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.”
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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. over the course of the year. Hualing AN ECONOMY FDI in Georgia in the fi rst half of Group, a global company worth $3 bil- 2015 was $530 million, according to lion, has implemented several projects A LOOK AT preliminary government data. in Georgia: a wood processing facility licensed for 20 years, a Free Industrial GEORGIA’S FDI INCREASED TRADE FROM POST- Zone project, a stone quarry license, and BASED ON SECTOR SOVIET COUNTRIES is a 90% shareholder of Basis Bank and FDI from post-Soviet countries Tbilisi Sea New City. increased by $350 million in 2014. Azerbaijan led, with investments exten- INVESTMENTS DOWN IN ENERGY sion of the South-Caucasus pipeline, SECTOR Baku-Tbilisi-Kars Project and SOCAR Investment in energy dropped in Energy Georgia, as well as other projects. 2014, compared to the previous year: Russian investment increased from $2 FDI was at $189.9 million in 2014, down
10 | Investor.ge • DECEMBER-JANUARY/2015-2016 ADVERTISEMENT
from $244.7 million in 2013. The energy sector remains attractive for investors, despite the dip in investment, due to high domestic and regional demand, coupled with the deregulated energy market and competitive rates. The World Bank noted “Georgia has a developed, stable and reliable energy sector…The most promising source of additional en- ergy generation is hydropower and the government is focused on securing private investments for construc- tion of new hydropower stations. Currently, only 12 % of Georgia’s hydropower potential is being utilized.” There are 15 hydropower plants under construction, with eight expected to be completed in 2015-2017, ac- cording to the Georgian National Investment Agency.
LOOKING AHEAD FDI in the fi nancial sector amounted to 115 million USD in 2014. Return on Equity (ROI) of Georgian commercial banks was 6.2 percent in the second quarter of 2015. Current trends suggest that investing in the fi nancial sector is profi table, and yields are in- creasing because interest rates are up (NBG increased its refi nancing rate by 3.5%, compared with the begin- ning of 2015). In contrast with the increase in interest rates, non-performing loans to total portfolio of loans decreased to 3 percent. FDI growth in real property this year accounts for only $9.6 million USD, compared to last year’s $96 million – which was largely due to building for the Youth Olympic Games. The drop in investment can be partially explained by limited demand due to the Georgian lari’s 37 percent depreciation against the U.S. dollar, which has cut into consumers’ purchasing power and made dollar-based mortgages more expensive. Tourism investment is also on the radar for 2015 and beyond, according to the World Bank, which noted there were 5 million visitors to Georgia in 2013 and 6.3 million are expected by the end of 2015. The Georgian Ministry of Finance released its projections of a budget orientated on social spending for 2016, whichis also a weak signal for investors. Eco- nomic growth is expected to be around 2 or 3 percent, which is low for a developing country like Georgia. Due to the strong link between economic growth and FDI, the likelihood of a signifi cant increase in capital infl ow is low for 2016.
DECEMBER-JANUARY/2015-2016 • Investor.ge | 11 of Wall Street.” Financial analyst Mari A COMPLICATED MENTOR Jordan Tsutskiridzeadmits that did not know Belfort is an engaging trainer, es- anything about Belfort before getting pecially for those with a beginner or her ticket for the day long master class intermediate level of knowledge about Belfort’s organized by Alliance Group Holdings, sales. Many people in the audience take the company that brought Belfort to notes, including me. Tbilisi. She wants expert advice on how He imparts wisdom about technique, Wall Street to present herself to clients. Among the- tone, and buyer psychology. His strategy, few diehard fans in the audience is math- however,assumes that sales techniques ematics student Luka Tikanidze who read are internationally universal. It would Cred Still Belfort’s memoir and saw the fi lm. have been interesting for him to engage For the uninitiated, Jordan Belfort more on what might work in Georgia’s has led a colorful life. He was arrested specifi c business culture. Sells in the United States in 1998 for securi- Further, he does not acknowledge ties fraud and money laundering for that the legendary sales from his glory THE NOTORIOUS running a penny stock scam in which he days were, in many cases, based on and his partners defrauded investors and misleading the customer. Heonly wades WOLF OF WALL STREET made millions for themselves. Belfort’s into ethical questionsonce, acknowledg- VISITS TBILISI fall from Wall Street grace included the ing that while individuals can learn the usual prolifi c excesses (drugs, alcohol, skills to persuade others and make a lot etc.) and some original excesses, such as of money, “without integrity and eth- wrecking helicopters andyachts. ics, it does not last.” Belfort could have According to the U.S. Justice Depart- drawn more meaningful lessons from ment, Belfort has only paid about $11 his failures about the need for regulatory million of the $110 million in restitution compliance and corporate responsibility, that he owes his former clients.In jail, for example. Belfort’s cell mate, Tommy Chong of In the end, the details of Belfort’s “Cheech and Chong” fame, encouraged sordid past and the question of whether LAURIE KELLEHER him to write his memoir and to launch his master class is a massive sales pitch a speaking tour. Belfort is supposed to of Belfort himselfdid not seem to mat- acing the stage in his untucked use the profi ts from his international tour ter much. blue business shirt, Jordan Bel- to pay back defrauded investors. Some Tikandize, joined by several friends Pfort lives up to The Hollywood have questioned whether Belfort’s tour who are launching an online sales and Reporter’s description as “buff, bombas- is simply a way for him to parlay his consulting company together, concluded tic and full of unrepentant braggadocio.” celebrity into yet another sale. that, “Belfort is cool. His advice is use- “Who here is a natural born Indeed,a tenant of Belfort’s presen- ful.” Management student LadoJishiash- salesman?”Belfort proselytizes. “There tation is that,“Everyone is in sales one vili agreed, “Belfort has deep personal are only a few of us. Who knows that they way or another,” and that, “Every sale experience, and one way or the other, have the gift?” A few hands shoot up in has the same straight line from open something to share.” Many audience the full house of Georgian entrepreneurs, to close.”His brochure promises that members came wanting business skills MBA students, and others just seeking a his Straight Line System can take any and left feeling like the got some, albeit brush with fame. company or individual, regardless of from a complicatedmentor. age, race, sex, educational background “EVERYONE” IS IN SALES or social status, and empowerthem to Only about a fifth of the crowd create massive wealth, abundance, and Laurie Kelleher is a writer and volunteers that it has seen Martin entrepreneurial success, without sacrifi c- international trade consultantbased in Scorcese’s fi lm about Belfort, “The Wolf ing integrity or ethics. Tbilisi, Georgia
12 | Investor.ge • DECEMBER-JANUARY/2015-2016 DECEMBER-JANUARY/2015-2016 • Investor.ge | 13 enough of them,” Mchedlidze says. 200 buses in 2016, with assistance from Tbilisi needs at least 900 buses, in the European Bank for Reconstruction TBILISI’S his opinion. Currently, there are just and Development (EBRD). over 700 buses, all operated by the city’s There are also plans to introduce new Tbilisi Transport Company, which also regulations for taxis and campaigns to 400,000 owns the metro and ropeway systems in promote public transport. the capital. “In 2016, a number of new projects Mchedlidze has been part of the cam- will be launched, including construction CARS: paign for the return of the Tbilisi tram. of overpasses for cars on Pushkin Street, A 2012 study conducted as part of the a redesign of the May 26 Square and How the City is Tbilisi Tram Project found that 75 per- Peking Avenue, and the construction of cent of the 8,000 Tbilisians questioned a road connecting Makhata Mount with Fighting Traffi c use public transport: more than half the St. Trinity Church, which we see as prefer marshrutka micro buses, while 24 one of the most important infrastructure percent opt for the metro, and 22 percent projects,” Lekvinadze said. INVESTOR.GE IS ENDING THE ride the bus. The EBRD is also developing a new YEAR THE WAY IT BEGAN: The study echoed offi cial statistics, route scheme for the city and studying LOOKING AT THE CAPITAL’S which show that public transportation— what will be the best option for the Tbilisi CONGESTED ROADS AND despite the fact that every third person Transport Company to develop in the TRAFFIC JAMS. MAIA in Tbilisi owns a car—is still popular: future—whether it should stay subordi- EDILASHVILI SPOKE WITH in 2013, there were 105.76 million bus nated to the municipality or be handed THE CITY AND NGOS ABOUT riders; 96.23 million trips by metro; and over to a private operator. WHAT IS BEING DONE AND 1.15 million trips by ropeways – a 24 per- WHAT IS NEEDED TO EASE THE cent increase across the board compared 33,136 PARKING PLACES COMMUTE HOME. to 2012, according to Tbilisi Transport’s One concrete decision to be made 2013 annual report. is about parking. Currently, Tbilisi has Today the city is working to make approximately 33,136 parking spots, of MAIA EDILASHVILI sure transportation available is better which 1,600 are located on sidewalks. organized, according to Deputy Tbilisi Adding to this problem, drivers keep ver 400,000 cars, 700 buses and Mayor Irakli Lekvinadze. parking along the streets illegally, block- 2,000 minibuses are on Tbilisi The city government has commis- ing traffi c. Ostreets every day, making the sioned a consortium of German and “We plan to hire a new consulting daily commute a nightmare for pedes- French companies to develop a trans- company soon that will work on a study trians and drivers alike. portation plan across different modes of to identify areas for constructing a mul- The city authorities say they have travel, he said. tistory parking garage and underground plans to ease traffi c jams and modernize “The plan will show how various parking garage, as well prepare invest- public transportation, but activists warn routes should be distributed, where ment proposals for private operators,” more work is necessary. troublesome areas are, and what needs Lekvinadze said. But after a decade of to be done to solve the problems,” Le- lobbying for safer roads, Ekaterine La- 105 MILLION BUS RIDES kvinadze noted in an e-mail interview. liashvili believes “a political decision” Activists like Kakha Mchedlidze In addition, the city plans to replace to act is necessary. Laliashvili, the Chair believe the city needs to focus on better old buses with new, 12-meter-long of the Board at the Georgian Alliance public transportation and infrastructure. wheelchair-accessible buses operated for Safe Roads, said:“There should be “At a bus stop after the arrival of by CNG, “which are more effi cient both a separate, independent agency with its three buses, the area remains crowded. economically and ecologically,” Lekvi- own budget ,and executive power needs Why? Because almost all buses go to nadze said. to be created that would put an end to Rustaveli Avenue, and there are still not The city plans to purchase as many as talks and make decisions.”
14 | Investor.ge • DECEMBER-JANUARY/2015-2016 DECEMBER-JANUARY/2015-2016 • Investor.ge | 15 Georgian Education: Turning the Clock Forward
GEORGIAN PARENTS ARE Book Illustration. They come to receive ing to The National Statistics Offi ce of INCREASINGLY TURNING instruction in English, Georgian and Georgia, there are currently 246 private TO PRIVATE SCHOOLS AND Russian. Regardless of the subject or general education schools in Georgia TUTORS TO FILL THE GAP language of instruction, creativity is the -- roughly 10.6 percent of the country’s LEFT BY PUBLIC EDUCATION. top priority. “We are all experimenting total. Of 553,945 general education GEORGIAN TEACHERS, together,” says Buachidze, an artist who students, 53,600 are enrolled in private EDUCATION SPECIALISTS opened the school in 1999. schools. That represents a 60.4 percent AND EVEN ENTREPRENEURS increase from the 2005-2006 school BELIEVE NEW METHODS FOR CREATING AN ALTERNATIVE year, even as overall general education TEACHING AND LEARNING Buachidze began teaching 16 years enrollment fell by 20.2 percent over the ARE NECESSARY TO REBOOT ago when a few students needed an art same period. And these fi gures don’t THE COUNTRY’S EDUCATION SYSTEM. teacher. People were looking for some- include schools like Buachidze’s, which thing they couldn’t fi nd in public schools. supplement rather than replace general “In the 1990s, the education system was education. In exchange for an enrollment JOSEPH LARSEN falling apart,” she recalls. “Our school fee (an amount she calls “moderate”) was an alternative to what people knew.” students receive instruction on top of ach week, hundreds of people What began with three pupils swelled to what they get in school. come through the doors of Nata 14 by the end of the school’s fi rst year. EBuachidze’s Studio in Mtats- Now, Buachidze’s school counts more IDEOLOGY “FROM ANOTHER minda. Children and adults come after than 300 students. CENTURY” school, in the evenings and on Saturdays. Her school is one of a growing num- Private schools are held in high es- They come to take courses like English ber of private outfi ts injecting innovation teem by many Georgian families. But for Language, Photography, Art History and into Georgia’s education sector. Accord- some, their popularity is less a refl ection
16 | Investor.ge • DECEMBER-JANUARY/2015-2016 of effectiveness than an indictment of the small. “You rarely see private schools ment spending on education was 739.7 public education system. In 2010, only do really different things from public GEL per student in 2014, according to 38 percent of Georgian 15-year-olds schools,” he says. statistics from the Ministry of Finance, who took the Organisation for Eco- a 13 percent increase from 2012. The re- nomic Cooperation and Development’s “POORLY” CONCEIVED REFORMS sults haven’t been impressive, however. Programme for International Student Nutsa Kobakhidze, a PhD candidate A 2014 report from the Geneva-based Assessment (PISA) attained profi cient in education at the University of Hong World Economic Forum ranked Georgia scores in literacy. Only 34 percent were Kong, maintains that Georgia’s educa- 95th out of 144 countries for quality of profi cient in science, and 31 percent in tional failures are more about policy than education. According to Kobakhidze, “A mathematics. culture.“Soviet institutional legacy is a more fundamental problem than fi nances “The largest problem is that the signifi cant barrier to changing leader- [is holding education back].” [teaching] ideology is from another ship and teaching style. However, poorly century,” says Simon Janiashvili, a conceived and implemented reforms, as BUILDING SKILLS THROUGH former schoolteacher who is now a PhD well as inadequate evaluation and policy LOGIC candidate at Columbia University in New adjustments have much powerful infl u- Kakha Kokhreidze isn’t happy about York. Georgia’s overall education culture ence on what happens at schools,” she the state of schooling in Georgia. “What is stagnant, with outdated methods and says. While disagreeing about causes the system is doing now is, unfortunately, teachers ill-prepared for contemporary and solutions, nearly all observers agree wasting the time of the students,” he demands, he notes. that change is necessary. Since coming says from his offi ce in Saburtalo. He While certain private initiatives are to power in 2012, the Georgian Dream doesn’t own or operate a school, but he doing impressive things, their overall coalition has increased spending on does aspire to improve education quality. impact on a country of 3.7 million is education every year. Central govern- Kokhreidze is the founder of Logicmeter,
ADVERTISEMENT a private initiative designed to prepare ogy and service sectors. For Kokhreidze, short of international standards. But students for success in a knowledge- the ability to think outside the box is both Buachidze and Kokhreidze view the based economy. An entrepreneur by pro- paramount.“We need people who are future with optimism. “I think there are fession, he founded the company in 2014 open minded...It’s necessary for the more and more schools that are doing a to redress what he sees as the failures of economic development of Georgia,” he good job,” Buachidze says. the current system. This July, Logicmeter stated. For 15 GEL per month – minus When asked whether she sees po- launched its fl agship program: a web- discounts for buying an annual member- tential for successful private initiatives based training module in which students ship and for families with more than one to “spill over” into the public sector, build math and reading skills by working student – users can access more than she is unequivocal: “Of course there is through logic games. 300,000 interactive tasks. The module potential.” “Everybody needs critical thinking provides detailed feedback for each task, And while Kokhreidze doesn’t smile and logical reasoning,” he says. These allowing users to track their progress and upon the current state of affairs, he is op- skills are especially important for Geor- get extra help in problem areas. timistic that his training module can help gia, a developing country attempting to improve performance in public schools. make the jump from an agriculture-based POTENTIAL FOR A BETTER FUTURE “We already have fi ve schools work- economy to one with dynamic technol- Georgian education currently falls ing with Logicmeter,” he proudly states.
