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Issue no: 1066/138 • JULY 17 - 19, 2018 • PUBLISHED TWICE WEEKLY PRICE: GEL 2.50

In this week’s issue...

Georgian Parliament Approves Reshuffl ed Cabinet NEWS PAGE 2 Average Hotel Prices in and Hotel Price FOCUS Index (June 2018) BUSINESS PAGE 4 ON NEW Batiashvili’s New Plans for ECONOMY PLANS Georgian Education The new Minister of Economy announces his fi rst ideas BUSINESS PAGE 5 for Georgia's economic development PAGE 2 The Highest Interest Rate on the Market and Deposit Porting at Terabank BUSINESS PAGE 6 Georgian Watermelon a Health Risk? French Institute BY THEA MORRISON in Georgia on Developing atermelon season has truly kicked off in Georgia, but Partnerships this year amid concerns that the juicy, refreshing summer BUSINESS PAGE 10 fruit hides health risks. WLast week the organizations under the Con- Russia, US Try to Revive sumer Rights Protection Association of Georgia examined several samples of Georgian water- Relations melon and melon and stated they contain exces- Photo source: Hub pages sive amounts of nitrates, which can lead to amount of watermelon is grown. nitrates in the accredited laboratory. SOCIETY PAGE 10 food-poisoning, irritability, sleeplessness and The farmers say that the information about “As a result of laboratory research, the level of respiration problems. excessive nitrates in watermelon has negatively nitrates does not exceed the permissible indica-

During the presentation of the results, the affected their business and now no one wants tor in fruit. Overall, about 70 samples are to be Prepared for Georgia Today Business by United Nations Expert and Ecologist Khatuna to buy their harvest. examined this year. We usually study nitrate con- Markets Asof13ͲJulͲ2018 Akhalaia underlined that the level of nitrates in “We demand that the representatives of the tent annually. According to the monitoring results STOCKS Price w/w m/m BONDS Price w/w m/m the watermelons and melons examined by them Agriculture Ministries come here and check the of 2017, a violation was observed in only one case,” BankofGeorgia(BGEOLN) GBP18.56 +3,2% Ͳ1,3% GEOROG04/21 101.57(YTM6.12%) +0,3% +0,6% GeorgiaCapital(CGEOLN) GBP10.43 +2,7% Ͳ3,0% GEORG04/21 106.81(YTM4.21%) +0,0% +0,4% is 3-4 times higher than the permissible norm. level of nitrates in our watermelons. I can assure the statement says. GHG(GHGLN) GBP2.62 Ͳ4,0% +3,8% GRAIL07/22 105.98(YTM6.04%) +0,3% +0,7% This statement has led to citizens losing trust you that our product is healthy and does not The statement of the NFA means that Georgian TBCBankGroup(TBCGLN) GBP17.30 Ͳ0,1% Ͳ GEBGG07/23 99.81(YTM6.05%) +0,1% Ͳ0,2% in their favorite summer fruit, with some mar- contain excessive amounts of nitrates, as stated watermelon and melon are safe and can be con- COMMODITIES Price w/w m/m CURRENCIES Price w/w m/m CrudeOil,Brent(US$/bbl) 75,33 Ͳ2,3% Ͳ1,8% GEL/USD 2,4521 +0,2% Ͳ0,5% kets refusing to sell it. of late,” Kakhetian farmer Khvicha Khimshiash- sumed by the population without any hesitation. GoldSpot(US$/OZ) 1244,32 Ͳ0,9% Ͳ4,2% GEL/EUR 2,8638 Ͳ0,4% Ͳ1,3% Popular hypermarket Agrohub was the fi rst vili said. In themselves, nitrates in watermelon are almost GEL/GBP 3,2446 Ͳ0,2% Ͳ1,6% INDICES Price w/w m/m GEL/CHF 2,4406 Ͳ1,0% Ͳ2,1% to ban watermelons on the basis of their con- Specialists of the National Food Agency (NFA) non-toxic, but with excessive intake of nitrates, FTSE100 7661,87 +0,6% Ͳ0,5% GEL/RUB 0,0392 +1,0% Ͳ0,5% taining too many nitrates. are currently carrying out a study on the market the human body can begin to show signs of acute FTSE250 20813,12 +0,9% Ͳ2,0% GEL/TRY 0,5047 Ͳ5,6% Ͳ5,1% DAX 12540,73 +0,4% Ͳ2,7% GEL/AZN 1,4411 +0,2% Ͳ0,5% “We refuse to sell watermelon in our store for nitrates in watermelon and melon. Samples poisoning. DOWJONES 25019,41 +2,3% Ͳ0,7% GEL/AMD 0,0051 ͲͲ NASDAQ 7825,98 +1,8% +1,7% GEL/UAH 0,0935 +0,5% Ͳ1,0% because it contains more nitrates than is per- are being taken in different spots, both in large Excessive use of fertilizers is commonly the MSCIEMEE 161,47 +1,2% +1,9% EUR/USD 0,8558 +0,5% +0,9% mitted,” the hypermarket’s Facebook post reads. supermarket networks and at agrarian markets. main source of a higher level of nitrates in fruit MSCIEM 1075,64 +1,5% Ͳ5,3% GBP/USD 0,7558 +0,4% +1,1% SP500 2801,31 +1,5% +0,9% CHF/USD 1,0017 +1,3% +1,6% The statements angered Kakhetian farmers, According to the NFA, about 30 fruit and veg- and vegetables because they are prone to absorb- MSCIFM 2685,47 +0,4% Ͳ3,9% RUB/USD 62,4462 Ͳ0,9% Ͳ0,1% Kakheti being the region where the largest etable samples have already been examined for ing harmful substances easily. GTIndex(GEL) 1582,68 ͲͲTRY/USD 4,8387 +5,8% +4,1% GTIndex(USD) 1208,13 ͲͲAZN/USD 1,6977 Ͳ0,2% +0,4% GEORGIA TODAY 2 NEWS JULY 17 - 19, 2018 Explosion in Tkibuli Mine Kills 4, Leaves 6 Injured: Shaft to Be Closed

