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Issue no: 864/37 • JULY 26 - 28, 2016 • PUBLISHED TWICE WEEKLY PRICE: GEL 2.50

In this week’s issue... FOCUS Ministry of Finance Presents ON FRIENDS IN US CONGRESS Jason Chaffetz, Chairman of the Committee New Income Tax System at on Oversight and Government Reform, International Forum reaffi rms support to PAGE 4

PAGE 3 Import of Oil Products to Georgia Increases in H1 2016 PAGE 4 EBRD Invests $155 Million Introduces New Pier in Georgian Ammonia Production Development BY EKA KARSAULIDZE

atumi City Hall announced that following rehabilitation works of the summer leisure area Green Cape in the city’s Botanical Garden, the new pierB has fi nally been opened. USD 425,455 (997,676 GEL) was allocated PAGE 5 from the state budget to fi nance the recent stage of Green Cape rehabilita- tion works. Stability The newly restored 131.5 meter long pier utilizes refurbished wooden planks And and comes with a sturdy metal railing and lights. According to the Batumi Instability Mayor’s Offi ce, it is now again available for the local population and tourists to In Georgia enjoy. Continued on page 2 POLITICS PAGE 11

Prepared for Georgia Today Business by Markets Asof22ͲJulͲ2016 STOCKS Price w/w m/m BONDS Price w/w m/m BankofGeorgia(BGEOLN) GBP27.36 Ͳ0,1% +6,3% GEOROG05/17 101.88(YTM4.47%) Ͳ0,1% Ͳ0,1% GHG(GHGLN) GBP3.02 Ͳ11,1% +6,0% GEORG04/21 111.47(YTM4.17%) +0,1% +0,7% TBCBank(TBCBLI) US$13.40 Ͳ Ͳ0,7% GRAIL07/22 111.50(YTM5.46%) +0,2% +0,7% GEBGG07/17 104.56(YTM2.79%) Ͳ0,3% +0,7% COMMODITIES Price w/w m/m CrudeOil,Brent(US$/bbl) 45,69 Ͳ4,0% Ͳ8,4% CURRENCIES Price w/w m/m GoldSpot(US$/OZ) 1322,73 Ͳ1,1% +4,5% GEL/USD 2,3450 Ͳ +4,9% GEL/EUR 2,5766 Ͳ0,1% +1,8% INDICES Price w/w m/m GEL/GBP 3,0747 Ͳ0,6% Ͳ6,7% FTSE100 6730,48 +0,9% +7,5% GEL/CHF 2,3759 Ͳ0,4% +1,9% FTSE250 16983,46 +1,5% Ͳ0,4% GEL/RUB 0,0362 Ͳ1,6% +4,6% DAX 10147,46 +0,8% +0,8% GEL/TRY 0,7681 Ͳ1,1% Ͳ0,8% DOWJONES 18570,85 +0,3% +4,4% GEL/AZN 1,4781 Ͳ1,1% +1,8% NASDAQ 5100,16 +1,4% +5,5% GEL/AMD 0,0049 Ͳ +4,3% MSCIEMEE 125,32 Ͳ1,1% +0,5% GEL/UAH 0,0947 +0,3% +5,2% MSCIEM 869,30 +0,2% +4,8% EUR/USD 0,9110 +0,5% +2,9% SP500 2175,03 +0,6% +4,3% GBP/USD 0,7629 +0,6% +12,2% MICEX 1926,90 Ͳ0,7% +1,6% CHF/USD 0,9871 +0,4% +3,0% MSCIFM 2567,89 Ͳ0,6% +0,9% RUB/USD 64,7984 +1,7% Ͳ0,0% GTIndex(GEL) 841,36 Ͳ2,6% Ͳ0,1% TRY/USD 3,0660 +1,7% +6,0% GTIndex(USD) 707,67 Ͳ2,7% Ͳ5,9% AZN/USD 1,5955 +2,7% +4,1% GEORGIA TODAY 2 BUSINESS JULY 26 - 28, 2016 where Azerbaijan Spends Over $600 your essential guide to Georgia .ge Pay 10 GEL for your Million on BTK’s Georgian DiscountD Cards 10 magic

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to drink zerbaijan announced it has allocated USD 611.5 million (1435 million GEL) s to buy for the construction of the Georgian section of the Baku-Tbilisi-Kars (BTK) In total, Azerbaijan allocated a loan of USD 775 railway as of July 1, 2016, since the million (1819 million GEL) for the construction of Astart of fi nancing of this project by the country’s BTK’s Georgian section. SOFAZ is fi nancing the State Oil Fund (SOFAZ), reported Trend News project in accordance with the Azerbaijani Presi- Agency on July 23. dent’s Decree of February 21, 2007. According to the agreement signed between the The Baku-Tbilisi-Kars railway is being constructed Azerbaijani and Georgian governments, the funds on the basis of a Georgian-Azerbaijani-Turkish were transferred to Marabda-Kartsakhi Railway intergovernmental agreement. It is planned to be through the International Bank of Azerbaijan. The commissioned by late 2016. Marabda-Kartsakhi Railway was created to design, The peak capacity of the railway will be 17 mil- construct, rehabilitate, reconstruct and operate the lion tons of cargo per year. At the initial stage, this Marabda-Turkish border railway section and rel- fi gure will be one million passengers and 6.5 mil- evant infrastructure projects. lion tons of cargo.