18 | Investor.ge • DECEMBER-JANUARY/2015-2016 ADVERTISEMENT Looking For a Chance to Help
FOLLOWING THE DEATH AND DESTRUCTION OF THE JUNE 13-14 FLOODS IN TBILISI, THOUSANDS GRABBED SHOVELS, BROUGHT FOOD, AND VOLUNTEERED TO HELP THE CLEANUP EFFORTS. THE MASS OUTPOURING OF VOLUNTEERS INSPIRED INVESTOR.GE TO ASK THE QUESTION: HAS GEORGIA PRODUCED A GENERATION OF VOLUNTEERS? COULD THAT BE AN INDICATOR OF FUTURE ACTIVISM, IN POLITICS OR IN THE FACE OF OTHER TRAGEDIES?
he outpouring of volunteers in the immediate aftermath of the June 13-14 fl oods in Tbilisi was inspiring – espe- Tcially for a nation where volunteering is not widespread. Sociologists and those involved in the fl ood cleanup believe the tragedy gave Georgians the chance to put into practice a value they hold sacred: helping out when others are suffering.
A MOBILE MOVEMENT The desperation of families caught in the fl ood inspired a major outpouring of support, mainly in the face of volunteers bearing shovels to clear the mud and debris. Irina Egadze was one of the fi rst to recognize the need to organize. Responding to calls for help at the height of the fl ood, Egadze knew she wanted to do something, but she was physi- cally unable to pull people from the rising water. The next day, however, she found a niche where she could help. “I realized that there was a lot of work to do and no one to organize it. The people who arrived there did not understand where to start,” she said. Egadze, her sister and friends used Facebook to start to mobilize and manage the volunteers. In the span of 24 hours, the Facebook group grew from 150 people to over 26,000. The impact of their work was felt far beyond the disaster zone and inspired debate in media and in society of what this Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a wave of volunteers could mean for civil society. UK private company limited by guarantee, and its network of member But sociologists are wary of rushing to conclusions. firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. DECEMBER-JANUARY/2015-2016 • Investor.ge | 19 © 2015 Deloitte & Touche LLC. All rights reserved. THE “LUXURY” OF VOLUNTEERING were part of an effort to understand how Khoshtaria said. The outpouring of support after “volunteering” is understood in Georgian There is no indication, however, that the flood was a natural response for society. Georgians’ willingness to help extends to Georgians, but that is different than the CRRC opted to refer to “volunteer- politics. Zurabishvili noted that while re- classic culture of everyday volunteering, ing” as “helping without compensation” spondents value the idea of volunteering, sociologists said. in its surveys. they “hate political activism in the sense The support citizens showed for Another possible issue is the lack of of being part of a particular movement.” victims of the flood and the ravaged role models, noted Zurabishvili. Projects parts of their city was a response to an conducted by CRRC have shown people “A TRAIT OF OUR COUNTRY” “extraordinary situation,” according to are unaware of how to volunteer and What happened after the fl ood, Khos- sociologist Iago Kachkachishvili. what opportunities exist. taria said, could be a refl ection of previ- When we talk about volunteering, he The CRRC’s Tamuna Khoshtaria not- ous research that showed young people said, it “should be part of an everyday ed there also appears to be a disconnect are willing to volunteer when there is pattern.” between what people do and what they “the chance for it.” “Volunteering is, I feel, a kind of lux- ury. You have this need to become a vol- unteer when all your basic needs are met. In a country where people are fi ghting for their existence and there are high rates of poverty, people fi rst of all care for their existence and survival,”Kachkachishvili said. “Volunteering needs a special real- ity, it has to be developed in a person, it doesn’t create itself...it requires edu- cation.” Surveys and interviews by the Caucasus Resource Research Center (CRRC) also indicate that volunteering as a regular act of giving back by giving of one’s time is appreciated but rarely practiced. “Based on pre-fl ood data, we Flood cleanup efforts in Tbilisi (marshalpress.ge) do not have high levels of volunteering and the fl ood was an exception, which report — in part because of the informal “There were people who needed we can call an exception based on the nature of Georgian society. help and there were people who wanted everyday data—but not evidence,” noted People, she said, do not support being to help them,” Egadze said, adding “it CRRC’s Tinatin Zurabishvili. formally active in the community. But, at was an example for me that, without any She added that previous surveys in- the same time, they are involved in many unnecessary obstacles or fuss, it was re- dicate Georgians overwhelmingly value informal organizations, like activities in ally easy for people who wanted to help the act of volunteering but report they their communities. to do so.” rarely actually volunteer. It basically boils down to helping But she stopped short of saying the There are several theories for the people, an act that sociologists say outpouring of support was surprising, or discrepancy, including even the word Georgians do regularly—but but do not that it represented a major shift in how “volunteer.” perceive as volunteering. Georgians view their role in society. In interviews with the CRRC, Geor- “Maybe, in the surveys, they do not “That is a trait of our country,” she gians immediately associated the word remember— or they cannot really state— said. “When someone is suffering, we “volunteering” with enlisting to fi ght in that they have done something because join together. On a small scale—and also the Great Patriotic War. The interviews they do not perceive it as a formal thing,” on a large scale.”
20 | Investor.ge • DECEMBER-JANUARY/2015-2016 ally volunteered did not change much. the European states studied in the above- CRRC-Georgia: Notably, volunteering is still not consid- mentioned GHK study, where the level ered as important as following traditions, of education tends to be connected with What We voting in elections or supporting people the level of volunteering, in Georgia an who are worse off. individual’s level of education does not Know About Despite the existing mismatch, if seem to matter with regard to involve- we compare Georgia to other European ment in volunteering. Volunteering in states, the level of volunteering is not Like actual volunteering activity, particularly low. A study on volunteer- attitudes towards the importance of vol- Georgia ing in the European Union carried out unteering do not change much by level in 2010 by the British consultancy GHK of education, nor do they change by re- Holdings Limited showed that the high- spondent’s age or gender. Settlement type ollowing the June 13, 2015 fl ood est rates of volunteering hovered around however, is a differentiating factor and in Tbilisi, hundreds of volunteers 40%, but only in a few states (Austria, fewer Tbilisians think that volunteering Fhelped to clean the disaster- Netherlands, the UK and Sweden). In is important for a good citizen (60%), affected zones of the city, which stirred fact, European volunteering rates were compared to other urban and rural dwell- the hope that volunteerism is on the largely comparable to those in Georgia, ers (68% and 72%, respectively). This is rise in Georgia. In the past, studies on ranging from 10%-19%, and European all the more striking when we breakdown volunteering in Georgia conducted by states like Italy and Greece actually had by age groups within settlement type. non-governmental organizations (such even lower rates (less than 10%). Even though the majority of volunteers as Helping Hand and the Civil Society following the 2015 fl oods were clearly Institute) claimed that volunteerism had WHO VOLUNTEERS, AND WHO young, in Tbilisi, young people were not taken root in Georgian society, and THINKS IT IS IMPORTANT TO the least likely age-settlement group to CRRC-Georgia surveys have consis- VOLUNTEER? think that volunteering was important for tently shown a mismatch between atti- When thinking about the prospects a good citizen. tudes and actions regarding volunteering for the development of volunteerism in The level of volunteering that fol- in Georgia. Nonetheless, a closer look Georgia, it is important to know who lowed the Tbilisi fl ood and Georgian at the level of volunteering in Georgia, tends to volunteer, which in turn would society’s agreement that volunteering is comparing it to Europe, and Georgian so- allow policy makers, NGOs and social important show that there is potential in ciety’s attitudes towards the importance entrepreneurs to understand where to the country for the level of volunteering of volunteering show fertile grounds for best direct programs aimed at promot- to increase. Policy makers, civic society volunteerism in Georgia. ing volunteerism. The 2013 Caucasus and social entrepreneurs alike should Barometer survey fi ndings show some consider ways to work off of the obvi- THE MISMATCH differences in volunteering between ous spirit of volunteerism embodied by CRRC-Georgia’s 2013 Caucasus socio-demographic groups. The elderly the cleanup efforts and the already sup- Barometer survey fi ndings show that (aged 56 and older) are slightly less ac- portive attitudes towards volunteerism 68% of Georgians fi nd it important for tive (14% reported volunteering) than in Georgia. a good citizen to do volunteer work. In 18-35 and 36-55 year olds (20% and Nino Zubashvili is a Junior Fellow contrast, only 19% of Georgians reported 22%, respectively), but this lower activ- at Caucasus Research Resource Centers volunteering during the past six months ity level could probably be explained by Georgia. before the survey was carried out in fall the infi rmities of age. Interestingly, males Interested in more data about volun- of 2013 – a clear gap between actions tend to volunteer more than females teerism? Check the upcoming Caucasus and attitudes. Interestingly, while the (25% and 14%, respectively) and in- Barometer 2015 data that will be avail- share of the population highlighting the habitants of rural areas are slightly more able by the end of the year or take a importance of volunteerism for good actively engaged in volunteering (24%) look at the 2014 Volunteering and Civic citizenship increased between 2011 and than inhabitants of the capital (14%) and Participation in Georgia survey at cau- 2012, the share of Georgians who actu- other urban areas (15%). In contrast to casusbarometer.org
DECEMBER-JANUARY/2015-2016 • Investor.ge | 21 22 | Investor.ge • DECEMBER-JANUARY/2015-2016 The Return of the Silk Road
RECLAIMING ITS PLACE AT THE CENTER OF EAST- WEST TRADE THROUGH THE NEW SILK ROAD TRADE ROUTE HAS LONG BEEN A GOAL FOR GEORGIA. IN THIS SECTION, AMCHAM GEORGIA PRESIDENT SARAH WILLIAMSON ARGUES THAT IT IS TIME HAS COME FOR A FREE TRADE AGREEMENT WITH THE US AND AMCHAM EXECUTIVE DIRECTOR GEORGE WELTON WRITES THAT CHINESE INVESTMENT COULD MAKE THE NEW SILK ROAD A REALITY.