Photo: Georgia’s Minister of Economy Giorgi Kobulia. Source: IPN New Minister Names Georgia's Main Economic Challenges

He believes that human resources, people's edu- BY THEA MORRISON cation, and skills should also be developed, adding the State should help people increase their knowl- edge and advance their skills in order to increase eorgia’s new Minister of Economy, their income. Giorgi Kobulia, has named the main According to the Minister, Georgia cannot exist challenges that hinder the develop- only by developing the local market. ment of the Georgian economy. “We need to focus on export and enter new mar- Kobulia, who was working for global kets. Therefore, integration with export markets Gconsulting company McKinzie for two decades, is very important. Steps have been made in this says one of the top challenges is that small and direction, but there is still much to be done,” he mining, construction or other works. medium businesses (SMEs) in Georgia are not added. BY THEA MORRISON “The investigation has already started and all developed enough. Kobulia highlighted that Georgia's economic responsible people will be punished to the full “In order to accelerate the pace of economic indicators are impressive, but despite that, the eco- extent of the law,” Bakhtadze noted. “The shaft will development, more people should be involved in nomic income that Georgia creates per capita is Monday morning explosion in Min- not resume work until the criminal investigation economic activities. It is necessary to develop small very small. deli Mine, Tkibuli, left 4 miners dead and technical expertise is complete.” and medium business, and in this area there are “In 2017, economic growth was 5%, and in 2018 it and 6 severely injured. The injured miners were hospitalized and one signifi cant challenges in Georgia,” he stated in Par- is 7.5%, which is a very good fi gure. In addition, The Georgian Ministry of Internal was transferred to in a critical condition. liament. employment has signifi cantly increased, as have Affairs (MIA) stated that a methane A previous explosion in the same Mindeli mine The new minister believes that better access to investments, but according to the World Bank, Aexplosion supposedly caused the collapse of the occurred in April 2018, when 6 died and 3 were injured. credit for small and medium-sized businesses will Georgia remains in the list of poor countries, some- ceiling in the tunnel. Deputy Ministers of Economy, Genadi Arveladze promote their development. thing which needs to be changed,” he said. Prime Minister Bakhtadze has said the govern- and Giorgi Cherkezishvili, went to Tkibuli to inspect In addition to this, Kobulia says it is necessary to “This can be explained by the fact that despite ment will no longer put its citizens lives at risk and the site, offering their condolences to the families accelerate the level of industrialization. good growth, the economic income that Georgia has declared the mine will be closed. and injured miners. “We have foreign investments, including in infra- creates per capita is very small. Our situation in An investigation was launched under the second The PM declared July 16 a Day of Mourning. The structural projects, but we need more. Industri- this regard is 10 times worse than in the leading part of Article 240 of the Criminal Code of Geor- state fl ag was lowered on all administrative build- alization is one of our priority directions. Without developed states,” the Minister added, noting that gia, which implies a violation of safety rules in ings on the territory of Georgia. development in this fi eld, we cannot move our in order to improve the living conditions of citi- economy forward,” he stated. zens, it is necessary to employ as many people as Development of the regions is another challenge possible. listed by the Minister. He said the Ministry of Kobulia and two other new ministers were nom- Economy will work together with Ministry of Agri- inated by the Prime Minister culture to help develop the agricultural industry last week. further. The PM noted that Kobulia has experience in the Kobulia underlined that Georgia is often referred development of the global economy and in the fi eld to as a logistics hub but noted that little has been of energy. He stated his confi dence that the new done to develop and use the full potential the coun- minister will be able to cope with the existing eco- try has in this sphere. nomic challenges in the country. Georgian Parliament Approves Reshuffl ed Cabinet