PPresent any Where Discount Card to the following locales and enjoy special discounts, exclusive offers and FREE gifts. Batumi Botanical Garden Introduces New Pier Continued from page 1 City Sightseeing Tbilisi Casino International Batumi “The Green Cape has clear waters and this coastal strip is very important for tourists, but the road Vardzia Resort Marco Polo Hotel Gudauri and infrastructure were in poor condition follow- to go w ing on from the Soviet collapse- for 25 years noth- Culinarium – Khasheria Japanese Restaurant Kyoto ing was done,” noted Batumi City Hall representa- to stay tives. w In order to make the Batumi Botanical Garden Chateau Mukhrani to eat 8000 Vintages even more attractive for visitors, plans are in place Get 170 GEL worth of w to widen the streets in the Green Cape area, creat- Nature Jewels FREE products & services Art Studio La Maison Bleue ing pavements, proper drainage systems, curbs and Cards can be used only once by and for the bene to drink protective walls. Decorative slabs and outdoor with extra discounts Cards valid until 15th July 2016. w lighting will also be installed. Parallel to these

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TBILISI-BATUMI BATUMI-TBILISI Ministry of Finance Presents KUTAISI AIRPORT

TBILISI CENTRAL BATUMI CENTRAL 09:00, 12:00, 20:00, 01:00 09:00, 12:00, 19:00, 01:00 New Income Tax System at 2 Station Square TAMAR MEPE AVE. 595 99 00 00 www.eurobus.ge International Forum