DECEMBER-JANUARY/2015-2016 • Investor.ge | 23 SARAH WILLIAMSON, PRESIDENT OF THE AMERICAN Why the Time CHAMBER OF COMMERCE IN GEORGIA
n October, Georgian Deputy Prime Minister Giorgi is Right for a Kvirikashvili met with US Trade Representative IMichael Froman to conduct a high-level trade dia- USA-Georgia logue. Many of us in the American -Georgian business community hope that this will lead to the beginning of negotiations on a US-Georgia Free Trade Agreement Free Trade (FTA). Opening such negotiations would increase oppor- tunities for American businesses to export to and invest in Georgia. Because of Georgia’s Free Trade Agreements Agreement with the EU and its neighbors, this would provide US fi rms with increased access to Europe, Turkey and wider ON OCTOBER 30, THE Eurasia, and ensure the US a signifi cant strategic and DEPUTY PRIME MINISTER economic place in the fast-growing New Silk Road. At a time when ‘Westernization’ is under pressure in the OF GEORGIA GIORGI region, it would also be a tangible political signal of KVIRIKASHVILI MET continued US support for Georgia. WITH THE US TRADE US exports to Georgia, at $300 million in 2014, is REPRESENTATIVE, signifi cant and largely concentrated in machinery and AMBASSADOR cars. However, there is evidence of fast expansion in others areas. In the last two years, fast food chains like MICHAEL FROMAN. Wendy’s, Dunkin Donuts, Domino’s Pizza, Burger King, IN SUPPORT OF Taco Bell, KFC and Subway have all appeared on the THIS MEETING, Georgian market for the fi rst time. Clothing retail is also AMCHAM WROTE expanding fast including storefronts for Gap, Banana TO AMBASSADOR Republic and Tommy Hilfi ger. Large infrastructure projects and government pro- FROMAN AS WELL curements also offer sizeable opportunities for US fi rms. AS TO THE US SENATE Projected investment in hydropower is $4.1 billion over AND THE US HOUSE the next few years. While US investors are prominent in OF REPRESENTATIVES. developing investments, Asian and European fi rms have SARAH WILLIAMS ALSO been winning the large engineering and construction projects. The government is also currently selecting the WROTE A VERSION fi nal consortium to build a new port in Georgia, which OF THE FOLLOWING could represent a $5 billion investment over the next 10 PIECE FOR THE US years. The US fi rm Conti Group is on one of two fi nal CONGRESSIONAL consortia. American companies are also participating NEWSPAPER, ‘THE HILL’. in projects from medical facility development to waste management. An FTA between the two countries would not only aid these companies in exporting American products and machinery to facilitate these projects, but would also greatly encourage other American companies looking to expand into the region. Georgia has worked hard to become a viable partner
24 | Investor.ge • DECEMBER-JANUARY/2015-2016 DECEMBER-JANUARY/2015-2016 • Investor.ge | 25 US Deputy Secretary of State Antony Blinken and Deputy Prime Minister of GeorgiaGiorgi Kvirikashvili to its Western counterparts. The country economic and strategic importance as with a pipeline upgrade that represents a is already a hub for the region, with low a transit route for oil and gas supplies $2 billion investment in Georgia alone. corruption, a simplifi ed tax system, bi- has never been so important, since the As important as Georgia is in the lateral trade ties with its neighbors and a country offers the only route from the energy transportation world, the coun- business-friendly legislative try is not only valuable as a environment. transit route for oil and gas. A In the technology sector, “New Silk Road” transit route the government of Georgia “The U.S. alone can’t deliver NATO is quickly emerging between recently signed an agree- or EU membership. However, opening Europe and Asia, and Georgia ment with Microsoft to is supporting this with heavy respect intellectual property negotiations on a U.S.-Georgia FTA investment in port, road and rights. The deal, worth $20 is a bilateral step that would be an rail infrastructure. million, is unique in the The recent Silk Road In- region, but it is just the ideal signal of support for Georgia’s vestment Forum, hosted this beginning of a series of Westernization agenda.” October in Tbilisi, saw over measures aimed at intellec- 500 companies visit the coun- tual property protection that try to investigate ways of could open up the country utilizing Georgia’s location for ICT sales and investment. Caspian to Europe that does not go and trade-route potential. Interested com- Business opportunities that follow through Russia. A BP-led consortium is panies came from 34 different countries, from an FTA also move signifi cantly in the process of tripling the capacity of including the USA. The Silk Road will beyond Georgia’s borders. Georgia’s gas that is transported across the country, enhance and expand Georgia’s role as a
26 | Investor.ge • DECEMBER-JANUARY/2015-2016 natural regional busi- region. While the Georgian government remains committed to A “New Silk Road” ness center. Euro-Atlantic integration, there are forces inside the country transit route is Offering a “force- that would dearly love to see that orientation come to an end. amplifi er” to these ben- Efforts to undermine the Western trajectory play on local dis- quickly emerging efits, Georgia signed satisfaction with the slow pace with which Western integration between Europe and an Association Agree- occurs. In particular, after many years of efforts, Georgia’s ment, including a Deep failure to gain NATO’s Membership Action Plan (MAP), have Asia, and Georgia is and Comprehensive started to cause “NATO and Euro-Atlantic fatigue.” Of course, supporting this with Free Trade Agreement the US can’t deliver NATO or EU membership. However, open- (DCFTA), in June ing negotiations on a US-Georgia FTA is a bilateral step that heavy investment in of last year. This is would be an ideal signal of support for Georgia’s continued port, road and rail enhancing Georgia’s Westernization agenda. Westernization of the At a time when Georgia is at risk, this FTA negotiation infrastructure. business environment would also provide a platform for revitalized bilateral engage- by requiring approxi- ment and a mechanism to encourage increased US commercial mation with EU stan- engagement in the region. It would therefore open up opportuni- dards and processes and should make it easier to establish a ties for US companies and boost the argument for Westerniza- US-Georgia FTA. At the same time, it will give Georgia free- tion, just when Georgia needs it the most. trade access to the EU for the goods and services it produces.
This will further enhance Georgia’s attractiveness for businesses ADVERTISEMENT that want to gain access to the EU market and will make Geor- www.ilf.com gia a more comfortable place for Western countries to set up businesses with a view to other regional or silk-road markets. An FTA with Georgia is also unlikely to create any signifi - cant new competition for US companies. Manganese makes up more than 80% of US imports from Georgia. This is mined and processed in Georgia by a US company that does not compete with US producers. Politically, opening negotiations on aFTA, would send a signal of continued material support for Georgia at an extremely important time. Georgia’s track record of reforms to fi ght ENGINEERING EXCELLENCE corruption and improve the business environment has been widely acknowledged. However, more recent reforms have not garnered the recognition that they deserve. Your Ultimate Partner in the field of In a region where human rights and rule of law are often Consulting and Engineering ignored, Georgia has remained a rare bastion of democratiza- Engineering Design, Construction Management tion, Westernization and transparency. A pre-election assess- and Site Supervision ment from the National Democratic Institute in 2013 found that Georgians now “enjoy an electoral environment shaped by Ŷ +\GURSRZHU'DPDQG5LYHU(QJLQHHULQJ the fundamentals of democracy: the fi rst peaceful transfer of Ŷ 3RZHU7UDQVPLVVLRQDQG'LVWULEXWLRQ6\VWHPV power through the ballot box; a credible political opposition; a Ŷ 7UDQVSRUWDQG6WUXFWXUHV5RDGV5DLOZD\V8UEDQ7UDQVSRUW 6\VWHPV parliament characterized by meaningful debate and decisions; Ŷ 7XQQHOVDQG&DYHUQV an increasingly independent judiciary; and a lively media en- Ŷ 3RUWVDQG+DUERU(QJLQHHULQJ vironment.” Entering into discussion about a Georgia-US FTA Ŷ :DWHU6XSSO\DQG:DVWHZDWHU7UHDWPHQW3ODQWV Ŷ $OSLQH5HVRUWV would acknowledge this success. Ŷ (QHUJ\DQG&OLPDWH3URWHFWLRQ Such visible support is particularly important as Russian Ŷ 2LODQG*DV continues to pressure Western-oriented governments in the ILF Consulting Engineers 7DPDU0HSH$YH 3KRQH 7ELOLVL )D[ *HRUJLD (PDLOLQIRWELOLVL#LOIFRP OP-ED: The New Silk Road and What it Means to Georgia ON THE 15TH AND 16TH OCTOBER, THE GEORGIAN GOVERNMENT HELD THE TBILISI SILK ROAD FORUM. THIS DISCUSSED THE CHALLENGES AND OPPORTUNITIES OF DEVELOPING THIS TRADE AND ENERGY CORRIDOR AND INCLUDED A LARGE DELEGATION FROM CHINA WITH SENIOR CHINESE GOVERNMENT OFFICIALS AND APPROXIMATELY 300 CHINESE BUSINESS PEOPLE. GEORGE WELTON, EXECUTIVE DIRECTOR OF AMCHAM, REFLECTS UPON WHAT A NEW SILK ROAD, WITH SIGNIFICANT CHINESE INVOLVEMENT, MIGHT MEAN FOR GEORGIA.
he core idea of the New Silk 2001, and has so far mobilized $24.2 bil- Road is to create an effective lion in investments and the International Ttransit corridor from the Black Transport Corridor, Europe Caucasus Sea across Georgia, Azerbaijan and Cen- Asia (TRACECA), which was initiated tral Asia to China and beyond.This idea by the EU in 2003 and mostly focuses on is built on Chinese and Central Asian technical assistance. trade routes that reached their height in makes many infrastructure investments the 10th Century and, while it has many CHINA AND THE $40 BILLION far more likely. elements, is largely driven by trade and “ONE ROAD, ONE BELT” energy issues. But since both Asia-Europe trade GEORGIA’S FUTURE AS REGIONAL Trade is potentially huge.$4.9 trillion and the oil/gas transit questions have HUB of trade transited between Europe and been around for a long time, what Georgia has good reason to see it- Asia in 2014 and between just the EU makes the Silk Road interesting now? self as part of the developing Silk Road and China was $600 billion.According Part of the answer certainly relates to story and a potential large recipient of to speakers at the forum, transit time by regional changes generally, which are this investment. It has already proven ship from China to Europe is around 45 fueling integration and infrastructure its place for hydrocarbon transit. Since days, but by land it can be as low as 9 improvements. The other main reason the Baku Tbilisi Ceyhan Oil Pipeline days. Therefore, even though land transit is China and the potential for Chinese (BTC) and the Southern Corridor Gas is more expensive, this route will make infrastructure investments. In 2013 Pipeline (SCP) were fi nished in 2005/6 sense for some goods. Chinese President Xi Jinpeng raised the Georgia has transited around 1% of The New Silk Road also about en- possibility of helping to re-create a new global demand for hydrocarbons. This ergy. Central Asia has some of the larg- Silk Road, under the umbrella of‘One will increase signifi cantly when the SCP est unexploited hydrocarbon reserves in Road, One Belt’ (or OBOR). pipeline upgrade is fi nished. Worth $2bn the world, and those reserves need to be This concept is backed by a Chinese in Georgia alone, this upgrade will triple connected to markets. More investments Silk Road Fund worth $40 billion to gas supply through the pipeline. and more pipelines are needed to create facilitate trade and infrastructure de- Georgia has also upgraded its trans- an energy Silk Road that connects to the velopment across the region and has port infrastructure in recent years, with East and West. more support from individual regions dramatic improvements in the East- A range of different international of China. This fi nance is particularly West Highway, a new railway line from institutions have been operating for a interesting since the concept of a New Azerbaijan to Turkey, new roads, and long time to support the development Silk Road aligns with broader Chinese the promise of a new deep water port at of this New Silk Road. For example, foreign policy. Therefore, it is assumed Anakhlia. the Central Asian Regional Economic that infrastructure support will not Also, while hydropower has been Cooperation program (CAREC), which need the short-term returns required by talked about in Georgia for many years, was launched with the support of ADB in commercial investment decisions. This without a lot of actual investment taking
28 | Investor.ge • DECEMBER-JANUARY/2015-2016 leased in March 2015, focuses on a land Silk-Road that moves down from Central Asia, across Iran and Turkey, cutting out the Caucasus altogether. This may not be a problem, as the Chinese vision (and the original Silk Road) allows for multiple routes. But it should certainly chime a note of caution for the most bullish sup- porters of this idea. Also, because a China-fi nanced Silk- Road clearly has geopolitical, as well as commercial, intentions one should probably consider its geopolitical con- sequences. Could it, for example, create confl icts with the overall Western trajec- tory of Georgian commercial and foreign Silk Road Forum in Tbilisi policy? Probably not. While Chinese Foreign Policy expansion in Asia may place, things are now beginning to move is enthusiastic about leveraging long- create areas of confl ict with US interests, and Georgia is increasingly looking like term Chinese investments to develop that seems unlikely in the Caucasus. As a credible regional hub for electricity the potential of the Silk Road route and discussed already, a developed Silk Road production. This is most evidenced by to increase FDI. The opportunity is cer- from Georgia to Asia would, if anything, the high level of investor activity in tainly credible and builds on the back of solidify Georgia’s Western orientation, the area, with the World Bank, Asian burgeoning Georgia-China commercial as it would provide another commercial Development Bank and EBRD commit- relations.There is already enthusiastic benefi t to Georgia’s EU-integration. ting loans in hydropower, the US-fi rm, talk of a Georgia-China Free Trade Area. Chinese development of a Silk Road Schultz Global Investment committing The recent Silk Road Forum brought the across the Caucasus will, however, in- $100 million to small hydro investment Governor of Xinjaing, which is China’s evitably come into confl ict with Russia. and the recently signed deal with Kwater largest province. The delegation also The Silk Road that Georgia and China to build a $1 billion, 280MW Nenskra brought around 300 Chinese business- imagine is, after all, primarily about hydro power station in Svaneti. men.This is signifi cant because, after ensuring non-Russian routes for goods However, Georgia’s greatest strength BP, the Chinese Company Hauling was and energy across Eurasia. Since Russia may lie in its trade relationships and the biggest FDI investor in Georgia last is trying to shore-up economic control of the continuing openness of its business year and will probably be again in 2015. the same geography through the Eurasia environment. In particular, Georgia is Also, one of the bidding Consortiums for Customs Union, the two plans ultimately the only Silk Road country that has ne- Anakhlia is led by a Chinese fi rm. compete.However, for Russia it seems gotiated an Association Agreement and likely that Central Asia would be the DCFTA with the EU. This privileged MORE THAN JUST THE CAUCASUS main hot-bed of contest. And, anyway, I access, makes Georgia a natural country Not that a betting onChinese-led Silk doubt many Georgians would lose sleep to consider as a base of manufacturing, Road development is entirely without over annoying the Russians. assembly or logistical operations for its issues. For a start, the Silk Road that However one looks at it, Chinese companies looking to export into the EU. China has most explicitly elaborated interest in the Silk Road has helped to Georgia is also the easiest market in the does not actually include the Caucasus. stimulate a ‘pivot to Asia’ in Georgia’s region in which to operate, has the most While the CAREC and TRACECA’s vi- developmental thinking. In a terrain that open market generally and has FTAs with sion for the Silk Road certainly includes tends to be polarized by options to the Turkey and across the region. the region, the Chinese Government plan West and options to the North this is, at Clearly, the Georgian Government for Silk Road Development, that was re- least, refreshing.
