Mobile banking is A tip for NATO to keepkeep changing how we pay Georgia even closerr See on p. 14 See on p. 8 MERAB PACHULIA, GORBI 23 July, 2018 News Making Money http://www.fi nchannel.com Pentagon to Give Fewer severe Kids of Working Moms natural Ukraine $200 Million disasters in More in Military Aid Grow Into Happy Adults the first half The FINANCIAL -- The U.S. and advisory assistance. All The FINANCIAL -- In earlier eventual careers than the Professor Kathleen McGinn of the year Defense Department says the military aid is nonlethal in research, Kathleen McGinn daughters of stay-at-home hopes the fi ndings bring a it will give $200 million to nature. and colleagues discovered moms. big sigh of relief for guilt- The FINANCIAL -- The fi rst Ukraine to help bolster its mil- A timeline for delivery of that adult kids of working Now the full study has ridden mothers who either half of 2018 was fortunate in itary’s defensive capabilities. the aid and equipment is to be moms are high achievers at been released, and it brings have to hold down a job to that natural disasters across Voice of America reported. determined later, the Penta- work. Now it turns out they even more good news for the make ends meet or simply the world caused signifi cantly The Pentagon said in an an- gon said. are happy, too. children of working moms: choose to work outside the lower losses than usual. Ac- nouncement Friday the mon- In 2015, preliminary re- They wind up just as happy home while raising their cording to provisional fi gures, ey will be used to help fund sults of a groundbreaking in adulthood as the children children. overall losses were around military training, equipment Continued on p. 2 study found that the daugh- of moms who stayed home, US$ 33bn, the lowest level ters of employed mothers according to HBS. since 2005 (US$ 29bn after adjustment for infl ation). Consumer sentiment in often perform better in their Harvard Business School Continued on p. 17 Europe improves slightly Estimating the Risk of Modern Slavery in 2018 Continued on p. 4 The FINANCIAL -- The con- since November 2007. The The FINANCIAL -- In 2017, Some regions of the world Walk Free and Gallup have sumer sentiment among Eu- average propensity to buy in Walk Free Fou ndation suff er this problem dispropor- collaborated since 2014 to CURRENCIES ropean consumers improved the EU dropped slightly, al- and the International Labour tionately, with modern slav- collect data on modern slav- slightly in the second quarter though the propensity to save Organization estimated that ery most prevalent in Africa ery using nationally repre- July 21 July 14 of 2018. also fell, making more money there were 40 million victims (7.6 per 1,000 people) and sentative household surveys In June the GfK Consumer available for consumption, of modern slavery on any giv- least prevalent in the Ameri- implemented through the 1 USD 2.4417 2.4478 Climate for the 28 EU states according to GFK. en day in 2016, including 25 cas (1.9 per 1,000 people). Gallup World Poll. 1 EUR 2.8436 2.8458 reached 23.2 points, thus tak- million people in forced labor o provide a targeted, ob- 100 RUB 3.8430 3.9292 ing it 2.6 points above March’s and 15 million in forced mar- jective assessment of the fi gure. This is its highest level Continued on p. 6 riage. problem at the country level, Continued on p. 11 1 TRY 0.5080 0.5040

© 2018 The FINANCIAL. INTELLIGENCE BUSINESS PUBLICATION WRITTEN EXPRESSLY FOR OPINION LEADERS AND TOP BUSINESS DECISION-MAKERS 2 HEADLINE NEWS & ANALYSIS fi nancialnancial nnewsews 23 JULY, 2018 | FINCHANNEL.COM CURRENT PRICES ON GASOLINE AND DIESEL 23 JULY, 2018, GEORGIA

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The FINANCIAL respects the intellectual property of others, and we ask our Pentagon to Give Ukraine $200 colleagues to do the same. The material published in The FINANCIAL may not be reproduced without the written consent of the publisher. All material in The FINANCIAL is protected by Georgian and international Million More in Military Aid laws. The views expressed in The FINANCIAL are not necessarily the views of the publisher nor does the publisher carry any responsibility for those views. The FINANCIAL -- The U.S. Defense Department says it will PERMISSIONS give $200 million to Ukraine to If you are seeking permission to use The help bolster its military’s de- FINANCIAL trademarks, logos, service fensive capabilities. Voice of marks, trade dress, slogans, screen shots, copyrighted designs, combination of America reported. headline fonts, or other brand features, The Pentagon said in an an- please contact publisher. nouncement Friday the money “&” is the copyrighted symbol used by The FINANCIAL will be used to help fund mili- tary training, equipment and FINANCIAL (The FINANCIAL) is registered advisory assistance. All the trade mark of Intelligence Group ltd in Georgia and Ukraine. Trade mark military aid is nonlethal in na- registration by Sakpatenti - Registration ture. date: October 24, 2007; Registration A timeline for delivery of the N: 85764; Trade mark registratrion by Ukrainian State Register body - aid and equipment is to be de- Registration date: November 14, 2007. termined later, the Pentagon said. ADVERTISING The latest military aid brings All Advertisements are accepted subject the total U.S. security sector to the publisher’s standard conditions of assistance to Ukraine to more insertion. Copies may be obtained from advertisement and marketing department. than $1 billion since 2014, Please contact marketing at: when Russia annexed Crimea. marketing@fi nchannel.com Ukraine’s government has see fi nancial media kit online www.fi nchannel.com been working to make its armed forces more compatible with Download RATE CARD those of the NATO alliance. “The implementation of these reforms will bolster Ukraine’s and democratic Ukraine,” the during a time of political debate summit between U.S. President ability to defend its territorial Pentagon said. over U.S.-Russian relations in Donald Trump and Russian integrity in support of a secure The new assistance comes the aftermath of the Helsinki President Vladimir Putin. Mercer Survey reveals Managing

DISTRIBUTION The FINANCIAL distribution network High Cost Claimants’ is Eployers’ covers 80 % of key companies operating in Georgia. 90 % is distributed in Tbilisi, Batumi and Poti. Newspaper delivered free Top Health Benefi ts Strategy of charge to more than 600 companies and their managers. To be included in the list please contact distribution department at: The FINANCIAL -- “Managing status. The nurse also helped temuri@fi nancial.ge and monitoring high cost claim- him apply for disability and set ants” is the top health benefi ts up care and durable medical CONTACT US strategy that US employers will equipment in the home when he EDITOR-IN-CHIEF be focusing on for the next fi ve was discharged. Careful moni- ZVIAD POCHKHUA years, according to Mercer, a toring and follow-up ensured E-MAIL: editor@fi nancial.ge global consulting fi rm. More editor@fi nchannel.com a smooth transition from facil- Phone: (+995 32) 2 252 275 than three quarters (77%) of ity to home and prepared the US employers with 500 or more patient and his family on what HEAD OF MARKETING employees said this strategy to know or avoid to prevent re- LALI JAVAKHIA E-MAIL: marketing@fi nancial.ge was “very important” or “impor- lapse or readmission. marketing@fi nchannel.com tant”. These fi ndings come from For an older patient having a Phone: (+995 558) 03 03 03 a recent analysis of responses hospital admission for hip re- CONSULTANT to the Mercer National Survey placement, the care manager MAMUKA POCHKHUA of Employer-Sponsored Health spoke with the member prior to E-MAIL: fi nance@fi nancial.ge Plans, 2017. admission to set expectations Phone: (+995 599) 29 60 40 The rapid rise in high cost regarding the surgery and re- HEAD OF DISTRIBUTION DEPARTMENT claims is most likely a key driv- covery. Once home, the nurse TEMUR TATISHVILI ing force behind this strategic spoke with the patient and her E-MAIL: temuri@fi nancial.ge Phone: (+995 599) 64 77 76 prioritization by employers. daughter about pain manage- A study of carrier claims data ment, proper medication dos- COPY EDITOR: from Mercer Health Advantag- age, helped schedule follow-up IONA MACLAREN esm, (MHA) a program off ered appointments and arranged COMMUNICATION MANAGER: through select insurance carri- for physical therapy to begin at EKA BERIDZE ers that features high-intensity home. Phone: (+995 577) 57 57 89 care management for the sickest Another patient credits his PHOTO REPORTER: employees, revealed a rapidly number of plan members drive care management programs nurse care manager with sav- KHATIA (JUDA) PSUTURI growing percentage of claims a large majority of the cost. Ac- such as MHA is that the care ing his life by convincing him MAILING ADDRESS: classifi ed as “high cost” by the cording to Mercer’s database manager works directly with the that his chest pain (the onset of 17 mtskheta Str. participating carriers . containing approximately1.6 care team as well as the patient a heart attack) warranted a trip Tbilisi, Georgia “High cost claims are clearly million members, on average and family, stays in contact after to the emergency room for im- OFFICE # 4 the sickest 6% of an employer’s discharge to provide support, PHONE: (+995 32) 2 252 275 one of the issues that keep em- mediate care. (+995 32) 2 477 549 ployer health plan sponsors up population represent 47% of the and provides a supportive role “Employers are justifi ed in FAX: (+95 32) 2 252 276 at night,” said Mercer’s Jean total allowed medical and phar- in improving compliance with placing high cost claims at the E-mail: info@fi nchannel.com Moore, Senior Director, Health macy spend. High touch, nurse- treatment plans. Real life MHA top of their worry list,” said Ms. on the web: www.fi nancial.ge daily news: www.fi nchannel.com Specialty Practices. “Fortu- centered care coordination can patient success stories include: Moore. “As the prevalence of nately there are ways employ- often produce the best possible A patient in a car accident high cost claims encroaches on ers can improve the experi- health outcomes and as cost- spent months in a hospital and limited plan dollars, plan-spon- ence of employees and family effi ciently as possible. MHA then a rehabilitation facility to sors must be mindful of the val- members dealing with serious has achieved a 3.3:1 Return On recover from severe injuries. ue or return-on-investment de- conditions while also mitigat- Investment for plan year 2016, The patient’s nurse care man- rived from solutions focused on Intelligence Group ltd. 2018 ing cost. This can be done by maintaining the same strong re- ager kept in contact with the high cost claims management, Member of helping to ensure that patients sult of 2015, while also improv- providers and the family to en- not simply cost alone. Value are receiving the right care, de- ing patient outcomes.* sure that the patient progressed should be the starting point for livered in the right place at the The important diff erence be- through the proper course of any employer’s strategic plan- right time.” tween standard health advocacy care and had a full understand- ning and action when it comes Generally, a relatively small programs and high-intensity ing of his treatment and health to high cost claimants.” HEADLINE NEWS & ANALYSIS 3 FINCHANNEL.COM | 23 JULY, 2018 ppublicityublicity