•Minister of Economy – Giorgi Kobulia; BY THEA MORRISON •Minister of Finance – Ivane Machavariani; •Minister of Environment Protection and Agri- culture – Levan Davitashvili; he Parliament of Georgia has supported •Foreign Affairs Minister– Davit Zalkaliani; the reshuffl ed cabinet of ministers with •Minister of Internal Affairs – ; 101 votes in favor to 12 against. •Minister of Internally Displaced Persons from This is the second time the govern- the Occupied Territories, Labor, Health and Social ment confi rmed the governmental Protection – ; compositionT in one month, as the former Prime •Minister of Justice and Corrections – Thea Tsu- Minister resigned on July 13 and after the new gov- lukiani; ernment was approved, the current PM, Mamuka •Regional Development and Infrastructure Min- Bakhtadze, launched structural changes which ister – Maia Tskitishvili; required a second vote for the ministers. •State Minister for Reconciliation and Civic Equal- The fi nal composition of the government is as ity – Ketevan Tsikhelashvili. follows: The parliamentary opposition parties did not vote •Defense Minister – ; for the new cabinet. •Minister of Education, Science, Culture, and Ruling (GD) has 116 MPs out of Sport – ; total 150 seats in the legislative body.

GEORGIA TODAY 4 BUSINESS JULY 17 - 19, 2018

Average Hotel Prices in Georgia and Hotel Price Index (June 2018)

n Georgia, the average cost of a Javakheti-GEL 330. In June 2018, the HOTEL PRICE INDEX room1 in a 3-star hotel was GEL average cost of a room in a guesthouse2 In June 2018, the hotel price index3 143 per night in June 2018. The in Georgia was GEL 73 per night. The increased by 8.6% compared to May most expensive 3-star hotels in highest daily rates for guesthouses were 2018. June in Georgia were in Samegrelo- found in Kvemo Kartli -148 GEL, Guria The daily rates for standard double ZemoI Svaneti -164 GEL, Tbilisi -153 GEL – 141 GEL and Adjara – 82 GEL. The hotel rooms increased mostly in Adjara and Adjara -150 GEL. The cheapest 3-star cheapest guesthouses in June in Georgia – 29.1% and Guria – 16.6%. Such price hotels in June in Georgia were found in were found in Shida Kartli – 56 GEL, increases in Adjara and Guria were due Kvemo Kartli- 89 GEL, Imereti – 103 GEL Imereti – 59 GEL and Kakheti – 61 GEL. to the hotel price increases in Batumi, and Guria – 120 GEL. In terms of apartments, on Airbnb in Kobuleti and Ureki. The average cost of a room in a 4-star Georgia the average cost of an apart- In June 2018, compared to May, the Table 1: Percentage change of prices in April 2018 over March 2018 hotel in Georgia in June 2018 was GEL ment in June was US$37. On Airbnb in daily rates decreased only in Shida Kar- The 3-star, 4-star and 5-star hotel price index increased by 10.6% in June 2018 247 per night. The most expensive 4-star Georgia among self-governing cities tli and Racha, correspondingly by 8.5% compared to May 2018. In these types of hotels, the highest price increases were hotels for this month were found in the highest average cost of an apartment and 2.3%. recorded in Adjara – 36% and Guria – 32.8%. The hotel price decrease was not recorded in any of the regions. In Tbilisi the prices for standard double hotel rooms Tbilisi – 268 GEL, Samtskhe-Javakheti in June was recorded in Batumi-US$51 In Tbilisi the hotel prices only increased only increased by 0.4% compared to the previous month. – 257 GEL and Kakheti – 231 GEL. The (125 GEL), followed by Tbilisi-$42 (103 by 0.3%. For guesthouses, the price index increased by 5.8% in June 2018 compared to May cheapest 4-star hotels in June in Geor- GEL), Poti-$41 (101 GEL), Kutaisi-$24 The increase of hotel prices in Geor- 2018. In this type of accommodation, like 3, 4 and 5 star hotels, the biggest gia were in Samegrelo-Zemo Svaneti (59 GEL) and -$23 (57 GEL). gia may be linked with the increased percentage price increase for standard double rooms were recorded in Adjara and – 173 GEL, Imereti – 197 GEL and Mst- According to Airbnb, in June, in Batumi, number of international travelers. The Guria, correspondingly 20.2% and 13.3%. In these type of accommodation the prices kheta-Mtianeti – 219 GEL. Tbilisi and Kutaisi the average cost of number of international travelers in decreased in four regions. The hotel prices decreased mostly in Shida Kartli region, by 8.5%. In Tbilisi the prices for guesthouses decreased only by 0.4%. The average cost of a room in a 5-star an apartment (Batumi- 125 GEL, Kutaisi- June compared to May increased by hotel in Georgia in June 2018 was GEL 59 GEL, Tbilisi – 103 GEL) were less 14.9%, and of these international trave- 403 per night. In Tbilisi, the average than average cost of a room in a 3* hotel lers, the proportion who stayed in Geor- price was GEL 522, followed by Kakheti- (Batumi -152 GEL, Kutaisi – 104 GEL, gia for 24 hours or more (classifi ed as 462 GEL, Adjara – 359 GEL and Samtskhe- Tbilisi – 153 GEL). tourists) increased by 11.4%4.