DECEMBER-JANUARY/2015-2016 • Investor.ge | 29 “My Everything HEATHER YUNDT hen Georgia introduced new visa regulations in Sep- tember 2014, tightening the rules on what was perhaps is Here” Wthe most open visa system in the world, the backlash was fi erce. Expats and business leaders went online to voice their concerns. Meanwhile, some longtime residents and their children were denied residency on the grounds of security, and foreign stu- GEORGIA HAS REVERSED dents coming to Georgia to start the school year were turned back at the airport. SOME OF ITS RESTRICTIVE The new rules revoked visa-free travel for more than a dozen RULES ON VISAS AND countries, and visa-free stays were shortened from 360 days to 90 MIGRATION THAT IT out of every 180 days. To stay longer, expats were required to apply INTRODUCED IN 2014. for residency, handing over an unclear list of documents, including work contracts. INVESTOR.GE SPOKE WITH SOME OF THE COUNTRY’S “I ALMOST LEFT” NASCENT EXPAT CREATIVE It was a blow to all expats working without long-term contracts — including creative professionals. CLASS ABOUT THE IMPACT Thomas Burns, an American cinematographer, fi rst came to the THE CHANGES MADE ON Caucasus in 1998 with a position at the Eurasia Foundation. He THEIR BUSINESSES AND THEIR stayed on in Georgia, writing and editing for Tbilisi Pastimes, an PLANS IN GEORGIA. English-language expat magazine. It was through his experience in Georgia that he discovered his passion: visual storytelling. His career took him to Los Angeles, working as a cinematogra- pher for feature fi lms, TV dramas and music videos. But Georgia stayed on his mind. After returning as a Fulbright Scholar in 2009, Burns made the leap and returned to Georgia in 2014, this time to stay. According to Mercer’s 2015 Cost of He says Georgia was a Living ranking, Tbilisi sits among the place where he felt he could grow as a cinematographer. ten cheapest cities in the world for “I really enjoy Geor- expats. gians’ visual sensibility. It’s very fresh for me,” he says. “Their approach to a story is a little bit different than what you see in Hollywood, and that expands my worldview on what I do. It helps my craft.” It’s also cheap. According to Mercer’s 2015 Cost of Living rank- ing, Tbilisi sits among the ten cheapest cities in the world for expats. Since returning, Burns’s plans have evolved. He recently opened Spectra Post, a color correction studio, and plans to color produc- tions remotely for North American and European clients, as well as for local productions.
30 | Investor.ge • DECEMBER-JANUARY/2015-2016 DECEMBER-JANUARY/2015-2016 • Investor.ge | 31 BUT IT ALMOST DIDN’T HAPPEN. and wanted a change. knows me in this garden. They are good The new visa rules came into effect “It’s like prison. I wanted freedom,” people, good artists, good friends.” soon after Burns arrived in the country. he says. Ultimately, Mondal says he wants to Though he tried to follow the rules, he Mondal had heard about Georgia stay in Georgia because, like for many was sent from ministry to ministry and through a friend and decided to give it a creative professionals, Georgia is where offi cial to offi cial. No one knew the an- shot. He says he has since fallen in love he feels inspired. swers. He ended up spending thousands with the country: the architecture, the old of dollars to fl y back to the U.S. to get buildings, the countryside. “DO SOMETHING FOR THIS a visa that would allow him to apply for And he’s had success. Mondal is a COUNTRY” temporary residency. member of the Georgian Artists Union. Like Mondal, Maria Shirshova also “I almost left,” he says. “It was in- His work has been part of several ex- found inspiration in Georgia — in the credibly frustrating.” hibitions in Georgia, including a solo country’s own young artists. exhibition. He has also The Russian national fi rst came to appeared on local TV Tbilisi with her husband, as a profes- Ultimately, Mondal says he wants programs. sional in the fi eld of creative advertising. to stay in Georgia because, like for But things changed But one day in 2010 changed every- for Mondal in 2014. thing. She went to meet a model for a many creative professionals, Georgia Though as a Bangladeshi, creative calendar for a commercial job is where he feels inspired. Mondal previously need- at the Tbilisi Art Academy. ed visas, when the new There she met talented young art- rules came into effect, ists who didn’t have much money. She “Of course when you’re a creative he gathered his documents and applied decided to help them. professional, you work from project to again. Despite getting recommendations She started looking for ways to pro- project. There’s no such thing as a long- from the Ministry of Culture and The mote them abroad by sending around term contract.” Georgian Artists Union, he says he was their portfolios and helping them craft Burns wasn’t alone in his frustration. denied a visa four times. their artistic statements. The outcry led to an apology from Prime Mondal is particularly upset by this In addition to cultural management Minister Irakli Gharibashvili and months because he sees himself as an ambas- projects, she has big plans to continue to of parliamentary debate and amend- sador for Georgia through his paintings help Georgian artists, such as creating a ments. In June, amendments came into of Georgian scenes, which effect that reinstated 360-day visas for have been sold internation- most countries. ally. “I have to do something for this “It was going to be my country. I really want to do “IT WAS GOING TO BE MY LAND” land,” he says. “My every- But not all expats have felt the relief. thing is here.” something for society and I think I In Tbilisi’s Dry Bridge Park, dozens It’s unclear just how can do more for Georgia than for of local artists show off their work to many expats live in Tbilisi, tourists and locals. let alone expats who are in Russia,” Shirshova says. Among the stalls hangs a series of creative industries. Without watercolor street scenes of Tbilisi. They concrete statistics, it is im- belong to Mimo Mondal, a painter from possible to know exactly how much the hub where artists can fi nd the assistance Bangladesh who fi rst came to Georgia in changing visa rules have affected the they need to locate residencies. 2011. After studying at Bangladesh’s art expat creative community. “I have to do something for this academy, Mondal worked at the Russian For now, Mondal continues to show country. I really want to do something Center of Science and Culture in Dhaka, his work at the Dry Bridge market. for society and I think I can do more for the country’s capital, before deciding the “People are really warm. They really Georgia than for Russia,” Shirshova says. structure was not for him. He was bored love my paintings,” he says. “Everyone “My heart is here, my place is here.”
32 | Investor.ge • DECEMBER-JANUARY/2015-2016 RICHARD RUBIN, FOUNDER OF THE ALEXANDER KARTVELI ASSOCIATION &MANAGING DIRECTOR OF AVIATION MEDIA LLC
A GEORGIAN GENIUS lexander Kartveli, born Alexan- der Kartvelishvili, (September A9, 1896 – June 20, 1974) was an infl uential aircraft engineer; pioneer in American aviation history; and an early technology innovator.Kartveliim- migrated to the United States and was credited with some of the most important breakthroughs in aviation design; he was prominent among a small cadre of aviation designers by virtue of seminal breakthroughs in general commercial and military aviation design. While Kartveli is considered to be one of the most important aircraft design- ers in US history and the world, regret- tably he is unknown to most Americans and Georgians. Kartveli’s own story asan emigre from Georgia was barely known to Americans during his life, as well. As the Hayward Daily Review (March 7, 1942) Alexander Kartveli stands in front of his P47 with C. Hart Miller Director of Military wrote “Russian Genius [who] Designed Contracts at Republic and Major Russel Kellior, Army Contracts representative Our Best Plane” was misunderstood at best and perhaps, at worst, mistrusted by the American defense administration he The Life and Work of served so faithfully in his career. He was bornin Georgia in 1896, seven years before the Wright Brothers’ Alexander Kartveli fi rst powered fl ight on the beaches of Kitty Hawk, North Carolina. Just a few WITHOUT A DOUBT, ALEXANDER KARTVELI IS GEORGIA’S MOST IMPORTANT years later, those early planes designed EXPORT TO AMERICA, AND HE DESERVES A PERMANENT PLACE IN GEORGIA in an innocent time were soon forgotten AS A NATIONAL HERO.HIS STORY IS FINALLY BEING TOLD IN TBILISI AT THE GEORGIAN NATIONAL MUSEUM, WHERE A DEDICATED EXHIBIT THAT as the world struggled to defeat the rise CELEBRATES THE LIFE AND WORK OF ALEXANDER KARTVELI OPENED ON of Nazi Germany armed with Kartveli’s NOVEMBER 17TH. RARE MATERIAL HAS BEEN CONTRIBUTED BY THE ALEXANDER important contributions to air design. KARTVELI ASSOCIATION (WWW.ALEXANDERKARTVELI.COM), A NOT FOR PROFIT GEORGIAN ENTITY FOUNDED BY RICHARD RUBIN, RAMAZBLUASHVILI His personal journey paralleled a AND STEPHEN JOHNSON. THE ASSOCIATION HAS CURATED AND DISCOVERED professional career made up of persistent PREVIOUSLY UNSEEN IMAGES, DOCUMENTS AND SCIENTIFIC PAPERS ON design contributions whose impact and KARTVELI’S LIFE THAT CLEARLY DOCUMENT THE BASIS FOR HIS ADVANCES IN timing were critical to meeting the chal- SUPERSONIC AND SPACE FLIGHT AS THEY UNFOLDED IN THE 20TH CENTURY AND INTO TODAY. lenges of the world under Harry Truman
DECEMBER-JANUARY/2015-2016 • Investor.ge | 33 he was sent to fi ght the Turks. However, after Georgia announced its independence from Russia following the October 1917 revolution, the new government sent Kartveli to Paris to study aviation engineering. In Paris, Kartveli worked for Blériot- Aéronautique (a leading French aviation design fi rm)and made several close pro- fessional friendships that were to serve him later in his career. The fi rst such colleague was Armand Thiebolt. The other friend was an engineer named Ed- mond Chagniard. In the 1920s, both men were designing racing aircraft andcabin transports for the SocietéIndustriale des Mataux et du Bois -- the leading French national design shop. The three would go on todesign a monoplane that would set the world speed record of 266 miles/ Kartveli with unidentified P47 pilot, 1940-1947 hour in 1924. In 1927 Kartveli arrived in the United and FDR, as well as early pioneers in ever designed. States by invitation of American entre- US aviation industry such as Charles The A-10 is the most heavily armed, preneur and millionaire Charles Levine. Lindbergh and well-known socialite and armored, tactical plane in history. Eventually all three – Kartveli, Thiebolt fi gures such as Walt Disney and other The Warthog remains feared by enemies and Chagniard – would work for Levine Hollywood socialites. and revered by the US Air Force decades together. Kartveliwas responsible for leg- after Kartveli’s death. Despite rapid in- Levine became one of the most in- endary aircraft like the P-35 (the fi rst novation in aeronautical materials and fl uential US aviation capitalists of the all-metal single-seat fi ghter), the P-47 designs since the 1970’s, 320 A-10s 1920’s, and it was his dream to build the Thunderbolt (a key asset that helped the remain in service as of 2015. world’s fi rst metal transatlantic plane, a United States win World War II), the massive undertaking from a number of XF-103, a high-speed concept bomber, A PERSONAL JOURNEY perspectives. Metal was not used in air- the F-105 (used extensively in Vietnam), Leaving behind other family mem- planes of the day and insuffi cient engine and the A-10 Thunderbolt II (also known bers, Kartveli and his mother escaped power proved to be the project’s undoing. as the ‘Warthog’). Importantly Kartveli’s turmoil and oppression in Georgia to pur- But the project helped launch Kartve- contributions to hypersonic fl ight theory sue a boyhood dream to design aircraft in li’s career designing for the US military. and design provided important stepping- the growing fi eld of aviation– an industry General Benjamin D. Foulois of the stones for today’s NASA space shuttle that resembled the freewheeling days of Army Air Corps had heard about the program. the early Internet. From very early years project, known as “Uncle Sam”, and The Fairchild Republic A-10 Thun- Kartveli was interested in aeronautical about the threeyoung designers building derbolt (Warthog) was designed by engineering and showed strong passion it. He met with them, offered them exten- Kartveli and team in the 1960s and fi rst and talent in aviation and aircraft design. sions of their visas and invited them to deployed in 1972 – and exemplifi es how However as with most young cadets, as work on his designs for the Army’s air Kartveli translated the need for a close World War I broke out, Kartveli was force. During their off hours the “Trio” air support fi ghter aircraft into the most tasked with studying artillery in the initiated the design of an all-metal attack potent close air support fi ghter aircraft military academy in St. Petersburg and bomber for the army air corps without
34 | Investor.ge • DECEMBER-JANUARY/2015-2016 DECEMBER-JANUARY/2015-2016 • Investor.ge | 35 An F-84G Thunderstreak