tion in current international projects like Job Vacancy BY EKA KARSAULIDZE BEPS’ inclusive platform, which Georgia joined this June. Involvement in this platform makes it eputy Finance Minister possible for Georgia to have equal rights, Lasha Khutsishvili par- along with the Organization for Economic ticipated in a roundtable Co-operation and Development (OECD) about the mobilization of and G20 countries, in fi ghting tax eva- domestic resources in part- sion, as well as to be part of the BEPS' Dner countries and the Addis Ababa’s Tax working group and the Global Forum’s Initiative in the framework of a United Experts Group of Tax Transparency and FARM MANAGER Nations high-level political forum last Information Exchange. Provided By: Investment Company week, with the Deputy Minister sharing Deputy Minister Khutsishvili reported ARIC GROUP the Georgian experience. on the already implemented tax reforms The Addis Ababa Tax Initiative was in Georgia and the new income tax sys- About the Company: established in 2015 between Germany, tem which will come into force from Investment company ARIC GROUP is the Netherlands, the UK and the US to support the mobilization of domestic about Georgia’s activities regarding Base 2017. The Ministry of Finance claims that seeking a professional with minimum governments, and yet it brings together resources. Georgia was one of the fi rst Erosion and Profi t Shifting (BEPS) and the organizers of the meeting marked 5 years management experience of a more than 40 countries and organiza- to join the initiative and actively coop- named areas where the country needs Georgia’s involvement in international large scale (500ha plus) planting farm tions that have expressed their readiness erate. help from donor countries. He also noted projects and the progress achieved by (vineyard, stone fruit, nut and so forth). to increase efforts in partner countries During the meeting, Khutsishvili spoke the importance of Georgia’s participa- the tax reform. Location: #2 D. Gamrekeli Street, 0160, Tbilisi, Photo: Georgian Railways Georgia to Create Transport Corridor Georgia Regular trips to Kakheti region, Geor- with Key Neighbors gia Melkonyan, said details will be discussed How to apply: BY EKA KARSAULIDZE in Sofi a shortly. Applicants whose qualifi cations match It will be the second meeting of the the above requirements are welcome countries involved after the fi rst took to send their CV (English) to the fol- eorgia, Armenia, Iran, Bul- place in Tehran in June. lowing e-mail: [email protected]. garia and Greece intend to The existence of a new transport cor- Please include the position title in the create a transport corridor ridor could allow Iran to become a trad- subject line. that will connect the Black ing hub for Europe and Central Asia. Sea and the Persian Gulf. Bulgaria’s Prime Minister Boyko Bor- Only shortlisted candidates will be GArmenia’s Deputy Head of Ministry of isov has already confi rmed that the contacted. Transport and Communication, David country is ready to join the project. GEORGIA TODAY 4 BUSINESS JULY 26 - 28, 2016 Mikheil Janelidze Meets Members of US Congress Delegation Import of Oil Products to BY EKA JANJGAVA Georgia Increases in H1 2016 eorgian Foreign Minister directly linked with the intensifi cation BY EKA KARSAULIDZE Mikheil Janelidze held a of the economy: agricultural works, meeting with members infrastructure projects, construction and of the US Congress del- transit transport,” they said. egation on their visit to mport of oil products to Georgia The largest volume of imported gaso- GGeorgia. in June 2016 increased by 2.4 thou- line and diesel fuel this June originated The sides discussed the strategic part- sand tons compared to May of in Romania – 31,000 tons (29.6 percent nership between Georgia and the US, this year, amounting to 104.9 thou- of total imports), followed by Russia – emphasizing the US Government’s sup- sand tons. Georgia received most 25,000 tons (23.8 percent), Azerbaijan port for Georgia’s economic develop- Ioil products from Romania, Russia and – 22,100 tons (21.1 percent), Bulgaria – ment, ongoing democratic reforms and Azerbaijan and diesel fuel was imported 12,000 tons (11.4 percent), Turkmenistan foreign policy priorities. Discussions more than petrol, the Union of Oil Prod- - 9,100 tons (8.6 percent), and Greece – also focused on the situation in Georgia’s ucts Importers (UOPI) claimed. 4,300 tons (4.1 percent). occupied territories and issues relating Growth of imports of petrol result from In general, imports of oil products to to regional security. an increase in consumption as, due to Georgia in the fi rst half of 2016 increased “We spoke about the strategic partner- lower prices for petrol, gas consumers by 14.3 percent compared to the same ship between Georgia and the US, about mittee on Oversight and Government countries. have switched back to petrol, reported period last year, amounting to 519,300 the political support the US Congress Reform. The delegation includes repre- “Georgia has wide bi-partisan support the UOPI. “Fuel consumption is also tons. shows for Georgia in its statements and sentatives from the committee as well from the US Congress,” said Chaffetz. resolutions, and most importantly, about as from the committees on Foreign Rela- “The delegations of the Congress will the fi rm support from the US for Geor- tions, Budget and Finance. continue to visit Georgia in the future. gia’s sovereignty, territorial integrity and The sides spoke extensively about the Georgia has many friends in the US Euro-Atlantic aspirations. Special atten- agenda of bilateral co-operation and the Congress, and we support what Georgia tion was paid to the reforms the Govern- outstanding results that have been is doing and what it is going through in ment of Georgia is carrying out to bring achieved under the US-Georgia Strategic this tumultuous time.” the country closer to the North-Atlantic Partnership Commission. Special accent Within the framework of this visit to Alliance. The American side reaffi rmed was put on the importance of deepening Georgia, the delegation of congressmen that Congress will continue to strongly co-operation with US legislative bodies is to hold meetings with representatives support Georgia on this path,” Janelidze with the Congress delegation reaffi rmed of the executive and legislative branches said following the meeting. the fi rm support of the US legislative of the Government. They have already The US delegation in Georgia is led by authorities for the further strengthening visited the Administrative Boundary Jason Chaffetz, Chairman of the Com- of strategic partnership between the Line. GEORGIA TODAY JULY 26 - 28, 2016 BUSINESS 5 EBRD Invests $155 Million in Georgian Ammonia Production Development Georgia’s Defense Minister Allows Military Personnel to Serve closer to Home