1 The results are based on the surveying of standard double hotel room prices of 3, 4, 5-star hotels and guesthouses in 10 regions of Georgia. Hotels were chosen arbitrarily according to random sampling principle. The study contains 71% (312) of all 3, 4 and 5-star hotels and 25% (456 guesthouses) of all guesthouses registered on www. booking.com The 3, 4 and 5-star hotel price data was collected by contacting hotels individually, while the prices of guesthouses were taken from booking.com. The average prices are arithmetic mean of standard double hotel room prices. 2 Guesthouse: a type of accommodation that is characterized by having a small number of rooms and services are usually offered by the resident family. 3 The calculation of the hotel price index is based on the recommendations given by the International Monetary Fund (IMF). The elementary aggregate price index is calculated by Jevons index (Consumer Price Index Manual-Theory and Practice (2004), Practical Guide to Producing Consumer Price Indices (2009)). 4 According to the Georgian National Tourism Administration, in June 2018, 727,385 international travelers visited Georgia. Of these, 399,989travelers stayed in Georgia Graph 1: In the graph, average prices for standard double rooms in 3 and 4-star hotels and guesthouses are given by region. 5-star for 24 hours or more. In May 2018, the number of international travelers was hotel prices are provided below. 633,086, of whom 359,744 travelers stayed in Georgia for 24 hours or more. SUBSCRIBE!

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[email protected] +995 32 229 59 19  Tel: (995 32) 2 45 08 08 10 Galaktion Street E-mail: [email protected] GEORGIA TODAY JULY 17 - 19 2018 BUSINESS 5 Batiashvili’s New Plans for Georgian Education

BY SAMANTHA GUTHRIE

ikheil Batiashvili was recently appointed as Georgia’s new Min- ister of Education, Science, Cul- ture, and Sport. According to Prime Minister Mamuka Bakhtadze, MBatiashvili is a “very prominent fi gure in our pro- cessional community” – the two worked together when Bakhtadze was head of Georgian Railways and Batiashvili was rector of the Business and Technology University, which he helped to found. He has spent several years as a member of the Strategic and Competitiveness Institute at the Har- vard Business School network, said Bakhtadze, and has signifi cant experience in the fi eld of education and technology. Batiashvili has faced criticism in the Georgian media and particularly on social media for state- ments that were seen as overly vague and using doublespeak. His fi rst public remarks came quickly after his appointment, however, and the ministry Batiashvili has made statements on several spe- energy, our position is that we should satisfy the of Tbilisi’s Business and Technology University he now heads is a recent creation, combining the cifi c programs, mainly in the fi eld of education. highest standards. We should not have controlling was ‘Silicon Valley,’ a public research, business and former Ministry of Education and Science with The new minister insists that the government bodies that frighten universities. We should be development center near Turtle Lake. “The mis- elements of the former Ministry of Sport and Youth should not only supervise the quality of national oriented on assistance, development and promo- sion of Silicon Valley Tbilisi is to become a regional Affairs and the former Ministry of Culture and education from a distance but be an active sup- tion to reach European standards.” educational hub that will meet the educational Monument Protection. With several areas of respon- porter and standards-setter. He wants Georgian Also speaking to Parliament last week, Batiashvili needs to be competitive in the global market. Our sibility in his purview, it is not yet clear what universities to attract more foreign students by emphasized the importance of involving Georgian objective is to train highly qualifi ed professionals Batiashvili’s positions will be on most topics. offering programs that are consistent with Euro- scientists in more international research. and to give them a chance to be hired by leading Bakhtadze has offered strong support for Batiash- pean standards. “Georgia should transform itself On July 13, Batiashvili spoke out about technol- international companies, without leaving Georgia,” vili and his ability to execute government plans for into a regional center of education,” said Batiash- ogy in the classroom, saying “we should not fi ght said Batiashvili in September 2016, ahead of the the future of education in Georgia. “We plan to vili, “We should offer almost all types of education smart phones and tablets in schools: we should use center’s opening. implement a 5-level reform that involves the inte- programs to foreign students, who are important them for education.” He plans to focus on “the The new Ministry of Education also plans to gration of preschool education, school education, for the country’s foreign image as well as for the concept of digital school,” which would encourage change the funding mechanisms for students. The vocational education, higher education and science, state economy.” classrooms to integrate electronic devices and new structure “will not be attached to the current the introduction of innovative education systems, Speaking of his reform plans to Parliament, technology into the curriculum and utilize diverse system. It will be based on a different system con- and more importantly, the deepening of close ties Batiashvili said, “In terms of the authorization- resources, including videos and computer programs. sisting of various criteria. World Bank experts are between education and economics. I am sure accreditation of universities, we should orient Batiashvili has long promoted STEM (science, involved in this reform. We’ll introduce it in Sep- Mikheil Batiashvili will be able to implement these towards European standards. Despite diffi culties, technology, engineering, and math) development tember,” Batiashvili said yesterday at an extraor- very important reforms,” said Bakhtadze. a protracted process, and a huge expenditure of in Georgia. One of his landmark projects as rector dinary session of Parliament. Georgia Advances Position in Global Innovation Index 2018

