Investor.A MAGAZINE OF THE AMERICAN CHAMBER OF COMMERCE IN GEORGIA ge
ISSUE 28 AUG.-SEP. 2012
Iran Sanctions
Hiring Local
Tax Courts in Georgia?
To Kutaisi... And Beyond
Investor.ge
Investor.ge CONTENT
Investment/ 17 Q and A with… Nino Development Zambakhidze 6 Investments in Brief Investor.ge spoke with A brief synopsis of Nino Zambakhidze, a new investments and winner of the Mercury business news. Award in 2011, about innovations in 8 Ambassador John agriculture. Bass, Goodbye and Good luck! 18 Tax Court: An Easier A small tribute to Way to Regulate Tax Ambassador John Bass Claims as he ends his tour in Kakha Kokhreidze, the Georgia. Vice President of the Georgian Small and 10 Twenty Billion Lari Medium Enterprises in Four Years: The Association (GSMEA), 34 Get Away! Where to government’s new analyzes the tax economic program dispute resolution in Go on the Weekend A brief overview to the Georgia compared with new prime minister’s international practices. economic development plan. 21 Business Optimism and Resulting 12 Giorgi Pertaia: $4 Decision Making 25 Big Sports, Big 34 Get Away! Where to billion in FDI in Four Around the world, the Events, Big Profits? Go on the Weekend Years year 2012 started with Sports are big business, Whether you are short Newly appointed Giorgi businesses confidence and, so the logic on money or short Pertaia spoke with on a knife edge. goes, sporting events on time, Georgia has Investor.ge about his Now, six months into attract big business: plenty to see and do on plans for the Georgian the year, there is a countries and cities the weekend. Investment Agency. glimmer of hope for across the globe – not the global economy to mention businesses 38 Ten Things You 14 Iran Sanctions: A as business investment – invest billions in Didn’t Know About… Cheat Sheet for picks up. A report from sporting events and Aghmashenebeli Business GrantThorton. merchandise. But are Avenue A cheat sheet to the the sporting events In the race to see U.S. sanctions on 23 Georgia’s Workforce worth the cost? Georgia, there is a commercial relations Going Local tendency to forget with Iran. International Tourism Tbilisi. Like any small organizations are 30 Kutaisi Airport, the city, Tbilisi is full of 14 Georgian Banks phasing out foreign Tip of the Tourist colorful neighborhoods Flexing Lending hires, replacing them Boom? and, over the next Muscle with locals – a sign that Can the Kutaisi airport several issues, Investor. Georgian banks are Georgia’s local talent kick start tourism in the ge will (re)introduce you seeing high growth in pool is improving. regions? to their charms. loan portfolios, capping a two year growth spurt, reports bne.eu.
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AmCham Georgia Patron Members:
© The American Chamber of Investor.ge Commerce in Georgia, 2011 All rights reserved. No part of this magazine may be re-printed, or reproduced or utilized in any form or by electronic, AmCham Executive Director George Welton mechanical or other means now known or hereafter invented, including photocopying Editor in Chief Molly Corso and recording, or in any information Copy Editor Kate Davies storage or retrieval system without permission. Marketing & Promotion Salome Tkeshelashvili The opinions expressed in this magazine Promotional Design Levan Baratashvili do not refl ect the opinion of the American Chamber of Commerce in Georgia nor its Magazine Design and Layout Giorgi Megrelishvili Board Members or staff, unless otherwise Writers Avtandil Chedia, Nick Clayton, Molly Corso, stated. AmCham Georgia neither endorses, Maia Edilashvili, Kakha Kokhreidze,Ernest nor can be held liable for any eventuality Petrosyan and Nelson Petrosyan arising from the use of any product or
service advertised within the pages of this Photographs Molly Corso, Davit Khizanishvili, issue. Vladimir Valishvili Investor.ge is printed by CEZANNE
AmCham Georgia Special thanks to the AmCham Editorial Board, and the AmCham staff. 36a Lado Asatiani Street, 3rd fl oor Tel: 2 22-69-07 [email protected] [email protected], www.amcham.ge www.investor.ge
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of reforms targeting competitiveness and ski resort. The deal is part of an agreement Investment inclusive growth. between the Austrian government and the The program focuses on three areas: bank. “Goderdzi Pass” is slated to open by improving competitiveness in trade, market the end of 2012. in Brief exports, and education; increasing transpar- ency in public fi nance and accountability; Investments in Adjara Increase and strengthening health care and social 14 percent services. From January to June, $63.8 million was invested in Adjara, a 14 percent in- Georgian Railway $500 million crease over the same period last year, BPI. Bond Emission ge reported on July 2. AVTANDIL CHEDIA JSC “Georgian Railway” listed a $500 More than half of the investments million, ten year bond on the London Stock were in new construction projects; the rest, China Business Group to Invest Exchange.The bond was priced at 99.998 tourism-related. $450 million in Tbilisi Projects percent to yield 7.75 percent, with the sale On July 8, Hualing Group presented the organized by Bank of America Merrill Georgia received € 500 Hualing Special Economic Zone at Tbilisi Lynch, JP Morgan, and Goldman Sachs. thousand for Ecotourism Sea, which will provide accommodation Development for the Tbilisi 2015 Summer Youth Olym- Chinese Grant for Georgian The World Tourism Association allo- pics. The project also includes a market, Agriculture Development cated € 500 thousand for new eco-tourism industrial and storage areas, customs, a The Chinese government will spend developments showcasing biodiversity commercial district, a residential complex, $9.5 million as part of an “Economic and in Lagodekhi, Vashlovani, Mtirala and and recreational and entertainment zones. Technical Cooperation” signed on July Kolkheti national parks. Hualing Group plans to invest $150 million 10 between the Chinese and Georgian The project budget is fi nanced by the in the fi rst stage, with investments increas- governments. federal ministries of the German environ- ing to $350 million over the next two years. The funds will be spent on agricultural mental protection, nature conservation and In addition, the Xinjiang-based Hualing development according to the Ministry of nuclear safety. Industry & Trade Group bought a 90 per- Agriculture. This is the second such grant cent stake in the “BasisBank” in June and from the Chinese government. New Hotel Kabadoni in plans to invest $100 million in the bank’s Sighnaghi Opens in August development. “Hualing Group” has been The United States and Georgia The boutique-style hotel will include an investor in the Georgian market since signed a grant a spa center, fi tness hall, swimming pool. 2006, with interests in the timber, mining, The United States and Georgia signed The hotel, a $5 million investment, is part and processing industries. a $2.7 million grant for the planning of of the “International Network of Hotels.” educational programs as part of Georgia’s World Bank allocated $60 bid for a second Millennium Compact. Israeli Investing in Georgian million to support economic Hotels growth in Georgia Austrian Bank to Finance New Israeli investors plan to build ART World Bank approved a $60 million Resort in Adjara region Hotel and Rixos Hotel, with a total of 500 Competitiveness and Growth Development Austrian bank “UniCredit Bank Aus- hotel rooms, according to an announcement Policy Operation (CG DPO) for Georgia in tria AG” will provide €10.93 million in by the Georgian National Tourism Agency July. The funds will be the fi rst in a series interest-free fi nancing for “Goderdzi Pass” on July 11.
