage terms compared to the US of the post-coup crack-down in Turkey If you take out that difference, then bal- dollar. This starts from October 2014, became apparent. ance of trade is almost exactly the same as that is when dramatic depreciation The Armenian Dram is the outlier. for 2016 as 2015. FDI figures have not started in Georgia. It experienced 20% devaluation in No- been released for the last quarter yet, but As one can see, the lari devalues 54% vember – October 2014/January 2015 the first three quarters are collectively over this time with brief but significant but has not devalued much improvements last summer. The other since then. This is the re- Most significantly, the ruble, the currencies generally also saw decline, sult of a number of factors. with some similarities and differences First, the Armenian Central lari and the manat recovered quite in their path over the period. Most Bank intervened to stop the a bit in the early summer – as significantly, the ruble, the lari and the devaluation in 2015. This manat recovered quite a bit in the early would probably have been a result of the strengthening oil summer – as a result of the strengthen- unsustainable in the long- price and weakening of the dollar ing oil price and weakening of the dollar term, accept that in 2016 a internationally. severely weakened consumer internationally. If one looks at each currency in turn, market led to a decline in the differences are pretty big. The manat imports and, at the same time, Armenia stronger in 2016 than 2015 and remit- has done worst with almost 150% depre- was also able to increase its exports, with tances and tourism figures were both up ciation. If the lari had depreciated to the the opening of a new copper mine and year on year. same degree, it would now stand at 4.4 increased agricultural exports to Russia. This might suggest that the depre- lari to the US dollar! What do all of these movements tell ciation was driven by other factors, par- This is strange, because while Azer- us about the Georgian Lari? Well, most ticularly increases in import of products baijan is dependent on oil and gas, so is obviously, they seem to support the or confusion over what the larization Russia, and it has not seen its currency idea that devaluation has been led by program would entail. Petroleum im-

february-march/2017 • Investor.ge | 27 Figure 2

ports, for example, were 80% higher in reviews currency fluctuations over the largely out of the hands of the Georgian December 2016 than December 2015, last 10 years or so. It would also make government. suggesting an increase driven by a desire no economic sense to have this kind In the short-term, apart from massive to avoid new taxes. of seasonality. If markets know which currency interventions from the National It is also worth noting that these are direction the currency is going to move Bank, there is not much that the Georgian not simply ‘seasonal’ fluctuations. It at a particular time of the year, then they government can do. is not the case that the Georgian GEL will move NOW to take advantage of that In the medium term infrastructure generally strengthens in the summer information, and this would iron-out the spending from IFIs (as planned) will because of increased tourism and weak- variation. support the currency. In the long-term ens in the winter. These are myths that This also seems to suggest that the promoting exports, FDI and tourism are are not supported by the data, if one general trend of currency movements is really the only options.

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28 | Investor.ge • february-march/2017 february-march/2017 • Investor.ge | 29 Shopping Sololaki

Come for the architecture, stay for the food! Central, charming, cobbled and crumbling, Sololaki is a haven for Tbilisi tourists and a hotbed of good dining.

30 | Investor.ge • february-march/2017 february-march/2017 • Investor.ge | 31 fter traversing the city from the Tbilisi’s historic Sololaki neighborhood. suburban heights of Saburtalo The streets of Sololaki are a treasure Ato the remodeled facades of of 19th century (and older) architecture, Aghmashenebeli Avenue, the third in and nearly every block holds a hidden Investor.ge’s series on shopping (and gem of an Italian courtyard or piece of eating) in Tbilisi is close to home: the Tbilisi history. From the former resi- AmCham office is located at the heart of dence of the Nobel brothers to the creator

32 | Investor.ge • february-march/2017 The neighborhood is full of shops, in good weather. cafes and restaurants, so we will tackle the guide street by street, with sincere Lado Asatiani Street apologies to all we miss along the way! Bad Dog Bar (33 Lado Asatiani)— For a more complete list, check out Non-smoking and pets allowed! Serves Culinary Backstreets’ great archive of bar food and craft beer. articles about tasty dining in Sololaki at Tone (in the passage between 23 and http://culinarybackstreets.com/. 25 Asatiani)—Khachapuri and lobiani For more detailed information about baked to crisp perfection in a traditional the history of some of Sololaki’s most Georgian clay stove, called a tone. iconic buildings, see www.sovlab.ge. Most of the best shopping is inter- Machabeli Street twined with eating, so it’s best to come Kiwi Cafe (6 Machabeli) is a well- prepared with good walking shoes, a full known vegan restaurant, with a menu wallet and an empty stomach. that includes delicious cookies.

Ingorovka Street Tabidze Street There are two well established, much Tabidze Street is a tiny, cobbled pass loved, and competing Georgian art cafes that, once upon a time, was a true pedes- on this little street that connects Sololaki trian street. Now, it is clogged with cars, to the government district: Azarphesha most driving in reverse and attempting (2 Ingorovka) and Amo Rame (4 In- to merge with the helter-skelter traffic on gorovka). the square. Proceed with care, although the eating and shopping is worth the risk. Amaghleba Street Crafting Corner (23 Asatiani)—Lo- Burgio (8 Amaghleba Street)—A cated at the top of Tabidze, on the corner small burger/craft beer joint with a cult of Tabidze and Asatiani. Part cafe, part following. gift shop, it is the perfect place to warm up while you buy that perfect-little- Leonidze Street something for a friend. Family Kitchen (1 Leonidze Street)— Royal Wine (23 Tabidze Street)— One might dismiss this gem as yet Here you can buy wine, wine and more another ready-to-eat cafeteria, but don’t wine. If you are interested in a Georgian be so quick to judge. What it lacks in beverage, check it out. ambiance, it makes up for in delicious Vino Underground (15 Tabidze khabizgina (Ossetian khachapuri), Street)—A famous wine bar, known for lobiani and pizza—if you have lived its knowledgeable staff and rich collec- abroad long enough to realize that, yes, tion of spectacular Georgian wines. sometimes you can put mayo on pizza. Georgian Tea House (15 Tabidze Street)—A little shop (which also boasts of Sarajishvili brandy, David Sarajishvili Kikodze Street a tea museum) with an abundant selec- – as well as plenty of ghosts from the Lui (1 Kikidze Street at the corner of tion of Georgian teas. Soviet era – the Sololaki neighborhood Leonidze and Kikodze) —A neighbor- is a mosaic of the city’s past. hood institution, highly recommended Dadiani Street It is also at the heart of the capital’s for its apple cake and its tarragon pies. Firewok (20 Dadiani)—Homemade growing identity as an international tour- Ezo (16 Kikodze)—A lovely, popular noodles, cooked to order, at this great ism and food destination. cafe with a yard, where guests can dine take-out spot.