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The FINANCIAL -- The fi rst half of perature will be more frequent peri- 2018 was fortunate in that natural ods of heat and drought, along with disasters across the world caused more intensive convective rainfall. signifi cantly lower losses than usual. So these weather processes roughly According to provisional fi gures, fi t the pattern that may be expected overall losses were around US$ more frequently in future as a conse- 33bn, the lowest level since 2005 quence of climate change.” (US$ 29bn after adjustment for in- fl ation). However, individual events did Major volcanic cause high losses for those con- cerned, for example crop losses in eruption in the agricultural sector as a result of drought in Europe. Guatemala Also, it is the second half of the year that usually brings higher loss- In Guatemala, more than 100 peo- es. For example, in 2017 the series of ple were killed, with many more still major hurricanes, Harvey, Irma and missing, after a deadly eruption of Maria, pushed overall losses for the the volcano Fuego. In the eruption, year to US$ 340bn. pyroclastic fl ows rolled down the sides of the 3,700 metre high vol- cano. The clouds of ash and boulders Overview have a temperature of several hun- dred degrees and can reach speeds of natural of well over 100 km/h. catastrophe figures for the Oman hit by first half of extremely 2018 powerful the winter months feature promi- Nor’easters are frequently accom- severe thunderstorms are rising cyclone The overall losses of US$ 33bn nently in the statistics for the fi rst panied by heavy snowfalls and can in Germany – even after taking in- were roughly half those of the pre- half of the year. The most destructive herald extended periods of frost in creasing values into account. While At the end of May, Oman was hit vious year and of the price-adjusted event was Storm Friederike, which eastern North America. The most windstorm and hail losses enjoy a by the strongest tropical cyclone ever average for the last 30 years (US$ swept across the United Kingdom, destructive event was a blizzard high level of insurance coverage, the registered on the Arabian peninsula. 65bn and US$ 68.3bn respectively). northern France, the Benelux states in the fi rst week of March, which share of insured losses from fl ash On 25 May, Cyclone Mekunu made At approximately US$ 17bn, in- and Germany in mid-January, with caused overall losses of US$ 2.2bn, fl oods is usually well below 50%. landfall close to Salala, the Sultan- sured losses were less than in the speeds of up to 150 km/h on fl at of which US$ 1.6bn was insured. At around the same time, north- ate’s third-largest city, with speeds previous year (US$ 25.5bn), but terrain and 200 km/h in elevated In total, winter losses in Europe east Germany, Denmark, parts of of 185 km/h, making it a Category more or less matched the average areas. Thousands of buildings and came to €3.9bn (US$ 4.8bn), of Poland, Scandinavia, the Baltic 3 storm (the third-highest category) for the fi rst six months over the last motor vehicles were damaged. In which €2.9bn (US$ 3.6bn) was in- states and the Balkans were experi- on the Saffi r-Simpson scale. The 30 years (US$ 17.5bn), according to Germany, long-distance train travel sured. The winter in North America encing very high temperatures and cyclone also brought an enormous Munich Re. was disrupted after uprooted trees caused overall losses in the fi rst half extremely dry weather. One result volume of rainfall: in the space of Even so, some 3,000 people lost had torn down the overhead lines in of the year totalling US$ 3.8bn and of this is that the grain harvest will three days, there was between 300 their lives in natural disasters in many places. Overall losses came to insured losses of US$ 2.7bn. be very poor in many of the aff ected and 600 mm of rainfall, equivalent the fi rst half of 2018, a lower fi gure €2.2bn (US$ 2.7bn), of which €1.7bn regions. Many places fear downturns to the average amount over four to than the 5,540 for the corresponding (US$ 2.1bn) were insured, refl ecting in yields, or even total losses, but the eight years. According to initial esti- period last year. This reduction is the high insurance density of wind- Thunderstorms loss amounts can only be determined mates, overall losses could amount particularly encouraging when com- storm cover in Europe. Roughly two after the crops have been harvested, to several hundred million dollars, pared with the long-term average of thirds of the losses occurred in Ger- and drought in according to Munich Re. with about a third of these insured. 28,000. many. Just a few weeks previously The reason for both these phe- 30 people were killed. The NatCatSERVICE database in the same regions, Storm Eleanor Europe nomena was a stable weather pat- There is still not much known registered 430 relevant natural di- (known in Germany as Burglind) tern featuring a blocking high- about the loss fi gures from the Mw sasters in the fi rst half of 2018, more had caused damage close to the bil- An unusual weather pattern devel- pressure area over Scandinavia and 5.5 earthquake that struck the south- than the long-term average (250) lion euro mark. oped in central Europe in May and an expansive low-pressure system ern Japanese prefecture of Osaka and the previous year (380). (Read With biting cold and snow, win- early June. In the south and west stretching from western to central on 18 June. The epicentre was lo- more) ter held Europe and North Amer- of Germany, as well as in France, parts of Europe. Areas of central cated near the city of Hirakata. The ica fi rmly in its grip until well into a series of very slow-moving thun- Europe recorded the warmest May tremors from the quake, which oc- March. Between the end of Febru- derstorms formed in warm, moist since 1881, having just experienced curred at a fairly shallow level of 13 Winter losses ary and mid-March, North Amer- air masses, triggering fl ash fl oods the warmest April as well. km, could be felt in both major cit- ica was hit by several widespread in many places. The fl ooding was Ernst Rauch, Chief Climate and ies Osaka and Kyoto. Several thou- prominent in snowstorms, known locally as caused by torrential rainfall that the Geo Scientist at Munich Re, ex- sand buildings were damaged and “nor’easters”. These are large low- storm sewers were unable to cope plained the background: “Although the electricity supply for 170,000 the loss figures pressure systems originating in the with. Overall losses from the storms individual events like these cannot households was disrupted. Howev- southwest that batter the shoreline came to around €1.6bn, with insured be attributed to climate change, cli- er, thanks to the very high building Windstorms and cold weather in with strong northeast winds as the losses of at least €900m. mate model studies show that one standards in earthquake-prone Ja- Europe and North America during storm moves up along the east coast. On the whole, losses caused by future eff ect of the increase in tem- pan, damage was kept within limits. Aging Asian Workforces Most Vulnerable to Workplace Automatisation, New Report

The FINANCIAL workers between the ages of 50 Japan – were located in the Asian placement. On average, Chi- In the United States, older and 64 are becoming an increas- Pacifi c. nese workers are doing jobs workers are doing jobs that are ingly greater proportion of the active “While businesses today are rac- that are 76 percent automat- on average 52 percent automat- lder workers in China workforce. ing to adopt intelligent technologies, able. able. and other Asian nations To garner insight on the related the fallout of this shift could dispro- Canada (47 percent) and Australia “Automation enables unprec- are most vulnerable risks of societal aging and workplace portionately impact older workers, (42 percent) have the lowest rates of edented levels of productivity and to displacement from automation, the Global Risk Center leading to unemployment, widen- aging of the 15 markets analyzed and gives fi rms the ability to invest in increasing adoption of brought together experts from two ing inequality and greater strain on the lowest risk scores, making older new revenue streams and younger Oworkplace automation, according of Marsh & McLennan Companies’ safety nets,” said Axel Miller, Oliver workers in these countries relatively workers,” said Patty Sung, a prin- to “The Twin Threats of Aging and leading professional services fi rms, Wyman partner and co-author of less susceptible to automation. cipal with Mercer and co-author of Automation,” a new report released Mercer and Oliver Wyman, to ag- the report. “Even as older work- Even in countries with high con- the report. “However, investing in today by Marsh & McLennan Com- gregate and analyse market-specifi c ers in aging nations are willing and centrations of advanced-skill work- younger workers will become chal- panies’ (NYSE: MMC) Global Risk economic data to quantify the risk able to engage in meaningful work, ers whose jobs are typically harder lenging as the younger population Center. The convergence of an aging posed by automation to older work- those skilled in the ‘yesterday’ work to automate -- including Singapore, shrinks. Governments and compa- global population with workplace ers in 15 countries across Asia, Eu- environment might be at risk of be- Japan, South Korea, Germany and nies should not – and cannot – ig- automation is expected to have sig- rope and the Americas (see “Figure ing excluded from the economy of Italy -- older worker jobs are still nore older workers, and need plans nifi cant economic and societal con- 1”). The study found that fi ve out of tomorrow.” relatively susceptible to automation that address older workers in addi- sequences, particularly in major the top six countries – China, Viet- Older worker jobs in China and worker displacement can occur tion to their larger digital strategies.” Asian countries, where low-skilled nam, Thailand, South Korea and are at the greatest risk of dis- across occupations and age groups. HEADLINE NEWS & ANALYSIS 5 FINCHANNEL.COM | 23 JULY, 2018 ppublicityublicity Sustainable Development Goals in Corporate Reporting: What Matters to Investors? TThehe FINANCIALFINANCIAL ---- UUNIT-NIT- AAchievingchieving thethe SDGsSDGs re-re- ttorsors wantwant toto seesee balancedbalanced EEDD NATIONS,NATIONS, NNewew YorkYork qquiresuires commitmentcommitment notnot rreportingeporting thatthat showcasesshowcases ---- TenTen recommendationsrecommendations oonlynly fromfrom GovernmentsGovernments a company’scompany’s targetstargets andand iintendedntended toto stimulatestimulate aandnd companies,companies, butbut alsoalso pprogressrogress againstagainst thethe SDGs.SDGs. mmoreore investmentinvestment inin sus-sus- ffromrom investors.investors. 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Advertiser: Terma. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com 6 HEADLINE NEWS & ANALYSIS fi nancialnancial nnewsews 23 JULY, 2018 | FINCHANNEL.COM Insurers must rethink Government traditional coverage to create solutions for debt slightly up to sharing economy 86.8% of GDP in The FINANCIAL The highest ratios of govern- area and for ment debt to GDP at the end of the fi rst quarter of 2018 were recorded t the end of the fi rst quar- 81.7 of EU28 in Greece (180.4%), Italy (133.4%) ter of 2018, the govern- % and Portugal (126.4%), and the ment debt to GDP ratio general government debt. Loans lowest in Estonia (8.7%), Luxem- in the euro area (EA19) made up 16.2% and 14.2% respec- bourg (22.2%) and Bulgaria (24.1%). stood at 86.8%, com- tively and currency and deposits Compared with the fourth quar- Apared with 86.7% at the end of the ter of 2017, twelve Member States represented 3.0% of euro area and fourth quarter of 2017. In the EU28, 4.1% of EU28 government debt. Due registered an increase in their debt the ratio decreased from 81.6% to to the involvement of EU govern- to GDP ratio at the end of the fi rst The FINANCIAL ropean markets. 81.5%. Compared with the fi rst quar- ments in fi nancial assistance to cer- quarter of 2018, and sixteen a de- The UK has the lowest sharing ter of 2017, the government debt to tain Member States, quarterly data crease. The highest increases in economy participation levels on GDP ratio fell in both the euro area on intergovernmental lending (IGL) the ratio were recorded in Belgium onsumer survey shows both the supply and demand sides. (from 89.2% to 86.8%) and the is also published. The share of IGL in (+2.9 percentage points – pp), sharing is widespread, Less than one in ten (9%) have EU28 (from 83.6% to 81.5%). GDP at the end of the fi rst quarter of Greece (+1.8 pp), Italy (+1.6 pp), but tremendous growth shared in the past three years, which 2018 amounted to 2.1% in the euro Slovenia (+1.4 pp) and the Czech opportunity still exists. is ten percentage points less than area and to 1.5% in the EU28. Republic (+1.1 pp). The largest de- A study of six key European neighbour Germany. At the end creases were recorded in Latvia Cmarkets – China, United Arab Emir- “Sharing economy platforms have (-4.4 pp), Lithuania (-3.5 pp), Cy- ates (UAE), Germany, France, UK, transformed entire industries be- prus (-2.8 pp) and Sweden (-2.6 pp). and US – reveals more than a quarter cause they’ve rejected the status quo of the first Government Compared with the fi rst quarter of of the population has either bought and challenged the way we think 2017, only Greece (+2.7 pp) regis- services or rented possessions from about once traditional goods and quarter of 2018, debt at the end tered an increase in its debt to GDP their peers via shared platforms in services. In order to eff ectively serve ratio at the end of the fi rst quarter the past three years. the sharing economy, we as insur- debt securities of the first of 2018, and twenty seven Mem- Approximately 500 million people ers must follow that example and ber States a decrease. The largest share assets or services across these rethink traditional insurance prod- decreases were recorded in Cyprus six key markets, and close to 680 ucts,” Lloyd’s Head of Innovation, accounted for quarter 2018 by (-11.3 pp), Ireland (-6.5 pp), Croatia million people make use of them. Trevor Maynard, said. (-6.4 pp), Malta (-6.2 pp) and Slove- 57% of adults who have sold ser- The report highlights that trans- 80.8% of euro Member State nia (-5.3 pp) vices or lent products in the sharing acting in the sharing economy is not economy in the past three years were without risk and adequate protection insured by transaction-embedded or for all parties means insurers must personally owned cover. continue working to adapt tradition- Potential for double digit increas- al coverages to fi t the unique needs es in the percentage of the popula- of this sector, whether it’s solutions tion willing to share services or as- provided by platforms via transac- sets. tion-embedded cover, or a product New research from Lloyd’s and purchased independently by shar- Deloitte systematically analysed the ing economy participants. A range of sharing economy with the aim to un- insurance products currently off ered derstand where insurance can sup- cover potential risks such as losing a port growth and opportunity in this possession, facing liability or suff er- booming sector. The study focuses ing damage, among others. Despite on the peer-to-peer model and spe- these risks, the positive experiences cifi cally the services, real estate and and benefi ts provided by the sharing fi nance sectors. economy, mean that it continues to Squaring risk in the sharing age grow and diversify. The opportunity - How the collaborative economy is for sharing economy platforms and reshaping insurance products calls the insurance industry to work to- attention to the role of the insurance gether is clear. industry in supporting shared plat- Nigel Walsh, partner in Deloitte forms as they grow and develop. Digital said: “In our market scan- While more than one in four peo- ning, we’re not only seeing an in- ple across the six countries surveyed creasing number of sharing econo- has been a consumer of shared goods my platforms provide insurance to or services, the penetration rates dif- their users, including bespoke prod- fer considerably by country yielding ucts through the Lloyd’s market, but notable geographic insights: also a large number of startups help- In the US, the birthplace of the ing to solve the insurance gap for all sharing economy, sharing is less participants in the sharing economy. widespread than it is in China and Equally, insurers are still in the very the UAE. early stages of developing the dy- China is the stand-out market for namic and fl exible solutions this sec- shared goods and services. Almost tors needs as it continues to evolve three quarters (73%) of the online at pace. The opportunity for sharing population are consumers and just economy companies and insurers to over half (55%) supply goods and partner to reduce risk in this space services to it – more than double the has real implications and exciting fi gures reported for the US and Eu- opportunities for future growth.” Four out of five recent graduates find a job