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Ambassador John Bass, Goodbye and Good luck!
I want to thank US Ambassador John R. Bass for his support to AmCham and to the community. He has been a strong advocate for the principles of democracy and free-market economy that are essential to our collective success. We are sorry to see Ambassador Bass and his wife, Holly Holzer Bass, depart Georgia this summer and wish them the very best in all their future endeavors. Respectfully yours,
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The voucher program is estimated Twenty Billion to cost 1.25 billion lari ($767 million), according to an interview with Minister Lari in Four of Finance Dimitri Gvindadze published Years: The by local media. government’s More Investment, More Jobs At the heart of the program is the new economic government’s strategy to tackle unem- ployment in Georgia. Offi cially, slightly program over 15 percent of the population is job- less; a recent survey published by the National Democratic Institute found that On June 4, Prime Minister Vano Merabishvili outlined the government’s new 36 percent of the population is actively four year economic program. Investor.ge is publishing an overview of the state’s spending plans and anticipated results. looking for work. When Merabishvili was appointed on June 30, a new state ministry for em- Billions for Development Georgian-grown goods overseas. ployment was also created – tasked with he government’s plan revolves The education program includes designing a plan to identify the country’s around four major issues: un- plans for a state-of-the-art technical uni- unemployed, and provide training and Temployment, rural development, versity in Batumi, as well as three new job placement programs. health care, and education. Prime Min- vocational schools in the country. There During his presentation to the par- ster Vano Merabishvili told parliament are also funds allocated for insurance for liament, Merabishvili predicted an ad- on July 4 that the government plans school children, and special internship ditional $4 billion in investment over to spend approximately 20 billion lari programs to help students obtain hands the next four years, money that will help ($12.2 billion) on all four sectors. on experience. Finally, plans to make create jobs. Also, an increase in tourism The largest cost to the budget will health insurance more accessible, and a is anticipated to employ an additional be for increasing pensions, which will new social program, are both estimated 140 thousand people, and road construc- require 6 billion lari – $3.68 billion – to cost the budget 3 billion lari ($1.84 tion projects will require an estimated 40 over the next four years. Plans to increase billion) a-piece. thousand people. pensions will bring monthly payments The health insurance program in- Other projects, including gasifi cation (including health insurance coverage) cludes plans to “stimulate” growth in the in villages and the process of creating a to $100 – one of President Mikheil Saa- health insurance industry, according to nationwide list of the unemployed, will kashvili’s election promises. MP Giorgi Kandelaki, and some effects also generate job opportunities outside Tied for second in the big ticket items will be nearly immediate: by September, of the capital. are the education program and rural de- 2.5 million families will have insurance. “There is no detailed information velopment – both calculated to cost tax One aspect of the social program, about the location of the unemployed payers 4 billion lari ($2.45 billion) each 1000 lari ($609) vouchers for every today, no data about who is looking for over the next four years. family, has garnered national attention as work, or about their qualifi cations. There Merabishvili told MPs, during his Merabishvili travels around the country is also a lack of systematic information presentation on July 4, that the rural to introduce the plan. about employers – and about what sort development program includes plans to Merabishvili told members of parlia- of qualifi ed work force they are looking cultivate some swamp land into good ment that the government’s plan to issue for,” Merabishvili was quoted as saying. farming soil, as well as to purchase new vouchers to every family in Georgia with “It is necessary to develop the regions tractors for villages and build more stor- provide them with “rainy day” funds that [outside of the capital] and create new age units to help farmers use modern can be spent on utilities, medicine, or jobs so the local population does not have techniques for packaging and exporting any other need over the next four years. to move to Tbilisi to fi nd work.”
