FROM AIRPLANES AND WHY THE TIME IS RIGHT FOR GEORGIAN EDUCATION: BLUEBERRIES TO HYDRO POWER: A USA-GEORGIA FREE TRADE TURNING THE CLOCK GEORGIA’S PARTNERSHIP FUND AGREEMENT FORWARD INVESTS IN INNOVATION Investor.ge A Magazine Of The American Chamber Of Commerce In Georgia ISSUE 48 DEC.-JAN. 2015/2016 Creating A Legend: Alexander Kartveli, The Story Of A Georgian Genius In American Aviation DECEMBER-JANUARY/2015-2016 • Investor.ge | 3 Investor.ge CONTENT 6 $100 Million and Two New Hospitals: Georgia’s Third Public Listing 8 From Airplanes And Blueberries to Hydro Power: Georgia’s Partnership Fund Invests in Innovation 10 Fdi, The Face Of An Economy 6 12 Jordan Belfort’s Wall Street Cred Still Sells 14 Tbilisi’s 400,000 Cars: How the City is Fighting Traffic 16 Georgian Education: Turning the Clock Forward 19 Looking For a Chance to Help 21 CRRC Georgia: What we know about volunteering in Georgia 22 The Return of the Silk Road 24 Why the Time is Right for a USA-Georgia Free Trade Agreement 28 OP-ED: The New Silk Road and What it 33 Means to Georgia 30 “My Everything is Here” 33 The Life and Work of Alexander Kartveli 38 Georgian Fashion in Vogue 54 NEWS ...... 42 4 | Investor.ge • DECEMBER-JANUARY/2015-2016 DECEMBER-JANUARY/2015-2016 • Investor.ge | 5 $100 Million and Two New Hospitals: Georgia’s Third Public Listing opens country for more investment GEORGIAN HEALTHCARE GROUP (GHG) BECAME THE COUNTRY’S THIRD PUBLIC LISTING – AND THE FIRST NON-BANK LISTING – ON THE LONDON STOCK EXCHANGE IN NOVEMBER. INVESTOR.GE SPOKE TO GHG, ECONOMISTS AND OTHER PUBLICLY LISTED GEORGIAN COMPANIES ABOUT WHAT THE LISTING MEANS FOR THE GEORGIAN ECONOMY. eorgia’s third public listing has the chairmain of Galt & Taggart. pediatric cancer specialists and modern netted $100 million for Georgian He noted that, following the successful fertility treatments. GHealthcare Group (GHG) and has listing of Bank of Georgia and TBC Bank, “There are many niches that the helped put the country on the map for “this transaction is a signifi cant milestone country needs to scale up to cover health investors, GHG’s general director, Nikoloz for the country as GHG will be the fi rst non- services...there is a huge amount of money Gamkrelidze, told Investor.ge. fi nancial sector company to be listed on that is going outside of the country now,” the London Stock Exchange.” he said. “BAROMETER FOR INVESTMENT” “This transaction confirms investors’ Gamkrelidze added that Georgians “This is investment for this country, $100 interest in Georgia, as well as confi dence are spending as much as $100 million on million in foreign direct investment, which in its economy and in the high standard medical treatments abroad due to either will create over 2000 news jobs over the of Georgian companies,” noted Vakhtang the lack of services here or the level of next two years,” he said. Butskhrikidze, CEO of TBC Bank. care available. This is what is helping georgia to be on He also congratulated GHG on its He said there are also plans to build the investors’ map. Basically, for everyone listing. over 30 new ambulatory clinics around - locally and internationally - it becomes a Companies that are publicly listed the country, including in cities like Batumi barometer for investor confi dence for the “share the important responsibility of and Kutaisi. country...that is the most important thing.” representing Georgia to the investment Gamkrelidze added that while current- The Bank of Georgia and TBC Bank are community and understand that these ly Georgians spend about $200 per person also publicly listed on the London Stock factors continue to be vital for the coun- on health care, there are predictions that Exchange. try’s development as an investment des- amount could double or triple in the next AmCham Executive Director George tination,” he said. decade, which would put it on par with Welton noted the listing”helps to raise the “This will be benefi cial for the Georgian the rates where Turkey was at in 2014. profi le of Georgia among large Western, economy.” The $200 per capita fi gure includes and particularly institutional investors. what citizens pay out of pocket, govern- “This can only help bring more investors SCALING UP SERVICES ment investments and insurance pay- and more business to Georgia,” he said. Gamkrelidze noted that the fi rst im- ments. pact for Georgia will be two new hospitals, “Ten years ago Turkey was where we “SIGNIFICANT LANDMARK” increased access to primary healthcare are today,” he said. GHG’s performance on the London and new services. “So we need to go through this cycle Stock Exchange is also a “signifi cant land- GHG is planning on offering medical as well. It will be much faster for us to get mark” for Georgian businesses considering treatments at its new hospitals that are cur- to where Turkey was in 2014 - I don’t think listing, according to Archil Gachechiladze, rently unavailable in the country, including we will need ten years to get there.” ADVERTISEMENT DNIJRJƌ@MDIBOC@RD?