to serve far from home. We made a BY TAMAR SVANIDZE decision some time ago and promised the members of our Armed Forces that we would look into the matter. Fifty- eorgia’s Defense Minister two servicemen from the 31st Battalion Tina Khidasheli issued a based in Batumi have already been new order last week allow- reassigned to units near to their home,” ing Georgian military Khidasheli said in her offi cial statement. personnel to serve in units The Defense Ministry also said those sioning of an operational ammonia than the previous year. nearG their place of residence. serving in the Armed Forces would BY EKA KARSAULIDZE production line in order to cut energy “By signing this agreement, we reaf- According to the Ministry of Defense now be required to pass a psychologi- consumption by 30 percent. fi rm our belief in Georgia’s future,” Press Offi ce, soldiers, sailors and air- cal and physical examination after sign- The program includes an overhaul said Balvanera. men who have already completed their ing their recruitment papers after which he European Bank for of the old Soviet-era production pro- Rustavi Azot Company is a producer fi rst contracted service in the Georgian they must undergo a vigorous 10-week Reconstruction and cesses. The project will signifi cantly of nitrogen-based fertilizers. It is the Armed Forces will be allowed to choose basic military course. Development (EBRD) on improve the energy effi ciency and primary fertilizer supplier in the Cau- a unit close to their registered home People between the ages of 18-35 and Tuesday signed an agree- environmental performance of the casus region with a production capac- address for the duration of their ser- young people who have already passed ment to provide USD 155 plant and will set new standards in ity of up to 220,000 tons per annum vice. their compulsory military or contract- Tmillion (270 million GEL) to Georgia’s the region, the EBRD said in its state- of ammonia and 14,000 tons of sodium Khidasheli had previously said she based service can now be recruited into Rustavi Azot Company, a producer of ment. cyanide. would ensure the rules be changed in the military on a four-year contract. nitrogen fertilizers. Bruno Balvanera, the EBRD’s Regional In 2015, the company generated 84 order to help recruit more professional Military personnel then receive 950 The EBRD will fi nance the company’s Director for Caucasus, Moldova and percent of its sales from exports mak- contract soldiers. GEL (USD 400) monthly during those capital expenditure for the reconstruc- Belarus, said the Bank’s investments ing it one of the largest exporters in “One of the problems military ser- four years. The salary increases based tion, modernization and recommis- for 2016 would be three times higher the country. vicemen face is the prospect of having on rank, position and experience. GEORGIA TODAY 6 BUSINESS JULY 26 - 28, 2016 Russia Hopes for Better Trade Relations with Georgia consider it necessary at this stage to BY EKA KARSAULIDZE respond to it,” Pushkov told the Ria Novosti News Agency. “First of all, it is a political step, largely dictated by the ollowing the announcement Georgian leadership to demonstrate their that Georgia had supported unity with the West, which was the ini- the extension of EU sanctions tiator of these sanctions.” against the Crimea and Sev- Pushkov also noted that Russia is com- astopol on July 20, a member mitted to the gradual normalization of ofF the Foreign Affairs Committee in the relations with Georgia and added that State Duma of the Russian Federation, “there are [in Georgia] forces that are Yan Zelinsky, spoke of the necessity to interested in it as well.” introduce a ban on imports of Georgian The Duma member expressed hope wine and mineral water to Russia. How- that after the parliamentary elections in ever, both the Georgian and Russian Georgia this October, it will be possible sides later refuted this statement, high- to create better foundations for the nor- lighting that the countries remain impor- malization of Russian-Georgian relations tant trade partners. “The restrictions on products produced in Crimea and Sevastopol were intro- duced by the EU in 2014. Georgia joined them the same year. Last year they were extended, and now extended again auto- matically,” said Zurab Abashidze, the Georgian Prime Minister’s Special Rep- resentative for Russian Issues. “Thus, it would be illogical for Russia to react this way to a decision which was adopted in 2014.” Source: www.nationalreview.com After a Russian media outlet reported Zelensky’s statement, the Head of the across the board. “Recently, during our ing to the latest data from the National To date, Russia remains the largest and Georgia were terminated following Foreign Affairs Committee in the State meetings with Georgian parliamentar- Statistics Offi ce of Georgia (Geostat), importer of Georgian wine, having the military confl ict in 2008. At present, Duma, Aleksey Pushkov, also said that ians on international platforms, we have Georgia’s foreign trade turnover with imported wine to a total cost of USD the dialogue between Russia and Geor- Russia does not consider it necessary to the impression that there is certain Russia this January-June grew by approx- 22.3 million, which is USD 4 million more gia is supported by the Geneva Interna- respond to the decision of Georgia and potential for the resumption of our inter- imately 16.5 percent compared to the than in January-June 2015. Additionally, tional Discussions and regular meetings other countries with regards the exten- parliamentary relations, and Russia is same period of 2015, amounting to more export of Georgian mineral waters to between the Georgian Prime Minister’s sion of sanctions. ready for this," stated Pushkov. than USD 390.3 million- 6.8 percent of Russia rose by USD 607,000, amounting Special Representative for Russian Issues, “Russia does not accept this step as Trade relations will naturally take one the total foreign trade turnover of Geor- to approximately USD 18 million. Zurab Abashidze, and the Deputy For- friendly, but at the same time does not of the main roles in this issue. Accord- gia. Diplomatic relations between Russia eign Minister of Russia, Grigory Karasin. GEORGIA TODAY JULY 26 - 28, 2016 BUSINESS 7 A Bountiful Harvest! 2000+ Jobs: Growth in Georgia Georgia Receives Project to Support Agriculture 30 Combines from Development in ABL Villages Azerbaijan BY EKA KARSAULIDZE Photo: Ministry of Agriculture he Ministry of Agriculture of Georgia, in partnership with the United States Agency for International Development (USAID), launchedT a new ‘Growth in Georgia’ project to support the rural population. The project will focus on villages located near the confl ict zones (near the Admin- istrative Boundary Line, ABL). The presentation of Growth in Georgia took place in Nikozi village, Shida Kartli, near the South Ossetia ABL last week. Ministry representatives stated that Growth in Georgia is to be implemented in 70 communities in fi ve regions of Georgia. The project will create 2000 jobs and increase incomes of 11 thou- sand families. As such, it is expected that it will signifi cantly improve the economic situation of the population. Growth in Georgia is part of the fi ve- year project implemented by USAID in “Compared with the previous years, cooperation with the Ministry of Agri- BY EKA KARSAULIDZE we are expecting a record-breaking culture of Georgia, the aim of which is harvest,” said Deputy Agriculture Min- to promote the sustainable economic ister Levan Davitashvili. “The average development of the villages located near he government of Azerbai- productivity per hectare has almost the dividing lines and confl ict zones, jan has given Georgia 30 doubled to four tons per hectare. For the growth of rural incomes, and the combines to cope with a this year alone, more than 80,000 hec- deepening of market relations between record-breaking harvesting tares of land was being used to grow producers and buyers. According to the season expected later this wheat and more than 40,000 hectares Minister of Agriculture, Otar Danelia, Tyear. for barley.” it is particularly important to have the The combines will be put to use by local The Ministry of Agriculture will help support of states and international farmers within the next 20-25 days, reported farmers store the crops as they undergo organizations in and near to ABL vil- Azeri business website ABC.AZ. stringent tests before being sold. lages. GEORGIA TODAY 8 BUSINESS JULY 26 - 28, 2016 Georgia’s Remote Regions to Receive Hi-Speed Internet Access