The FINANCIAL -- In 2017, over 80% of recent graduates in the EU Employment were employed. This is the fourth consecutive year that the rate of em- rate of recent ployment for recent graduates has risen, reversing the decrease seen graduates between 2008 and 2013. Recent graduates refer to people Malta (95%), Germany (91%), the aged 20-34, who are not in educa- Netherlands and the Czech Republic tion and training, and who com- (both 90%) recorded the highest em- pleted their education at most three ployment rates for recent graduates. years ago. The education level con- At the other end of the scale, the sidered is at least upper-secondary lowest employment rates for recent education, so also includes tertiary graduates were in Greece (52%) and education. Italy (55%). HEADLINE NEWS & ANALYSIS 7 FINCHANNEL.COM | 23 JULY, 2018 ppublicityublicity

Advertiser: m2. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com 8 HEADLINE NEWS & ANALYSIS ssurveysurveys & aanalysisnalysis 23 JULY, 2018 | FINCHANNEL.COM MERAB PACHULIA, GORBI

A tip for NATO to keep Georgia even closer

aving a big circle of friends Table1. Type and origin of email service providers by size of businesses had the chance to repeat the survey attack. When is this going to hap- is exciting and cool. It is among Georgian troops in Afghani- pen? Well, I think sooner that most exciting because it is posi- TOTAL stan for the sake of comparatively skeptics think. But in the meantime, tively correlated to the registered Small medium Large and I can only hope that those fi g- I think NATO should put this on the number of events and su- business ures are at least smaller now. agenda as one of the requirements Hpras I attend, and it is cool because As shown in Table 1: the size of a to qualify for membership and then, gmail & yahoo .COM 51 50 61 55 getting together with close friends business largely determines the type someone should run a “Shame and gives us an opportunity to discuss mail & rambler .RU 36 37 33 24 and origin the email service it uses. Educate” campaign or similar and questions like “what would we ask Almost half of the large businesses over the next few years, monitor and for if we had a Gini in the bottle?” posta.GE 3 3 1 1 (45%) have their own email system assess how Georgian businesses are and how would we change and miti- Dedicated accounts 9 7 19 45 and every fi fth is using free West- moving to .com free mail domains gate the reality we live in? For in- ern emails, while 7% is still tied up and preferable, creating their own stance, just a couple of days ago some Source: based on registered business data base (≈145k emails were ana- with Russian services. The smaller ones. And NATO can help us, like friends and I we were discussing lyzed). Businesses had more than one email address the business is the more they rely they did 27 years ago when they pro- some interesting fi ndings that I re- mentioned, thereof, data exists 100%. on Russian free email services, 37% vided a handful of businesses includ- ceived from one of my sources, who small, 33% medium and 24% large ing GORBI access to emails. has access to data of registered busi- businesses are consequently us- Someone at NATO’s Headquarters nesses (and who preferred to stay losing all correspondences and in- service was off ered by Western and ing .ru emails. Among very few free in Brussels may think that Georgians anonymous). When we met recently, formation that has been archived Russian companies, and knowledge Georgian services, only posta.ge has should be able to solve this issue I asked him to employ my algorithm over the last two decades. of English among the public as well a noticeable presence and especially quickly based on our track record and check the database to see what And of course, here is the million- as the business community was mis- among small business owners – 3%, of military reforms. But then they kind of email services the Georgian dollar question: Is this sabotage? NO erable. As a consequence, they had the rest, medium and large business- will still be faced with the dilemma business community is using and – this is my free answer. Let’s do a to rely on Russian services. Howev- es have each 1% penetration only. of granting membership without ir- their origins. The result was most brief tour of the evolution of electron- er, time has passed, all major West- As we all are aware, some selected ritating the Kremlin. I can tell him/ alarming and certainly needs to be ic communication including email in ern email services now have Geor- NGOs in Georgia are given grants to her that Georgia would still be fac- addressed carefully and ASAP. More- Georgia. I am here to describe this gian interface. People either don’t monitor Russian propaganda. They ing other big issues that needs to be over, my friends and I developed an based on my personal experience. I want to move to a new email address are trying to undercover and report addressed and changed and some outline of a marketing campaign that obtained a corporate email in 1991 or they don’t know how to (and I be- it to their donors, conduct semi- of them are harder then the story we are tentatively calling “Shame (yes, nineteen ninety-one) thanks to lieve most of them have never heard nars and sometimes publish their described in this column. One issue and Educate.” And of course, we are a joint project between the Georgian about synchronizing more than one fi ndings so they can earn another off the top of my head is the question most open to handing it to anyone Academy of Sciences, NATO and the email account or exporting archives tranche. Of course, I have nothing of what to do with the 30,000 or so when and if there is interest. Soros Foundation which set up the into another service provider, etc.). against this, like the pre-election Georgian men from the central Geor- To start with, did anyone know very fi rst email server in Georgia. At And of course, it is all about institu- media monitoring exercises that are gia (especially Gori region) who dur- that well over one third (39%) of present, very few businessmen can tional culture as well, especially for always exclusively given to a certain ing every single supra drinks at least Georgian businesses are using mail recall the cost of sending one page the large and medium businesses. group of people via strange tender- one toast to comrade Stalin? Well, I servers owned by Russian business- of text via a fax machine to the EU or Naturally, we are talking about ing procedures and conducted using have a solution for this problem too, es and located in Russia? Well I did USA, but I do - it was USD 2.50, and FREE services here and the only an archaic methodology... well, at but would rather wait and see how not. But I am sure we all (or most of we used to send tens of pages of multi- good thing is that Russian email ser- least this helps the Georgian labor Georgian business’s electronic com- us) can agree that this poses a seri- language questionnaires and survey vices are most prevalent among small market and money is spent in my munication culture changes fi rst. ous and imminent threat, one that instruments to our clients. Now, per- businesses. As the size of a business country. However, as I said earlier, can blow up in our faces at any mo- haps it is not a big deal to spend a few rises, the number of .ru domains are we are facing a serious issue, and Note: I would like to extend special ment. While I understand that busi- hundred bucks for communications decreasing. The latter is basically on someone needs to deal with it. Given appreciation to Ani Lortkipanidze ness needs to be transparent, I don’t if you are talking about the average an expanse on having the own do- this reality, there are only a few play- who assisted with the analysis and understand why anyone would want project, but at that time, USD 2.5 was main and in majority of cases - .ge ers left, and I would name NATO in charts featured in this article to be transparent with the Russian equal to enough rubbles to purchase a My eyes caught this “anomaly” the fi rst place. Here is why – despite GORBI is an exclusive member of security services. I also aware that roundtrip ticket to Moscow. the fi rst time when I was doing an Georgia’s NATO aspirations, we are the Gallup International research Georgian businesses are not devel- And then email came along – it on-the-ground survey of Georgian approaching membership very slow- network and has more than two oping a space program or any high- saved not only a huge amount of troops in Iraq in 2008. While walk- ly. While plenty of experts are con- decades of experience in survey tech startups, but just imagine if cash, but we were able to send and ing into an “internet café” on one of vinced that technically and based on research (gorbi.com) one day all these services were to be receive documents in electronic for- the largest military bases where we its reforms, Georgia deserves MAP, blocked by the service providers…. mat. We were pioneers, and elec- had several hundreds of soldiers sta- followed by full NATO membership, If GORBI was relaying on a .ru mail tronic mail became popular by the tioned, I remember noticing at least this is still not happening and based service and was shut down, we end of 90s when internet penetra- logged out interfaces of .ru domains on my personal assessment, the only would simply be out of business in a tion reached 10%, and even higher on at 7 out of 10 PC screens. Despite issue now is to choose the right time month’s time, nothing to say about among businesses. At that time the several attempts, GORBI has never and not provoke another Russian rrentent iinn aamericamerica Black Renters Could Afford 16 Percent of Rentals in 2017 The FINANCIAL -- SEATTLE, July “Perhaps more so than any other Asian household income ($83,007) 17, 2018 -- Rental options for black factor, income determines where could aff ord 67.4 percent of rentals renters were far fewer than what and how we live in the United States while spending 30 percent of their Asian or white renters could choose today. Income disparities across ra- income on housing. Black house- from last year. Black renters could cial and ethnic groups in the United holds would have to spend upward aff ord less than a third of the rentals States have remained stubbornly of 60 percent of their income to that white or Asian renters could af- persistent, and as a result, Black come close to aff ording two-thirds ford in 2017. and Hispanic families encounter far of listed rentals. Black and Hispanic renters could fewer aff ordable rental options than Hispanic renters also had far aff ord, at most, 5 percent of rentals white and Asian families,” said Zil- fewer options than white or Asian in Boston, New York, Los Angeles low Senior Economist Aaron Terra- renters did. Renters earning the and Miami without spending more zas. “With fewer aff ordable options, median Hispanic household income than 30 percent of their income on these households are likely to have ($48,210) could aff ord 27.3 percent rent to make sacrifi ces elsewhere, wheth- of rentals last year. White renters A renter making the median U.S. er that means putting a higher share with a median income of $64,944 household income in 2017 could af- their pre-tax income toward hous- a monthly basis, and are also more of their income toward rent and cut- could aff ord 49.7 percent of listed ford 42 percent of rental listings on ing costs, according to a new Zillow likely to make other sacrifi ces such as ting back on saving, cutting costs rentals. Zillow. analysis. If they spent 45 percent of dental careii. Most Americans aspire elsewhere in their budgets, moving Based on the median rent list A black renter would have to spend their income on rent, they could af- to become homeownersiii, but many further away or living with more price, a black renter would have to 50 percent of their income on rent to ford 42 percent of the listed rentals – struggle to save for a down payment people. The desire to own a home is spend 49.4 percent of their income aff ord the median listed rental. the same amount as a renter earning and point to down payment savings similar across all races, but the dif- on rent to aff ord the median on-mar- Asian renters could aff ord a rental the median U.S. income ($59,250) as a key barrier to homeownershipiv. ference in homeownership rates be- ket rental last year. In San Francisco, more than twice as expensive as could aff ord while only spending 30 And as home values continue to rise, tween races is wide – a lasting legacy the least aff ordable market for black black renters. percent of their income on rent, ac- hopeful buyers will have to put aside of the historical income gap.” renters, the typical rental would take A renter making the median black cording to Zillow. increasing amounts of money to The diff erence in rent aff ordabil- up about three quarters of their in- household incomei ($39,647) in High rent burdens limit the fi nan- keep up with the cost of a standard ity is especially stark when com- come. St. Louis is the most aff ord- 2017 could aff ord 16.2 percent of the cial freedom renters have. Those with down payment – a diffi cult prospect paring how limited options are for able market for black renters, where available rentals on Zillow® with- the highest rent burden are often when rents already consume a large black renters versus other racial the typical rental required 29.9 per- out putting more than 30 percent of unable to put aside any savings on share of incomev. groups. Renters earning the median cent of the median income. HEADLINE NEWS & ANALYSIS 9 FINCHANNEL.COM | 23 JULY, 2018 ppublicityublicity