Photo source: tbilisilocalguide.com World Business, a British magazine. The GII is BY THEA MORRISON commonly used by corporate and government offi - cials to compare countries by their level of innova- tion. eorgia has advanced its position in The GII is computed by taking a simple average the Global Innovation Index 2018 and of the scores in two sub-indices, the Innovation was ranked the 59th position out of Input Index and Innovation Output Index, which a total 126 countries, which is a 9-point are composed of fi ve and two pillars respectively. improvement compared to the same Each of these pillars describes an attribute of inno- Gindex in 2017. vation, and comprises up to fi ve indicators, their The Global Innovation Index is an annual rank- score calculated by the weighted average method. ing of countries by their capacity for, and success Georgia’s scores in each indicator are: in, innovation. It is published by Cornell University, Output rank – 62, Input rank – 53, Institutions – INSEAD, and the World Intellectual Property 39, Human capital and research – 67, Infrastructure Organization, in partnership with other organiza- – 71, Market sophistication – 39, Business sophis- tions and institutions, and is based on both subjec- tication – 91, Knowledge and technology outputs tive and objective data derived from several sources, – 57, Creative outputs – 73. including the International Telecommunication The top 10 list is headed by Switzerland, the Neth- Union, the World Bank and the World Economic erlands, Sweden, the United Kingdom, Singapore, Forum. the United States, Finland, Denmark, Germany and The index was started in 2007 by INSEAD and Ireland. GEORGIA TODAY 6 BUSINESS JULY 17 - 19, 2018 The Highest Interest Rate on the Market & Deposit Porting at Terabank

s the fi rst offer on the Georgian bank- ing market with the highest interest rate and deposit porting A– Terabank is starting a new deposit promotion. Our new promotion offers cus- tomers the opportunity to open up deposits at the highest interest rate available locally. These terms are valid for two Terabank prod- ucts: Term Deposit and Deposit Certifi cate. Moreover, the promotion includes a further novel offer: deposit porting that allows cus- tomers to port deposits to Tera- bank without any fi nancial loss. For those term deposits opened in 2018, any interest that consum- ers will lose due to a violation of their deposit terms will be cov- ered entirely by Terabank. Deposit porting is something completely new on the Georgian banking market. “The offer will give customers a chance to be more fl exible, port to Terabank without any obstacles or losses and receive the highest interest rate on their deposit opened as a part of this new promotion,” explains Keti Mghebrishvili, Head of Terabank’s Retail Banking Divi- sion. Deposits are one of the most important and successful direc- tions for Terabank. According to 2017 fi nancial data, the increase in the bank’s retail deposit amounted to GEL 61 million (42%). GEORGIA TODAY JULY 17 - 19 2018 BUSINESS 7 Despite Russia- Georgia Economic Contacts, Relations Will Remain Strained

Image source: wcastl.org

BY EMIL AVDALIANI

n December 2017, Tbilisi signed a contract with a Swiss company, known by its acro- nym, SGS, to monitor the and The freight’s annual Samachablo (the so-called ) trade corridor, one provision of the 2011 deal. value ranges from $7 IIn late May 2018, Moscow followed suit. The ini- tiative involves linking Russia and Georgia via a to $15 million trade corridor through South Ossetia, a faster, wider and, in winter, safer route than the Kazbegi-Upper confl ict divide daily, in both directions. The freight’s Lars mountain pass over which most cargo between annual value ranges from $7 to $15 million, accord- the two countries travels today. ing to International Alert studies conducted in The agreement comes on the 10th anniversary of 2010-2015. the 2008 Russia-Georgia war and after almost three The new trade route initiatives are clear, but there decades of separatist confl icts in the regions of are many problems, among them the unwillingness Abkhazia and Samachablo. Despite geopolitical on the part of any interested parties to compromise differences between Russia and Georgia, trade the territories’ political status. Moreover, as will between the breakaway territories and the rest of be shown below, differences between Tbilisi and Georgia has in fact increased. Even the European Moscow are in fact so wide that any fundamental Union has begun testing options for opening the progress in bilateral relations will be unlikely to free trade agreement it has with Georgia to Abkhaz follow. businesses. In some respects, the agreement on trade corri- GEORGIA-RUSSIA: A BIRD’S EYE VIEW dors would be benefi cial for Samachablo, the Rus- This economic activity might be taken as a sign sians and, most notably, Armenia, which has only of gradual improvement in the bilateral relations one access route to Russia through the Georgian of Georgia and Russia. However, when compared territory would likely enjoy some economic divi- with the geopolitical constrains hindering any dends. improvement, it is clear that Moscow and Tbilisi Trade has been rising since 2015 at the only cross- share some fundamental differences in foreign ing for motor vehicles between Samachablo and policy. Georgia proper, connecting Akhalgori to the Georgia’s intention to integrate into the EU and Mtskheta-Mtianeti region of Georgia. In 2017, trade NATO goes against Russian interests. I have writ- increased: and a large number of trucks passing ten before that for Russia, Georgia’s NATO aspira- through became common. An average of 20 trucks tions are problematic, but integration into the EU per day passed through the checkpoint to deliver is far more crucial and long-term for Russian deci- goods from Tbilisi to the breakaway territory mar- sion-makers. kets. Georgian commodities, despite costing 2-3 Russians fear that there is a defi nite shift among times the price in Samachablo, are nevertheless the Georgians towards the benefi ts of the European much cheaper in comparison with products imported economy, education and military capabilities. from Russia. Just to give approximate numbers for Tbilisi and Moscow might sincerely wish to ongoing trade: 1,500 tons of cargo reach Akhalgori improve bilateral relations, and there are reasons per month. for this. The resolution of security issues in the As to the Abkhaz side, according to the Abkhaz light of terrorist activities in the region would ben- authorities, 150 tons of commercial cargo cross the efi t both countries. Economic prospects, as noted in the beginning, too might drive the countries to work more closely. However, beyond that, it gets diffi cult to ascertain any additional factors for cooperation. Russia’s military strategy does not have any room for Georgia’s NATO/EU integration. Moscow wants Tbilisi to reverse the course of its foreign policy – a nearly impossible task for any Georgian gov- 150 tons of ernment as it would result in a public backlash, strong European and US reactions and overall commercial cargo geopolitical ramifi cation in the region. Thus, economic cooperation is important, but cross the confl ict divide not so crucial as to cause Georgian-Russian rela- daily tions to improve signifi cantly. GEORGIA TODAY 8 BUSINESS JULY 17 - 19, 2018 Georgian Brand ‘Gepherrini’ Opens Store in Hong-Kong