program on broadband infrastructure development BY TAMAR SVANIDZE in Georgia and said the new program would be completely fi nanced by Cartu Fund, owned by Georgian billionaire and former Prime Minister ore than 2,000 towns and villages Bidzina Ivanishvili. throughout Georgia are to receive Kvirikashvili said the USD 100 million charitable high-speed Internet network program would be implemented with the support access, Georgia’s Prime Minister of the Economy Ministry’s Innovation and Tech- Giorgi Kvirikashvili announced at nology Agency. aM cabinet session last week. “This is a truly historic achievement as access to The government has already approved a state information is the main condition to creating a free

The USD 100 million charitable program would be implemented with the support of the Economy Ministry’s Innovation and Technology Agency

society. It is of critical importance for education said that young, educated Tbilisi residents use the and for the development of civil society," Kviri- Internet more frequently than other Georgians. kashvili said. The same study highlighted that the most vocif- He also indicated that all interested private pro- erous Internet users are 18 to 35-year-olds with a viders will be allowed to use the infrastructure to full 81 percent of them in Tbilisi, 61 percent in other provide Internet across Georgia. urban settlements and 39 percent in rural settle- According to the Georgian National Communica- ments. tion Commission just 600,000 of Georgia’s 3.5 mil- Only 1 percent of Georgians has never heard of lion people have regular internet access, 79 percent the Internet, lower than in previous surveys which of which reside in the capital, Tbilisi. showed that as much as 6% of Georgians had no The Caucasus Research Resource Center in 2015 previous knowledge or experience with the Internet. GEORGIA TODAY JULY 26 - 28, 2016 BUSINESS 9

New Metallurgical ROUTING FLIGHT NUMBER WEEK DAYS DEPARTURE ARRIVAL TK 379 02:35 04:05 TBILISI - ISTANBUL ATATURK AIRPORT TK 387EVERYDAY 06:35 08:05 TK 383 22:55 00:30+1 TK 386 01:40 04:55 Plant to Be Built by ISTANBUL ATATURK AIRPORT - TBILISI TK 382EVERYDAY 18:10 21:30 TK 378 21:15 00:30+1 TK 381 1/2/4/5/6/7 04:25 05:50 TBILISI - ISTANBUL SABIHA GOKCEN AIRPORT TK 381 3 05:05 06:30 South Korean Investors ISTANBUL SABIHA GOKCEN AIRPORT - TBILISI TK 380 EVERYDAY 19:40 22:55 TK 391 1/2/4/6/7 10:35 11:40 BATUMI - ISTANBUL TK 393 1/3/4/5/7 20:15 21:20 market value. TK 390 1/2/4/6/7 06:25 09:20 POSCO currently operates two inte- ISTANBUL - BATUMI grated steel mills in South Korea, in TK 392 1/3/4/5/7 16:20 19:20 Pohang and Gwangyang. In addition, POSCO operates a joint venture with US Steel, USS-POSCO, which is located in Pittsburg, California, United States.