Levine knowing anything about it. THE P-47 development of human spacefl ight. When Levine did fi nd out, he claimed The P-47 Thunderbolt on Kartveli’s Kartveli’s important contributions the right to the design and initiated a drawing board in 1940 (as a successor to hypersonic fl ight and early advisory lawsuit against the trio who immediately to Seversky’s P-35 all metal fi ghter) is work to NACA formed the basis for de- departed Levine’s company. ranked as one of the three best fi ghters of signs for the NASA’s space shuttle and World War II. The P-47 sported a mas- orbital aircraft capable of returning to the ALEXANDRE DE SEVERSKY AND sive fuselage, used the Pratt & Whitney earth. Kartveli’s initial theory about the REPUBLIC AVIATION R-2800 “Double Wasp” engine enhanced possibilities of supersonic and subsonic In 1931 Kartveli met Alexander de with a turbocharger, and was the heaviest fl ight and collaboration with prominent Seversky, also born and raised in Tbilisi, single-engine fi ghter to fl y in the war. engineers resulted in signifi cant tech- Georgia. The two men were to form an The P-47 was the fi rst all metal fi ghter nological advances and eventually to amazing partnership. to fl y at 400 miles an hour and pound the development of preliminary designs Kartveli started working at the Sev- for pound, it was the world’s fastest, for aircraft that could reenter the earth’s ersky Aircraft Corporation as a chief highest-climbing single-engine fi ghter. atmosphere such as the NASA’s space engineer. Along with Seversky, Kartve- The P-47s could also carry bombs, which shuttle. Kartveli went on to design sev- liembarked on an advanced all-metal, turned the fi ghters into fi ghter-bombers eral new important commercial aircraft multi-place monoplane amphibian, the with the P-47D “Juggernaut,” the fi rst but not all of them met with success SEV-3. On September 15, 1935, fl ying large-scale production model. and the company was left in precarious at a speed just over 230 mph, Seversky Production of the P-47 ended in fi nancial position. set a world speed record for this piston- November 1945 as the US Air Force engine amphibious aircraft. wound up its military success. However THE F-84 AND SUPERSONIC His career continued at Republic as World War II was in its fi nal stages, DESIGNS Aviation Corporation (the successor to the National Advisory Committee for However the F-84 jet fi ghter-bomber Seversky’s company), where he waschief Aeronautics (NACA the predecessor to returned Republic to profi tability. The engineer and was responsible for the de- NASA) inaugurated sophisticated studies company built three main varieties of this sign and production of many important of high-speed upper atmosphere fl ight plane to replace the P-47. The Thunderjet military aircraft. that had signifi cant ramifi cations for the was a high-performance aircraft, and
36 | Investor.ge • DECEMBER-JANUARY/2015-2016 briefl y set an American speed record, in advanced fi ghter technology. a supersonic fi ghter-bomber to replace fl ying at 611 miles per hour. The last in An even more far-reaching prospect the F-84F. The F-105 Thunderchief, also the Thunderjet series, the F-84G, could was in view at Republic Aviation under nicknamed “Thud” (some say with af- deploy nuclear weapons and was the Kartveli’s direction. Powered by ex- fection and others say because the plane fi rst fi ghter capable of in-fl ight refueling. perimental ramjet technology, theXF-103 was too heavy), made its fi rst fl ight on Used by American forces in Korea, by was to fl y at Mach 3.7, nearly 2,500 miles October 22, 1955, although the fi rst pro- NATO troops, and by some nonaligned per hour (mph) with a sustained ceiling duction version, the F-105B, was not de- nations, approximately 4,450 Thunder- of 75,000 feet. livered until May 1958. This supersonic jets were built between 1947 and 1953. Kartveli set Mach 7, or 5,000 mph, aircraft had an internal bomb bay, the fi rst At the same time that Republic was as an achievable goal. He anticipat- ever on a fi ghter aircraft, and was capable working on the F-84, Kartveli and his ed achieving this speed with another of deploying nuclear weapons. It was the team were designing Republic’s first bomber design that was to cruise at heaviest and most complex fi ghter used swept-wing plane, a high-speed experi- 120,000 feet. Propulsion was to come by the Air Force to date. mental interceptor designated the XF-91 from two turbojets and two ramjets, The content of this history is copy- Thunderceptor. Begun in 1946, it was with this concept pressing the limits of right © 2015 by Aviation Media LLC, America’s fi rst combat-type fi ghter to fl y subsonic combustion.This was one of the Bethesda, MD, USA. It is provided faster than the speed of sound. In Decem- stepping-stone for orbital aircraft and the expressly for the internal use of Ameri- ber 1951, it became the fi rst U.S. combat basis of the NASA space shuttle. can Chamber of Commerce in Georgia. aircraft to go supersonic in level fl ight. It may not be distributed to any third The Thunderceptor never went into pro- THE F-105 without the written consent of Aviation duction but it led to further developments In 1951, Republic began to develop Media LLC
An F105 with the full range of munitions display at the Republic Aviation Plant
DECEMBER-JANUARY/2015-2016 • Investor.ge | 37 38 | Investor.ge • DECEMBER-JANUARY/2015-2016 Georgian Fashion in Vogue
WITH TWO GEORGIAN DESIGNERS HEADING TWO EUROPEAN FASHION HOUSES AND THE ANNUAL MERCEDES BENZ FASHION WEEK TBILISI INSPIRING PAGES OF COVERAGE FOR LOCAL DESIGNERS IN MAJOR INTERNATIONAL FASHION MAGAZINES, COULD GEORGIAN FASHION FINALLY BE HITTING THE MAINSTREAM? Photo by Gregory Regini
DECEMBER-JANUARY/2015-2016 • Investor.ge | 39 SOMETHING “CREATIVE AND or techniques used that is identifi able IN CASE UNKNOWN” among Georgian designers. Rather, While both men have been building there’s a certain aesthetic sensibility YOU MISSED their careers outside of Georgia for that appears to me to be informed by a years, international interest in their variety of infl uences and the ability to IT, VOGUE success could help throw a spotlight make those infl uences and inspirations on the country’s unique fashion entirely your own.” MAGAZINE world, noted Georgian designer Diana Kvariani. LAYERING OF IDEAS AND IS A LITTLE IN “I think everyone wants to know FABRICS about the country of Demna Gvasalia, In particular, Perlson pointed Balenciaga’s new creative director. to Georgian designers’ approach to LOVE WITH Also, the fashion world is changing. layering. People are searching for something “There’s obviously great awareness GEORGIA new, something creative and unknown. to what’s going on in the fashion I think Georgia is full of these kinds of capitals of the world, and many brands,” she said. designers I’ve spoken to also studied Kvariani, who studied in Italy and abroad, but the approach to layering – worked in Russia before returning to of ideas as well as fabrics – is specifi c, Tbilisi to create her Diana Kvariani clever and like nothing I’ve seen with label, said Georgia has had a strong young designers elsewhere,” she said. reputation as a fashion center in the Perlson compared Tbilisi’s fashion former Soviet Union for “many years”. scene to that of Antwerp, a city Now, it is “new for the rest of the famous for its fashion academy and its he fashionista’s go-to journal world,” she added. experimental fashion. published daily missives on One force pushing Georgian “It takes guts to follow something TGeorgia’s fashion scene in designers out to a wider audience as risky as “your own vision” rather November, doting on everything from is Sofi a Tchkonia, the organizer than quotes of what’s already selling the country’s designers and handcrafted of the Organizer of the BENEXT well,” she said. shoe culture to its bazaars and beauty International Art and ARTGeorgia “My fi rst impression was that this is treatments. fashion festivals. a new generation of designers who are Vogue is not alone in its new It was through Tchkonia that establishing a scene that didn’t exist as adoration for the je ne sais quoi of fashion writer HiliPerlson was such in Tbilisi before; a generation that Georgian fashion. From Paris to New introduced to Georgian fashion in grew up in a time of political turmoil, York, Georgian designers are picking 2014. economic strife, and blackouts, and up accolades and international press. Perlson said she didn’t know what who are now creating something new, The New York Times gave to expect when Tchkonia invited her to without playing it safe.” Georgian-born designer David Koma Tbilisi, but she has been impressed by Kvariani agreed that Georgian – a go-to name for Hollywood It “the experimental spirit and talent of designers are “not afraid to Girls – a tentative thumbs up, saying Georgian designers” during her visits experiment.” “the tulle ruffl es of a tutu, scattered to the capital. “Georgian fashion is unique Swarovski crystals and zips in place “What struck me the most was the because it has its world in fashion. of boning gave a fl uid femininity” to fact that each label managed to create Georgians are not afraid to experiment. his Spring 2016 line.French power an absolute clear, individual signature,” Every designer in Georgia has his or house Balenciaga named Tbilisi-native she said. her own style, no one is alike. That is Demna Gvasalia as its new creative “I wouldn’t say there’s a common incredible for such a small country,” director in October. silhouette, combination of materials, she said.
40 | Investor.ge • DECEMBER-JANUARY/2015-2016 DECEMBER-JANUARY/2015-2016 • Investor.ge | 41 NEWS
CONTENT
Andrew Coxshall elected to 45 AmCham Board of Directors
43 AMCHAM MEMBERS MEET 47 MEMBER PROFILE: NOBLET MEDIA ECONOMY MINISTER DIMITRYKUMSISHVILI 48 MEMBER PROFILE: PMCG
44 ECONOMIC PLATFORM 49 NEW MEMBERS PRESENTATION: UNITED NATIONAL MOVEMENT 52 MEMBERSHIP DIRECTORY 44 ECONOMIC PLATFORM PRESENTATION: FREE DEMOCRATS 54 SOCIAL: LUNCH WITH U.S. STATE DEPARTMENT DELEGATION 45 US AMBASSADOR IAN KELLY MEETS AMCHAM MEMBERS 55 SOCIAL: US AMBASSADOR IAN KELLY MEETS AMCHAM MEMBERS 46 MEMBER FEATURE: LEAVINGSTONE
42 | Investor.ge • DECEMBER-JANUARY/2015-2016 NEWS
AmCham Luncheon meeting with Dimitry Kumsishvili, Minister of Economy and Sustainable Development of Georgia
AmCham Georgia hosted a Member luncheon with Dimitry Kumsishvili, Minister of Economy and Sustainable Development of Georgia on December the 2nd, at Holiday Inn. Mr. Kumsishvili presented an overview of the Georgian economy which included a review of the current macro-economic environment, the attractiveness of the investment envi- ronment, the current and future prospects for international trade development and many other issues. He also highlighted the Ministry initiatives to stimulate growth in a wide range of sectors. The presentation was followed by a lively Q+A between members and the Minister.
DECEMBER-JANUARY/2015-2016 • Investor.ge | 43 NEWS
Economic Platform Presentation: United National Movement
With the parliamentary elections Giga Bokeria and Zurab Tchiaberashvili. 1.4 billion lari; reduce bureaucracy and coming next year, on November 12, The UNM’s reform agenda is based regulations; and introduce means-tested AmCham continued its series of presen- on a core program to stimulate employ- and highly targeted welfare and social tations by major political parties about ment and economic activity. Specifi cally, spending. their economic platforms with a talk by they presented a plan to reduce tax rates; A lively question and answer period the United National Movement’s (UNM) reduce the country’s fi scal footprint by followed the presentation.
Economic Platform Presentation: Free Democrats
With the parliamentary elections coming next year, AmCham has ar- ranged a series of events to allow the major political parties to showcase their economic platforms. AmCham hosted the Free Democrats party on October 29. The Free Democrats were represent- ed by Irakli Alasania, Vasil Revishvili and Davit Onoprishvili, who updated AmCham members about their economic policy initiatives and shared their vision on economic development of Georgia. The meeting was followed by an open discussion. AmCham guests enjoyed wine and private conversations with representatives of Free Democrats.
44 | Investor.ge • DECEMBER-JANUARY/2015-2016 NEWS
US Ambassador Ian Kelly Meets AmCham Members
Ian C. Kelly, United States Ambas- sador to Georgia, spoke with AmCham members for the fi rst time since starting his post in Tbilisi, at the Chamber’s an- nual meeting on November 2. Badri Japaridze, Vice Chair of the Supervisory Board of TBC Bank, was re-elected to the AmCham Board of Di- rectors at the meeting. Andrew Coxshall, Managing Partner of KPMG, was elected as a new member of the board. Andrew Coxshall has over 27 years of experience in audit, accounting, tax and advisory services in more than 10 countries around the world. He is a Fel- low of the Institute of Chartered Accoun- tants in England and Wales, a member of the Chartered Institute of Taxation, is a Registered Auditor in Georgia and has an MBA from Herriot Watt University Chamber to become the most effective Leasing, Bank Constanta and the Board in Scotland. He has been a Trustee of the and respected private voluntary business of TBC TV LLC. AmCham President Eurasia Partnership for over 5 years. He associations in Georgia. Japaridze is co- Sarah Williamson congratulated both is also the Tax Chair of the Commercial founder of IDS Borjomi Georgia, and Coxshall and Japaridze on their election, Law and Tax Committee of AmCham. Vice-Chairman of the Supervisory Board saying, “We extend a warm welcome to “I am delighted to have been elected of JSC TBC Bank since 1996. He is also Andrew, and are pleased to have Badri to the Board of AmCham Georgia and a member of the Supervisory Board of return for another term on our Board. It believe that I can add value to the Board, GRDC as well as the EU-Georgian Busi- is an honor for me to work with both of serve the interests of members and will ness Council and Geoplant. A graduate them as AmCham continues to advocate work hard to help improve the business of an executive course at the London for a strong pro-business environment environment in Georgia,” said Coxshall. School of Economics and Political in Georgia.” Ambassador Kelly’s talk Badri Japaridze has served as a valu- Science, he is the chairman at several was met with much enthusiasm and was able Board Member of AmCham Geor- Georgian organizations, including the followed by an engaging and candid gia since 2002 and has helped steer the Supervisory Board of TBC Kredit, TBC question and answer session.