february-march/2017 • Investor.ge | 33 NEWS

content

42 Burns Supper

36 AmCham Meets UK Ambassador 41 New Members

36 mEmbers Meet US Assistant 42 Social: Burns Supper Secretary of Commerce 44 Social: AFG Annual Gala 37 Chamber Meeting with the Governor of NBG and Head 46 Social: Back to Business of IMF Cocktail Hour at Dinehall

38 mEmber Feature: American 47 Social: Holiday Reception at Medical Centers Funicular Lounge and Bar

39 mEmber Profile: GTS 48 mEmber Directory

40 mEmber Profile: Riverside Hotel

34 | Investor.ge • february-march/2017 AMENDMENTS TO THE TAX CODE WITH UNEXPECTED TWISTS deregulated, until now. Pursuant to simultaneous amendments to the Law of the National Bank of Georgia, the National Bank took over the regulation Effective from January 2017, new amendments were introduced to the Tax thereof. Code of Georgia. Key changes in brief: The highlights of the amendment are as follows: · Individuals will now be taxed with the property tax on motor vehicles. The initial bill suggested different tax rates for old vehicles. However, · The effective annual interest rate was capped at 100% of the principal eventually the Parliament went for 0.2% for the households with the amount of the loan; income in the range of GEL 40,000 to GEL 100,000 and 1% for those above GEL100,000, irrespective of the age of the taxed vehicle. The · Any penalty or any other financial sanction imposed on the debtor for property tax rate is calculated based on the market price of the vehicle; the breach of commissions, fees, any financial expenses, as well as any provision of the loan agreement, in aggregate, shall not exceed · Excise duty on vehicles was increased, ultimately resulting in increase annual 150% of the outstanding principal amount of the loan; of the vehicle price. Please, note that the increase rate will not affect the vehicles bought till 1 January 2017 and will enter the territory of · Any loan issued to individual shall be in Georgian Lari only, unless the Georgia until 31 March 2017; As excise duty is calculated based on the principal amount exceeds GEL100,000; engine of the vehicle, cars older than 7 years are expected to carry · A lender may not impose on the debtor any prepayment fee or higher tax burden; penalty, or any fine for early repayment of the loan, which exceeds 2% · Excise duty was also increased on the tobacco and tobacco products. of the outstanding principal amount of the loan; As increased tax burden will affect the tobacco price, the amendment · Entrepreneurs or related group of entrepreneurs are allowed to intends to incentivize Georgian population to quit smoking and opt for a borrow finances in any form from more than 20 individuals, only healthy lifestyle; when the amount so borrowed/attracted from each individual · Advances will now be taxed with VAT. New VAT regulations will affect exceeds GEL100,000. The latter regulation shall not apply to the advances paid for the goods and services supplied after 1 January commercial banks, credit unions, brokerage companies and public 2017; offering of securities, as well as to other financial institutions determined by the National Bank of Georgia. · VAT taxable sale of immovable property will be taxed as of the date of execution of the deed of transfer of title on the property, irrespective of when the payment of the purchase price is due; If the transfer of title ENCOURAGE THE “LARISATION” (INCREASE OF THE SHARE OF GEL depends on performance of any condition or obligation by the parties, DENOMINATED TRANSACTIONS) IN THE FINANCIAL SECTOR VAT is payable on the date of performance of such obligation or condition. As a declared remedy against depreciation of Georgian Lari, the Government has announced so called “Larisation” policy, which entails increase of the share of GEL in the financial sector. For this end, the State undertook to NEW AMENDMENTS TO THE GEORGIAN CIVIL CODE SHAKING UP THE subsidize the conversion of the foreign currency denominated loans issued to EXISTING LENDING MARKET borrowers who are less protected from the currency fluctuation risks. In pursuit of the same goal, the new amendments to the Law on the National On 15 January 2017, game-changing amendments to the Civil Code of Georgia Bank of Georgia oblige entrepreneurs to denominate the price in Georgian entered into force. The background story behind the amendments: the Lari only when offering or advertising goods or services. The said rule comes Government was concerned by significant growth of companies issuing into force from 1 July 2017. As confirmed by the representatives of the short-term loans online (local typology of payday loans), which are easily National Bank of Georgia, the requirement to set prices in GEL applies to accessible, but high-cost loans, coupled with inability of vast majority of offers and advertisements only and shall not extend to denomination of population to manage their financial obligations. Online crediting companies contractual price. However, it remains as a practical challenge as to how the issued small, unsecured loans mostly to non-bankable citizens and used to price offered or advertised in GEL can be denominated in different currency recover the loans by charging tremendously high penalties and default in the actual contract. interest rates or extension fees. This segment of the financial sector was

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NEWS

AmCham Members Meeting with UK Ambassador

AmCham hosted a monthly round- UK’s engagement with Georgia and the have formed over the years and identified table meeting at Courtyard Marriot Hotel region, as well as about the UK’s future areas for future cooperation between on January 26. relationship with the EU. the two countries. The presentation was Justin McKenzie Smith, British Am- The Ambassador underlined the spe- followed by dynamic Q+A between bassador to Georgia, presented about the cial relationship that Georgia and the UK AmCham members and the Ambassador.

Members Meet US Assistant Secretary of Commerce

AmCham hosted a monthly round- table meeting at the Holiday Inn on November 30. Michael Lally, Deputy Assistant Secretary of Commerce, presented about strengthening the U.S.- Georgia commercial partnership. George Welton, Executive Director of AmCham presented findings from the AmCham tax survey financed by USAID as part of the G4G project. The presentation was followed by dynamic Q&A between AmCham members and the speakers.