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its strengths and its weaknesses.” One of his fi rst moves as director belies Pertaia’s close experience with businesses: he is creating a new service for investors once their new ventures get off the ground. “The big businesses can hire con- sultants but our experience shows they still need help with communication with the government and they still need help answering the questions the consultant cannot answer as quickly,” Pertaia said. “This will be a function to serve a small group of special investors and investors starting out…some people say it is much easier to start than to conduct a business and that is what we want to help with.” he newly independent Georgian In addition, the agency is forming Giorgi National Investment Agency closer ties with the government’s eq- T(GNIA) is on track to bring in uity fund, the Partnership Fund, to help Pertaia: an average of $4 billion in foreign di- streamline large investments. Newly rect investment (FDI) over the next four appointed Prime Minister Vano Merabsh- $4 billion in years, according to Giorgi Pertaia, its vili announced a four year, $4 billion goal new director. for FDI as part of his economic strategy. FDI in Four Pertaia, previously the country’s fi rst Under Bochorishvili, GNIA brought business ombudsman, was tapped to lead in nearly $1 billion in FDI in 2011, ac- Years the investment agency after former direc- cording to offi cial fi gures, and Pertaia tor Keti Bochorishvili was appointed as is confi dent the agency can build on its a deputy at the Ministry of Sustainable previous successes. Investor.ge spoke with Giorgi “We both know how Georgia is de- Pertaia, the newly appointed Development and Economy. head of the Georgian National Years working with the business veloping right now. We believe we can Investment Agency, about his community – Pertaia worked as a cus- do it,” he said, noting that Bochorishvili transition from tax payer advocate toms expert at AmCham before becom- was “very effi cient” and will continue to investment guru and how to ing a Muskie Scholar- will help ease to have a role in investment promotion attract $4 billion in foreign direct the transition from tax payer advocate to as one of three councils overseeing the investment in just four years. investment promotion, he said. agency under its new structure. “The mission of GNIA is to attract In July, along with Pertaia’s ap- FDI, in other words it is selling a product pointment, GNIA was separated from – Georgia. With its low taxes, special re- the economy ministry and put under the gimes, future trade deals with Europe… stewardship of a three person council. it is an attractive market for investors,” Now, in addition to Pertaia, the agency he said in a phone interview. is managed by three councils, lead by “My advantage is that over the past former Prime Minister Nika Gilauri (in years I have been working on the ground; his new role as head of the Partnership I know this project very well. I know the Fund), Bochorishvili, and Deputy Minis- exact strengths of the Georgian market – ter of Finance Kote Kintsurashvili.
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Georgian Banks Flexing Iran Sanctions: Lending Muscle A Cheat Sheet for Georgian banks are seeing high growth in loan portfolios, capping a two year growth spurt, reports bne.eu. Business
rom BusinessNewEurope: While the rest Investor.ge asked John Ashworth, the deputy chief of of the economy has struggled to match political and economic affairs and senior economic/ levels seen before the 2008 war and commercial officer at the U.S. Embassy in Tbilisi, F what businesses in Georgia should know about the fi nancial crisis, the banks have enjoyed steady latest wave of sanctions against dealings with Iranian growth since 2009 – unlike their counterparts in companies and banks. Europe and the US. A large demand for loans from both retail and commercial clients is the driving force behind the growth, notes Macca Ekizashvili, head of inves- he United States and the international community are tor relations at Bank of Georgia’s London offi ce. committed to preventing Iran from acquiring a nu- According to Ekizashvili, Georgia has a “Tclear weapon,” Ashworth said in an email interview. low loans/GDP ratio for the region, somewhere “The United States and our partners have implemented a num- around 30 percent of GDP, with household loans ber of sanction measures against Iran. Many of these are focused making up less than 10 percent of GDP. That on Iran’s energy and fi nancial sectors- two areas highlighted in leaves a lot of space for individuals and corpo- United Nations Security Council Resolution1929 as possible av- rates to borrow. Total loans by commercial banks enues used by Iran to fund its illicit nuclear activities.” increased 14 percent in June to 5.41 billion lari Sanctions include, but are not excluded to, some types of (€2.69bn), helping to make the banking sector transactions with the Central Bank of Iran (CBI), and transactions the third fastest growing sector in the fi rst quarter with “designated Iranian banks.” with 16.7 percent year-on-year growth. Providing goods and services to Iran’s energy and petrochemi- Bank of Georgia, the fi rst Georgian bank to cal sectors is also illegal under the sanctions. list on the London Stock Exchange, on July 9 “All of these sanctions come with signifi cant consequences raised $250 million by placing fi ve year Euro- for the businesses involved, including potentially being cut off bonds at 7.75 percent. Ekizashvili says the funds from the U.S. fi nancial system or from other interactions with the will help the bank continue to increase its loan United States,” he noted. portfolio. “The loan book has been increasing by The U.S. Treasury outlines specifi c categories of business deal- 20 percent for the past year,” she says. ings that are prohibited by the sanctions, including the conducting Deposits are up across the board for banks or facilitating of “any signifi cant transactions with a U.S.-desig- in Georgia, including for the country’s micro- nated Iranian fi nancial institution or with the CBI – whether for lenders. National Bank of Georgia data shows the purchase of petroleum or otherwise – unless the transaction is that micro-lending jumped 41% over the past for the sale of food, medicine, or medical devices to Iran.” year, from 241 million lari (€120m) in the fi rst Banks and other private fi nancial institutions in the United quarter of 2011 to 341 million lari (€170m) in States and abroad, including central banks or foreign state-owned the fi rst quarter of 2012. The jump is a strong or -controlled banks, “potentially face sanctions” if they are in- signal that lending demands have not been met volved in “signifi cant transactions” for the “purchase of Iranian in agriculture and small businesses, the target petroleum or petroleum products with a U.S.-designated Iranian audience for micro-fi nance institutions. fi nancial institution or with the CBI.” This brief was reprinted with permission from More information about the sanctions is available at: CISADA: bne.eu, a business news website and monthly The New U.S. Sanctions on Iran http://www.treasury.gov/resource- magazine. center/sanctions/Programs/Documents/CISADA_english.pdf.
