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Developing a New Tourism Hub AFTER EU VISA LIBERALIZATION: TBILISI’S EVOLVING RETAIL FAKE NEWS IN GEORGIA GEORGIA’S NEXT STEPS MARKET Investor.A Magazine Of The American Chamber Of Commerce In Georgia geISSUE 57 JUNE-JULY 2017 Developing a New Tourism Hub JUNE-JULY/2017 Investor.ge | 3 Investor.ge CONTENT 6 Investment News Investor.ge provides a brief update on investments and changes in government policy that could impact the business environment. The information in this issue was taken from agenda.ge, a government-supported website, and other sources. 7 After EU Visa Liberalization: Georgia’s Next Steps 8 U.S. Bans Aid to Countries Recognizing Georgia’s Separatists 12 Georgia: An “Island” of Democracy and Economic Liberty in the Caucasus 6 14 Can Emigration Boost Development? Recent empirical findings in Georgia 15 Georgia Seeks a New Generation of Scientists The Georgian government is eager to reboot the country’s scientific community, which suffered from brain drain and a lack of funding in the years following the collapse of the Soviet Union. With an eye on the new generation, the government and its Western partners are investing in education and innovative programs to attract young people and bolster the popularity of science- related professions. 18 The Avant-Garde of Technology and Art: Georgians Redefine Digital Marketing 25 A few months ago, a Dutch tourist traveling to Georgia was treated to an incredible surprise: he was Georgia’s sixth-millionth tourist and got VIP treatment, which included a dinner with Prime Minister Giorgi Kvirikashvili. The viral video of the sixth-million tourist campaign, created by a Georgian marketing company, was yet another sign of the creative boom in Georgia’s digital marketing industry. 22 From Open Markets to Online Bazaars: Tbilisi’s Evolving Retail Market 25 Kutaisi: Building a New Future for Georgia’s 34 Second City 30 Fake News in Georgia: The Government’s Plan to Tackle Russian Soft Power 32 Finding a Niche Among the Khachapuri: The Success of Foreign Fast Food in Georgia 34 Georgian Ballet – Yesterday and Today 38 NEWS ...... 38 4 | Investor.ge JUNE-JULY/2017 ! "# $ " % ! & '$ ( ! JUNE-JULY/2017JUNE-JULY/2017 Investor.geInvestor.ge | 5 CHINA, GEORGIA SIGN FREE EXTERNAL TRADE UP 17 PERCENT INVESTMENT TRADE DEAL Georgia’s external trade was up 17 Tbilisi and Beijing signed a free trade SHUFHQWIRUWKH¿UVWIRXUPRQWKVRIWKH deal on May 13, paving the way for Geor- year, agenda.ge reported on May 13. NEWS gian products—including wine, mineral Exports increased by 30 percent to water and agricultural products—to enter $788 million, and imports also increased INVESTOR.GE the 1.4 billion-consumer market with 13 percent to $2.3 billion, according to PROVIDES A zero tariffs, agenda.ge reported. RI¿FLDOVWDWLVWLFV0LQLVWHURIWKH(FRQR- BRIEF UPDATE The deal took just seven months to my and Sustainable Development Giorgi complete. Gakharia told journalists the increase in ON INVESTMENTS Currently, Georgia has free trade exports has helped drive the country’s AND CHANGES deals with Turkey; the European Union economic growth. IN GOVERNMENT (EU); European Free Trade Association “In terms of economy, it means that POLICY THAT COULD (EFTA) countries—Switzerland, Nor- the situation on the markets of our main way, Iceland and Liechtenstein; and trade partners is getting stable. Demand IMPACT THE BUSINESS the countries of the Commonwealth of has increased and our producers are able ENVIRONMENT. THE Independent States (CIS)—Armenia, to sell more. The more they sell, the more INFORMATION IN THIS Azerbaijan, Kazakhstan, Kyrgyzstan, jobs they create, and consequently, the Moldova, Turkmenistan, Tajikistan and more jobs are created, the more people ISSUE WAS TAKEN Uzbekistan. are employed. We all understand that FROM AGENDA.GE, Finance Minister Dimitry Kum- 5.3 percent growth is not enough for A GOVERNMENT- sishvili met with Chinese Vice Premier our country. That is why we are follow- SUPPORTED WEBSITE, Wang Yang in the city of Hefei in China, ing a four-point plan that aims to make agenda.ge reported on 18 May. economic growth more rapid and impres- AND OTHER “We asked the Chinese side to launch sive,” Gakharia said. SOURCES. a new project under the One Belt – One Real GDP growth in March was 5.3 Road initiative to support Chinese pri- percent, compared to the same period vate companies that will be represented of the previous year, according to pre- in Georgia,” Kumsishvili said. OLPLQDU\GDWDIURP*HR6WDWWKHRI¿FLDO statistics body. NEW FRENCH-ITALIAN- GEORGIAN FILM CO- MORE FLIGHTS TO AND FROM PRODUCTION ANNOUNCED GEORGIA A Georgian film production com- Several international airlines are pany, Magenta Films, is set to shoot a LQFUHDVLQJÀLJKWVWR7ELOLVLDJHQGDJH prison-rugby drama as a co-production reported. with France and Italy within the state Greek airline company Aegean Air- program “Film in Georgia,” the agenda. OLQHVDQQRXQFHGLWZLOORIIHUGLUHFWÀLJKWV ge website reported. between