36 | Investor.ge • february-march/2017 NEWS

Chamber Meeting with the Governor of NBG and Head of IMF IN GEORGIA

AmCham Georgia hosted a members- only luncheon with Mr. Koba Gvene- tadze, Governor of the National Bank of Georgia and Mr. Francois Painchaud, Head of International Monetary Fund (IMF) in Georgia at the Holiday Inn Tbilisi on December 12. Mr. Gvenetadze presented on the current macroeconomic climate in Georgia. Mr. Painchaud gave a presentation about Georgia’s economic outlook and de-dollarization. The pre- sentation was followed by a lively Q&A between the members and presenters. advertisement

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140, Tsereteli Avenue, 0119, Tbilisi. Georgia Tel.: +995 32 235 70 02, +995 32 235 70 05 www.cezanne-web.com

february-march/2017 • Investor.ge | 37 NEWS AMC: Bringing Patient- Driven Care to Georgia

“We see Georgia as a tremendous many Government officials have talked opportunity for concierge and boutique about in the last year or two and is in fact health services, bringing a wholly unique our AMC model: encouraging broader patient-driven model to the city,” he said. access to primary healthcare will help “With its highly educated and talented reduce unnecessary spending. The major- medical professionals, physicians and ity of Georgians visit specialists rather than specialists, competent ancillary or refer- general practitioners, even for routine ral facilities, and a respectable business care. Experts generally concur that en- climate, we felt it was time to invest and hancing primary healthcare would allow expand the model.” the government to limit the high cost of AMC operates in Eastern Europe and hospital-based treatment and increase Central Asia, Sokol noted, adding that the disease prevention with early diagnoses.” American Medical group’s international experience brings Providing high quality care in a cost- Centers Georgia opened an extra layer of medical attention to the effective way is a challenge, Sokol noted. its first Georgian facility healthcare market in Georgia. “While Tbilisi should provide gold- stan- last year, combining the “As an American healthcare network, dard secondary care in specialized units, with our seventh group clinic opening it also needs to develop a “gate-keeper” latest in Western medicine this summer, we are able to leverage approach, or access to specialty care practices with highly important group resources, not only with through an increasingly competent pri- educated and qualified management and capital, but also estab- mary care or family medicine service,” local physicians. lished clinical guidelines and protocols, he said. Investor.ge spoke with quality assurance standards, and our “Georgia has vast rural areas and we insurance and affiliate hospital relation- believe that promotion and funding of AMC Group president Alex ships,” he said. quality primary care can positively impact Sokol about medical “We work with over 40 global insur- the lower-density populations. So primary care in Georgia and ance providers on a preferred direct care promotion, CME training, hospital what AMC brings to the billing basis (a cashless service) and are collaboration, standardized accredita- healthcare market. certified as an official affiliate clinic of tion, and developing a truly competitive New York Presbyterian’s Executive Registry patient-driven market will greatly benefit program, allowing our local physicians to and improve Georgia’s health system.” refer for elective procedures or second- opinions. We invest in and encourage “Tremendous potential” for regular continuing medical education medical tourism (CME) and workshops abroad. And we Sokol noted that Georgia is gaining work hard to provide convenient and re- popularity as a medical tourism desti- sponsible service for our patients. But the nation due to the increased quality of most important AMC differential we feel is medical care in the country, as well as its the integrity, experience, accountability, affordability and availability. and genuine care and compassion of our “I think there is tremendous potential, professionals, the difference in our care specifically in elective narrow specialties providers.” such as infertility treatment, surrogacy, dental, or aesthetic surgery. Steps would Strong primary care for include regional marketing with greater healthier lives government sponsorship and promotion Georgia’s medical reforms are a in targeted European markets,” he said. American Medical Centers Georgia good step toward creating an effective “The government’s full collaboration (AMC) opened in Tbilisi’s Vake neighbor- healthcare sector, Sokol said. He added, with the private sector, combined with the hood in 2016. however, that a key to providing the best rich natural beauty of this great country, The facility is a marriage of the best the care is making sure patients are seeking its central geographic location, and a West and Georgia have to offer in medi- primary care before they need the atten- current and historical spa and wellness cal services, noted AMC Group president tion of a specialist. culture make Georgia an ideal destination Alex Sokol. He said: “I would agree with what for medical tourism.”

38 | Investor.ge • february-march/2017 NEWS

GTS: Success in 2016

2016 was the beginning of important is ready at any time to provide technical of services: projecting, product delivery, achievements and changes for GTS Elec- support to client by remote method and installation and further service. Partners of tronics. outreach method as well. GTS Electronics are leading international The company successfully completed In addition, the company in 2016 companies: DELTA, ELECTROTECH, ALI- negotiations with the world’s two largest began a very important process with the MAR, ARTRONIC, ESIS POWER and others. companies: French generator manufac- intention to receive ISO 9001, ISO 14001, In the domestic market, the largest com- turer SDMO and Chinese HUAWEI, which and OHSAS 18000 international quality and panies using the company’s services are: is (except for TV and communication management system certificates. Bank of Georgia, TBC Bank, Radisson Blue devices) manufacturer of uninterruptible GTS Electronics is a leading electri- Iveria Hotel Tbilisi, Tbilisi Marriot Hotel, Min- power supply systems (UPS). cal uninterruptible power supply systems istry of Internal Affairs of Georgia, Ministry As a result, GTS Electronics offers its company in the Georgian market. The of Defense of Georgia, Evex, Aversi, USA customers high-quality electric power company offers its customers a full range Embassy Tbilisi Georgia and others. generators, gasoline and diesel engines and also natural gas engines tha are new for the Georgian market. Special advantages of SDMO natural gas engine generators are cheap exploi- tation, low level of noise and the ecologi- cal cleanliness. The second innovation, which GTS Electronics has offered its clients, is Huawei uninterruptible power supply systems (UPS). All products manufactured by HUAWEI satisfy all the best international standards and at the same time their cost is much cheaper compared with its competitors. HUAWEI uninterruptible power supply sys- tem’s important technical advantage is the possibility to attach external batteries that significantly increases their energy storage and delivery time and, therefore, they are able to replace some of the ex- pensive similar products. With the renewal of its product range, GTS Electronics moved its customer service to a new stage. The company implemented a 24/7 service and Operational Response Team