@~NK@>OMPH <K@M<>F<BDIBMJ?P>ODJI AJMOC@uMNOODH@DI @JMBD< GGJNND=G@JGJMN £¦¢yN@M@O@GDQ@IP@y¢££«y=DGDND| @JMBD< @G|{¬««§¥¤¤¥§©¢¢¤y¬««§¥¤¤¥§©¢¢§y RRR|>@U<II@~R@=|>JH6 | Investor.ge • DECEMBER-JANUARY/2015-2016 DNIJRJƌ@MDIBOC@RD?@~NK@>OMPH <K@M<>F<BDIBMJ?P>ODJI AJMOC@uMNOODH@DI @JMBD< DECEMBER-JANUARY/2015-2016 • Investor.ge | 7 LIKA JORJOLIANI cultural projects, including a salads and greens company in the western region ith a $1 billion portfolio and of Imereti, a pig farm in Tetritskaro mu- assets worth $3.5 billion, the nicipality and the processing of Georgian WGeorgian Partnership Fund olives and sunfl ower oil in Kakheti in is gearing up for more investment in eastern Georgia. innovation in 2016. New projects and a “The main purpose of the fund is to new mandate will help the Fund identify fi nance projects that will assist in import and support “potential opportunities for substitution and increase exports,” she business development,” Georgian Part- said, noting Grant Thornton is working nership Fund Deputy CEO Natia Turnava with the fund to prepare proposals on told Investor.ge. investment opportunities, especially in the agricultural-processing industry. A BILLION IN HYDRO One of the biggest projects the Fund $85 MILLION IN AIRCRAFT PART Georgian Partnership Fund Deputy CEO is currently involved in is a $1 billion in- MANUFACTURING Natia Turnava vestment implemented by South Korean Turnava said the fund is partnering State Corporation of Water Resources, with the Israeli company Elbit Cyclone FROM AIRPLANES K Water, to construct and launch the to manufacture aircraft parts and details 280-megawatt Nenskra Hydro Power for civilian aircraft. The $85 million AND BLUEBERRIES Plant. project, which will be located near the “The K Water company is ready to Tbilisi International Airport, is slated to TO HYDRO POWER: develop cooperation in other projects,” start production in 2018, she said. Turnava said, noting potential invest- The fund has also been involved in a Georgia’s Partnership ments include water-supply infrastruc- $6 million project to produce construc- Fund Invests in ture and small and medium hydro power tion materials, namely polyurethane Innovation plants. Other successful projects for sandwich panels; the factory was com- the fund include the Gardabanigas-fi re pleted in June 2015 and has already thermal power station, which generates started working, Turnava said. THE STATE-OWNED GEORGIAN 239 megawatts. PARTNERSHIP FUND WILL GO NEW STRUCTURE FOR THE FUND THROUGH A REBRANDING FROM GURIA TO THE UK Turnava said the fund is “in a period AND STRUCTURAL TRANSITION The fund has also been active in the of transition” heading into 2016, as it IN 2016. INVESTOR.GE SPOKE agriculture sector, especially in prepar- works to improve its structure and ex- WITH THE DEPUTY CEO OF ing high-value export to the European pand on its investment rights. THE PARTNERSHIP FUND, market. She noted that German and French NATIA TURNAVA, ABOUT Turnava said the fund is cooperating consultants are currently working with THE FUND’S PROJECTS AND with the Georgian Company Van Rikto ITS PLANS, INCLUDING A the fund to help it create an “improved $1 BILLION INVESTMENT IN expand its Gurian plantation and pack- and modernized model” that will “stabi- NENSKRA HPP WITH SOUTH aging lines to export fresh and frozen lize” the fund’s fi nancing and allow it to KOREA’S K WATER COMPANY blueberries. coordinate with “different sectorial funds AND AN INITIATIVE TO SELL “Blueberries are being exported in and donor programs.” GEORGIAN BLUEBERRIES IN the CIS and European countries. The “We focus our attention not only on THE EUROPEAN MARKET. fi rst batch has already been sent to Great the commercial feasibility of projects but Britain,” she said. also on the positive social or macroeco- Turnava added that the fund is also nomic effects that these projects could looking at partnerships with other agri- bring to the country,” she said. 8 | Investor.ge • DECEMBER-JANUARY/2015-2016 DECEMBER-JANUARY/2015-2016 • Investor.ge | 9 oreign direct investment (FDI) in million in 2013 to $82 million in 2014, 2014 was $1.75 billion, up from according to offi cial statistics. F2013’s $941.9 million. Slightly over 50 percent of total FDI in 2014 was CONTINUED INVESTMENT FROM in construction, restaurants, transporta- CHINA tion and infrastructure. During the fi rst nine months of 2014, FDI Investments from China, as well as China’s Hualing Group was the biggest an uptick in investment from post-Soviet investor in the country, putting a total THE FACE OF countries, were responsible for the 2014 of $200 million in its Georgian projects increase.