Heraklion and Tbilisi once a The film, “Negative Numbers,” week from June 14 to September 13. was written by Georgian screenwriter Another Greek airline, Ellinair, will carry Uta Beria. It is based on the true story RXWZHHNO\7ELOLVL+HUDNOLRQÀLJKWVIURP of “two ex-professional rugby players June 15 to September 14. who helped juvenile offenders recover Iranian airline Zagros Airlines an- by bringing rugby into their life under nounced it would start direct flights detention,” the report said. between Tbilisi and Tehran in May. 6 | Investor.ge JUNE-JULY/2017 he freedom to travel to and country needs to “continue implementing After EU Visa throughout the Schengen area reforms to become a full member of the Twithout a visa has been lauded European family.” Liberalization: as a milestone in Georgia’s relations Foreign Minister Mikheil Janelidze with the EU. also pledged that Georgia will take “all %XW*HRUJLDQRI¿FLDOVKDYHPDGHLW steps” to move closer to Europe. Georgia’s Next clear this is just one step toward their ³*HRUJLDKDVDFOHDUO\¿[HGLQWHU- XOWLPDWHJRDOWREHFRPHDIXOOÀHGJHG est—to have more political integration Steps member of the Union. with the EU, and we will take all steps Prime Minister Giorgi Kvirikashvili within the framework of all formats,” has repeatedly spoken about Georgia’s Foreign Minister Mikheil Janelidze GEORGIA’S VISA-FREE REGIME future in the EU. was shown saying on Rustavi-2 TV on WITH THE EU WENT INTO EFFECT IN MARCH 28. EVEN In comments at the European Parlia- April 13. AS THE COUNTRY CELEBRATES ment when the visa-liberalization legisla- But some political scientists and THIS MILESTONE, GEORGIAN tion was signed, Kvirikashvili reiterated international policy specialists have OFFICIALS HAVE BEEN OPEN Georgia’s commitment to becoming a cautioned against Tbilisi moving too ABOUT THEIR AMBITION TO full member of the “European family.” quickly. CONTINUE TO MOVE CLOSER TO “Today, the European Union’s doors THE EU. INVESTOR.GE SPOKE WITH SPECIALISTS ON EU INTEGRATION have opened to Georgians. This is not DIFFICULT POLITICAL CLIMATE AND INTERNATIONAL POLICY only a step towards Euro-integration but Alexandra Hall Hall, a former UK ABOUT WHAT TBILISI SHOULD DO a tremendous achievement,” he said in Ambassador to Georgia and now a se- NEXT. comments to journalists, adding that the nior fellow at the Dinu Patriciu Eurasia ADVERTISEMENT JUNE-JULY/2017 Investor.ge | 7 Center, told Investor.ge that it is to the remains full integration within the EU.’ I is enough,” he said. credit of both Georgia and the EU that think that the Georgian leadership needs “It is quite the opposite; it’s just the the visa liberalization regime has been to be careful not to play up expectations beginning of a lengthy and time-consum- put in place. on that,” she said. ing Europeanization process. Despite the In a recent editorial published on skeptical position of some EU members, the Atlantic Council website, Hall Hall TIME FOR REFORM Georgia should continue its reforms and argued that the new visa-free deal was a Koba Turmanidze, the director of act like a member state adopting, step by “one small step for Georgia and one huge Caucasus Research Resource Center in step, EU standards. The experience of leap for the EU.” Georgia, told Investor.ge that now Geor- EU-candidate Balkan states is important “I think it is to Georgia’s huge credit gia needs to focus on taking full advan- in this regard: the more Georgia will do that it persisted with its visa liberalization tage of its Deep and Comprehensive Free its homework, the closer it will be with process. It took longer than the Georgians Trade Agreement (DCFTA) with the EU. the EU and there will [eventually] be wanted, but it was actually quicker than “We need to focus on an information momentum when the EU can’t reject a lot of other countries have achieved, campaign to explain DCFTA opportuni- Georgia’s progress.” Hall Hall stressed, DQGLWUHÀHFWHGYHU\ZHOORQWKH(8WKDW ties to businesses. At the same time, the however, that the Georgian government GHVSLWHWKLVLQFUHGLEO\GLI¿FXOWGRPHVWLF government should design programs to must be sensitive to the political situation environment and backlash against migra- help businesses with export potential. LQWKH(8³7KHUHLVGH¿QLWHO\DGLI¿FXOW tion generally in the EU, it honored its Meeting formal requirements related to political environment within the EU; promise to Georgia. So I would take that DCFTA is hard, but relatively straight- they have many other things on their as a very good sign,” she said. forward,” he said. plate and enlargement, further enlarge- But she cautioned that Tbilisi should Political scientist Kornely Kakachia ment, is not on the agenda within the EU not play up expectations that full mem- also urged the government and the as far as I can observe,” she said. bership is on the horizon for Georgia. Georgian people to push ahead with The views expressed in this article by “I have seen senior Georgian leaders needed reforms.
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