february-march/2017 • Investor.ge | 39 NEWS

RIVER SIDE HOTEL, TBILISI WINS 2017 TRIPADVISOR TRAVELERS’ CHOICE AWARD FOR HOTELS World’s Best Hotels Named in 15th Year of Awards TBILISI, GEORGIA – 24.01.2017 – Best Service, B&Bs and Inns, Romance press our gratefulness to our entire team RIVER SIDE HOTEL, TBILISI today and Family. The hallmarks of Travelers’ of RIVER SIDE & TIFFANY BAR who announced it has been recognized as a Choice hotels winners are remarkable made this great celebration happen. Their winner of the 2017 TripAdvisor Travel- service, value and quality. hard work is invaluable.” ers’ ChoiceR awards for Hotels. In the “We are honored to have won Travel- “For the past 15 years, TripAdvi- 15th year of the awards, TripAdvisor ers’ Choice Awards for the third time in sor has relied on the experiences and has highlighted the world’s top proper- a row” – said Dimitri Shvelidze, deputy opinions of our travel community that ties based on the millions of reviews director of RIVER SIDE HOTEL – “We has explored thousands of hotels around and opinions collected in a single year would like to thank all the guests who the world to determine these celebrated from travelers around the globe. Win- stayed at RIVER SIDE and took time awards,” said Barbara Messing, Chief ners were identified in the categories to write about their experiences in our Marketing Officer for TripAdvisor. of Top Hotels, Luxury, Bargain, Small, beautiful hotel. Also, we would like ex- “Travelers planning their trips for 2017 can find inspiration for some of the best places to book from this group of outstanding accommodations around the globe.” For all of the 2017 Travelers’ Choice Hotel winners, visit https://www.tripad- visor.com/TravelersChoice- Hotels. Travelers can also follow the con- versation on Twitter at #travelerschoice

40 | Investor.ge • february-march/2017 NEWS ne w member s

Willis Towers Watson Ltd. T3Concept Ltd. Civil Development Agency Corp A Corp B (CiDA) Willis Towers Watson in Georgia provides Turner Broadcasting Systems has grant- Non-Profit a broad range of risk advice and insurance ed the right to the T3Concept Ltd. to repre- CiDA is a regional civil society organiza- broking services to clients ranging from sent, negotiate and sign license agreements tion established in 2002 in Rustavi, Georgia, small businesses to international corpora- for distribution of CNN, Cartoon Network which supports and promotes the social tions. Services include: risk management, and Boomerang channels on behalf of Turn- and economic rights of Georgian citizens creating insurance products on the basis er on the territory of Georgia, Armenia and by providing direct services and/or enables of complex analysis, getting the terms and Azerbaijan. As awholly owned subsidiary of constituents to engage in networking op- prices from insurance companies, analyzing Time Warner Inc., Turner creates and pro- portunities to solve community problems. offers and choosing the best option working grams branded news, entertainment, sports, One of the principal directions of CiDA’s on reinsurance, offering international health animation, and young adult multi-platform work is coordination and development of insurance, and providing services after content for customers around the world. the Regional Civil Society Network (R-CSN) insurance. Willis Towers Watson is a leading T3Concept, among other activities, works to connecting 64 CSOs from all regions of global advisory, broking and solutions com- improve the brand’s competitive position in Georgia, established in 2013. pany that helps clients around the world turn the market and with Turner strives to defend CiDA is one of the few organizations in risk into a path of growth. its intellectual property rights against piracy Georgia that has been working on promo- www.willis.com and unlicensed copying and distribution, tion of international corporate responsibility as well as working for brand extension and standards among relevant stakeholders in recognition throughout territory. Georgia, such as businesses, CSOs, Gov- www.t3concept.ge, ernment. www.turner.com CiDA is a leading CSO in Georgia in the field of capacity development of demo- cratic and human rights institutions. www.cida.ge

february-march/2017 • Investor.ge | 41 NEWS

8th Tbilisi Gala Benefit Burns Supper and Ball

Held at the Funicular Ballroom on February 4th, the annual event and charity auction raised funds for Temi – a caring community with a stimulating environment for socially vulnerable people in eastern Georgia; Catharsis – a community charity which helps the homeless elderly, in particular by providing them with daily hot meals in its canteens; and Dog Organization Georgia – providing shelter for stray dogs along with sterilization, immunization and homing programs.

42 | Investor.ge • february-march/2017 NEWS

february-march/2017 • Investor.ge | 43 NEWS

Annual AFG Gala

The annual Charity Gala of American Friends of Georgia was held in December 2016 in Garden Hall. Over 250 guests from leading corporations and Diplomat Corp, celebrated Christmas in the spirit of philanthropy and corporate social responsibility to restore life for the most needy children and elderly. The culmination of the evening was live auction and raffle prizes that made the evening memorable. Contributions from our long-term partners resulted in raising over $90,000 for the reconstruction of Dzegvi orphanage/shelter and palliative home care program.

44 | Investor.ge • february-march/2017 NEWS

february-march/2017 • Investor.ge | 45 NEWS

Back to Business Cocktail Hour at Dinehall

On January 20th, AmCham Georgia hosted a Back to Business Cocktail Reception for AmCham members at Dinehall. AmCham President Michael Cowgill greeted the guests and thanked the newly joined member, Dinehall, for hosting the reception. Mr. Cowgill informed guests about AmCham’s upcoming events. The reception was attended by AmCham members, friends and heads of foreign diplomatic missions. Members used the opportunity to reconnect with each other.