Continued on p. 12 Advertiser: ProCredit Bank. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com 10 HEADLINE NEWS & ANALYSIS hhealthealth 23 JULY, 2018 | FINCHANNEL.COM High fruit and vegetable consumption may reduce risk of breast cancer

The FINANCAL

oston, MA – Women who eat a high amount of fruits and vegetables each day may have a lower risk of breast cancer, especially of aggres- Bsive tumors, than those who eat few- er fruits and vegetables, according to a new study led by researchers from Harvard T.H. Chan School of Public Health. In their fi ndings, crucifer- ous vegetables such as broccoli, and yellow and orange vegetables, had a particularly signifi cant association with lower breast cancer risk. “Although prior studies have sug- gested an association, they have been limited in power, particularly for specifi c fruits and vegetables and aggressive subtypes of breast can- cer,” said fi rst author Maryam Far- vid, research scientist in the Depart- ment of Nutrition. “This research provides the most complete picture of the importance of consuming high amounts of fruit and vegetables for breast cancer prevention.” The researchers analyzed diet questionnaires submitted every four years by participants in the Nurses’ Health Study (88,301 women, start- ing in 1980) and the Nurses’ Health Study II (93,844 women, starting in 1991). Data on other potential breast who ate 2.5 or fewer servings. (A ceptor status and molecular subtype. the benefi ts of fruits and vegetables and vegetables is associated with cancer risk factors such as age, serving is defi ned as one cup of raw They found that higher consumption found in this study appear to be in- many other health benefi ts, our re- weight, smoking status, and family leafy vegetables, half a cup of raw or of fruits and vegetables was particu- dependent of their fi ber content, sults may provide further impetus cancer history were taken from bi- cooked vegetables, or half a cup of larly associated with lower risk of according to the researchers. This for women to increase their intake ennial questionnaires, according to chopped or cooked fruits.) more aggressive tumors including suggests that constituents of these of fruits and vegetables,” said senior HSPH. To fi nd out whether the benefi ts of ER-negative, HER2-enriched, and foods, such as antioxidants and author Heather Eliassen, associate They found that women who ate fruit and vegetable consumption dif- basal-like tumors. other micronutrients, may also be professor at Harvard Medical School more than 5.5 servings of fruits and fered among various types of breast Previous work by this research important in reducing breast cancer and Harvard Chan School and asso- vegetables each day had an 11% low- cancers, the researchers conducted group linked reduced breast cancer risk. ciate epidemiologist at Brigham and er risk of breast cancer than those an analysis by tumor hormone re- risk with higher fi ber intake, but “While a diet with lots of fruits Women’s Hospital.

Asset Managers’ Global Growth Surge Sets Stage for Digital Competition

petitive threat to active management Profitability and than the broader passives trend. “Asset managers that choose to Asset Inflows Set join the smart-beta bandwagon now Global Records will need to achieve scale and devel- op an industrialized approach if they in 2017, as Total want to be competitive,” said report coauthor Hélène Donnadieu, a BCG Assets Under principal and global manager of the asset management segment. Management Rose China and US Lead in Region- al Market Growth to $79.2 Trillion. AuM grew robustly in regional markets around the world, led no- Firms Should Use tably by China and the US, the BCG This Windfall to report says. China’s 22% growth in AuM el- Fund Adoption of evated it to the fourth-largest global market, up from eighth place fi ve Advanced Digital years earlier. The partial opening and rapid growth of the Chinese and Analytics, Says market, has created the conditions for a potential gold rush among for- a New Report by eign fi rms. BCG “We expect China’s AuM to triple “Asset managers would be wise lytics, and testing alternative data. managers generated average annual by 2025, which—if it comes to pass— to take advantage of a strong year “Few asset managers, however, TSRs of 20%, compared with an av- would make the Chinese market the The FINANCIAL to reinvest capital and talent in fu- have mastered digital and analyt- erage of 9.1% for asset managers in second-largest after the US,” said ture growth,” said Renaud Fages, ics at scale,” said Brent Beardsley, the other three quartiles, considered Qin Xu, a BCG partner, leader of the a BCG partner, global leader of the a senior BCG partner, former leader as a group. asset management topic in Asia, and EW YORK—A surge in a coauthor of the report. global growth by the asset asset management segment, and a of the asset and wealth manage- Analysis Reveals Winners’ coauthor of the report. “Most of the ment segment, and a coauthor of Traits The North American market was management industry, oc- the second standout regional per- curring as advanced digi- bounce-back growth of 2017 was the report. “That requires signifi cant Disaggregating and analyzing market driven, not structural,” he and sometimes complex organiza- the TSR data, the report says, re- former, buoyed by US growth of tal and analytics are fi nal- 14%, the strongest among mature Nly going mainstream, has positioned said. “Cost pressures and fee erosion tional change. Most fi rms will need vealed that the most successful fi rms markets. The European market grew fi rms to invest in capabilities needed will persist, especially when equity- to adopt agile ways of working to grew at the same rate as others, but market growth slows, as it shows achieve that goal.” achieved greater profi tably by main- less robustly at 7%. to stay competitive, according to a The benchmarking survey that new report by The Boston Consult- signs of doing in 2018.” The recent solid performance of taining prices and expanding mar- The value of global AuM rose by asset managers extends beyond a gins. In terms of product strategy, informed this year’s report drew on ing Group (BCG). The study, titled 165 leading asset managers repre- Global Asset Management 2018: 12% to $79.2 trillion in 2017, from strong showing in business funda- the most notable winners were ei- $71.0 trillion in 2016, the BCG re- mentals, such as AuM growth and ther small niche players or very large senting $48 trillion—or more than The Digital Metamorphosis, is being 65%—of global AuM, and it covered released today. port says. This represents the stron- profi t, according to the report. Firms asset managers with strong growth gest annual growth since 2009, have also delivered excellent invest- in passive products. more than 3,000 data points per Fueled by bull fi nancial markets, player. Our measurements assessed asset management’s growth re- when assets rebounded from the ment returns to their owners, as Passives, in fact, were easily the depths of the global fi nancial crisis measured by total shareholder re- highest-growth product category in assets in 44 markets globally, in- bounded in 2017. Firms set global cluding off shore. records for net infl ows of assets and the year before. turns (TSR), the standard gauge of 2017, posting a record 25% increase At the same time, advanced digital gains received by company owners. in AuM. Traditional active products A copy of the report can be for profi tability, according to BCG’s downloaded here. 16th annual report on the industry. and analytics are fi nally going main- Over the past fi ve years, publicly continued to lose share to solutions stream across the asset management owned asset managers recorded an and specialties. Going forward, the To arrange an interview with one Total assets under management of the authors, please contact Eric (AuM) recorded their strongest industry. Nearly every fi rm now has average TSR of 12%, surpassing the rapid growth of “smart beta”—pas- a digital agenda—hiring technolo- robust performance of global stock sive products with an active com- Gregoire at +1 617 850 3783 or gre- growth in a decade. [email protected]. Reinvesting in Future Growth gists, experimenting with new ana- markets. The top quartile of asset ponent—could pose a bigger com- HEADLINE NEWS & ANALYSIS 11 FINCHANNEL.COM | 23 JULY, 2018 fi nancialnancial nnewsews Estimating the Risk of Modern Slavery in 2018 The FINANCIAL -- In 2017, Walk Urbanicity (living in a rural Free Fou ndation and the Interna- area or on a farm, in a small tional Labour Organization estimat- town or village, in a large city, in ed that there were 40 million victims the suburb of a large city) of modern slavery on any given day Gender (male, female) in 2016, including 25 million people Years of formal educa- in forced labor and 15 million in tion (0-8, 9-15, 16+) forced marriage. Marital status (single/never Some regions of the world suf- been married, married, separat- fer this problem disproportionately, ed, divorced, widowed, domestic with modern slavery most prevalent partner) in Africa (7.6 per 1,000 people) and Employment status (employed least prevalent in the Americas (1.9 full time for an employer, em- per 1,000 people). ployed full time for self, em- o provide a targeted, objective ployed part time/do not want assessment of the problem at the full time, unemployed, employed country level, Walk Free and Gal- part time/want full time, out of lup have collaborated since 2014 workforce) to collect data on modern slavery Number of individuals in the using nationally representative household (1-96) household surveys implemented Not enough money for food through the Gallup World Poll. To (yes/no) date, the module on modern slav- Life rating today (0-10) ery has been fi elded in 54 nation- Currently own a business (yes/ al surveys covering 48 countries no) (conducted multiple times in some Feelings about household in- countries), with a total sample of come (living comfortably on 71,158 individual interviews, ac- present income, getting by on cording to Gallup. present income, finding it diffi- In preparation for the release of cult on present income, finding Walk Free’s 2018 Global Slavery In- it very difficult on present in- dex, Gallup and Walk Free have de- against freedom -- human traf- five dimensions of the Walk Free come) veloped an extrapolation methodol- ficking, slavery and slavery-like modern slavery vulnerability Health problems (yes/no) ogy using hierarchical Bayes models practices such as servitude, forced model (Joudo Larsen & Davina issues such Country vulnerability score to inform prevalence estimates. This labor, forced or servile marriage, Durgana, 2018, to be published). (21.2-123) type of model is of particular inter- the sale and exploitation of chil- The vulnerability model, guided as the We then proceed to build our est because we want to extrapolate dren, and debt bondage. by human security and crime predictive models using a multi- the results of the model beyond the We operationally define mod- prevention theories, assesses vul- impact of level modeling approach that en- sample of 48 countries that have in- ern slavery following the meth- nerability at the country level to ables us to simultaneously model cluded the module on modern slav- odology described by Jacque- improve our understanding of the terrorism individual-level predictors of ery. line Joudo Larsen and Pablo drivers of modern slavery, as well modern slavery and country- Hierarchical models can inte- Diego-Rosell (2017) and the In- as the quantitative changes over level predictors of the average grate individual-level and country- ternational Labour Organization time in these drivers. and prevalence of modern slavery in level predictors to estimate varia- (2017). We set up our models by The risk scores for 167 coun- different countries. Multilevel tion in individual and country-level first defining modern slavery, in- tries are based on an analysis of displaced models also allow us to let regres- risks, allowing predictors to follow cluding cases of forced labor and data covering 23 risk variables sion coefficients vary in different diff erent functions in diff erent parts forced marriage. across five major dimensions: persons parts of the world. For example, of the world, as needed. A Bayes- Forced labor victims are iden- Governance issues, includ- we may want to fit a model that ian approach is computationally tified according to the following ing issues such as political in- allows a predictor such as gender useful because our data deal with criteria: The work was involun- stability and regulatory quality; Using these five dimensions to have different effects in differ- rare events that in a frequentist ap- tary (“yes” to any of the screen- Lack of basic needs, including is- as an organizing framework, we ent regions to better fit the risk proach may lead to computational ing questions), and The work was sues such as undernourishment identified a total of 157 variables ecosystem of each region. This problems. under coercion or the menace of and social safety ;nets;Inequality, that could potentially be used to is an innovative approach in the a penalty, and The work occurred including issues such as being predict forced labor or forced field of modern slavery (Gelman in the last five years. Forced mar- able to come up with money; marriage status, including 122 & Hill, 2007). How do riage victims are identified accord- Disenfranchised groups, includ- individual-level variables from The following charts summa- ing to the following criteria: The ing issues such as the treatment the World Poll and 35 country- rize the key regression coeffi- marriage was involuntary (“yes” of immigrants and other minori- level variables from the Walk cients for the final forced labor we define to the screening question), and ties; Free vulnerability model. From and forced marriage models. In The marriage occurred without this larger set, we identified a the case of forced labor, and ad- ‘modern their consent (forced marriage). subset of 10 independent vari- justing for all other factors in the What factors predict modern Effects of ables that were available across model, the risk of having expe- slavery? most countries and most opti- rienced an instance of forced la- slavery’? We identified suitable predic- mally predicted either forced bor in the past five years varies tors of modern slavery from the conflict, labor or forced marriage, includ- according to the protective and Modern slavery is an umbrella intersection of the Gallup World ing: risk factors shown in the table term that includes several crimes Poll core questionnaire and the including Age (15-99) below.