Source: Enterprise Georgia and, from now on, customers will be able to pur- BY ANNA ZHVANIA chase Georgian leather handbags from Gepherrini there. Within the framework of Enterprise Georgia, eorgian handbag and accessories Gepherrini participated in an international exhibi- brand ‘Gepherrini’ has unveiled a new tion APLF in Hong-Kong. During the exhibition, store in Hong-Kong. company representatives established contacts and With the support of the Ministry of raised interest among international buyers. As a Economic and Sustainable Develop- result, Gepherrini signed a contract with InterBlock Gment’s Agency ‘Enterprise Georgia’, Georgian Hong Kong Limited, which offered to export Gep- leather bag manufacturer ‘Gepherrini’ has opened herrini products to Hong-Kong. a store in the most prestigious retail center ‘Harbor Gepherrini’ founded in 2014, is one of the fastest- City’ in Hong-Kong. growing leather handbag brands. It is renowned Harbor City is a large shopping mall in Hong- as a high-end and top quality leather handbag Kong and is owned by a chain of offi ce blocks and manufacturer adding a refi ned lady-like appeal to hotels. The mall features various branded boutiques any outfi t.

Winery By & For Women Gets EU Support

Photo: Madamwine, Facebook varieties. The For Women line gives its blends fun BY SAMANTHA GUTHRIE names such as “Lovely woman,” a semi-sweet red, “Coquette,” a semi-dry red, and “Housewife,” a dry red. adamwine is a Georgian wine The enterprise is supported in part by EU4Busi- venture created by female entre- ness, an EU initiative which boosts the growth of preneurs. It is the fi rst winery in small and medium-sized businesses by improving Georgia that is entirely created their access to fi nancing and new markets. The and run by women. The company initiative targets female entrepreneurs and projects boastsM that its founder, managers, wine technical in green energy. The winery plans to broaden its specialists, and all its employees are women. online marketing strategies with the support of Madamwine was founded in 2010 by Manana EU4Business. Akhvlediani with the mission to create products Madamwine describes itself as a “company which for women. Their website puts a decidedly feminist tries to provide the Georgian wine to the whole foot forward, reading, “research shows [that] the world, seen by eyes of the Georgian women. Plans role of women today has increased much in all are big, beautiful and endless, like the female phe- spheres. It is well-known around the world that nomenon.” women are considered the best winemakers (enol- EU4Business explains that as Madamwine is a ogists). However Georgian people, in many centu- small company, it does not have its own produc- ries and years, thought that this job is only for men tion line, but has taken part in many domestic and and there is only men’s prerogative to create alco- international exhibitions. The company has exported holic beverages. [Madamwine] dared to break this its wines to South Korea, Japan and Hong-Kong. stereotype.” The winery’s core is a group of women The company is focusing on online marketing to united by their love of winemaking and “whose attract new customers and international investors. nature is similar to this divine drink.” Madamwine EU4Business gave the winery fi nancial support draws similarities between wine and women, see- and connected them with a leading IT advisory ing in both “a coquetry, playfulness, fun, severity fi rm to develop its concept and website design, and and mysteriousness.” Madamwine has two product to integrate social media channels. lines, Traditional and For Women, both of which Akhvlediani has further plans to build a winery produce wines using traditional Georgian grape and actively participate in wine tourism.