46 | Investor.ge • february-march/2017 NEWS

Holiday Reception at Funicular Lounge and Bar

On December 9th, AmCham Georgia hosted a Members Appreciation Holiday Reception and networking event at the Funicular Lounge and Bar. It’s been a wonderful year for AmCham with more events, more policy initiatives and more new members. Guests were welcome to enjoy cocktails, mulled and Georgian wine along with delicious holiday food and American-style desserts. AmCham President Michael Cowgill greeted the guests and briefly highlighted the achievements and challenges of the past year. AmCham Vice-President Sarah Williamson recognized Ted Jonas, ex-Board Member of AmCham, for his 10 years of committed service to AmCham and its goals. Members used the opportunity to reconnect with friends and colleagues.

february-march/2017 • Investor.ge | 47 AmCham Company Members as of February 2017

PATRON MEMBERS Betsy’s Hotel / Prosperos Books Cushman & Wakefield Georgia Georgian American University 32/34 Makashvili St. / 6th floor, Block 10, 8 Aleksidze St. 34 Rustaveli Ave. 71 Vaja-Pshavela Ave. Tel: 2206520; Fax: 2206519 Tel: 2987624, Fax: 2923592 Tel: 2474849 www.gau.ge BP Exploration Georgia www.betsyshotel.com www.cushmanwakefield.ge 24, S. Tsintsadze St. Tel: 2593400 www.bpgeorgia.ge GMS Ltd. Digomi District, Area 25, 0159

Dechert Georgia LLC Tel: 2644101 BHP International 7th floor, Pixel building, Office 305, 3rd Floor, www.gmsgroup.ge KPMG Georgia LLC 34 Chavchavadze avenue 2 Baratashvili St. 3rd Floor, Besiki Business Center, Tel: 2334719 Tel: 2103207 4 Besiki St., 0108 www.dechert.com www.bhp-int.com Tel: 2935713; Fax: 2982276 GMT Group www.kpmg.ge 4 Freedom Square Tel: 2988988; Fax: 2988910 Deloitte www.gmt.ge 36a, L. Asatiani St., 0105 PricewaterhouseCoopers British American Tobacco Tel: 2244566; Fax: 2244569 7 Bambis Rigi St., 0105 71 Vazha Pshavela Ave. www.deloitte.ge Tel: 2508050; Fax: 2508060 Tel: 2157500/01/02; Fax: 2157503 www.pwc.com www.bat.com Gosselin Moving Georgia 3 M/D, Didi Digomi Tel: 2596601/02/03; Fax: 2596600 www.moving.gosselingroup.eu Diplomat Georgia UGT 65, Kakheti Highway 17a Chavchavadze Ave., 7th floor Tel: 2984950 Tel: 2220211; Fax: 2220206 Budget Rent a Car - Otokoc www.diplomat.ge www.ugt.ge Georgia LLC Grant Thornton LLC 37 Rustaveli St. 61 D. Aghmashenebeli Ave. Tel: 2234122 Tel: 2604406 www.budget.com.ge www.grantthornton.ge CORPORATE A MEMBERS DLA Piper Georgia LP 10 Melikishvili St. Tel: 2509300; Fax: 2509301 www.dlapiper.com Greco Group AECOM Georgia LLC Catoni & Co. Georgia 1 Nutsubidze St. 34, Chavchavadze Ave. 7 Dzmebi Zubalashvilebi St. Tel: 2393138; Fax: 2311107 Tel: 555603200 Apt.22/23 www.greco.ge www.aecom.com Tel: 2989230; Fax: 2922264 www.hapag-lloyd.com EY Georgia 44 Kote Abkhazi St. Tel: 2439375; Fax: 2439376 GT Group Alliance LLC www.ge.ey.com 48 B. Cholokashvili St. 135 King Parnavaz St., Batumi Tel: 2740740 Tel: 591555757 www.gtgroup.ge www.alliancegroup.ge Caucasus University 77 Kostava St., Bld.6, 4th fl. Tel: 2377777; Fax: 2313226 F H Bertling Georgia Ltd. www.cu.edu.ge Room 3, 4th Floor, Alliance Group Holding, JSC 154 Agmashenebeli Ave. GULF Georgia 47/57 M. Kostava St., 0179 Tel: 2252287 by Sun Petrolium Georgia LLC Tel: 2424181; Fax: 2998112 www.bertling.com Pixel Business Center, www.agh.ge 34 Chavchavadze Ave. Tel/Fax: 2496444 Chemonics International www.gulf.ge 5, 2nd Blind Alley, Chavchavadze St. Tel: 2234311; Fax: 2234309 Alstrom Grid SAS FINCA Bank Georgia www.chemonics.com Representation in Georgia 71 Vazha-Pshavela Ave. 3rd fl. 5th Floor, Pixel Bulding, Tel: 2244949 Hilton Batumi 34 Chavchavadze Ave. www.finca.ge 13 Takaishvili St., Batumi Tel: 2259516 / 2259505 Tel: 292092 www.ge.com www.hilton.com Colliers International Georgia LLC 37/39 Kostava St., Frontera Resources Georgia American Medical Centers, 12 Paliashvili St. Grato Business Center 7th Floor Georgia Tel: 2252412 Iberia Refreshments, JSC Tel: 2224477 Tetri Khevi Hesi District, Orkhevi 12 Arakishvili, Tbilisi, 0179 www.colliers.com www.fronteraresources.com Tel: 557313707 Tel: 2241091; Fax: 2241090 www.amcenters.com www.pepsi.ge

Georgian American Alloys, Inc. Avon Cosmetics Georgia LLC Construction Service LLC 200 S Biscayne Blvd Suite 5500, IG Development Georgia Ltd. 117 Tsereteli Ave. 2 Gen. Mazniashvili St., Rustavi Miami FL 33131 USA 47/57 Kostava St. Tel: 2226805; Fax: 2226806 Tel: (599)500559 Tel: (1)3053757560 Tel: 2987589 www.avon.com www.cs.ge www.gaalloys.com www.igdevelopment.ge

48 | Investor.ge • february-march/2017 IMSS Ltd. PepsiCo Wimm-Bill-Dann West Invest Ltd. Basel LLC 10a Bakhtrioni St. Village Ponichala, Tbilisi 0165 13a Lortkipanidze St. 49 Krtsanisi St. Tel: 2920928 Tel: 2475290 Tel: 2997275 Tel: 2550110 www.imss.ge www.wbd.ru www.west-invest.ge www.krtsanisi.com

Philip Morris Willis Towers Watson Ltd. Kartlos Group 1 Tabidze St. 17 M. Lebanidze St. Basis Bank JSC 20 Ushangi Chkheidze St., 0102 Tel: 2439001; Fax: 2439005 Tel: 2905509 1 Ketevan Tsamebuli Ave. Tel: 599540893 www.philipmorrisinternational.com www.willis.com Tel: 2922922; Fax: 2986548 www.kartlosgroup.com www.basisbank.ge