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Five Questions with… Nino Zambakhidze
fi nancing grant from BP and its partners Q: Do you plan expansion? What’s Nino Zambakhidze is the owner Care International in the Caucasus for next on your agenda? of Georgian Business Zone (GBZ), $40 thousand (GBZ has invested $150 A: We purchased a plot to construct a a dairy processing plant and a mixed fodder producing factory in thousand in the project) to open a mixed hothouse with the ability to produce bio the village of Tsnisi in Akhaltsikhe fodder producing factory. Both plants gas. In addition, we will make an artifi - in South Georgia. Zambakhidze hold ISO quality certifi cates. cial lake to develop agro tourism around won Georgia’s National Business Q: How welcoming was the village our place… like a demonstration village. Award, the Mercury, in 2011 for when you appeared there? Do they [It would be] a training center both for her innovative work in agriculture. feel that they are benefi ting from these our farmers and others. There will be a Investor.ge spoke with her about how a woman from Tbilisi started a projects? two-week long practical course – start- dairy farm and what she is doing to A: We employ 25 people, all locals. ing from the very fi rst stage, when milk change the market. In addition, we have 350 benefi ciary is obtained from cows, to selling cheese farmers from eight villages, which pro- to consumers, and will include informa- MAIA EDILASHVILI vide the milk… Our diary plant was the tion about the sanitary-hygienic norms fi rst of its kind not only in Akhaltsikhe, necessary for the cows. Additionally, we Q: It’s unusual in Georgia that a but also in Georgia. will teach how to calculate cost price. women from Tbilisi launches a business The main problem with farmers is For instance, if you use bio gas instead in the agribusiness sector in a remote that they do not calculate expenditures of electricity, you will save money and village. when they produce something. Initially, then can use that money to buy better A: There is a funny story behind this they did not realize that it would be more pesticides or a better variety of potato. - I have a business partner in Tbilisi who benefi cial for them to sell milk to us It will be more like a social project- went fi shing, drank some alcohol, and rather than produce cheese domestically providing training for free. A farmer can’t felt like buying two cows. Not know- and sell it. The salary at the plants ranges afford to travel overseas. I spent months ing what to do with them, we had to between 250 lari and 300 lari monthly, living in various countries, including purchase a small [piece of land]. In 2008, while farmers selling milk to us get more Holland and Turkey to see how farmers we received a grant worth approximately on a monthly basis. keep their farms. In Akhaltsikhe, no one $125,000 under Millennium Challenge Q: Do you consider exporting your had a clue that cows have claustrophobia Georgia’s Agribusiness Development cheese? and should not be milked in a closed Activity as well as $50,000 within the A: If you send a product for export space. So the more I see and the more I framework of the Farmers to Markets you have to send at least one container. read, the higher my interest is in sharing project that is being implemented by In Tbilisi, the demand for cheese alone it. Currently, I am in talks with potential CARE International in the Caucasus, a is 40 tons a day. donators. project which is a part of Community Now our diary plant’s capacity is As part of our future plans, we are Investment Program initiated and funded 2.5 tones per cycle - four hours is one thinking to introduce high producing by BP and its co-venturers and, in 2009, cycle - but we can produce fi ve tones, cows in Georgia, since the genetics of opened the diary plant where we now or 600 kg cheese. If we had more cows, the local breeds has been damaged and produce two types of cheese – Imeruli we would produce more cheese and work their milking ability is very low. Sakhachaoure and Salty Cheese - under around the year – at the moment we have At present, local cows provide just the trade mark of Akhaltsikhuri. to close down due to the lack of milk in six liters a day, which is disadvanta- In 2010, we also obtained a co- wintertime. geous to both farmer and entrepreneur.
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A Holstein cow, for instance, would provide 25-30 liters per day, although we don’t yet know how well they will adapt to this environment. The productivity may suffer for some time but it would improve later. Then we plan to introduce artifi cial insemination, which is the biggest factor in changing the birth cycle: Currently, in all Georgian villages, all cows give birth at the same time, meaning high milk productivity occurs at the same time everywhere – in May, June, and July. But if they start birthing from October, November and December as a result of artifi cial insemination, we will have high productivity all the year round. Q: The share of the agriculture sector in Georgia’s GDP has been declining and many people blame the government for not taking enough measures to help it. Do you think – given your experience – that there is potential in this fi eld? Do you think that the initiatives should come from the government or from the private sector? A: Georgia is an agrarian country, no matter what you plant or seed, everything grows here. I understand the govern- ment. Now farmers own 600 meter or one hectare plots and it’s really hard to make a profi t on such a small territory. If they merged their lands, that would increase profi ts. Agriculture is a fi eld which can’t be revived overnight. I think it’s like a chain process involving both the state and the farmers. We are grateful to the state for cancelling VAT for producing cheese. Previously we were selling plus VAT meaning that, in a month, we were paying approximately 15 thousand lari in VAT. At present I am developing a consult- ing agency with a specifi c focus on advis- ing entrepreneurs who want to invest in agriculture so we can play as mediators between suppliers and the market.