GEORGIA’S BEST OF TRAVEL 2018 Video reviews of Hotels and restaurants by Miss Georgia

GET REVIEWED: 558030303 12 HEADLINE NEWS & ANALYSIS FFactCheckactCheck 23 JULY, 2018 | FINCHANNEL.COM Just over 56 000 persons in the EU committed suicide Mamuka Bakhtadze:

“Budget revenues are at a historic maximum.” Valeri KVARATSKHELIA 26.01%, respectively. In this characterised by a permanent regard, the fi gures for 2018 growth tendency with some FactChek do not constitute a historic exceptions (crisis years). maximum but, in fact, they Therefore, claiming that rev- lag behind the same fi gures enues received for a specifi c VERDICT: for 2017. period of time constitute a historic maximum would be FactCheck concludes that ANALYSIS legitimate for almost every Mamuka Bakhtadze’s state- year with 2018 being no dif- ment is HALF TRUE. The Prime Minister of ferent. Georgia, Mamuka Bakhtadze, In order to analyse changes RESUME: in his speech before the Par- in the aforementioned param- liament, stated that budget eters over time, it is impor- In the fi rst fi ve months of revenues collected by tax bod- 2018, state budget revenues tant to assess them in terms The FINANCIAL -- Out of the country comparison, these 000 inhabitants, Lithuania ies stand at a maximum in the of economic activity instead constituted GEL 4,210 mil- history of independent Geor- 5.2 million deaths reported absolute numbers must be registered by far the highest lion which is GEL 256 mil- of analysing the absolute fi g- in the European Union (EU) adjusted to the size and struc- rate of suicide among the EU gia. ures. This implies an analysis lion more as compared to the FactCheck took interest in in 2015, 56 200 (1.1%) were ture of the population. Member States. It was fol- same fi gure in the respective of the budget parameters to due to intentional self-harm. lowed by Slovenia (21), Latvia the accuracy of the statement. the GDP ratio. As GDP fi gures period of 2017, In absolute Mamuka Bakhtadze talked Almost 8 in 10 suicides (77%) and Hungary (both 19), Bel- numbers, it is indeed the are not available in monthly concerned men and about Suicide rate gium and Croatia (both 17) about budget fulfi lment data form, quarterly data (fi rst maximum amount for inde- for the fi rst fi ve months of 31% by a person aged between and Estonia (16). At the op- pendent Georgia. The ten- quarter) is used to calculate 45 and 60. highest in posite of the scale, the lowest 2018 in his statement. Graph the relative fi gures. The re- dency is the same in regard to 1 presents the budget param- In absolute terms, Ger- rates of suicide were recorded budget total revenues as well spective fi gures are given in many (10 200 deaths) and Lithuania, in Cyprus (4 suicides per 100 eters as of the fi rst quarter of Graph 2 which shows that the as tax revenues. 2018 and the fi rst fi ve months France (9 200) were the two lowest in 000 inhabitants), Greece (5), However, budget revenues trend of changes in the rela- Member States recording the Italy (6), the United Kingdom of the year. In the fi rst fi ve tive fi gures as opposed to ab- and total revenues, including months of 2018, budget rev- most suicides in 2015, fol- Cyprus and (7), Spain and Malta (both 8). tax revenues, have a tendency solute fi gures does not always lowed by Poland (5 400), the At EU level, the suicide rate enues reached GEL 4,210 indicate an upward motion. of constant growth with some million which is GEL 256 United Kingdom (4 700), Ita- Greece stood on average at 11 deaths exceptions. Therefore, claim- As of the fi rst quarter of ly (4 000) and Spain (3 600). per 100 000 inhabitants in million more as compared to 2018, the budget revenues ing that revenues for a spe- the same fi gure of the same However, for a relevant With 30 suicides per 100 2015. cifi c period of time constitute and tax incomes ratio to the period of 2017 and is indeed GDP amounted to 28.8% and a historic maximum would be a historic maximum for in- legitimate for almost any year 26.01%, respectively. In this dependent Georgia. The ten- regard, these fi gures for 2018 with 2018 not being diff erent dency is the same in regard to in this regard. do not constitute a historic the budget total revenues and maximum but, in fact, they Taking into account all tax revenues – the most im- of the aforementioned, it is are 0.33 and 1.28 percentage portant component of budget points lower, respectively, as appropriate to use relative revenues. fi gures instead of absolute compared to the fi gures of Of note is that changes in the same period of 2017. Of fi gures in order to make a budget parameters are direct- complete analysis of changes further note is that the tax in- ly dependent upon the situa- comes and budget revenues/ in budget parameters over tion in the country in terms time. As opposed to abso- total revenues to GDP ratio is of economic activity. In the an indicator of tax burden and lute fi gures, the tendency of absence of major economic change in relative fi gures does government size which means problems/shocks, all things that its growth is not a desired not always imply growth. As being equal, budget revenues of the fi rst quarter of 2018 objective. However, a discus- do increase in absolute num- sion on this particular aspect the budget revenues and tax bers. In the case of Georgia, revenues to the gross domes- of budget parameter changes budget revenues and total goes beyond the scope of this tic product (GDP) ratio in revenues, including taxes, are 2018 constituted 28.8% and article.

Graph 1: State Budget Parameters

Source: Ministry of Finance of Georgia, State Treasury Farming: profession with Graph 2: Budget Figures to GDP Ratio relatively few young farmers

The FINANCIAL -- There ularly few and far between in Nevertheless, the young- were 10.3 million people Cyprus (3.3% of all farm man- est farm managers tended to working as farm managers in agers), Portugal (4.2%) and have bigger farms in terms of the EU in 2016. The average the United Kingdom (5.3%). area, livestock and standard age of farmers is very much at They were more common output than the oldest ones the older end of the age spec- in Austria (22.2%), Poland (over 65 years of age). tum; one third (32%) of farm (20.3%) and Slovakia (19.0%). The farming profession is managers in the EU were 65 dominated by men, with only years of age or more. Only about three in ten (29%) EU 11% of farm managers in the Proportion of farm farm managers being women. EU were young farmers under managers aged The proportion of young farm the age of 40 years. managers who were women Young farmers were partic- was lower still (23%). Source: Ministry of Finance of Georgia, National Statistics Offi ce of Georgia under 40, 2016 HEADLINE NEWS & ANALYSIS 13 FINCHANNEL.COM | 23 JULY, 2018 FFactCheckactCheck Ex-Georgian President: Mr. Trump, Putin does not bluff but you have the upper hand – use it Mamuka Bakhtadze: By MIKHEIL SAAKASHVILI Fox NEWS