MonitoringTIFLIS Report 7.5x6cm ING.indd Says 1 Georgian Media 13/06/16 15:16

meeting the two parties introduced the BY EKA KARSAULIDZE investment project and revealed their Making Progress in Pre-Election Coverage future plans regarding Georgia. Georgia’s Deputy Foreign Minister welcomed outh Korea’s largest multina- Korea’s interest in Georgia and updated tional steel-making company the Korean delegation on the political POSCO has indicated its inter- and economic situation and investment est in investing USD 500 mil- environment in Georgia, as well as on lion in building an ultra-mod- the increasing level of bilateral relations Sern metallurgical plant in Georgia. The between Georgia and Korea. news was announced following a recent POSCO is a multinational steel-making meeting of the POSCO Senior Vice company headquartered in Pohang, South President, Jin Sik Choi, and Georgia’s Korea. It had an output of 39.1 million Deputy Foreign Minister, David Jalaga- tons of crude steel in 2011, making it the nia, in Georgia’s capital, Tbilisi, on July world’s fourth-largest steelmaker by this 22. measure. In 2010, it was the world's larg- The Ministry reported that during the est steel manufacturing company by

mation for the monitoring report, as well on negative aspects of the government, BY TAMAR SVANIDZE as a series of monitoring rounds that while arch-rival GDS, owned by the rap- will end in November, a month after the per son of the Georgian billionaire and elections take place. former Prime Minister Bidzina Ivanish- he results of a media mon- “We have been conducting the project vili, consistently praises the government’s itoring report ahead of for six years, with the support of the EU. performance. Georgia’s Parliamentary We carried out several monitoring mis- Civil Development Institute represent- elections in October were sions before the previous fi ve elections… ative Giorgi Jologua said the main chal- released last week showing we can honestly say that there is progress lenge for Georgia’s media is the issue of Tareas of progress during the pre-election regarding the overall media coverage of constant violations of ethical standards. season by local media outlets. the pre-election process. We hope this According to the report, radio reports Three non-governmental organizations, trend will continue,” said Natia Natsv- are the most balanced and unbiased Internews Georgia, the Georgian Char- lishvili, UNDP’s Resident Representative among other local mediums for the ter of Journalistic Ethics and Civic Devel- in Georgia. media. Representatives of Internews opment Institute, observed more than The Journalistic Ethics Charter, which Georgia noted that they objectively cover 40 local online, print, broadcasting and has been conducting monitoring of local events that create the pre-conditions radio outlets over a six-week period to TV channels, emphasized that Georgian need to provide balanced information. compile the results. TV programs had been focusing their The European Union and United attention on the conduct of the various All reports are available online: www.Medi- Nations Development Program (UNDP) branches of government. aMonitor.ge and Facebook page: www. supported the process of gathering infor- Leading TV station Rustavi-2 focuses facebook.com/MediaMonitor.ge

Tel: (995 32) 2 45 08 08 10 Galaktion Street E-mail: [email protected] GEORGIA TODAY 10 BUSINESS JULY 26 - 28, 2016 Council of Europe Releases Assessment Report on Public Service Media in Armenia, Georgia and Azerbaijan

service broadcasting, Abashina makes a useful BY THE COUNCIL OF EUROPE comparison of the three systems. Common ele- ments emerge from her analysis such as a declara- tion of commitment to public service broadcasting wenty fi ve years have passed since values through their stipulation in the relevant legal Armenia, Georgia and Azerbaijan – framework; the application of state funding, detailed the Transcaucasian countries – came regulation of appointment procedures of govern- out from under Soviet rule and were ing bodies, and general content requirements able to develop their own independ- (though these are formulated more as guidance Tent public media. But twenty fi ve years on, how principles). are they dealing with the challenges of maintaining She then focuses on programming policies in the a credible system of public service media? To help three countries. In the cases of Armenia and Azer- answer that, the European Audiovisual Observa- baijan, their respective Boards are entitled to tory, part of the Council of Europe (CoE) in Stras- approve programming schedules and program burg, has just released a unique new report entitled structures but they do not communicate these to Public Service Media in Transcaucasian Countries. the public and do not announce or present them This new IRIS Extra report is authored by Ekat- in any way. The Georgian PSB Board issues quite erina Abashina, a researcher at Lomonosov Mos- a detailed and annually updated programming cow State University. She opens by analyzing the concept (“Programming Priorities”) – made avail- evolution of the public service broadcasting con- able on the website of the broadcaster annually; cept in Georgia, Armenia and Azerbaijan. Public the “Programming Priorities” of the Georgian PSB service companies were fi rst established in this are indeed purely advisory in nature. region in the early 2000s, replacing the Soviet It is clear that the creation of PSB companies in model state-run broadcasters. Georgia, Armenia, and Azerbaijan was fostered by Moving on to look at the governance of public their joining the Council of Europe (CoE). The author focuses her penultimate chapter on the role of international organizations such as the CoE and the OSCE Representative on Freedom of the Media (OSCE RFOM). Their membership of the CoE has imposed upon these countries the adoption of or amendments to existing national broadcast- ing laws to incorporate the CoE principles on PSB. In addition, regular evaluative CoE reports are written about the media in all their member states; although these rather play an inter- pretative and explanatory role for the regulation and operation of public broadcasting. For its part, the OSCE RFOM has designed spe- cifi c recommendations for the devel- opment of PSB in this region and on the creation of an inter-regional platform for the exchange of ideas and experience on PSB practice within the region. Abashina concludes that PSB in these countries has suffered from “common weak spots” such as “the lack of safeguards for the independence of PSB companies from political interests due to loopholes in appointment mechanisms for the governing bodies […]; unstable funding sources; lack of specifi c legal programming require- ments; and absence of effec- tive mechanisms of interaction with its audi- ences and audi- ence research.” She does, how- ever, underline the role of international organizations like the CoE and the OSCE who, while they cannot directly influence PSB systems, “are active and con- sistent promoters of PSB values and Contact: www.edelbrand.ge best practice in the Transcaucasian Phone: 599 461908 region.” GEORGIA TODAY JULY 26 - 28, 2016 POLITICS 11