ProCredit Bank 154 Agmashenebeli Ave. Kavkaz Cement JSC Batumi International Container Tel: 2202222; Fax: 2202222-2226 29 Andronikashvili St., 0189 Terminal www.procreditbank.ge Tel: 2619090 11, Baku Street, 6010, Batumi www.kavkazcement.ge CORPORATE B MEMBERS Tel: 422 276452 www.bict.ge Radisson BLU Iveria Hotel 1 Rose Revolution Sq. Maersk Georgia LLC Tel: 2402200; Fax: 2402201 Action Global Communications 6 Khetagurov St. www.radissonblu.com Georgia (Action Georgia) BDO LLC Tel: 2200800; Fax: 2200815 App. 3, 84a Paliashvili St., 0165 2 Tarkhnishvili Str. www.maerskline.com Tel: 2220426 Vere Business Centre, 0179 www.actionprgroup.com Ronny’s Ltd. Tel: 2545845; Fax: 2399204 3 Apt., 3 Vazha-Pshavela Ave. www.bdo.ge Tel: 2472472

Marriott Hotels, Resorts & Suites www.ronnyspizza.com 13 Rustaveli Ave. Adjara Group Hospitality Tel: 2779200; Fax: 2779210 1, 26 May Sq., 0179 BGI Advisory Services Georgia www.marriott.com Tel: 2300099 18 Rustaveli Ave., II floor Savaneti 99 Ltd. www.adjaragroup.com Tel: 2997292; Fax: 2996615 Vilage Savaneti, Bolnisi Region www.bgi.ge Tel: 2605599 Meridian Express 15-17 Ketevan Tsamebuli Ave.0103 Air Astana Airlines JSC Tel: 2745188 SEAF Management LLC 5th Floor, Pixel Business Center, BLB (Business Legal Bureau) www.ups.com 7, Niko Nikoladze St. II Floor. 34 Chavchavadze Ave. 1 Shevchenko St, Apt.1 Tel: 2998115; Fax: 2923533 Tel: 2514999 Tel: 2995797 www.seaf.ge www.airastana.com www.blb.ge Microsoft Georgia LLC 34 Chavchavadze Ave. Tel: 2970123 Sheraton Metechi Palace Hotel Aliance Georgia Ltd www.microsoft.com 20 Telavi St. BLC Law Office Tel: 2772020; Fax: 2772120 33 Samurzakano St. 4 Gudiashvili Sq. www.sheraton.com/tbilisi Tel: 2243773 Tel: 2922491; Fax: 2934526 www.groupaliance.com www.blc.ge M & M - Militzer & Munch Georgien, FedEx GSP SICPA Security Solutions 39 Ketevan Tsamebuli Ave. Georgia Tel: 2748240, 2748941 79 Chargali St., 0178 Aversi Pharma BMC Gorgia www.fedex.com/ge Tel: 2434580 148/2 Aghmashenebeli Ave. 140 Tsereteli Ave. www.sicpa.com Tel: 2987860 Tel: 2960960 www.aversi.ge www.gorgia.ge

ModernRoofing Ltd. T&K Restaurants (McDonald’s 118 Tsereteli Ave. Georgia) Baker Tilly Georgia Ltd. Capital Bank Tel: 2356611 1 Dzmebi Kakabadze St. Meidan Palace, 44 Kote Abkhazi St. 1 Vertskhli St. www.modernroofing.ge Tel: 2921246; Fax: 2251422 Tel: 2505353; Fax: 2505353 Tel: 2428888 www.mcdonalds.ge www.bakertillyinternational.com www.capitalbank.ge

Oracle Ayazağa Mevkii Meydan Sok. TBC Group Spring Giz Plaza Kat:11 7 Marjanishvili St. Bank of Georgia CaspiGroup Ltd. Maslak, Istsnbul, Turkey Tel: 2272727; Fax: 2228503 3 Pushkin St. 29 Bochorma St. Tel: 577500151 www.tbc.com.ge Tel: 2444134; Fax: 2983269 Tel: 2550818 www.oracle.com www.bog.com.ge www.caspigroup.com

TMC Global Professional Services Orient Logic Ltd. 6001 Indian School Road NE, Suite Bank Republic Caucasus Online LLC 8 Beliashvili St. 190, Albuquerque, NM 87110, USA 2 Gr. Abashidze St. 71 Vazha-Pshavela Ave. Tel: 2541818 Tel: (1 505) 8723146 Tel: 2925555; Fax: 2925544 Tel: 2000022 www.orient-logic.ge www.tmcservices.com www.republic.ge www.co.ge

february-march/2017 • Investor.ge | 49 AmCham Company Members as of February 2017

Channel Energy (Poti) Limited GeoCapital Microfinance Gloria LLC International Black Sea Georgia LLC, By Petrocas Energy Organization Ltd. 3 Gorgasali St., 0105 University Group 5 Tsereteli St, Kutaisi Tel: 2000245 David Agmashenebeli Alley 13 km, 52, David Agmashenebeli St., Poti Tel: 431 267070 www.tiflispalace.ge 2, 0131 Tel: (995493) 2-7-08-60 www.geocapital.ge Tel: 2595005 www.petrocasenergy.com www.ibsu.edu.ge