GEORGIA TODAY 10 BUSINESS JULY 17 - 19, 2018

French Institute in Georgia on Developing Georgian fusion restaurant "Meama" with an authentic taste tradition! Partnerships Adress: 8 Dzmebi Zdanevichebi str. Tbilisi what is being done for peace in Georgia. Further- Mob: 558 31 11 33 EXCLUSIVE INTERVIEW BY more, we try to inform people in Georgia about ANTOINE DEWAEST this event. Last, the Institut Français must fi nd EUR 4.5 billion from sponsors all around the world.

he Institut Français in Georgia (IFG) DESCRIBE A TYPICAL IFG STUDENT fi rst opened its doors to students in A large majority of our students want to study 2002. If we take a closer look at it, this abroad, in French Universities, in particular Sci- is a win-win relationship: a way to ences Po (Political Sciences), but there are also enhance the French infl uence in the students who aim to get involved in business man- CaucasusT but also an opportunity for Georgians to agement. Others learn French for Tourism or just increase their cultural and linguistic background. because of a real love of the French language. They GEORGIA TODAY met with Cécile Fagegaltier, can start the courses here when they are three years the Secretary-General of the IFG, who agreed to old, but the majority are between 10 and 35. Learn- answer to our questions. ing French at the Institut Français can be really useful. They can then study in France, and if they IS THE IFG A RELAY OF THE apply to a Master’s there, they will be able to do FRENCH EMBASSY? an internship provided by the French Ministry of Of course. The IFG is a French Institution with Foreign Affairs. Financial Autonomy under the control of the French Embassy, formerly known as Alliance Française TELL US ABOUT THE COURSES (until 2002). We are funded by the Ministry of The IFG is based on the European framework. Hav- Foreign Affairs. Each year, 900 students go through ing a Diploma for life, which allows you to study our Institute and some pass the DELF, a diploma in France, requires a B2 level knowledge of French. of French language studies. With this diploma, On average, you need 4 years of courses here to students can apply to French Universities. get that. For three classes each week over two months, it’s not so expensive, only 390 Lari. More- TELL US ABOUT THE FRANCOPHILIA HERE over, each year we deliver around 20 scholarships The relationship is old and strong. France hosted in order to enhance student mobility. On May 26, refugees from Georgia during the second world Jean-Yves Le Drian ratifi ed a partnership between war. The exiled government was located in Neu- six French universities and some Georgian univer- ville-sur-Orge, and near it there are plans to build sities. This partnership focuses on the food indus- a Georgian cultural center. In addition, the Geor- try, agriculture, digital, tourism and wine studies. gian national treasure was hidden in France in order In September, we’ll start the fi rst: Tourism. We are to avoid soviet looting. Alexandre Dumas wrote a confi dent, because for four years the number of book about Georgia and the Caucasus in the mid- Georgian students in France has grown by 35% 19th century. And in 2008, France supported Geor- (around 650 currently). We are also proud of the gia against Russia. French Media Library we have in Tbilisi, among the best ways to connect the Georgian and French WHAT ARE THE MISSIONS OF THE IFG? people. According to the agreement of objectives 2018-2019, the IFG aims to enhance the attractive and above IS THE IFG WELL-ESTABLISHED all innovative image of France. That is the fi rst IN GEORGIA? objective, working on excellence, innovation and Yes, it is. We go to local events, even if the cultural the digital. This will is embodied by the Night of budget is down. Most events are audio-visual Ideas ('La Nuit des idées') which aims to celebrate because Georgia is full of good cinema directors, the stream of ideas between countries, cultures, and each year some Georgian directors come to topics and generations. Another example will be the Festival de Cannes, the Prométhée Festival and the Paris Peace Forum (Paris, November, 11-12-13, the Festival of Annecy. France is also working with 2018) of which the Institut Français is a founding Georgia to help it get back its old movies from member. So, the fi rst goal, putting Paris at the heart Russia, but for that, Georgia needs infrastructure of international diplomacy. and knowledge to keep them in good condition. But, I think we should be more involved as many WHAT ROLE WILL THE INSITUT people do not know who we are. FRANÇAIS EN GÉORGIE PLAY AT THE PARIS PEACE FORUM? Find the IFG at 75 Davit Aghmashenebeli Ave, Tbilisi We are looking for Georgian speakers to discuss and https://institutfrancais.ge/fr/ GEORGIA TODAY JULY 17 - 19 2018 SOCIETY 11 Russia, US Try to Revive Relations