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DECEMBER-JANUARY/2015-2016 • Investor.ge | 45 NEWS
Leavingstone has evolved from a Facebook page manage- ment service into an international award-winning digital marketing fi rm in just fi ve years. The key to the company’s success, according to its Creative Director, Levan Lepsveridze, is its ability to mix “Georgian culture elements with worldwide pop culture trends.” “As we see, there are only few companies that care about branding, and often marketers do not pay enough attention to their marketing campaigns’ results. But we are seeing a positive trend, as more and more companies are interested in outstanding marketing campaigns. With the help of social media, now marketing managers clearly see results of our outstanding innovative approach,” he said. “We call it the philosophy of “Batman in a Chokha” (Batman wearing the traditional Georgian costume), as the representation “Batman in of two opposite polarities united in one image . . . we always use as- pects of the Georgian psyche together with unique internet trends.” a Chokha” GEORGIAN BEER FOR 34 LARI This philosophy helped launch Beer 34 and introduced Georgian “beer fanatics” to a new, locally produced beer. INTERNATIONAL AWARD- The campaign had to convince beer lovers that a Georgian- made beer could compete against international brands. WINNING LEAVINGSTONE, Lepsveridze said that, in order to capture the attention of beer fanatics, the campaign started by pricing Beer 34 at 34 lari a bottle A DIGITAL MARKETING AND – an incredibly high price for a domestic beer. APPLICATION DEVELOPMENT Leavingstone tracked the sales, identifying which Georgian beer lovers were willing to take the risk. SERVICES COMPANY BASED “In fi ve days, we tracked the fi rst heroes to buy [Beer] 34 and IN GEORGIA, IS MAKING built their personal statues,” he said. “We did set an extremely high price to get attention of true WAVES WITH ITS INNOVATIVE beer lovers. This news spread across social media like a bomb.” The campaign also helped Leavingstone become the fi rst AD CAMPAIGNS. Georgian company to win a Lion prize at the Cannes Lions Festival. INVESTOR.GE SPOKE WITH “We are very proud of our prize, as it was the fi rst Georgian Lion in the history of Cannes Lions Festival. It stressed that Leavingstone LEVAN LEPSVERIDZE, THE has ability to do creative campaigns as well as the world’s leading COMPANY’S CREATIVE agencies,” Lepsveridze said. DIRECTOR, ABOUT MIXING BORJOMI ABROAD The team has also produced international campaigns for GEORGIAN TRADITIONS WITH Georgian companies seeking to strengthen their products’ brands SOCIAL MEDIA AND POP abroad. Specifi cally, Leavingstone incorporated Georgians’ love for CULTURE AND ITS RECENT Borjomi mineral water and its diverse émigré population for a New Year’s campaign, “Our Message to the World.” CANNES LION PRIZE. Georgian emigrants in three European cities, Paris, Vienna and Budapest, received care packages for New Year’s from Borjomi. Inside was a smorgasbord of Georgian goodies, including, of course, Borjomi, as well as churchkhela – nuts covered in dried grape pud- ding – and a traditional Georgian table cloth, the supra. The footage that emerged is touching – families crowding around the wooden boxes, joyfully recounting past New Years at home in Georgia as each present is unwrapped. “Our goal was to reach Georgians who live abroad and bring the Georgian New Year to them. It was a wonderful way to link the Georgian New Year with Borjomi,” Lepsveridze said. “We were counting on Georgian pride, to see their beloved brand acting abroad for Georgians. And it worked; Georgians loved our intention.”
46 | Investor.ge • DECEMBER-JANUARY/2015-2016 NEWS
Noblet Media CIS Launches A New Business Division - Etiquette & Protocol School
Full-service marketing and communications company Noblet programs for international companies usually include, but are Media CIS announcesthe launch of a new service in Georgia, the not necessarily limited to, three main areas: “Noblet CIS Etiquette and Protocol School.” Outclass the competition There is nothing similar to the new school in the South Caucasus Business etiquette and protocol or Eastern Europe, and it is designed to meet the demands of the How to succeed in the international arena growing business environment in the region. It is worth mentioning Cultural differences in business etiquette and protocol that the past two years were very important for Georgia socio- Dine like a diplomat economically and internationally: in September 2014, a free trade Dining etiquette and protocol area (DCFTA) between EU and Georgia was set up as a part of “For the businessman and top manager, it is indispensable to the Georgia-EU Association Agreement with the aim of gradually be self-confi dent and focused on the international arena. Basic integrating Georgia’s economy with the European economy, as knowledge of international etiquette and protocol has long be- well as offering benefi ts for people and businesses. come a fundamental need, especially in the highly competitive With the DCFTA agreement, Georgian companies and service international world where communication skills play a crucial providers have the chance to develop their businesses beyond role in conducting business,” remarks Zhenya Pankratieva, CEO of Noblet Media CIS. Training will be conducted by Zhenya Pan- kratieva, who has completed a course and received the status of Corporate Etiquette and International Protocol Consultant at the Proto- col School of Washington® (USA). The Protocol School of Washington® has been a global leader in business etiquette, reputation and teaching international protocol for more than 20 years now. It has been recog- nized as the most trusted brand in the industry. The Protocol School of Washington® has been ACCET (Accrediting Council for Continuing Edu- cation and Training) accredited (www.ACCET. org) as the fi rst and only accredited school of its kind in the country. ACCET has offi cial rec- ognition by the U.S. Department of Education. Noblet Media is a full service Marketing & Communications Company in the CIS, founded in 2004 in Kyiv and operating in seven CIS countries. Noblet Media is the only PR-network in the CIS that is affi liated and partnered with Edelman, the world’s biggest independent PR their borders, throughout the European network. company and a member of a range of powerful international Noblet Media CIS launched the “Noblet CIS Etiquette and organizations. The company provides a full range of professional Protocol School” in Georgia to contribute to this important process PR services using both Ukrainian and adapted foreign experience. and meet the market demands for new services to assist Georgian Since its establishment, the company has implemented over 1,000 businesses to develop professionally and ensure their smooth projects in virtually every business fi eld, developed dozens of integration into the European business community. programs and strategies for their customers, held over 300 press Earlier this year, the “Noblet CIS Etiquette and Protocol School” conferences, about 60 new product launches, over 70 trainings was successfully launched in Ukraine and a number of trainings and educational events, and issued 10 corporate editions. Ac- have been already conducted for large Ukrainian enterprises, as cording to the Ukrainian Advertising Coalition and Marketing well as individuals. Now the company is offering training courses- Media Review,the company was named as #1 International for the Georgian business sector, generally for top and mid-level Agency for 2012–2013 and ranked in the top 3 in 2014. management from large companies,as well asfor individuals. Noblet Media has operated in the Georgian market since The“NobletCIS Etiquette and Protocol School” is currently 2011 as a PR and marketing service. The portfolio of the com- ready to welcome all interested candidates and host its fi rst pany is very diverse and consists of a wide range of companies/ classes upon request. organizations, including the EU Delegation to Georgia, EBRD SBS, The new department is designed to offer trainings in the fi eld satellite operator SES (project: MagtiSat), PayPal, MasterCard, of international corporate etiquette and protocol. The training Bosch and IDS Borjomi.
DECEMBER-JANUARY/2015-2016 • Investor.ge | 47 NEWS
Making the Most of the DCFTA for Georgia, Ukraine and Moldova also several questions since there are risks the public and private sectors. INTERVIEW WITH NINO SAMVELIDZE, and challenges to the process of eco- Q: How will such conferences benefi t MANAGER OF THE PROJECT, EU nomic approximation. the business community in Georgia? PROGRAMS MANAGER AT PMCG. DCFTA has a political context for these A: DCFTA implementation may bring countries, and its proper implementation a quick legislative approximation process, is important. It is essential to have regular which could hinder the liberal economic consultations with the private sector. development of the country. DCFTA largely incorporates the adop- DCFTA implementation will bring the tion of European norms and standards. world’s largest market of 500 million, which So it is essential to empower the private is stable, so local businesses will have easier sector’s capacity and awareness of the access to lower-rate investments. compliance requirements. On the other hand, Georgia will be- Knowing the rules and regulations come more attractive for other countries does not necessarily mean that SMEs can which don’t have access to the European adopt the necessary changes right away, market for production, so it’ll obtain the however. External assistance is necessary function of hub to the largest market. Fi- to develop a strategy and implementation nally, in the mid- and long- term, it will be plan for compliance with the legislation positively refl ected in local economies and that is applicable for the product they the living standards of the citizens. produce or sell. International donors attending the Q: What major challenges were conference declared that their priority is Nino Samvelidze stressed for Georgia, Moldova and Ukraine to support these countries in the process in the approximation process? of EU integration. PMCG, an international development A: One of the challenges stressed by Cecilia Malmstrom, EU Commissioner consulting company, recently organized Visegrad countries was local SMEs’ lack of for Trade, and Luc Devigne, Head of a knowledge sharing conference in Chi- opportunity to catch up with the increased EU Commission Unit Russia, CIS, Ukraine, sinau, Moldova, Making the Most of the competition. Western Balkans, EFTA, EEA and Turkey, DCFTA. To deal with this challenge, Visegrad recommended that Georgia, Ukraine The event was supported by the In- countries advised Georgia, Ukraine and and Moldova should make the most of ternational Visegrad Fund and aimed to Moldova to introduce reforms to liberate the opportunities DCFTA offers and imple- assist Moldavan and Georgian businesses, their economies and to effectively use ment reforms so the business environment entrepreneurs and government bodies fi nancial support from the EU and interna- improves, and businesses are encouraged to strengthen their dialogue on the op- tional development organizations. to export to European markets. portunities presented by the signature of There are three main types assistance Conferences and meetings like this the Association Agreement (AA), potential that donors offer: play an important role in this process, costs and benefi t of the implementation 1. Budget support since they provide a platform for an open of DCFTA, and the resolution of practical 2. Technical assistance dialogue between key stakeholders, issues related to accessing European 3. Credit Lines: In this case interna- including governments; the business com- markets. tional banks like The World Bank, European munity and international development Cecilia Malmstrom, EU Commissioner Bank for Reconstruction and Development organizations. for trade; Luc Devigne, Head of EU Com- (EBRD) and etc. give a large amount We are proud to be part of this process mission Unit Russia, CIS, Ukraine, Western credits to the banks operating in the local and assist institutions in capacity devel- Balkans, EFTA, EEA and Turkey; as well as markets to allocate to SMEs at lower rates. opment and economic reform. We con- other high-ranking offi cials and people The key to deal with these challenges tinue to support of the EU approximation with experience in the DCFTA implemen- is to raise SMEs’ awareness about the agenda of Georgia, Moldova and Ukraine tation process from Georgia, Moldova, opportunities DCFTA offers, using regular and provide policy advice in various areas Poland, Czech Republic, Slovakia, Hun- communication and dialogue between of the Association Agreement Agenda. gary and Ukraine shared their experience and opinions about the EU approximation process. International development partners and institutions - EC, USAID, WB, EBRD, IFC, GIZ, UNDP – also participated. Q: What was the major outcome of the conference? A: The conference stressed the ben- efi ts of the implementation of DCFTA for Georgian, Moldovan and Ukrainian SMEs in terms ofnew business possibilities and increased export opportunities. There are From left to right: Silvia Radu – resident, GAS NATURAL FENOSA; President, EBA Moldova H.E. Ambassador Pirkka TAPIOLA – Head of the European Union Delegation to Moldova Cecilia Malmstrom – EU Commissioner Trade 48 | Investor.ge Mr. Octavian CALMIC – Deputy Minister of Economy, Republic of Moldova NEWS CAPITAL
DECEMBER-JANUARY/2015-2016 • Investor.ge | 49 NEWS
Avis Georgia Aisi BHP Construction Ronny’s Ltd. Savaneti 99 Ltd. Corp A International Service LLC Corp A Corp A Corp A Corp A
Avis Rent a Car BHP International Construction Service Ronny’s serves real Meat, fi sh and egg System is the world’s provides Cost LLC was found in American pizza. There manufacturing. largest car rental Management, 2012 and is a legal are now two eat-in savaneti.ge company, providing Project Management, successor of famous locations, one at business and leisure Quantity Surveying, ЗМК, which was the Vaja-Pshavela #3 in customers with a wide Project Monitoring, largest structural steel Saburtalo, and one range of services Lender’s Supervision producer in the South at Paliashvili #43 in at more than 4,000 and Construction Caucasus region from Vake. In addition, locations worldwide. consultancy Services the Soviet period. Ronny’s conveniently Avis is recognized as to many clients delivers to homes - Manufacturing of the industry leader throughout Central and offi ces across metal constructions in applying new and East European Tbilisi. Fundamentally, in several spheres, technologies and is regions on projects pizza is about dough, including assembling, one of the world’s top ranging in size from sauce and cheese, constructing and brands for customer US $10,000 to US $100 but Ronny’s pizza is installing on the loyalty. Avis Georgia million. also about people construction site. has been presented - owners, team bhp-int.com in the Georgian car - The company members, customers, rental market since has it’s own design suppliers - building 1999. Leading three bureau, which is a business that rental locations: staffed by highly- builds communities. Tbilisi International qualifi ed engineers Entrepreneured from Airport, Courtyard and designers, with scratch, Ronny’s by Marriott Tbilisi, more than 20 years is committed to and Batumi airport. of professional freedom, integrity and Short-term car rental, experience. deliciousness. medium- and long- - LLC has a certifi ed (P.S. Now you can term rental of vehicles. management and order online directly The company HSE policy, introduced from Facebook or cooperates with according to laws www.ronnyspizza. various international meeting international com.) organizations, standards. conpanies, main ronnyspizza.com projects active Synthesis of the in Georgia and experience and embassies. modern technology generate avis.ge opportunities that meet all modern requirements.