AUG.-SEP. 2012 17 Investor.ge
s Benjamin Franklin said, a method that is based solely on rule Tax Court: nothing in life is certain of law and institutions, rather than Aexcept death and taxes. That on a system that can be infl uenced by An Easier means that when an investor is explor- subjective factors. ing business opportunities in a country, Today, taxpayers who wish to Way to the local alternative tax dispute resolu- appeal decisions made at the RS tion (ATDR) format is of paramount and the MoF are treated like those Regulate importance. in any other administrative dispute: The government’s online services they have to go to court – fi rst to the for paying taxes, and low tax rates, City (District) Court, followed by the Tax Claims are signifi cant Appeal court, and improvements for fi nally the Supreme the businesses, but Court. Because of Kakha Kokhreidze, the Vice there will always be The current the small number of President of the Georgian Small ground for dis- policy puts a tax disputes in the and Medium Enterprises Association agreements. courts, the judges (GSMEA), analyzes the tax dispute In Georgia, preference cannot deepen their resolution in Georgia compared tax disputes are experience and are with international practices. While on dispute the tax authorities have made steps discussed at the ill-prepared to rule towards easing the process of Revenue Service prevention rather on complicated tax contesting tax fines, creating a tax (RS), in the Dispute than resolution. issues. Moreover, court could streamline the process Resolution Depart- there are no fi nan- of resolution and improve the ment (Mediation); cial professionals quality of judgments. at the Ministry of involved in the Finance (MoF), in the Dispute Reso- decision-making process, which also lution Council; and in the common increases the possibility that the court Courts. does not have the level of understand- The current policy puts a preference ing necessary to make qualifi ed deci- on dispute prevention rather than reso- sions. lution: companies can appeal to the RS before the fi ne comes into force. But Tax Courts: an international the system has its shortcomings. The approach to resolving tax RS determines preventative measures disputes on a case-by-case basis, which can To resolve such problems, many add an unwelcome sense of insecurity countries have created special Tax to the process. While members of the Courts, staffed by judges well versed in business community agree that the complex fi nancial issues. In the United dispute resolution at RS and MoF is States, tax courts were established in taxpayer- friendly , they would prefer 1942, although today tax courts exist
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only on a federal level. decrease the amount of time necessary munity, ombudsman offi ce (possibly In Germany, tax disputes are re- for the resolution of cases. tax ombudsman), and approved by the solved in two instances: tax disputes in Medium-term Reform – It is pos- Parliament of Georgia. Fiscal Courts are resolved by 11 Sen- sible to create a Tax Dispute Resolu- This reform guarantees the detailed ates. Because of the complexity of tax tion body, which will be separated and qualifi ed discussion of tax disputes issues, Senates specialize on narrowly from the executive government of the and the establishment of a common defi ned issues within the Tax Code; country, without changing the Geor- approach for this vital area of the law. there is an Income Tax Senate and a gian Constitution. GSMEA recom- By resolving cases in courts ruled VAT Senate. Special Sub-Senates were mends the creation of a legal entity of by qualifi ed judges, tax disputes will created to rule on even more specifi c public law, “Tax Disputes Resolution be concluded more quickly and with cases. more qualifi ed judgments. This will While the approach is different eventually reduce the likelihood of in Denmark, where tax disputes are It is possible to create a a misinterpretation of the law by the resolved at a Tax Tribunal- an inde- Tax Dispute Resolution tax authorities and of misperceptions pendent administrative agency the body, which will be by the taxpayers. Overall, this will Supreme Tax and Customs Appeal separated from the be a signifi cant step forward towards body -the pattern of turning to highly executive government improving the business climate in trained specialists is the same. The Tax of the country, without Georgia. Tribunal resolves disputes according to changing the Georgian Georgian Small & Medium Enter- the offi ces, which specialize in taxes, Constitution. prises Association (GSMEA) is imple- and three judges rule on every case. menting a project “Supporting the Development of a Business-Friendly Conclusion Bureau,” with offi ces in Tbilisi and Legal Framework in Georgia”, which Based on international practice, Kutaisi. Decisions made by the Bureau is supported by USAID, through EWMI GSMEA recommends two possible can be appealed at the Supreme Court. and EPF. The goal of the project is to solutions for tax dispute resolution in It is also recommended that special Tax increase the effectiveness, indepen- Georgia: Chambers are created within the Bu- dence and transparency of the judicial reau, according to the tax competences, system, which is of vital importance for Short-term Reform – In the in particular a VAT chamber, income the attraction of foreign direct invest- Tbilisi and Kutaisi Appeal courts, tax chamber, import tax chamber, and ment. This report was prepared as part tax disputes should be separated a corporate profi t tax chamber. The of that project. from administrative cases and a Tax Bureau’s decision can be appealed in GSMEA carried out several round- Case Chamber should be established. the Supreme Court according to the tables and the idea is most appreciated The Appeal Court and the Supreme rules established by the Administrative by the business community and even Court should be on two levels for tax and Civil Procedure Code. In addition, by public service representatives. The disputes, where cases will be directed the decisions passed by the Bureau will Association plans to submit legislative following RS and MoF, a structure that be systematically published. Arbitra- proposals, based on its research, to the should deepen the experience of judges tors serving in the Bureau will be Parliament of Georgia following ad- dealing with tax dispute, as well as nominated by the GoG, business com- ditional discussions.
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Business Optimism and Resulting t the beginning of 2012 global world economy. The index mark for Decision business confi dence was bal- Georgia’s optimism displays the busi- Aancing on a knife edge, stand- ness community’s hope for continued Making ing at net 0%, indicating a balance development and sustainable economic between those business leaders feeling growth. Looking at the overall chart by optimistic about their economies and country, business optimism is also high in Around the world, the year 2012 started with businesses confidence those feeling pessimistic. Brazil and the Philippines. Comparison on a knife edge. Now, six months The regional picture was, however, with survey participant neighbouring into the year, there is a glimmer more nuanced. Optimism levels in the economies shows that businesses also of hope for the global economy BRIC economies and in North America show optimism in Armenia (52%) and in as business investment picks up. have shown signifi cant improvement. Turkey (20%), while Russia’s businesses GrantThorton’s Nelson Petrosyan However, at the global level this has been indicated some pessimism (at -4%). writes about the trend. offset by a large drop in Europe where Now, let us see how the optimistic or optimism in the eurozone fell to -16%. pessimistic outlooks at the beginning of Quite interestingly, while global year have infl uenced the decision-mak- business confi dence stood at net 0%, ing in business to date. The global survey Georgia’s business optimism stood at suggests that businesses, especially in 78%. Together with Peru, this was the emerging markets, are taking a longer- highest business confi dence index out term approach to growth by increasing of the 40 countries participating in the levels of investment. survey, representing over 80% of the The proportion of businesses looking
AUG.-SEP. 2012 21 Investor.ge
to increase investment in new buildings and competitiveness. A regional break- and plant & machinery has risen consid- down of the IBR research reveals that erably over the past 18 months. Expendi- businesses in emerging markets lead the ture on research and development is also way in investing for long-term growth - set to climb, further supporting evidence investment in research and development from the World Intellectual Property With the eurozone still to work Organisation which recorded a growth in through its fi nancial issues, and business- patent fi lings. Moreover, businesses are es in the US awaiting possible changes also investing more in their employees – in policy following the November elec- 68% plan to offer pay rises over the next tions, it may take some time for the 12 months, compared with 51% in 2010. current economic uncertainty to lessen. By comparison, business expecta- In this climate, businesses in mature tions for revenues, profi ts and employ- markets are sitting on trillions of dollars, ment remain at or below levels observed wary of spending and hiring. 18 months ago. And the slowdown in the However, the results should act as a global economy is further highlighted by wake-up call to businesses in developed the sharp rise in the proportion of busi- economies, because, while they are sit- nesses in the eurozone, China and the US ting on their cash, their emerging market citing reduced demand as a constraint on counterparts are investing in their own expansion. futures. If such behaviour continues, they Global economic uncertainty is could fi nd their competitiveness eroding weighing on short-term business growth as emerging economies put increasing prospects. However, it is encouraging to resource behind research and innovation see dynamic businesses willing to adopt and equipment that will increase their bolder, long-term growth plans. This productivity. Even in tough times, busi- strategy is not about immediate returns in nesses need to be forward thinking, keep terms of revenues and profi ts, but rather pace with their competitors and invest in about investing in their long-term growth the future of their companies.