Geocell GM Capital LLC Château Mukhrani, J.S.C. 3 Gotua St. 2 Tarkhnishvili St., 0179 JTI Caucasus Sangebro St. Tel: 2770100, ext. 7435; Tel: 2912626 VII Floor, Pixel Business Center, Tel: 2201878; Fax: 2201878; Fax: 2770119 www.gmcapital.ge 34 Chavchavadze Ave. www.mukhrani.com www.geocell.ge Tel: 2604111 www.jti.com GeoEngineering LLC GTS Electronics Citi & Co. 15a Tamarashvili St. 4 Besiki St. 35 Moscow Avenue, 0137 Tel: 2311788; Fax: 2311787 Kordzahia, Jgenti Law Firm Tel: 2920921 Tel: 2710800 www.geoengineering.ge 10 Petriashvili St. www.gts-el.com Tel: 2921878 www.kjlaw.ge Continent Cron Palace Geomill LLC Hotel Tbilisi 4, Chirnakhuli St. Gvinadze & Partners LLC 1 Kheivani St., 12/13 Tel: 2400000 44 Kote Abkhazi St, 0105 Leavingstone Tel: 2242321 www.geomill.ge 12a Al. Kazbegi Ave. Tel: 2438970, Fax: 2438971 www.cronpalace.com Tel: 2105103 www.gvinadzeandpartners.ge www.leavingstone.com Georgian Airways Crowne Plaza Borjomi 12 Rustaveli Ave. Tel: 2999730; Fax: 2999660 Baratashvili Str. 9, 1200 Borjomi Legal Partners Associated LLC www.georgian-airways.com HeidelbergCement Georgia Tel: 995 367 220260 Office #203, Besiki Business Center, www.cpborjomi.com 18 Lermontov St. Tel: 2474747 4 Besiki St. 0108 Tel: 2200203; Fax: 2250458 Georgian Beer Company www.heidelbergcement.ge www.lpa.ge 3311 Saguramo, Mtskheta District Crystal, MFO JSC 72 Tamar Mepe St. Kutaisi, 4600 Tel: 2437770 Tel: 431253343 www.geobeer.ge Herbalife Liberty Bank JSC www.crystal.ge Bld. 4a Tamarashvili St., 0162 74 Chavchavadze Ave. Georgian Express Tel: 2202929 Tel: 2555500; Fax: 2912269 105, Tsereteli Avenue, 0119 www.herbalife.com www.libertybank.ge Dio Ltd. Tel: 2696060 12th Km David Agmashenebeli Alley www.dhl.com N3, Parsadani St. Luca Polare Tel: 2361112 Hotels And Preference Hualing 54 Oniashvili St. www.dio.ge Georgian Hospitality Group Tbilisi Tel: 2990399 22 Peritsvaleba St., 0103 Hualing Tbilisi Sea New City, 0152 www.lucapolare.com Tel: 2987789 Tel: 2505025 Domsons’ Engineering www.ghg.ge www.hotelspreference.ge 8a Sanapiro St. Tel: 2050303 Maqro Food “Dinehall” 28 Rustaveli Ave. www.domsons.com Georgian Industrial Group LLC GIG Plaza, 14 Gazapkhuli St., 0177 Tel: 2001616 Hualing International Special www.dinehall.ge Tel: 2210187 Economic Zone Duty Free Georgia www.gig.ge 25 Apt. 34/36 Kobuleti St. 3rd floor, 4 Besiki St., Tel: 591005900 Mercure Tbilisi Old Town Besiki Business Center www.hualing.cn Tel: 2430150 Georgian Integrated Systems 9 Gorgasali St., Old Tbilisi, 0105 www.dfg.ge (GiS) Tel: 2006060 Office 1, 85 Abashidze St., 0163 www.mercure.com Tel: 2243724

www.gis.ge Hydrolea LLC Efes Brewery in Georgia - 11 A. Apakidze St. Lomisi JSC Tel: 790420015 Mgaloblishvili Kipiani Dzidziguri Village Natakhtari, Mtskhta Region (MKD) www.hydrolea.com Tel: 2357225 Georgian Resources Company Office 24, 71 Vazha-Pshavela Ave. 3-5 Kazbegi St. www.natakhtari.ge Tel: 2553880 Tel: 2936676 www.mkd.ge www.georgianresources.com ICS Ltd. TNT Agent in Georgia EVEX Medical Corporation 25 Agmashenebeli Ave. 40 Vazha-Pshavela Ave. Geo Steel LLC Tel: 2910220 Mina JSC Tel: 2550505 36 Davit Gareji St., Rustavi, 3700 www.tnt.ge 4 Besiki St. www.evex.ge Tel: 2243794 Tel: 2449981/82/83; Fax: 2449980 www.geosteel.com.ge www.mina.com.ge

Gebrüder Weiss LLC ILF Beratende Ingenieure ZT Airport Adjacent Territory, Globalink Logistics Group GmbH Branch in Georgia Mira Hotels Ltd. Kakheti Hwy 14-A Shartava St, 2nd fl, Suite 7 15 Tamar Mepe Ave. Brose Street Turn,Old Tbilisi Tel: 2710011 Tel: 2253262; Fax: 2439002 Tel: 2199453 Tel: 2242244/55/88 www.gw-world.com www.globalinkllc.com www.ilf.com www.riverside.ge

50 | Investor.ge • february-march/2016 MyGPS Primera Golf & Residence Silknet Ltd. NON-PROFIT ORGANIZATIONS 6 Bokhua St., 0159 36, Khetagurovi St., 0102 95 Tsinamdzgvrishvili St. Tel: 2180180 Tel: 2200036 Tel: 2910345; www.mygps.ge www.silknet.com Agricultural University of Georgia 140 David Aghmashenebeli Alley SRG Investments LLC Tel: 2594901 National Center for Dispute Publicis Ltd. 49a Chavchavadze Ave, 3rd floor www.agruni.edu.ge Resolution 17 V. Jorbenadze St. Tel: 2253581 4/7 Rustaveli St., Rustavi Tel: 2745672; Fax: 2745671 www.silkroad.ge Tel: 2193406 www.publicis.ge Alliance for Progressive www.ncdr.ge Healthcare T3Concept Ltd. 27/29 Chavchavadze Ave., 0179 Qebuli Climate 13 Radiani St., 0179 Tel: 2242413 101, Tsereteli Ave. NCC Ltd. Tel: 2434455 Tel: 2356201 9, Erekle II turn www.turner.com, www.t3concept.ge www.qebuli.ge Tel: 2725088 American Friends of Georgia www.ensisi.ge 77 Nutsubidze St. Tbilisi View Tel: 2397174; Fax: 2388495 Rakeen Development LLC 4a, Freedom Sq. www.afgeorgia.org Pixel Business Center, Tel: 2999980 Nexia TA 34 Chavchavadze Ave. www.tbilisiview.ge 4th Floor, 19 David Gamrekeli St., Tel: 2933393; Fax: 2933993 CARE International in the 0160 www.rakeen.ge Caucasus Tel: 2242559 TBC Leasing JSC www.nexia.ge 37 Tsagareli St., 0162 8 Bulachauri St., 0161 Tel: 2291941