in Kyiv and Tbilisi fear their countries’ BY SHAWN WAYNE core geopolitical interests could poten- tially be compromised in an apparent Russo-American rapprochement. S lawmakers visited Rus- Yet, there is substance behind the need sia this week in what is for Russia-US cooperation. Both coun- considered a mission to tries want improvement in relations help revive the much- primarily in the realms of Syria and worsened Russian-US . It is in Russian interests to gain Urelations. The senators also aimed to some (even minor) geopolitical conces- observe how Russia's economy has been sions from Washington at a time when doing after four years of Western sanc- the Western front has remained pretty tions. The main meeting took place with much united against the Russian actions Russia’s Foreign Affairs Minister, Sergey in Ukraine since 2014. Lavrov, on July 3. However, the intention behind the Rus- The senators’ visit in itself is important sian diplomatic moves (although the as rarely have such events taken place idea of senators’ visit seems to have in the last several years. However, what originated from the US) is based on the makes this nascent Moscow-Washington Russian strategy of trying to divide the cooperation more crucial is the sequence Western opposition. Indeed, the time of events leading up to the July 3 meet- seems to be ripe for those efforts to suc- ing as the visit comes at the time both ceed. The transatlantic alliance between countries are preparing for the Trump- the US and the European Union has been Putin summit on July 16 in Helsinki, strained recently with the US pulling Finland. out of the Iran nuclear agreement and The presidents are expected to discuss heaping additional taxes on European a whole range of problematic issues steel and aluminum. concerning the two states across the Moscow clearly sees that dangers to Europe. Yet, even if this happens, from at bay. Europe understands that without It is for the moment unclear what Mos- Eurasian landmass. Russia and the United Western unity are apparent, but it is still a broader perspective, the EU will still the US’ military resolve in eastern Europe, cow and the US are hoping for in trying States have also agreed that their top unclear what will come of these US-EU hold important leverage in Ukraine as Ukraine’s military capabilities are unlikely to revive the bilateral relations. There diplomats will meet after the presiden- economic and diplomatic confrontations. Kyiv remains fi rmly under the European to improve, making Moscow less hesitant are simply so many fronts where both tial summit, the Russian FM said. True, for Moscow it will be a big oppor- economic infl uence. in its actions on its borderlands. countries’ geopolitical agendas clash This follows Trump’s recent consistent tunity to grab, but the maximum the The EU-US disagreements are impor- The same goes for Georgia. In Tbilisi’s that any prospective cooperation would rhetoric that Russia must be readmitted Russian leadership can hope for is the tant, but for the moment not so much as understanding, any meandering on the need a clear concession from either the to the G8 and the relations be improved. (partial) lifting of EU sanctions as well to cause real fractures in the trans-Atlan- Western part would near geopolitical Russians or the Americans. The Trump- Quite naturally, Ukraine and Georgia as minor concessions in the fi eld of the tic partnership. Europe and the US see concessions and the increase of Russian Putin summit is expected to bring more have become worried, as top politicians NATO military build-up in eastern that they need each other to keep Russia infl uence. clarity to the discussion. 200,000 Children Born to Georgian Emigrant Families Since 1990

on-year to reach 10,465. Eurostat reported BY SAMANTHA GUTHRIE that 4,970 Georgians requested asylum in the European Union in the fi rst quar- ter of 2018. he Georgian organization In the midst of Europe’s migration cri- Demographic Revival Foun- sis, the increase was seen quite unfa- dation has released a report vorably. In February, German Foreign that estimates that since Minister Thomas de Maizière warned 1990, approximately the Georgian government that if the fl ow T200,000 children have been born into of asylum seekers continued at that pace, Georgian emigrant families, as reported they would be forced to consider rein- by Commersant.ge. stating visa requirements. At that time, The fi gure is based on demographers’ Dorota Dlouchy-Suliga of the EU Del- calculations: offi cial fi gures are not par- egation in Tbilisi was not worried, tell- ticularly reliable, as they do not account ing EurasiaNet, “In the past, we have had for the signifi cant numbers of undocu- a similar experience with the Balkan mented Georgian emigrants living in countries. There was a bump at fi rst...we Europe and North America. hope that the number of applications Tamar Chubinidze, head of the Demo- from Georgia will go down.” graphic Revival Foundation, explains The predication was realized, as 2018 that most children born abroad to Geor- has seen decreasing numbers of asylum gian citizens will not return to their fam- seekers each month. Germany’s Federal ily’s historic homeland, instead building Offi ce for Migration and Refugees reports a life in the country of their birth. that in January 2018, there were 745 asy- "This is a serious loss for Georgia,” pora is particularly notable. The global cultural homes and pan-Armenian organ- established in March 2017, has a signifi - lum applications fi led by Georgians in says Chubinidze, “The children of Geor- Armenian community numbers approx- izations.” The Armenian Diaspora Min- cant downside. She claims that the num- Germany, while in February there were gians who were born abroad, show inter- imately 10 million, while the domestic istry was established in 2008. ber of emigrants from Georgia to Europe only 595, March 490, April 350 and in est in their historical homeland, but as population is under 3 million. The web- An Offi ce of the State Minister of Geor- is four times higher than before the May just 221. guests only. We can only hope that as site of the President of Armenia writes gia for Diaspora Issues was also estab- regime came into effect. Nine countries in the European Union the borders are opened, the attractive- that “there are Armenian communities lished in 2008, but it was dissolved and In the fi nal quarter of 2017, more Geor- have granted Georgia the status of ‘safe ness of Georgia will grow, and at least in more than 100 countries all over the its duties absorbed by the Ministry of gians citizens applied for asylum in country’ from which no asylum applica- some of them will come to live here.” world” and that “Armenians of the Dias- Foreign Affairs in late 2016, although the Europe than from any other former Soviet tions are accepted. These countries are Similar patterns are seen in many coun- pora are mainly involved with issues website is still active, if outdated. state. The European Asylum Support Ireland, Luxemburg, Belgium, Nether- tries, including in other former Soviet concerning preservation of the national Chubinidze warns that Georgia’s visa- Offi ce reported that the number of Geor- lands, France, Bulgaria, Lichtenstein, states. The case of the Armenian dias- identity; they establish schools, churches, free regime with the European Union, gian asylum seekers increased 39% year- Austria and Iceland.

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