22 AUG.-SEP. 2012 MAIA EDILASHVILI Eka Abashidze, Administrative and Georgia’s Human Resources Manager at NRC ompanies in Georgia are International Services Representative Workforce looking local for staff Offi ce in Georgia (formerly known Chires, a change that bucks as SEACOR Environmental Services earlier trends when foreigners were International), also says that, currently, Going given preference for their skills and they employ 75 people – and foreign qualifi cations. In a country where highers are eight times less than when unemployment fi gures range from 15 the company started in 2004. Local to 40 percent depending on the source, While there are no offi cial statistics the issue of local labor is a crucial available for foreign nationals working International organizations are topic. in Georgia, some analysts from ILO phasing out foreign hires, replacing them with locals – a sign that From large internationals like BP claim that their number is 10 thousand, Georgia’s local talent pool is Georgia, to smaller businesses, local which they say “is pretty high” improving. But for the trend to take staffi ng is picking up speed, according for a country fi ghting wide spread hold, experts say Georgia needs to Lana Tsagareishvili, founder and unemployment. better trained professionals. managing partner at Mindstream, a In July, Prime Minister Vano professional recruiting and headhunting Merabishvili announced plans for a company. Ministry of Employment, with a former Companies like BP Georgia, construction company tycoon, Paata ProCredit Bank, and others, are tapping Trapaidze, at the helm – a sign that into universities and the labor pool to the government is also tuned into the bring locals on board for a variety of unemployment issue. reasons, including cost effi cency and Trapaidze has been tasked to create sustainability. Better training and better a database of Georgia’s jobless, and English language skills are also making create a strategy to pair people with local hires more attractive. jobs. But making Georgians more Over the past fi ve years, the competitive will require more than proportion of Georgian nationals just a database: the labor pool needs working for BP Georgia has steadily to match the demands on the ground. increased, including local hires in For instance, Georgia is fl ush with management positions. quality personal for the banking and According to the BP in Georgia fi nancial sectors, but lacks experienced Sustainability Report 2011, while the professionals in IT, engineering, number of national employees was less metallurgy, heavy industry, and than 300 in 2007, it exceeded 350 last construction – as well as sales and year. At the end of 2011, 95 percent of services, according to Tsagareishvili. its staff was Georgian citizens. The International Labor
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Organization (ILO) reported that hundreds of migrant workers, mostly from China, Turkey, and India, come to Georgia for jobs in agriculture, construction, trade and services sectors. While the workers are taking advantage of Georgia’s easy visa requirements, their numbers are also a sign that the local labor pool does not fi t real demands. Elza Jgerenaia, analyst of Georgian Trade Union Confederation, who has worked with ILO on the issue of foreign hires, said that the market suffers from both the lack of workforce and the excess of it. “This is because certain professions do not meet the criteria set by the market,” she noted. For example, companies have to hire expatriate contractors when specialist skills are needed. At BP Georgia, foreign hires are still necessary for “technical” jobs, like engineering and pipeline operations. In November, Mindstream, the recruitung company, is organizing a job fair in partnership with ten leading industry companies to connect companies and university graduates so that, after several months of training, selected candidates receive hands on experience. Training is crucial to bringing more locals on staff, Tsagareishvili noted. ProCredit Bank Georgia is a good example: the bank currently has 1,420 employees – and just fi ve of them are foreign. To keep local hires up to speed on the latest skills, though, the bank spent $1 million on training last year, noted Teo Lezhava, a marketing specialist at ProCredit Bank Georgia. NRC International Services’s Abashidze also noted that “intensive training” is part of their employment package. “Education and professional experience is the key selection criteria for us,” Abashidze said. “Given our company’s specifi cations, fi nding qualifi ed local staff is comparatively hard. Therefore, after we hire someone, we provide intensive training and teaching opportunities.” Investor.ge
Big Sports, Big Events, Big Profits?