s in the U.S., politics in the former Soviet Union can be highly polarized. But in the run-up to Presi- “Fifty percent of Georgia’s Adent Donald Trump’s summit with Russian President Vladi- mir Putin in Helsinki on Mon- population is employed in day, many in my region share the same concern: Will the self- described “master negotiator” agriculture which causes poverty.” agree to a deal that poses an existential threat to American allies in Eastern Europe? I am somewhat more opti- VERDICT: ANALYSIS the rapid advancement of more mistic about the summit’s pros- competitive sectors, it is expected pects for several reasons—but FactCheck concludes that The candidate for Prime that the share of agriculture will cautiously so. Mamuka Bakhtadze’s statement Minister of Georgia, Mamuka decline substantially. This is be- First, I have known Trump is TRUE. Bakhtadze, in his speech before cause, all things being equal, the for many years. In 2012, when the Parliament stated that 50% of share of agriculture in a country’s I was the president of Georgia, RESUME: Georgia’s population is employed GDP is much lower in developed he visited my country to evalu- in agriculture which causes pov- economies and is higher in less ate potential real estate devel- As of 2017, a total of 736,500 erty. developed nations. Therefore, opment. persons were employed in agri- FactCheck took interest in the in the case of Georgia, it is not a After this visit, Trump culture which constitutes 43.2% accuracy of the statement. low share of agriculture in the praised our favorable busi- of the country’s total employees. In accordance with the data of GDP which is a problem but the ness environment and simple The fi gure for 2003-2017 was the National Statistics Offi ce of surplus workforce employed in 48.4% on average although the taxation system. My team and Georgia, a total of 736,500 people agriculture to achieve this result. number of those employed in ag- The share of self-employed per- I carried out the reforms that were employed in the agriculture riculture has been clearly drop- sector as of 2017 which consti- sons in agriculture is high (as of created this environment, and ping since 2017 which is a positive tutes 43.2% of the total number 2016 it is 47.7%) with the majority we did it to reject the Soviet leg- trend itself. of employed persons. The World of persons employed in their own acy of corruption, opacity, and Of those employed in the agri- Bank publishes the same fi gure domestic households and with nepotism—which still charac- culture sector, the share of self- on the basis of the International the majority of their produce for terize the Russian system. Dur- employed (as of 2016 it is 47.7%) Labour Organization’s (ILO) data. self-consumption. Usually, the ing our conversations, I had the eral world order, predicated on mendously. And the very fact is high and the majority of them In this case, the share of those effi ciency/productivity of these sense that Trump understood self-determination, multilater- of the meeting legitimizes Putin are people employed in domestic employed in agriculture consti- people is poor. In accordance with this reality. I hope and believe alism, and territorial integrity, in the eyes of Russian elite, who households. The majority of their tutes 40.9% of the total number of the World Bank’s research, the his clear-eyed understanding of had triumphed for good over to- were getting nervous during the produce is self-consumed. The employed persons in Georgia. The “success” of self-employed per- Russia’s business environment talitarianism, imperialism, and long delay in holding the sum- effi ciency/productivity of these trend of changes for employment sons in the agriculture sector in bodes well for Monday’s sum- bipolar spheres of infl uence. mit. people is usually poor. As a re- in the agriculture sector based on developing countries (Georgia be- mit. The Western misperception Now, it’s America’s turn to sult, even though almost half of ILO data is given in Graph 1. In longs to this category) is assessed employed people in Georgia are Second, while it is true that of the Russian threat—in tan- make demands. Russia should the course of the last years, this on the basis of two indicators: 1) Putin tried to meddle in the working in agriculture, the share fi gure shows a constant decrease whether the self-employed are dem with Putin’s obsession with stop positioning itself as equal of agriculture in the country’s U.S. elections and almost cer- which is a positive trend. employers and 2) whether the the “Western threat”—had dev- to the United States and stop gross domestic product (GDP) is worker lives in a household with tainly favored Trump, it is also In regard to productivity, even astating consequences for my pretending its foreign adven- less than 10% which indicates the though almost half of those em- per capita consumption above true that the Russian leader se- region, including Putin’s inva- tures, be they in Syria, Ukraine ineffi ciency of the employment ployed work in the agriculture the $2/day poverty line. In accor- riously miscalculated Trump’s sions and annexations of Geor- or Georgia, are part of a global and its low productivity. The lat- sector, the share of agriculture in dance with these criteria, only 5% motivations. Putin expected to gia and Ukraine. fi ght against American expan- ter automatically means a lack Georgia’s GDP is less than 10% of persons self-employed in agri- get an American version of his Unlike many of his Western sionism. Moreover, Russia must of income which is duly refl ected which indicates the ineffi ciency of culture in developing countries old Italian friend Silvio Berlus- counterparts, Putin does not stop threatening the U.S. with upon the standard of living. For employment in this sector and its uses hired labour whilst only 23% coni, who could be easily cor- bluff . He is honest about his new weaponry, as Putin did more clarity, 43.2% of the total low productivity. The latter auto- passes the minimum consump- rupted and manipulated. In- ambitions. And why shouldn’t during a recent address to the amount of employed people cre- matically means a lack of income tion threshold. stead, Putin got a determined, he be honest, when he does not Russian Parliament. ated only 8.2% of the total value which is respectively refl ected In parallel to the sizable share nationalistic, and highly unpre- have to pay the political price? Furthermore, Trump must produced in Georgia in 2017. In upon the standard of living. For of persons self-employed (ineffi - dictable U.S. president—who Nevertheless, Western leaders dash Putin’s hopes that the parallel with the sizable segment more clarity, 43.2% of the total cient employment) in agriculture, staff ed his national security often fail to listen. U.S. will ever accept Russia’s of self-employed persons in agri- number of employed persons cre- the labour remuneration is also team with well-known Russia Unlike the American for- land grabs in the former Soviet culture (ineffi cient employment), ated only 8.2% of the total value low. As illustrated by the graph, labour remuneration in the sector hawks and Putin critics, such eign policy agenda at times, space. In this respect, not only produced in Georgia in 2017. the average monthly nominal sal- as John Bolton, Fiona Hill, and is also low. The average monthly At the same time, an increase ary for hired labour in agriculture the Russian agenda is clear Ukraine should be mentioned, nominal salary in the agriculture Gen. James Mattis. in the share of agriculture in the is substantially (30%-40%) lower and consistent. Putin will con- but also Georgia—where Russia sector is 30%-40% lower as com- as compared to the average fi gure Third, the Trump admin- total GDP is not a desirable goal tinue instigating and exploiting occupies one-fi fth of the NATO pared to the average fi gure in itself. On the contrary, in light in the whole economy (all sec- istration went beyond formal “frozen confl icts” in NATO- ally’s territory, in violation of a Georgia’s economy (all sectors). of economic development and tors). compliance with CAATSA in aspirant post-Soviet countries withdrawal agreement Moscow imposing historically harsh like Ukraine, Georgia, and had previously signed. sanctions on Russian power Moldova, so that no indepen- The bottom line should be Graph 1: Share of Those Employed in Agriculture from Total Employment brokers earlier this year. In my dent state in his backyard will that America will respect the region, sanctioning government be welcomed into the Western borders of Russia if Russia starts offi cials is not enough: Oli- alliance. Moreover, by promot- to respect the borders of its garchs and the authorities have ing nationalistic, extremist, and neighbors. Unlike many in my always been inextricably linked. corrupt politicians in the former region, I believe Trump should For the fi rst time in the histo- Soviet space, Putin weakens make a deal with Putin, with ry of the U.S.-Russian bilateral Russia’s neighbors by amplify- very specifi c terms: America will relationship, the Trump admin- ing social divisions. not undermine Putin’s regime istration acknowledged this nu- The Helsinki summit is argu- inside Russia—Putin’s greatest ance, by imposing sanctions on ably the biggest test of Trump’s fear—if Putin stops undermin- politically-connected oligarchs. foreign policy acumen thus far, ing the sovereignty and territo- These sanctions dismantled any and he cannot aff ord to fail. rial integrity of other countries. pretense that oligarchs are legit- As someone who has met Only if Russia withdraws un- imate business owners by treat- with Vladimir Putin more than conditionally from Ukraine and ing them as they are—subsidiar- thirty times, has had to repeal Georgia should the U.S. agree to ies of the Russian government. his military attack and survived discuss lifting sanctions. I have several other rea- assassination threats from him, Finally, Trump—and the rest Source: World Bank, International Labour Organization sons for optimism, including I have the following recommen- of the world—would do well to Trump’s criticism of the Nord dations for President Trump: manage expectations. A real Stream II pipeline deal at this Be Reaganesque. Talk to the deal cannot be made at the very Graph 2: Average Monthly Nominal Salary of Hired Labour week’s NATO summit and his Russians, but start tough, and fi rst summit, as Reagan’s ex- authorization of lethal defensive remember to “trust but verify” perience with Gorbachev dem- weapons sales to Ukraine and at each turn. onstrated. When Gorbachev Georgia last year—a dramatic Both Presidents Bush and tried to sell their fi rst summit reversal of Obama’s policy. Obama made the same mistake in Iceland as a success, Reagan In spite of these promising of trying to reset relations with bluntly contradicted his Soviet signs, however, I must caution Russia early in their presiden- counterpart. Only with calculat- Trump to avoid the mistakes his cies. By hiding the sticks and ed skepticism in the beginning predecessors have made with producing too many carrots, will the U.S. achieve victory in regards to Putin’s Russia. Bush and Obama attempted to the end. After the collapse of the So- demonstrate good will—which Mikheil Saakashvili was viet Union in 1991, I sensed a Putin interpreted as weakness. the President of Georgia from widespread perception among The language of sheer force is 2004-2013 and led his country Americans that the U.S. had what Putin understands best. through the Russian-Georgian “won” the Cold War. Since then, President Trump should not War of 2008. His perspective is American policymakers have lose sight of the fact that he shaped by his personal experi- consistently underestimated doesn’t owe Putin anything: ence with Trump, Putin, and Russia’s ambitions. Many opin- Indeed, Trump holds the upper Russian interventionism as the ion leaders and policymakers hand. head of state in a NATO-aspi- believed we had reached “the Despite Putin’s bravado, the rant country partly occupied by end of history,” where the lib- sanctions are hurting him tre- Russia Source: National Statistics Offi ce of Georgia 14 HEADLINE NEWS & ANALYSIS fi nancialnancial nnewsews 23 JULY, 2018 | FINCHANNEL.COM India – pearls most Mobile banking is changing how we pay traded product The FINANCIAL -- More people with the EU than ever are using their mobile phones to shop, yet ING research TThehe FINANCIALFINANCIAL ---- LLogoogo SStatisticstatistics shows that when it comes to paying, EExplainedInxplainedIn 2017,2017, IndiaIndia wwasas EU’sEU’s they aren’t quite ready to give up on nninthinth largestlargest partnerpartner forfor importsimports banks yet. Despite having more pro- ((2.42.4 % ooff totaltotal extra-EUextra-EU imports)imports) viders to choose from, 58% of Euro- aandnd tenthtenth largestlargest forfor EUEU exportsexports peans prefer to use their own bank ((2.22.2 % ooff totaltotal extra-EUextra-EU exports).exports). for their money services. FFromrom tthehe periodperiod 20072007 toto 2012,2012, One in fi ve Europeans has used tthehe EUEU ranran a tradetrade surplussurplus (mean-(mean- another provider to transfer money iingng thatthat theythey exportedexported moremore thanthan (to pay for goods or services) in the ttheyhey imported)imported) withwith India.India. ThisThis past 12 months. When it comes to ttraderade surplussurplus turnedturned intointo a deficitdeficit other fi nancial services the major- iinn 2013,2013, rreachingeaching EEURUR 22.4.4 bbillionillion ity stick to their own bank. Only iinn 2017.2017. 15% have used another provider’s FForor bothboth EUEU exportsexports andand importsimports app to make a peer-to-peer pay- wwithith India,India, “machinery“machinery andand vehi-vehi- ment (for example to split a bill ccles”,les”, “chemicals”“chemicals” andand “other“other man-man- with friends), and even fewer (9%) uufacturedfactured goods”goods” dominate.dominate. To-To- have gone elsewhere for a loan, ac- ggetherether thesethese manufacturedmanufactured goodsgoods cording to ING. aaccountedccounted forfor 8989 % ofof EUEU exportsexports Those that do look beyond tradi- ttoo andand 8383 % ofof importsimports fromfrom IndiaIndia tional banks are most likely to be in iinn 2017.2017. AAtt a mmoreore detaileddetailed level,level, Turkey, Germany or Poland. ““pearlspearls andand semi-precioussemi-precious stones”stones” The ING International Survey of wwereere thethe EU’sEU’s mostmost exportedexported prod-prod- mobile money trends in Europe, uuctct toto India,India, whilewhile “petroleum“petroleum oil”oil” the US and Australia questioned wwasas thethe mainmain productproduct importedimported around 15,000 people in 15 coun- iintonto thethe EUEU fromfrom India.India. tries. It found that smartphones are changing the way people shop, with roughly two out of three peo- The United ple buying items online at least monthly or even weekly. In the UK Kingdom and and US, 16% of people make online Germany: main purchases even more frequently ments app and another 11% pay vice, are other reasons for not than once a week. on delivery (using either cards or shopping online. traders with India cash). While the big tech compa- Traditional Those who visit physical nies like Apple, Google and Ama- stores tend to pay with cash among the Member Tech giants zon all offer their own payment shoppers (32%), credit card (31%) or deb- services, each of these accounts for it card (29%). States only one percent of transactions Convenience and availability, as At the other end of the scale, AAmongmong thethe MemberMember States,States, thethe not so big in Europe and not much more in four percent of Europeans never well as the absence of fees, comfort the US.Facebook is the least popu- with security and device compat- UUnitednited KingdomKingdom (EUR(EUR 8 billion)billion) shop online. More than half of wwasas thethe largestlargest importerimporter fromfrom IndiaIndia lar choice, with 52% of Europeans these say they prefer to actu- ibility are all contributing to the in- in payments saying they would ‘never’ use it to creasing popularity of online bank- aandnd GermanyGermany (EUR(EUR 1111 billion)billion) waswas ally see what they’re buying tthehe largestlargest exporterexporter toto IndiaIndia inin 2017.2017. pay for goods or services. At the rather than rely on a digital im- ing. Another contributor is the rise When it comes to paying for time of the survey (in March/April of automated payments that require FFurtherurther informationinformation isis providedprovided inin these purchases, 42% use their age; others like the social side tthehe StatisticsStatistics ExplainedExplained articlearticle In-In- 20108) Facebook was being criti- of shopping. Security fears and no action from the consumer, for in- bank cards; 32% use payments cised for leaking personal data to stance direct debits to settle monthly ddia-EUia-EU internationalinternational tradetrade inin goodsgoods service PayPal, 11% use a local pay- waiting for deliveries, or not sstatistics.tatistics. third parties. having a reliable delivery ser- bills.