cs.ge NEW MEMBERS
50 | Investor.ge • DECEMBER-JANUARY/2015-2016 NEWS NEW MEMBERS
BMC Gorgia Evex Medical Hydrolea LLC Poti Free University of Corp B Corporation JSC Corp B Industrial Zone Georgia Corp B Corp B Corp B
Gorgia was founded Evex Medical Hydrolea LLC Poti Free Industrial University of Georgia in 1998 and is one of Corporation JSC is is focused on is spread over 3.0 (UG) is the largest the fi rst DIY retailer the largest chain of developing, mln sqm where the private educational on Georgian market hospitals country-wide, constructing and majority of land is institution in Georgia. specialized in building currently represented operating small offered for industrial Throughout the and construction with 43 clinics in 6 to mid-size HPPs in usage. The great past decade, the materials distribution regions of Georgia. Georgia. advantage of our FIZ is improvement of the and retail sales. Today Hospitals organized being adjutant to one quality of education in Gorgia is the largest in regional clusters of the most important Georgia has been one home improvement and referral hierarchy ports on Black sea of the top priorities. specialty retailer within cluster enables – Poti Sea Port. Poti In this framework, the group in the Caucasus Evex to provide Sea Port is one of the aim of UG has always region. Through its continuous patient oldest (150 years) been to develop strong distribution treatment pathway and most famous sea and maintain high chain, Gorgia sells from outpatient ports in the Black Sea, academic standards, its imported building clinics to multi-profi le handling both dry as well as a high materials in Georgia, referral or sepecialized and wet cargos. It’s a quality of student Armenia, Azerbaijan, hospitals. profi table port which is life, for the benefi t Ukraine and expanding. Poti FIZ has of both its students evex.ge Kazakhstan and has experienced stable and community. its own production of growth in recent years UG offers a wide pipes. The distribution and currently more range of courses and network includes than 100 operating programs, containing about 1500 shops in companies from faculties of: Law, Georgia. Corporate different parts of Business, Economics sales provide about the world continue and Management; 1000 building units. to enjoy numerous Health Sciences In the Georgian benefi ts and are and Public Health retail market Gorgia expanding their (including nursing, is presented by two businesses in Poti FIZ. dental, pharmacy); brands: Hypermarket The investors represent IT, Engineering Gorgia and Gorgia various sectors, such and Mathematics; Premium. Gorgia is as manufacturing Social Sciences; represented by brand of chemical and Humanities. shops in the country’s products, spirits, UG has assembled biggest cities: Tbilisi, perfume ingredients, laboratories, IT Kutaisi, Batumi. production of rooomsm simulation building materials, courtroom, and gorgia.ge warehousing, historical facilities international and to create a superior regional trading, etc. learning environment where students potifreezone.ge are able to gain theoretical knowledge Mr. Kučan, Dražen and develop practical Individual Member skills. Individual consultant ug.edu.ge
DECEMBER-JANUARY/2015-2016 • Investor.ge | 51 AmCham Company Members as of December 2015
PATRON MEMBERS Colliers International GULF Georgia TBC Group Georgia LLC by Sun Petrolium Georgia LLC 7 Marjanishvili St. BP Exploration Georgia 37/39 Kostava St., Pixel Business Center, Tel: 2272727; Fax: 2228503 24, S. Tsintsadze St. Grato Business Center 7th Floor 34 Chavchavadze Ave. www.tbc.com.ge Tel: 2593400 Tel: 2224477 Tel/Fax: 2496444 www.bpgeorgia.ge www.colliers.com www.gulf.ge TBSC Consulting 3, Rapiel Eristavi Street, IV Floor Exxon Azerbaijan Ltd Construction Service LLC Hilton Batumi Tel: 2959019; Fax: 2420215 Landmark Suite 300, 95 Nizami St., Baku, 2 Gen. Mazniashvili St., Rustavi 13 Takaishvili St., Batumi www.tbsc.ge AZ1010 Azerbaijan Tel: (599)500559 Tel: 292092 www.cs.ge TMC Global Professional Services Tel: (994-12) 4982460; Fax: (994-12) www.hilton.com 6001 Indian School Road NE, Suite 190, 4982472 Cushman & Wakefi eld - Albuquerque, NM 87110, USA Iberia Refreshments, JSC www.exxonmobil.com Veritas Brown Tel: (1 505) 8723146 Tetri Khevi Hesi District, Orkhevi 6th fl oor, Block 10, 71 Vaja-Pshavela Ave. www.tmcservices.com KPMG Georgia LLC Tel: 2474849 Tel: 2241091; Fax: 2241090 3rd Floor, Besiki Business Center, www.veritasbrown.com www.pepsi.ge USA2Georgia 4 Besiki St., 0108 27 Kavtaradze St. Tel: 2935713; Fax: 2982276 Dechert Georgia LLC IMSS Ltd. Tel: 2421818 www.kpmg.ge 7th fl oor, Pixel building, 31 Makashvili St. www.usa2georgia.com 34 Chavchavadze avenue Tel: 2938911 PricewaterhouseCoopers Tel: 2334719 www.imss.ge 7 Bambis Rigi St., 0105 www.dechert.com CORPORATE B MEMBERS Kavkaz Cement JSC Tel: 2508050; Fax: 2508060 Deloitte 29 Andronikashvili St., 0189 Adjara Group Hospitality www.pwc.com 36a, L. Asatiani St., 0105 Tel: 2619090 1, 26 May Sq., 0179 Tel: 2244566; Fax: 2244569 www.kavkazcement.ge Tel: 2300099 UGT www.deloitte.ge 17a Chavchavadze Ave., 7th fl oor www.adjaragroup.com Maersk Georgia LLC Tel: 2220211; Fax: 2220206 Diplomat Georgia 6 Khetagurov St. Air Astana Airlines JSC www.ugt.ge 65, Kakheti Highway Tel: 2200800; Fax: 2200815 5th Floor, Pixel Business Center, Tel: 2984950 www.maerskline.com 34 Chavchavadze Ave. www.diplomat.ge Tel: 2514999 CORPORATE A MEMBERS DLA Piper Georgia LP Marriott Hotels, Resorts & Suites www.airastana.com 13 Rustaveli Ave. 10 Melikishvili St. Aliance Georgia Ltd Tel: 2779200; Fax: 2779210 Alliance Group Holding, JSC Tel: 2509300; Fax: 2509301 33 Samurzakano St. www.marriott.com 47/57 M. Kostava St., 0179 www.dlapiper.com Tel: 2243773 Tel: 2424181; Fax: 2998112 EY Georgia www.groupaliance.com www.agh.ge Microsoft Georgia LLC 44 Kote Abkhazi St. 34 Chavchavadze Ave. AMK Law Auto Service Caucasus Tel: 2439375; Fax: 2439376 Tel: 2970123 1 Iv. Javakhishvili Sq., 0102 5 Shalikashvili St. www.ge.ey.com www.microsoft.com Tel: 2054628 Tel: 2208080 F H Bertling Georgia Ltd. www.amklex.com www.precisiontune.com Oracle 10 Shevchenko St. Ayazağa Mevkii Meydan Sok. Asseco Georgia Tel: 2252287 Avis Georgia Aisi Spring Giz Plaza Kat:11 24 Mosashvili St. www.bertling.com 4 Freedom Sq. 0105 Maslak, Istsnbul, Turkey Tel: 2720901 Tel: 2923594 FINCA Bank Georgia Tel: 577500151 www.asseco.ge www.avis.ge 71 Vazha-Pshavela Ave. 3rd fl . www.oracle.com Aversi Pharma Avon Cosmetics Georgia LLC Tel: 2244949 148/2 Aghmashenebeli Ave. PepsiCo Wimm-Bill-Dann 117 Tsereteli Ave. www.fi nca.ge Tel: 2987860 Tel: 2226805; Fax: 2226806 Village Ponichala, Tbilisi 0165 Frontera Resources Georgia www.aversi.ge www.avon.com Tel: 2475290 12 Paliashvili St. www.wbd.ru Baker Tilly Georgia Ltd. Best Western Hotel Tbilisi Tel: 2252412 Meidan Palace, 44 Kote Abkhazi St. 11 Apakidze St. www.fronteraresources.com Pfi zer Luxembourg SARL Tel: 2505353; Fax: 2505353 Tel: 2300777 Representation Offi ce in Georgia Georgian American Alloys, Inc. www.bakertillyinternational.com www.bestwesterntbilisi.ge 58 I. Abashidze St. 200 S Biscayne Blvd Suite 5500, Miami FL Tel: 2252986 Bank of Georgia Betsy’s Hotel / Prosperos Books 33131 USA www.pfi zer.com 3 Pushkin St. 32/34 Makashvili St. / 34 Rustaveli Ave. Tel: (1)3053757560 Tel: 2444134; Fax: 2983269 Tel: 2987624, Fax: 2923592 www.gaalloys.com Philip Morris www.bog.com.ge www.betsyshotel.com Georgian American University 1 Tabidze St. Bank Republic BHP International 8 Aleksidze St. Tel: 2439001; Fax: 2439005 2 Gr. Abashidze St. Offi ce 305, 3rd Floor, 2 Baratashvili St. Tel: 2206520; Fax: 2206519 www.philipmorrisinternational.com Tel: 2925555; Fax: 2925544 Tel: 2103207 www.gau.ge www.republic.ge www.bhp-int.com ProCredit Bank Georgian Audit & Consulting 154 Agmashenebeli Ave. Basel LLC Booz Allen Hamilton, Inc. Company Tel: 2202222; Fax: 2202222-2226 49 Krtsanisi St. 4 Freedom Sq. Axis Business Pl, 2 Gamrekeli St. www.procreditbank.ge Tel: 2550110 Tel: 2481348; Fax: 2481349 Tel: 2904522; Fax: 2904523 www.krtsanisi.com www.boozallen.com www.gacc.com.ge Radisson BLU Iveria Hotel 1 Rose Revolution Sq. Basis Bank JSC Georgian Logistic Group Ltd. British American Tobacco Tel: 2402200; Fax: 2402201 1 Ketevan Tsamebuli Ave. 12 G. Kuchishvili St., 0179 71 Vazha Pshavela Ave. www.radissonblu.com Tel: 2922922; Fax: 2986548 Tel: 2157500/01/02; Fax: 2157503 Tel: 2422424 www.basisbank.ge www.bat.com www.glg.ge Ronny’s Ltd. Batumi International Container Catoni & Co. Georgia GMT Group 3 Apt., 3 Vazha-Pshavela Ave. Terminal 7 Dzmebi Zubalashvilebi St. Apt.22/23 4 Freedom Square Tel: 2472472 11, Baku Street, 6010, Batumi Tel: 2989230; Fax: 2922264 Tel: 2988988; Fax: 2988910 www.ronnyspizza.com Tel: 422 276452 www.hapag-lloyd.com www.gmt.ge www.bict.ge Savaneti 99 Ltd. Caucasia Trading Gosselin Moving Georgia Vilage Savaneti, Bolnisi Region BDO LLC Apt 11, Bld 7, 16 Krtsanisi St. 3 M/D, Didi Digomi Tel: 2605599 Pixel Center 8th fl oor Tel: 14433050083; Fax: 14433788388 Tel: 2596601/02/03; Fax: 2596600 Tel: 2545845; Fax: 2399204 www.caucasiatrading.com www.moving.gosselingroup.eu SEAF Management LLC www.bdo.ge 7, Niko Nikoladze St. II Floor. Caucasus University Grant Thornton LLC Tel: 2998115; Fax: 2923533 BGI Advisory Services Georgia 77 Kostava St., Bld.6, 4th fl . 61 D. Aghmashenebeli Ave. www.seaf.ge 18 Rustaveli Ave., II fl oor Tel: 2377777; Fax: 2313226 Tel: 2604406 Tel: 2997292; Fax: 2996615 www.cu.edu.ge www.grantthornton.ge Sheraton Metechi Palace Hotel www.bgi.ge CH2M Hill Greco Group 20 Telavi St. BLB (Business Legal Bureau) 5th Floor, GMT Plaza, Freedom Square 1 Nutsubidze St. Tel: 2772020; Fax: 2772120 1 Shevchenko St, Apt.1 Tel: 2474040; Fax: 2470210 Tel: 2393138; Fax: 2311107 www.sheraton.com/tbilisi Tel: 2995797 www.ch2m.com www.greco.ge www.blb.ge T&K Restaurants (McDonald’s Chemonics International GT Group Georgia) BLC Law Offi ce 6a N. Ramishvili St., 0179 48 B. Cholokashvili St. 1 Dzmebi Kakabadze St. 4 Gudiashvili Sq. Tel: 2234311; Fax: 2234309 Tel: 2740740 Tel: 2921246; Fax: 2251422 Tel: 2922491; Fax: 2934526 www.chemonics.com www.gtgroup.ge www.mcdonalds.ge www.blc.ge