Sports are big business, and, so the Build it and They’ll Come ing degrees of success: Montreal ran up a logic goes, sporting events attract ports and business, business and $2.8 billion debt that took the city three big business: countries and cities sport. The allure of sponsorship decades to pay off. Seoul, on the other across the globe – not to mention dollars, ticket sales, and event hand, turned a cool $300 million profi t. businesses – invest billions in S sporting events and merchandise. tourism is enough to drive cities to bare Cities celebrate large sporting events Georgia itself is hosting the 2015 the brute of the cost of hosting large as an opportunity for economic growth – Youth Games, as well as the 2015 sporting events. for the events’ ability to create a ‘legacy’ UEFA Super Cup, and Tbilisi is The London 2012 Summer Games, for a region that will translate into invest- bidding, together with Baku, for the for instance, is estimated to have cost the ment, jobs, and prosperity, according to 2020 European Championships. United Kingdom £8.4 billion, or roughly sports economist Andrew Zimbalist. But are the sporting events worth the cost? $13 billion, according to research done In 2015, Tbilisi will host two large by the University of Oxford. sporting events – the Youth Games and The cost – which includes security, the UEFA Super Cup. Both events re- infrastructure, and ceremonies – along quire millions of dollars in investment with construction and technology up- in infrastructure, such as expanding the grades – is par for the course for a city airport, as well as constructing hotel and country hosting the world’s largest rooms, and bigger sporting venues. sporting event. Different cities have man- While the total cost for both events aged the cost of the Olympics with vary- was not available, Zviad Archuadze, the
AUG.-SEP. 2012 25 Investor.ge
26 AUG.-SEP. 2012 Investor.ge
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offi cial in charge of municipal economic to the next level, not only in sports,” Economic Intelligence Unit (EIU) ana- development programs, said the city he said. lyst, agrees. is already talking with investors about “I think it is quite diffi cult to actu- picking up a large portion of the price tag. Tourism and Jobs, Jobs and ally ascertain exactly how much benefi t, “In the end, it is all about the long Tourism if any, comes from a big event such as term benefi ts for promotion and future While there is a growing body of this [Olympics] until quite some time tourism,” said Archuadze. research that questions the connection afterwards,” he told Investor.ge during a “In the long term prospective, of between sports and direct economic ben- telephone interview from London. course it will create income for the city,” efi t, economists appear more confi dent “I think there are probably two main he said. “We must prepare the city for that large events bolster city economies areas in terms of benefi ts. One is in the big events.” indirectly. run up to the big event on the construc- Revaz Arveladze, general secretary Zimbalist, a Robert A. Woods Profes- tion side…if you are having to build for the Georgian Football Association, sor of Economics at Smith College in quite large new developments, new said the UEFA Super Cup will cost the the United States, noted that the benefi ts buildings…obviously that will provide association an estimated 5 million euro, are far from straightforward, and differ a construction boost and through that, or $6 million. That does not include the greatly depending on the host city. in the employment market as well for a additional cost of other upgrades neces- In a 2010 article, “Is It Worth It? sort of temporary period.” sary to host the event – like expanding Hosting the Olympic Games and other Other economists have also noted Tbilisi airport or insuring that there are mega sporting events is an honor many that job opportunities increase around 2500 luxury hotel rooms (as well as other countries aspire to—but why?” Zimbalist large events like the Olympics, although accommodation) for the 20 thousand argued that, while direct benefi ts – like it is diffi cult to pinpoint the direct impact anticipated fans that will descend on the new infrastructure, ticket sales, and the because it depends on a variety of issues, city for the event. fl urry of economic activity by attendees including how venues are used after the The event, however, is about more – is tangible, the indirect benefi ts could event, and how many other economic than just money and investment for be more important. development programs proceeded and Georgia, noted Arveladze. “The indirect economic benefits followed it. Zimbalist noted that cities “On the side of organization, it is for generated by mega sporting events are that are less developed – for example us, for our employees, for the business- potentially more important than the Tbilisi as opposed to London – can re- men, it is also the challenge; for us it is direct benefi ts, but are more diffi cult to ceive more of a boost from large events. a challenge to host these things,” he said. quantify,” he wrote. “The impact of hosting major sport- “Of course, for the city and the coun- “Many Olympic host metropolitan ing events varies according to the level try it is an economic issue also because areas and regions view the Olympics of development in the host city and coun- a lot of people are coming … of course as a way to raise their profi le on the try,” he said. “With proper planning, they will stay for more than one day… world stage. In this sense, the intense hosting a large event can serve as a for the city, for the country, for the small media coverage before and during the catalyst for the construction of modern restaurants, small businesses, small ho- Olympic Games or other big events is a transportation, communications, and tels, and large hotels – of course it is a form of advertising, possibly attracting sports infrastructure, which generally business.” tourists who would not have otherwise benefi ts less developed areas more.” And, pure economics aside, hosting considered the city or region, and who In Tbilisi, the 2015 Youth Games large events is a chance for Georgia to may generate significant, broad, and have already inspired one large invest- show the world what it is capable of, long-lasting economic benefi ts. “ ment: in July, China’s Xinjiang Hualing according to sport event organizers like In reality, however, Zimbalist cau- Industry and Trade (Group) announced Giorgi Khachidze, the project coordina- tioned, it is hard to correlate the direct plans to invest $150 million to build tor for the Tbilisi 2015 European Youth impact that sports coverage – even an “Olympic Village” in Tbilisi for the Olympic festival. Olympic coverage – has on later tour- athletes competing in the games. “[It is an opportunity] to say that we ism fi gures. Reportedly, 3000 people will be em- as a whole country are trying to proceed Neil Prothero, a Western Europe ployed during construction.
Investor.ge
Georgian officials say that discount flights to Kutaisi will be a boom to Kutaisi Airport, the Tip the local economy and Georgian tourism in general when the city’s renovated airport opens this fall, of the Tourist Boom? but local tour operators maintain there is much more work to be done for the city to be able to handle the coming influx of tourists.
30 AUG.-SEP. 2012 Investor.ge
An artist’s rendition of the new Kutaisi Airport.