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MMOSCOWOSCOW — AfterAfter hostinghosting thethe WorldWorld RRussiaussia heldheld thethe 20142014 WinterWinter Europe improves slightly CCup,up, PresidentPresident VladimirVladimir PutinPutin sayssays OOlympicslympics inin SochiSochi butbut itsits legacylegacy waswas tthehe countrycountry couldcould bidbid forfor a futurefuture ttaintedainted byby allegationsallegations ofof widespreadwidespread SSummerummer Olympics,Olympics, APAP reported.reported. ddopingoping whichwhich ledled toto RussianRussian athletesathletes The FINANCIAL -- The consumer sen- AAskedsked aboutabout hostinghosting a SummerSummer bbeingeing forcedforced toto competecompete asas neutralsneutrals timent among European consumers OOlympicslympics inin RussiaRussia forfor thethe fi rstrst timetime aatt thisthis year’syear’s WinterWinter OlympicsOlympics inin Py-Py- improved slightly in the second quar- ssinceince 1980,1980, PPutinutin sayssays feasibilityfeasibility eeongchang.ongchang. ter of 2018. sstudiestudies needneed toto bebe conductedconducted “but“but TThehe nnextext ssummerummer ggamesames RussiaRussia In June the GfK Consumer Climate oobviouslybviously wewe willwill organizeorganize majormajor ccouldould hosthost wouldwould bebe inin 2032,2032, bbecauseecause for the 28 EU states reached 23.2 iinternationalnternational competitionscompetitions here,”here,” inin TTokyo,okyo, PParisaris aandnd LLosos AAngelesngeles areare al-al- points, thus taking it 2.6 points above ccommentsomments reportedreported byby statestate newsnews rreadyeady conconfi rmedrmed aass hhostingosting tthehe 22020,020, March’s fi gure. This is its highest level aagencygency RIARIA Novosti.Novosti. 22024024 aandnd 22028028 eeditionsditions rrespectively.espectively. since November 2007. The average propensity to buy in the EU dropped slightly, although the propensity to save also fell, making more money available for consumption, according Fraudsters Use Fake Gift to GFK. Consumers assessed economic Cards to Lure Consumers into prospects on average in the EU as less positive than at the start of the year. Handing Over Personal Data The economic expectations reached 7.1 points in June. This is an obvi- The FINANCIAL the option of freely generating gift ous decline compared to the 15 points cards for well-known companies - achieved in March. The level of trust like iTunes, Google Play, Amazon, in economic development diminished aspersky Lab experts have or Steam - are nothing new. For ex- signifi cantly in Germany, France and discovered the distribution ample, legitimate apps like Tokenfi re Belgium. In contrast consumers in of an unusual fraudulent and Swagbucks buy card codes from Spain and Italy looked on domestic scheme that tricks users into vendors, to then give them to clients economic activity more favorably. parting with their time and as a reward for certain activities. Ktheir data, for no return. Criminals have apparently recog- Income expectations stood their ground on the EU average, reaching Kaspersky Lab experts have dis- nized the popularity of such websites 16.8 points in June. This put them covered the distribution of an un- and have decided to deceive users us- 0.5 points above the March fi gure. In usual fraudulent scheme that tricks ing a simple algorithm. Spain, Slovenia and Greece the indica- users into parting with their time When on the fake site, the user is tor increased signifi cantly compared to and their data, for no return. By cre- asked to select the gift card he/she the fi rst quarter. Here consumers rated ating fake websites for the free gen- wants in order to receive the code. the future development of their sala- eration of gift cards, cybercriminals After that, the fraudulent mecha- ries with more optimism. are able to “sell” users’ data to third nism is set in motion. To get the gen- In comparison to the fi rst quarter the party partner sites, to which they re- erated code, however, the user needs propensity to buy fell slightly to 17.6 direct victims. to prove that he/she is not a robot. points in June. This is 2.1 points lower While industry and law enforce- To do this, the user has to follow the than in March. While the indicator fell ment agencies from around the world suggested link and complete various by double digits in Bulgaria and France, are busy fi ghting against cybercrime, tasks, the number and type of which it improved in Slovenia and Spain. criminals themselves are constantly are determined by the partner net- Despite a slightly falling propensity looking for new ways of earning mon- work to which the user is redirected. to buy, the GfK Consumer Climate in ey – other than just malware. Off er- For example, he/she may be asked to Europe rose to 23.2 points in the sec- ing something valuable free of charge fi ll in a form, leave a phone number ond quarter of 2018, since the calcula- is always an enticing piece of market- or email address, subscribe to a paid tion of the falling propensity to save is ing, and criminals can take advantage SMS-message, install adware, and so also taken into account here. of this. Websites that off er customers on. Unemployment rate in EU countries, 2000-2018

ANTONIO FLORES JENS while Greece, Spain, Italy, Croatia MANUEL KROGSTAD and Cyprus had the highest. Nearly all EU countries’ unem- Pew RESEARCH CENTER ployment rates declined from the fi rst quarter of 2013 – the end of Eu- The FINANCIAL -- The European rope’s second recession – to the fi rst Union’s unemployment rate has quarter of 2018, but the degree of dropped to its lowest point in almost change diff ered starkly between na- a decade, though joblessness still tions. The countries with the largest varies widely among the 28 coun- percentage-point decreases include tries that make up the bloc, accord- Spain (-10.0 percentage points), Por- ing to a Pew Research Center analy- tugal (-9.7) and Ireland (-8.7), while sis of data from Eurostat, Europe’s unemployment decreased far more statistical agency. modestly in Austria (-0.3 points), Luxembourg (-0.3), Italy (-0.8) and France (-1.1). Only Finland (+0.1) EU-28 saw an increase during this time. Europe’s economic downturns unemployment also aff ected countries’ unemploy- ment at diff erent times. Germany’s rate has nearly unemployment rate peaked at 11.2% before the crisis, in the second and returned to pre- third quarters of 2005, and then de- clined from 2008 to 2018. In Greece, recession low unemployment climbed to 27.7% through the second recession, which of the bloc’s countries. In fall 2017, Greece’s persistently high unem- in the second and third quarter of The EU unemployment rate was lasted from the fourth quarter of for example, 85% of Germans said ployment rate. Almost all Greeks 2013, the highest unemployment 7.1% in the fi rst quarter of 2018, the 2011 to the fi rst quarter of 2013. Al- the economic situation in their coun- (98%) said the country’s economic rate an EU country has seen over the most recent quarter for which data though output grew in the roughly try was very or somewhat good. That situation was somewhat or very bad past two decades. By contrast, in the for all countries are available. That two years between the recessions, was up from 2007, when 63% said in 2017, unchanged from the share UK, unemployment never reached was nearly on par with the 6.8% rate unemployment still trended up dur- the same, according to Pew Research in 2012 that said the same (the fi rst double digits, peaking at 8.4% in the recorded in the fi rst quarter of 2008, ing this period. Center surveys. time the question was asked). fourth quarter of 2011. before the European fi nancial crisis Explore our interactive on unem- But public opinion about the econ- Youth unemployment in the EU began. Europe’s unemployment rate ployment rates in the 28 countries omy has not improved everywhere. has also dropped to pre-recession reached a recent high of 11% in the that make up the European Union. In Spain, where unemployment re- Unemployment levels. At the beginning of 2018, the fi rst and second quarters of 2013. mains high despite dropping in re- unemployment rate among workers The steady decline since then re- cent years, just 28% of adults gave rates vary ages 15 to 24 (15.6%) was the same fl ects steady economic improvement Unemployment the economy a positive grade in fall as at the start of the recession in the in many EU countries. 2017, down from 65% in 2007. In the widely across second quarter of 2008. Europe’s overall unemployment rate in EU United Kingdom, 41% said that their However, youth unemployment rate fl uctuated during the EU fi - national economy was good, down EU-28 countries remains high in parts of Europe. As nancial crisis, which spanned two countries, 2000- from 69% in 2007, even though the of the fi rst quarter of 2018, at least a recessions. Unemployment steadily British unemployment rate is rela- Unemployment varies widely by quarter of workers ages 15 to 24 were increased as economic output fell 2018 tively low and has steadily decreased country in the EU, in many cases unemployed in Greece (43.8%), during the fi rst recession, which since the fi nancial crisis ended. refl ecting national diff erences in Spain (35.5%), Italy (32.5%) and lasted from the second quarter of As Europe’s overall unemploy- The Greek public, meanwhile, economic performance. In the fi rst Croatia (23.6%). Germany (6.3%), 2008 to the second quarter of 2009. ment rate has returned to pre-reces- continued to give its country’s quarter of 2018, the Czech Repub- the Czech Republic (6.9%) and the Unemployment then continued to sion levels, public optimism about economy an extremely low rating lic, Germany, Hungary and Poland Netherlands (7.2%) had the EU’s increase while output stayed fl at the economy has increased in some in a spring 2017 survey, refl ecting had the lowest unemployment rates, lowest youth unemployment rates. 16 HEADLINE NEWS & ANALYSIS fi nancialnancial nnewsews 23 JULY, 2018 | FINCHANNEL.COM

Advertiser: The FINANCIAL. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com HEADLINE NEWS & ANALYSIS 17 FINCHANNEL.COM | 23 JULY, 2018 fi nancialnancial nnewsews Kids of Working Moms Grow Into Happy Adults