52 | Investor.ge • DECEMBER-JANUARY/2015-2016 BMC Gorgia Georgian Integrated Systems (GiS) Lemondo LLC Sayali Ltd. 140 Tsereteli Ave. Offi ce 1, 85 Abashidze St., 0163 13 Dzotsenidze St. 6 Ushangi Chkheidze St. Tel: 2960960 Tel: 2243724 Tel: 2193377 Tel: 2951212; www.gorgia.ge www.gis.ge www.lemondo.com www.sayali.ge
Canargo Georgia Georgian Resources Company Liberty Bank JSC Silknet Ltd. 67 Aghmashenebeli Ave. 3-5 Kazbegi St. 74 Chavchavadze Ave. 95 Tsinamdzgvrishvili St. Tel: 2332527 Tel: 2936676 Tel: 2555500; Fax: 2912269 Tel: 2910345; Capital Bank www.georgianresources.com www.libertybank.ge www.silknet.com 1 Vertskhli St. Geo Steel LLC Luca Polare Tel: 2428888 SRG Investments LLC 36 Davit Gareji St., Rustavi, 3700 54 Oniashvili St. www.capitalbank.ge 49a Chavchavadze Ave, 3rd fl oor Tel: 2243794 Tel: 2990399 Tel: 2253581 CaspiGroup Ltd. www.geosteel.com.ge www.lucapolare.com www.silkroad.ge 29 Bochorma St. Tel: 2550818 Globalink Logistics Group Mina JSC Statoil www.caspigroup.com 14-A Shartava St, 2nd fl , Suite 7 4 Besiki St. GMT Plaza, 4 Freedom Sq. Tel: 2253262; Fax: 2439002 Tel: 2449981/82/83; Fax: 2449980 Tel: 2471002 Caucasus Online LLC www.globalinkllc.com www.mina.com.ge www.statoil.com 71 Vazha-Pshavela Ave. Tel: 2480048; Fax: 2480048 Gvinadze & Partners LLC Mira-Group Ltd. Tbilisi View www.caucasus.net 44 Kote Abkhazi St, 0105 Brose Street Turn,Old Tbilisi 4a, Freedom Sq. Tel: 2438970, Fax: 2438971 Channel Energy (Poti) Limited Georgia Tel: 2242244/55/88 Tel: 2999980 www.gvinadzeandpartners.ge LLC, By Petrocas Energy Group www.riverside.ge www.tbilisiview.ge 52, David Agmashenebeli St., Poti HeidelbergCement Georgia National Center for Dispute Resolution Teliani Valley JSC Tel: (995493) 2-7-08-60 18 Lermontov St. 4/7 Rustaveli St., Rustavi 2 Marshal Gelovani Ave. www.petrocasenergy.com Tel: 2474747 Tel: 2193406 Tel: 2313245; Fax: 2313249 Château Mukhrani, J.S.C. www.heidelbergcement.ge www.ncdr.ge www.telianivalley.com III fl oor, Didube Plaza, Herbalife Noblet Media Theco Ltd. 116 Tsereteli Ave. Bld. 4a Tamarashvili St., 0162 Ap. 25, 34-36 Kobuleti St. 16 Chikovani St. Tel: 2201878; Fax: 2201878; Tel: 2202929 Tel: 2396300 Tel: 592107515 www.mukhrani.com www.herbalife.com www.nobletmedia.com www.tbilisia.ru Citi & Co. Hotels And Preference Hualing Tbilisi 4 Besiki St. Nodia, Urumashvili & Parnters University of Georgia Hualing Tbilisi Sea New City, 0152 Tel: 2920921 Offi ce #28, IV Block, 77a Kostava St. Tel: 2505025 71 Vazha-Pshavela Ave. Crowne Plaza Borjomi Tel: 2552222 www.hotelspreference.ge Tel: 2207407 Baratashvili Str. 9, 1200 Borjomi www.ug.edu.ge www.nplaw.ge Tel: 995 367 220260 Hualing International Special VD Capital www.cpborjomi.com Economic Zone Nutrimax Ltd. 25 Apt. 34/36 Kobuleti St. 77 Kostava St., 0175 Crystal, MFO JSC 68a Rustavi Highway, 0165 Tel: 2363672; Fax: 2364302 Tel: 591005900 Tel: 2305335 72 Tamar Mepe St. Kutaisi, 4600 www.hualing.cn Tel: 431253343 www.nutrimax.ge Wings and Freeman Capital www.crystal.ge Hydrolea LLC Green Building, 6, Marjanishvili St. Overall Management Group (OMG) Inc. 11 A. Apakidze St. Tel: 2940051; Fax: 2940053 David Tvildiani Medical Univesity 29 Marjanishvili St. Tel: 790420015 www.wfcapital.ge 2/6 Ljubljana St. Tel: 2436052; Fax: 2436052 www.hydrolea.com Tel: 2516898, Fax: 2527196 Wissol Georgia Paine Stevens LLC www.aieti.edu.ge IGroup 74b Chavchavadze Ave. 1 Ivane Javakhishvili Sqr. 197/24g Kazbegi Ave. Tel: 2915315; Fax: 2915615 Duty Free Georgia Tel: 2903211, Fax: 2903291 Tel: 2308483 www.wissol.ge 3rd fl oor, 4 Besiki St., Besiki Business www.painestevens.com Center www.igroupgeorgia.com Tel: 2430150 Policy and Management Consulting ILF Beratende Ingenieure ZT GmbH www.dfg.ge Group (PMCG) NON-PROFIT ORGANIZATIONS Branch in Georgia 61 Aghmashenebeli Ave, 4th fl oor Efes Brewery in Georgia - 15 Tamar Mepe Ave. Agricultural University of Georgia Tel: 2921171 Lomisi JSC Tel: 2199453 140 David Aghmashenebeli Alley www.pmcg.ge Village Natakhtari, Mtskhta Region www.ilf.com Tel: 2594901 Tel: 2357225 Poti Free Industrial Zone www.agruni.edu.ge www.natakhtari.ge Imedi TV 51 Ljubljana St. Pixel Building, 4th fl oor, American Friends of Georgia EVEX Medical Corporation Tel: 2464646 34 Chavchavadze Ave. 77 Nutsubidze St. 40 Vazha-Pshavela Ave. www.imedi.ge Tel: 2485485 Tel: 2397174; Fax: 2388495 Tel: 2550505 www.potifreezone.ge www.afgeorgia.org Imperial Tobacco International Limited www.evex.ge CARE International in the Caucasus Representative Offi ce in Georgia Publicis Hepta Gebrüder Weiss LLC 37 Tsagareli St., 0162 12 Dariali Turn, 0162 17 V. Jorbenadze St. Airport Adjacent Territory, Tel: 2291941 Tel: 2232438 Tel: 2745672; Fax: 2745671 Kakheti Hwy www.care-caucasus.org.ge www.imperial-tobacco.com www.publicishepta.com Tel: 2710011 Eurasia Partnership Foundation Qebuli Climate www.gw-world.com Interco Travel Holding 3 Kavsadze Str. 101, Tsereteli Ave. 36 Al. Kazbegi St. Tel: 2253942; Fax 2252763 (ext. 112) GeoCapital Microfi nance Organization Tel: 2356201 Ltd. Tel: 2294343 www.epfound.org www.intercontinental.ge www.qebuli.ge 5 Tsereteli St, Kutaisi Free University of Tbilisi Tel: 431 267070 International Black Sea University Rakeen Development LLC 140 David Agmashenebeli Alley www.geocapital.ge David Agmashenebeli Alley 13 km, 2, 0131 Pixel Business Center, Tel: 2200901 Geocell Tel: 2595005 34 Chavchavadze Ave. www.freeuni.edu.ge Tel: 2933393; Fax: 2933993 3 Gotua St. www.ibsu.edu.ge Georgian Wine Association Tel: 2770100, ext. 7435; www.rakeen.ge JTI Caucasus 12 Mtatsminda St. Fax: 2770119 VII Floor, Pixel Business Center, Resolution Insurance Brokers, Tel: 2505456 www.geocell.ge 34 Chavchavadze Ave. Georgia LLC Good Governance Initiative GeoEngineering LLC Tel: 2604111 61, Gorgasali St. Pixel Center, 8th Floor, 34, Chavchavadze 15a Tamarashvili St. www.jti.com Tel: 2936305 Ave. Tel: 2311788; Fax: 2311787 www.rib.ge Tel: 2243111 www.geoengineering.ge Kordzahia, Jgenti Law Firm www.ggi.ge 10 Petriashvili St. Rixos Hotel Borjomi Geomill LLC Tel: 2921878 16 Meskheti St., Borjomi QSI International School of Georgia 4, Chirnakhuli St. www.kjlaw.ge Tel: 2292292 Village Zurgovani, Tbilisi Tel: 2400000 http://borjomi.rixos.com Tel: 2537670; Fax: 2322607 www.geomill.ge KSB Bank www.qsi.org 3 Ketevan Tsamebuli Ave. Rooms Hotel Georgian Airways Salvation Army Tel: 2550000, Fax: 2507707 14 Merab Kostava St. 12 Rustaveli Ave. 16 Ikalto St. www.ksb.ge Tel: 2020099, 2730099 Tel: 2999730; Fax: 2999660 www.roomshotels.com Tel: 2333786; Fax: 2330227 www.georgian-airways.com Leavingstone www.salvationarmy.org Georgian Beer Company 12a Al. Kazbegi Ave. Rustavi Azot Ltd. San Diego State University - Georgia 3311 Saguramo, Mtskheta District Tel: 2105103 2 Mshvidoba St. Rustavi-3702 3 Chavchavadze Ave. Tel: 2437770 www.leavingstone.com Tel: 995341270900 Tel: 2290820 www.geobeer.ge www.azot.ge Legal Partners Associated LLC www.sdsu.edu Georgian Hospitality Group Offi ce #203, Besiki Business Center, 4 Rustavi Steel LLC Transparency International Georgia 23 Peritsvaleba St., 0103 Besiki St. 0108 12 Y. Gagarin St., 3700 Rustavi 26 Rustaveli Ave. 0108 Tel: 2987789 Tel: 2200203; Fax: 2250458 Tel/Fax: 260 66 99 Tel: 2932129 www.ghg.ge www.lpa.ge www.rmp.ge www.transparency.ge
DECEMBER-JANUARY/2015-2016 • Investor.ge | 53 NEWS
AMCHAM HOSTS LUNCH WITH U.S. STATE DEPARTMENT DELEGATION
AMCHAM BOARD HOSTED A LUNCH WITH U.S. DEPUTY SECRETARY OF COMMERCE BRUCE ANDREWS AND A DELEGATION FROM THE U.S. STATE DEPARTMENT ON OCTOBER 15. THE DELEGATION WAS IN GEORGIA FOR THE SILK ROAD FORUM. THE DELEGATION DISCUSSED THE STATE OF THE ECONOMIC AND POLITICAL SITUATION IN GEORGIAWITH THE AMCHAM BOARD, AS WELL AS CURRENT OPPORTUNITIES AND CHALLENGES FACING THE BUSINESS COMMUNITY AND HOW THE U.S. GOVERNMENT CAN SUPPORT FUTURE BUSINESS ENVIRONMENT REFORM IN GEORGIA.
54 | Investor.ge • DECEMBER-JANUARY/2015-2016 NEWS
US AMBASSADOR IAN KELLY MEETS AMCHAM MEMBERS
IAN C. KELLY, UNITED STATES AMBASSADOR TO GEORGIA, SPOKE WITH AMCHAM MEMBERS FOR THE FIRST TIME SINCE STARTING HIS POST IN TBILISI, AT THE CHAMBER’S ANNUAL MEETING ON NOVEMBER 2. BADRI JAPARIDZE, VICE CHAIR OF THE SUPERVISORY BOARD OF TBC BANK, WAS RE-ELECTED TO THE AMCHAMBOARD OF DIRECTORS AT THE MEETING. ANDREW COXSHALL, MANAGING PARTNER OF KPMG, WAS ELECTED AS A NEW MEMBER OF THE BOARD.
DECEMBER-JANUARY/2015-2016 • Investor.ge | 55 NEWS
Board Of Directors 2015
SARAH WILLIAMSON PRESIDENT
R. MICHAEL COWGILL 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 Maia Edilashvili, Lika Jorjoliani, Laurie Kelleher, Joseph Larsen, Richard Rubin, George Welton, Sarah Williamson, Heather Yundt, Nino Zubashvili. Copy Editor Alexander Melin Photographs Cover image and all photos on pages 33-37 are used with permission from Marketing & Promotion Alexander Kartveli Association; Page 38-41: Diana KvarianiSpring Summer Saba Gvetadze and Salome Tkeshelashvili 2016 collection, photographs by Gregory Regini
Promotional Design Levan Baratashvili Special thanks to the Alexander Kartveli Assocation, CRRC-Georgia and Diana Magazine Design and Layout Kvariani, as well as to all the AmCham Georgia staff. Without your help, this Giorgi Megrelishvili issue of Investor.ge magazine would not be possible. 56 | Investor.ge • DECEMBER-JANUARY/2015-2016 NEWS
STEVE JOHNSON TED JONAS KETTI KVARTSKHAVA DIRECTOR DIRECTOR DIRECTOR
CHRIS SCHLUETER BETSY HASKELL, K.G. MOORE DIRECTOR FOUNDING ADVISOR EX-OFFICIO MEMBER
GEORGE WELTON EXEC. DIRECTOR
AmCham Georgia Patron Members:
© The American Chamber of Commerce in Georgia, 2015 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 fl oor. Tel: 2 22-69-07 The opinions expressed in this magazine do not refl ect 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 DECEMBER-JANUARY/2015-2016 • Investor.ge | 57
BGI LEGAL BGI ADVISORY SERVICES GEORGIA
Experience e Effi tis ci er en p c x y E
For more information contact BGI partners: Zaza Bibilashvili - [email protected] Lasha Gogiberidze - [email protected] Sandro Bibilashvili - [email protected] Oto Kakhidze - [email protected]
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Otar Kipshidze, Office Managing Partner ([email protected])
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