Rentals LLC Tel: 2272727 www.care-caucasus.org.ge 46 Rustaveli Ave.; 36 Griboedov St. www.tbcleasing.ge Noblet Media Tel: 2454567 / 2996412 7, Khorava St. www.rentals.ge (CiDA) Civil Development Tel:w 2396300 Terabank JSC Agency 3 Ketevan Tsamebuli Ave. www.nobletmedia.com 9/1 Pirosmani St., Rustavi, 3700 Tel: 2507700 Resolution Insurance Brokers, Tel: 341258822 www.terabank.ge Georgia LLC www.cida.ge Nodia, Urumashvili & Parnters 61, Gorgasali St. Office #28, IV Block, Tel: 2936305 www.rib.ge Terrace Hotel & Restaurant 71 Vazha-Pshavela Ave. 7 Polikarpe Kakabadze St. Europe Foundation Tel: 2207407 Tel: 2999001 3 Kavsadze St. www.nplaw.ge www.theterracetbilisi.com Tel: 2253942; Fax 2252763 (ext. 112) Rixos Hotel Borjomi www.epfound.org 16 Meskheti St., Borjomi Tel: 2292292 Theco Ltd. Nutrimax Ltd. http://borjomi.rixos.com 68a Rustavi Highway, 0165 16 Chikovani St. Free University of Tbilisi Tel: 2305335 Tel: 592107515 140 David Agmashenebeli Alley www.nutrimax.ge www.tbilisia.ru Tel: 2200901 Rooms Hotel www.freeuni.edu.ge 14 Merab Kostava St. Tel: 2020099, 2730099 University of Georgia

Overall Management Group www.roomshotels.com 77a Kostava St. Georgian Wine Association (OMG) Inc. Tel: 2552222 12 Mtatsminda St. 29 Marjanishvili St. www.ug.edu.ge Tel: 2505457 Tel: 2436052; Fax: 2436052 RSM Georgia LLC 67, Aghmashenebeli Ave. Tel: 2558899 VD Capital Good Governance Initiative Paine Stevens LLC www.rsm.ge 77 Kostava St., 0175 Pixel Center, 8th Floor, 34, 1 Ivane Javakhishvili Sqr. Tel: 2363672; Fax: 2364302 Chavchavadze Ave. Tel: 2903211, Fax: 2903291 Tel: 2243111 www.painestevens.com Rustavi Azot Ltd. www.ggi.ge 2 Mshvidoba St. Rustavi-3702 Veziri Ltd. Tel: 995341270900 7 Luarsab Andronikashvili St., 0131 Tel: 2251614 www.azot.ge QSI International School of PASHA Bank Georgia JSC www.veziri.net 15, Shota Rustaveli Ave. Georgia Tel: 2265000 Village Zurgovani, Tbilisi Rustavi Steel LLC www.pashabank.ge Vinotel (“Aigvinissakhli”) LLC Tel: 2537670; Fax: 2322607 12 Y. Gagarin St., 3700 Rustavi 4 Elene Akhvlediani Ascent www.qsi.org Tel/Fax: 260 66 99 Tel: 2555888 www.rmp.ge www.vinotel.ge Policy and Management San Diego State University - Consulting Group (PMCG) Georgia 61 Aghmashenebeli Ave, 4th floor Sakcable JSC Wings and Freeman Capital 5 Kostava St. 0108 Tel: 2921171 Suite 414, 19 Gamrekeli St. Green Building, 6, Marjanishvili St. Tel: 2311611 www.pmcg.ge Tel: 2221418 Tel: 2940051; Fax: 2940053 www.georgia.sdsu.edu www.sakcable.ge www.wfcapital.ge

Poti Free Industrial Zone Transparency International Pixel Building, 4th floor, Shota@Rustaveli Boutique Hotel Wissol Georgia Georgia 34 Chavchavadze Ave. 1 Shevchenko St., 0108 74b Chavchavadze Ave. 61 Agmashenebeli Ave. 0102 Tel: 2485485 Tel: 2317089 Tel: 2915315; Fax: 2915615 Tel: 2932129 www.potifreezone.ge www.theshota.com www.wissol.ge www.transparency.ge

february-march/2016 • Investor.ge | 51 NEWS

Board Of Directors 2016

R. Michael Cowgill President

Sarah Williamson Irakli Baidashvili Andrew Coxshall First Vice-President Vice-President & Treasurer Director

Esben Emborg Lasha Gogiberidze Badri Japaridze Director Director Director

AmCham Executive Director Writers George Welton Nino Bakradze, Joseph Larsen, Lika Jorjoliani, Bruce Packard, Inge Snip

Copy Editor Special thanks to Tbilisi Mayor’s Office for the use of the cover photograph, Alexander Melin Georgian Prime Minister’s Office for the photographs on page 4, AmCham Georgia’s staff, Michael Cowgill, and all our contributors. This magazine would Marketing & Promotion not be possible without your help. Saba Gvetadze

Promotional Design Levan Baratashvili

Magazine Design and Layout Giorgi Megrelishvili 52 | Investor.ge • february-march/2017 NEWS

Steve Johnson Otar Kipshidze ketti kvartskhava Director Director Director

Chris Schlueter Betsy Haskell, Director Founding Advisor

george welton dwight nystrom Exec. Director Ex-Officio Member

AmCham Georgia Patron Members:

© The American Chamber of Commerce in Georgia, 2017 arising from the use of any product or service advertised within All rights reserved. No part of this magazine may be re-printed, or the pages of this issue. reproduced or utilized in any form or by electronic, mechanical Investor.ge is printed by cezanne or other means now known or hereafter invented, including AmCham Georgia: photocopying and recording, or in any information storage or rd retrieval system without permission. 36a Lado Asatiani Street, 3 floor. Tel: 2 22-69-07 The opinions expressed in this magazine do not reflect the opinion [email protected] of the American Chamber of Commerce in Georgia nor its Board [email protected] │ www.amcham.ge Members or staff, unless otherwise stated. AmCham Georgia neither endorses, nor can be held liable for any eventuality www.investor.ge february-march/2017 • Investor.ge | 53

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