Georgia’s path to greater stability is far from guaranteed, but there are indications of a signifi cantly smoother Stability And path than there was three, fi ve or ten years ago Instability In Georgia

2012 was as much a regime collapse as somewhat limited ideological relevance. BY LINCOLN MITCHELL a peaceful transition. Today, Georgia, whether the leaders The election this year, regardless of recognize it or not, is arguing that stabil- who wins, will not be a case of regime ity is what makes it important and rel- he Georgia Analysis is a collapse or even regime change. This is evant. Georgia can only be an ally in the twice monthly analysis of evident by the encouraging reality that struggle against an aggressive Russia to political and other major while rhetoric on both sides is strong, its north, or against the wellsprings of developments in Georgia. and will get stronger as the election Islamic terror to its south, if it is stable. Lincoln Mitchell is a polit- approaches, the central dynamic of this Demonstrating this is no small part of Tical development, research and strategic election is not one of an opposition the reason that Georgia continues to consultant who has worked extensively demanding regime change and a govern- make steady, if slow, progress towards in the post-Soviet space. He has agreed ment presenting themselves as essential NATO and the EU. to share some of his analyses exclusively to the country’s future security and even Stability is both real and perception with GEORGIA TODAY. survival. The recent six party declara- based. Therefore, it is important for Since once again achieving its inde- tion affi rming Georgia’s commitment to Georgia to be both stable and perceived pendence in 1991, the Georgian State has NATO is further evidence of this. as stable. Moreover, as a given country faced innumerable challenges and obsta- There are no guarantees that Georgia becomes more broadly seen as stable, cles. One of the most signifi cant of these can maintain this stability. That is the international actors behave in a way that was that Georgia found itself in a rough nature of political stability in any coun- helps that country become more stable, neighborhood. The confl ict between try. It can seem permanent and strong for example, by investing more, bringing Azerbaijan and Armenia in the early one moment and dissolve relatively Georgia even closer to NATO and the 1990s, the proximity to Iraq in the fol- quickly the next. Moreover the path to EU, and even sending more tourists here. lowing decade, to the tumultuous Mid- meaningful enduring stability is a dif- However, to become more stable, and dle East in general in recent years, as fi cult one; and Georgia still has some prompt this kind of behavior from west- well as to confl ict-wrought parts of Rus- distance to go to achieve that. An elec- ern countries, Georgia must continue to fewer cabinet shakeups would also con- Those politicians, within both major sia, such as Chechnya, all made the pro- tion that runs smoothly and ends peace- present itself to the world as more stable. tribute to greater stability here. parties and others who have built their ject of state and democracy building in fully in which the governing party may Elections that are not presented or seen Stability, in Georgia, or anywhere else, political base by claiming that one gov- Georgia even more diffi cult. Additionally, remain in power, but loses some seats, as an existential referendum on the is both diffi cult to predict and identify ernment or another is bent on destroy- the Russian actions, most notably in will help institutionalize this stability. country’s future, less talk of eminent and also frustratingly transient. The ing Georgia, or who can only remain Abkhazia and South Ossetia, but in Geor- Stability, however, is about more than Russian invasion, even as the threat from space between stability for the foresee- part of the political discussion by relying gia more broadly as well, have only made just elections. Institutions must be strength- Russia remains real, and a politics that able future and instability that is viewed on cataclysmic rhetoric and fear mon- life more arduous for Georgia. ened, but there also needs to be a popular does not vilify opponents or make unre- as inevitable is frequently very limited. gering are among the domestic actors Georgia’s immediate neighborhood consensus around the nature of the Geor- alistic promises are all ways Georgia can That should be particularly apparent to who lose out by greater stability. Mos- remains riven with tumult and confl ict. gian State. This consensus is emerging, make itself seen as more stable. people who remember the last years of cow, would obviously be a big loser in a The Middle East is becoming more but it is not quite present yet. While the The current government has made the Soviet Union. Nonetheless, there is more stable Georgia, as would terrorist unstable with refugee crises and violence idea of democracy as the way to organize steps in all these directions, but there is reason to believe the movement is in