The FINANCIAL -- In earlier re- search, Kathleen McGinn and col- leagues discovered that adult kids of working moms are high achiev- ers at work. Now it turns out they are happy, too. In 2015, preliminary results of a groundbreaking study found that the daughters of employed moth- ers often perform better in their eventual careers than the daugh- ters of stay-at-home moms. Now the full study has been re- leased, and it brings even more good news for the children of working moms: They wind up just as happy in adulthood as the chil- dren of moms who stayed home, according to HBS. Harvard Business School Pro- fessor Kathleen McGinn hopes the fi ndings bring a big sigh of re- lief for guilt-ridden mothers who either have to hold down a job to make ends meet or simply choose to work outside the home while raising their children. “People still have this belief that when moms are employed, it’s somehow detrimental to their children,” says McGinn, the Cahn- ers-Rabb Professor of Business Administration. “So our fi nding that maternal employment doesn’t aff ect kids’ happiness in adulthood is really important.” “AS WE GRADUALLY UNDER- STAND THAT OUR CHILDREN AREN’T SUFFERING, I HOPE THE GUILT WILL GO AWAY” This isn’t about raising happier kids, she continues. “When women choose to work, it’s a fi nancial and personal choice. Women should than 100,000 men and women Only adult daughters—not handle multiple demands—a job, reers is less important when girls make that choice based on wheth- across 29 countries revealed how sons—see their careers infl uenced a family, a household—you see see a lot of other women with jobs, er they want or need to work, not the employment of mothers aff ects by whether their mothers work that it can work. Everything we because these women can act as based on whether they are harm- their adult children, both in terms outside the home. It may not aff ect know about role models and social alternative role models. For sons, ing their children—because they of their own employment as well as sons’ employment choices simply learning suggests that children are however, their own mothers’ em- are not.” how much time they spend at home because men tend to be employed, actively picking up life skills from ployment is critical to how much caring for children and doing house- and also, as other research shows, the adults around them. It’s all they pitch in with their own chil- work. sons’ occupations and earnings about what they’re exposed to as dren, even when they are raised Some critics questioned if the map closely to their fathers’ em- children.” around a lot of other employed Welcome news preliminary fi ndings might have ployment, McGinn explains. Also on the domestic front, women. nothing to do with whether mothers In non-work ways, however, daughters of employed moth- “For girls, seeing other em- Three years ago, McGinn and col- work, but were tied to the moms’ ed- sons may be infl uenced by their ers spend about an hour less on ployed moms can provide some of leagues got some pushback when ucation level instead. After control- working mothers, the study sug- housework compared with the the same eff ects on attitudes and preliminary fi ndings were included ling for the mother’s education, fi nal gests. They spend an extra 50 min- children of stay-at-home mothers. skillsets,” McGinn says. “For boys, in a New York Times article. The results still showed that a mother’s utes each week caring for family Meanwhile, when both daugh- their own moms and other women research found that adult daugh- work experience is strongly linked members. ters and sons were asked about in the community are comple- ters whose moms worked outside to her daughter’s future work per- Sons are infl uenced in other their overall life satisfaction, adult ments; each reinforces the other.” the home are more likely to work formance, according to the recently ways when their moms work. children of employed moms re- themselves, hold more supervisory published full study, Learning from The sons of employed mothers ported being just as happy as adult responsibilities, and earn higher Mum: Cross-National Evidence hold signifi cantly more egalitar- children of moms who didn’t work wages than women whose mothers Linking Maternal Employment and ian gender attitudes—even more outside the home. Easing the stayed home full time. Adult Children’s Outcomes, which so than the daughters of stay-at- “Some asked if children of stay-at- was featured in Work, Employment home moms, a fi nding that sur- guilt home moms were happier,” McGinn and Society. prised McGinn because it shows says. “Many decried the research as Compared to women whose that the infl uence of maternal The research While previous research has another installment of the ‘mommy mothers stayed home full time, employment may even outweigh shown that young children and wars.’ But the most common re- women raised by an employed well-documented sex diff erences uncovered teenagers do just fi ne when their sponse was from mothers who suf- mother are 1.21 times more likely to when it comes to shaping people’s moms work, McGinn is hoping fered guilt, self-doubt, and disap- be employed; 1.29 times more likely mindsets about appropriate roles other this longer-term view into adult- proval from others. They found our to supervise others at work; and for men and women. hood provides reassurance for em- preliminary results to be welcome they spend 44 extra minutes at their “Sons of employed moms also ployed mothers who feel confl icted news.” jobs each week, according to HBS. tend to choose wives who are interesting when they kiss their kids goodbye After the preliminary fi ndings They also earn more money. employed, and they have more to head to the offi ce. were publicized, McGinn, Mayra Among the women who responded egalitarian gender attitudes about findings: “Women are socialized to be- Ruiz Castro of Kingston University to the survey in the United States women and men in the workplace lieve mothers should stay home in the UK, and Elizabeth Long Lingo in 2012, employed daughters of as well,” McGinn says. “So hav- Both sons and daughters of em- with their children, so when you of Worcester Polytechnic Institute employed moms earned an aver- ing an employed mom aff ects the ployed mothers have signifi cantly separate from your kids every day added a second international data age of $1,880 more per year than choices these sons are making.” more education than children of for work, it can be painful,” she set to their study. To make sure their employed daughters of moms who Employed moms strongly shape mothers who are not employed. says. “As we gradually understand fi ndings could be replicated across stayed home full time. their daughters’ gender attitudes The employment rates of adult that our children aren’t suff ering, I both time and geographic distance, and provide role models for them daughters are aff ected by their hope the guilt will go away.” they compared two cross-national to imitate, McGinn says. So when mothers’ employment, regardless Working moms can also take social surveys, the “Family and these daughters grow up, they of- of whether the moms held high- comfort from their own kids. In Changing Gender Roles” section What about ten follow in the footprints of their skill or low-skill jobs. But only a panel discussion with female of the International Social Survey working mothers. women whose mothers worked executives and their grown chil- Programme from 2002 and 2012, as sons of “Having an employed mom medium- or high-skill jobs are dren about maternal employment well as the “Generations and Gen- makes daughters think that em- more likely to have supervisory at Caterpillar Inc., McGinn asked der Survey Core Questionnaire” in employed ployment is compatible with par- positions than women whose the adult children, “What advice the Generations and Gender Pro- enting,” McGinn says. “If you’re mothers weren’t employed. do you have for employed moms, gramme from 2002 through 2013. actually observing an employed The infl uence of mothers’ em- given what you experienced as a All told, the two surveys of more mothers? mom manage a complex life and ployment on their daughters’ ca- child?” 18 HEADLINE NEWS & ANALYSIS ppublicityublicity 23 JULY, 2018 | FINCHANNEL.COM






 
 

 

 
  
 

 

  



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(+30.7% y/y), cars International ranking, 2017 ECONOMY (+130.9% y/y), ferro-alloys (+14.2% y/y), wine (-11.3% Ease of Doing Business Exports y/y) and pharmaceuticals s# 9(Top 10) (-3.3% y/y) were the top Economic Freedom Index 5 exported commodities. up 31.1% # 16 (mostly free) A 23.3% of exports y/y in was directed to the EU Global Competitiveness Index (+107.8% y/y), 44.1% to # 59 (improving trend) June 2018 the CIS (+43.1% y/y) and 32.6% to other countries Source: O௻ cial data, IMF Source: GeoStat Source: Rating agencies Source: World Bank, Heritage In June 2018, exports (-4.9% y/y). 1) As of 1Q18 Note: Rapid estimate for 4Q17 Foundaition and World Economic 2) As of 5M18 Forum increased by 31.1% y/y to In June 2018, US$ 308.9mn, imports petroleum (+51.9% Overall, in 1H18, the were up 19.8% y/y to US$ y/y), cars (+45.9% y/y), trade de¿ cit was up 20.0% Money June 2018 Producer 771.2mn and the trade copper (+75.1% y/y), y/y at US$ 2.8bn as de¿ cit widened 13.2% exports were up 28.5% y/y transfers In June 2018, money price pharmaceuticals (+7.7% transfers increased 14.8% y/y to US$ 462.3mn, y/y) and phones (-32.4% to US$ 1.5bn and imports according to GeoStat. increased by 22.9% y/y to up 14.8% y/y to US$ 135.1mn, index up y/y) represented the top after growing 13.0% y/y In June 2018, copper US$ 4.4bn. 5 imported commodities. y/y in in the previous month, 6.8% y/y according to NBG. From major remitting countries, in June money transfers were up from Italy (+32.2% 2018 y/y, 11.5% of total), USA (+16.6% y/y, 10.5% of Annual PPI for total), Greece (+19.4% industrial goods was y/y, 10.3% of total), Israel up 6.8% in June 2018, (+27.3% y/y, 9.8% of according to GeoStat. total) and Turkey (+1.9% Rising prices in y/y, 7.2% of total), while manufacturing (+5.1% remittances were down y/y) and supply of from Russia (-0.6% y/y, electricity, gas and water 29.0% of total). Overall, (+14.6% y/y) contributed Source: NBG in 1H18 money transfers were up 18.3% y/y to US$ the most to the overall Note: Index growth means appreciation of exchange rate, index change. Source: GeoStat decline means depreciation of exchange rate. 744.4mn.

FIXED EQUITIES INCOME Corporate Eurobonds: Bank of Georgia Group Eurobonds (GEBGG) closed at 6.0% yield, trading at 99.8 (+0.01% w/w). Bank of Georgia GEL- denominated Eurobonds (GEBGG) were trading at 100.5 (+0.5% w/w), yielding 10.7%. Georgia Capital Euro- bonds (GEOCAP) were trading at 94.5 (+0.2% w/w), yielding 7.4%. GOGC Eurobonds (GEOROG) were trading at 101.9 (+0.3% w/w), Source: Bloomberg Source: Bloomberg yielding 6.0%. Georgian Railway Eu- robonds (GRAIL) traded at a premium of BGEO shares traded was at 0.84% 109k shares changed hands in the at 106.0 (+0.01% w/w), yielding 6.0%. Source: Bloomberg range of GBP 16.88 – 17.52/share. Av- Georgian Sovereign Eurobonds Source: Bloomberg of its capitalization. (GEORG) closed at 106.7 (-0.1% w/w) Georgia Capital (CGEO LN) shares erage daily traded volume was 25k in at 4.2% yield to maturity. closed at GBP 9.76/share (-6.39% w/w the last 4 weeks. Bank of Georgia Group (BGEO and -13.55% m/m). More than 545k Georgia Healthcare Group LN) shares closed at GBP 17.73/share shares traded in the range of GBP 9.80 (GHG LN) shares closed at GBP 2.6/ (-4.48% w/w and -7.09% m/m). More – 10.49/share. Average daily traded share (-0.76% w/w and -1.70% m/m). than 414k shares traded in the range volume was 103k in the last 4 weeks. More than 25k shares were traded in of GBP 17.23 – 19.57/share. Average The volume of CGEO shares traded was the range of GBP 2.60 – 2.66/share. daily traded volume was 79k in the last at 1.41% of its capitalization. Average daily traded volume was 17k 4 weeks. FTSE 250 Index, of which TBC Bank Group (TBCG LN) in the last 4 weeks. The volume of BGEO is a constituent, gained 0.51% closed the week at GBP 17.24 (-0.35% GHG shares traded was at 0.02% of its w/w and lost 0.03% m/m. The volume w/w and +2.25% m/m). More than capitalization.

GEL 40.0mn (US$ 10.2mn) Benchmark Bonds of Ministry MONEY MARKET of Finance were sold at the auction held at NBG on July 18, 2018. The weighted average yield was ¿ xed at 9.016%. The Re¿ nancing loans: National Bank of Georgia (NBG) is- nearest treasury security auction is scheduled for July 25, sued 7-day re¿ nancing loans of GEL 950mn (US$ 387.1mn). 2018, where GEL 30mn nominal value 5-year Benchmark bonds will be sold. * Source: Bloomberg Ministry of Finance Benchmark Bonds: 10-year *GWP 12/21 bonds and GEBGG 06/20 bonds are in Georgian lari **Coupon rate 3.5% over the NBG’s re¿ nancing rate

Source: NBG Source: NBG Source: Bloomberg *Note: As of latest auction.

WEEKLY MARKET WATCH EXCLUSIVELY PROVIDED TO THE FINANCIAL BY GALT & TAGGART Investments (or any short-term transactions) in emerging markets involve signi¿ - GALT & TAGGART cant risk and volatility and may not be suitable for everyone. The readers of this document must make their own investment decisions as they believe appropri- Address: 79 D. Agmashenebeli Avenue, Tbilisi 0102, Georgia ate based on their speci¿ c objectives and ¿ nancial situation. When doing so, such Tel: + (995) 32 2401 111 recipients should be sure to make their own assessment of the risks inherent in Email: [email protected] emerging market investments, including potential political and economic instabil- ity, other political risks including without limitation changes to laws and tariɣ s, and nationalization of assets, and currency exchange risk. 20 HEADLINE NEWS & ANALYSIS ppublicityublicity 23 JULY, 2018 | FINCHANNEL.COM  YEARS ON THE MARKET

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