the organizations to Georgia’s south who from that region having an increasingly the Georgian State seems strong, fi ssures a good deal of work still to do, and not right direction for Georgia. This provides benefi t from instability everywhere, but global impact. Armenia and Azerbaijan around the relationship between the State simply by the government. Election an important opportunity both to con- particularly in the region. Georgia’s path are still frequently on the cusp of renewed and Church, the struggle to fully incorpo- related violence of the kind in Kortskheli solidate some of its gains, but also to to greater stability is thus far from guar- confl ict and the recent coup attempt in rate ethnic minorities into the modern a few months ago endangers Georgia’s change the nature of the international anteed, but there are indications of a Turkey raised the specter of instability Georgian State, external pressure from democratic evolution, but also sends the discussion about Georgia. Ultimately, a signifi cantly smoother path than there in a large neighboring country that is a Russia, the role of unelected leaders and world a message that Georgia is less than reduction in discussions of whether a was three, fi ve or ten years ago. member of NATO and has been an impor- ongoing economic pressure are all factors stable. The frequent comments from the government has pro-Russian elements, tant trade partner and ally of independ- potentially working against the further Governor of Odessa that he will return or if the former government will seek to If you would like to be on the Georgia Anal- ent Georgia. institutionalization of stability. to Georgia in the near future is not exactly destabilize the country to return to power, ysis mailing list or are interested in more Interestingly, as Georgia’s region experi- The sense of stability in Georgia is also a harbinger of calm either. A defi nitive is good for all Georgians. research, analysis or consulting for your busi- ences even greater instability than in recent partially a product of the GD’s style of end to political reprisals, the continued The benefi ts of an increasingly stable ness, government, campaign or other organ- years, Georgia itself is slowly, and relative governance. One of the most frequently reduction of the role of unelected indi- Georgia are clear, but the drawbacks, at ization, please email lincoln@lincolnmitchell. to only a few years ago, implausibly, emerg- heard criticisms of the GD government, viduals in the country’s governance and least for some, cannot be overlooked. com. ing as something of an island of stability. particularly from those who are not While Georgia is certainly still character- strong UNM or GD supporters, is that ized by contentious and polarizing politics, the GD either has not done enough or signifi cant economic challenges and a is not working actively enough to solve Russian presence in Abkhazia and South Georgia’s problems. This assertion may Ossetia, the State itself is more stable than or may not have some credence, but the at any time in recent memory, particularly contrast between the GD and the UNM when compared to the rest of the region. in this respect is hard to miss. The UNM Today, Georgia looks more stable than style of governance by adrenaline cer- much of the Middle East, Turkey, Ukraine tainly brought great energy to bear on or either of its South Caucasus neighbors. Georgia’s problems, and helped make This is seen in the general tone of political possible the wave of reforms during the life, the often overlooked continuity on two or three years immediately follow- key policies between this government and ing the Rose Revolution, but it was also the previous one and even in electoral a handmaiden to the low to mid-level politics shortly before parliamentary elec- crises of stability that characterized the tions. last half of the decade or so the UNM The coming elections in the autumn were in power. are expected to be very competitive. It As Georgia has become more stable it is very likely that three or more parties will continue to become more important will exceed the fi ve percent threshold to the West. Georgia has struggled to for their party list to get into parliament, remain a top priority for the US and and possible that no party will win a Europe since independence. Initially, clear majority of seats in the new parlia- this relevance rested largely on the fi g- ment, making it necessary to form a ure of Eduard Shevardnadze. In the Rose coalition government. Of course, four Revolution period, Georgia sought to years ago the governing party lost the make itself relevant by being, in George parliamentary election, but four sum- W. Bush’s words a “beacon of democ- mers ago very few, other than Georgian racy,” but once that was no longer plau- Dream (GD) activists, thought that was sible, it sought to position itself as an possible. The defeat of the governing anti-Russian bulwark and libertarian United National Movement (UNM) in paradise, but both of those concepts had

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