NICK CLAYTON and Kiev in September. This news came cies, as it will provide bargain fl ights earlier than expected, as the renovation to the country, starting at €22.99 ($28). izz Air, the largest low- of the airport, which had long been out “The biggest problem for [Georgian cost carrier in Central and of use after serving as a Soviet military tour agencies] has always been the prices WEastern Europe, announced airfi eld, was slated to be completed no of flights,” said Gvantsa Razmadze, in June that it would be the fi rst interna- sooner than October. Marketing Manager of Georgia’s oldest tional airline to use the airport, beginning Still, the arrival of Wizz Air to the tour agency, Caucasus Travel. three weekly flights between Kutaisi Georgian market has excited tour agen- The price tag on most fl ights in and
AUG.-SEP. 2012 31 Investor.ge
out of Tbilisi, and Batumi, to nearby Bagrati1003, Kutaisi’s only fi ve-star The opportunities over there are huge. hubs starts at several hundred dollars. hotel, charges 155-180 lari ($94-108) The first guys that come in – we’re Budget carrier Pegasus offers daily per night for double rooms and has talking about four-and-fi ve-star hotels – fl ights between Istanbul and Tbilisi start- more negative reviews than positive on those are the ones that will get the biggest ing at €79.99 ($98), but uses Istanbul’s TripAdvisor.com, with one reviewer say- gains,” he said. Gokcen airport, making international ing “the only fi ve star thing about it was However, the prospect of a new rush connections complicated. As a point of the price,” and another comparing it to of budget tourists to Georgia has not been entry, Kutaisi’s central location is also “Saddam’s palace circa 1990.” universally welcomed by the country’s more convenient for arriving travelers Khubuluri from Caucasus Travel said tourism industry. Mumladze said that interested in Adjara and Svaneti, said there is great demand for “tourist-class the government organized a forum in Caucasus Travel General Director Maia hotels” in Georgia, especially in Kutaisi. June with industry representatives on Khubuluri. What currently exists, she said, is a large the topic, “Do we need more tourists?” “It presents the opportunity to make amount of big high-end hotels and low- In discussions, she said the various leisure packages for people traveling to capacity affordable bed-and-breakfasts. sides debated whether Georgia should Adjara and the areas in between, because What are needed are more mid-level work to lower prices and orient itself it’s about a two-hour drive,” she said. hotels with 60 or more rooms that can towards attracting mass tourism like “From the Kutaisi airport to Svaneti, soak up the demand for large groups. Turkey with its affordable all-inclusive you can get there in one day, which is Both Khubuluri and Mumladze said resorts, or if the country should stick to important because if you arrive in Tbilisi that their agencies regularly have to turn lower-volume “niche tourism,” involving at midnight, you have to stay one night away travel groups interested in Kutaisi adventure tours, cultural excursions and in a hotel and then spend another day due to the scant availability of rooms. the like. In the end, the vote was a 50-50 getting to Mestia.” But Giorgi Tsikolia, First Deputy split among industry associations. However, the addition of cheap Director of the Georgian National “I think that Georgia is not the kind fl ights and a third point of entry into Investment Agency, said he expects of country that needs, like, 10 million Georgia for air travelers has exposed the situation to improve rapidly as tourists. Right now, we just cannot serve other weaknesses in the local tourism Kutaisi develops. He said the opening them. It should not be very cheap, it infrastructure, said Inga Mumladze, of Kutaisi’s Kopitnari Airport represents should be interesting and special, with Deputy Director of Concord Travel. the second stage of Georgia’s air travel special types of tourists,” she said. “The situation is like this: if you development. Betsy Haskell, founder of AmCham want to develop the region, we need to The fi rst stage, he said, was to allow Georgia and Betsy’s Hotel in Tbilisi, said build new hotels; some roads are not fi n- Turkish fi rm TAV to take over the Tbilisi that Georgia has room for all types of ished yet, some places are not reachable and Batumi airports to make them more tourism, but noted that the country has right now,” she said. attractive to international airlines. Now, yet to fully capitalize on the economic Mumladze said the lack of hotels in the government is focused on develop- opportunities presented by its recent Kutaisi is particularly acute, keeping ing regional airports in Mestia, Poti and tourism boom. prices high, while quality remains low. Kutaisi, the latter being a part of a wider In a recent AmCham experiment, “When a group comes, they expect strategy to remake Georgia’s second she said she sent groups of four expatri- to have twin rooms, like they can all largest city into a major business center. ates to Georgia’s top six tourism desti- around the world, with the same kind of By moving the Parliament to Kutai- nations and took down their comments beds. In Kutaisi You cannot fi nd a hotel si, Tsikolia said he expects the demands upon their return. Their #1 complaint, she with twin rooms – real twin rooms,” she presented by international delegations said, was, “There was nothing to buy.” said. “You know, we want to operate, to quickly expand both the air traffi c “That’s what Western tourists do. we want to have groups in Kutaisi, but through Kutaisi airport, but also the They like to travel, but when they get somehow it’s impossible. And when market for hotels in the city. there, they want to buy things; it doesn’t you negotiate with an airline company “Currently, if you look at Kutaisi, even matter what. Georgia still has a or a tour operator, in the end, they go you fi nd that there is what, one hotel that ways to go, but there’s a lot of money somewhere else.” provides more or less adequate service? still out there for them in this industry.”
32 AUG.-SEP. 2012 © 2012 Ernst & Young LLC. All Rights Reserved. Difficult to build. Easy to damage. Trust. +(995 32) 2439375 (2110) To learnmore ourlegal about See More | In tough times,In tough when many with ourother service lines works inclose coordination with staying afloat, one with staying one afloat, services, contact us at services, usat contact synergy. Law practice Our can dependon. cannot thrive without thrive without cannot integrated thatyou service to provide highqualityand [email protected] businesses are concerned Certainty Investor.ge
Get Away! Where to Go on the Weekend
34 AUG.-SEP. 2012 Investor.ge
ERNEST PETROSTYAN
eorgians often boast about how much their small country has Gto offer – from skiing down towering glacier heights to swimming in the Black Sea. When time is short, however, it seems easier to just cart the family to Tbilisi’s Turtle Lake (Kus Tba) than to venture out on the road. But there are plenty of things to do and see within a short drive of the capital, noted Tourists Tour’s Eka Kasradze. “Weekend tours are very convenient in Georgia, as there are many interesting places within a two-hour’s drive,” Kas- radze, a manager at the tour agency, said, noting that camping, hiking, rafting, and wine tasting tours top the list.
History on Your Doorstep When a country is as ancient as Geor- gia, there are plenty of historic wonders. From the stone remains of Uplistsikhe, one of the Georgians’ fi rst capitals, to the cave monastery of Davit Gareji in the eastern Georgian desert; living monu- ments to the country’s vivid – and often violent – past are easy to fi nd.
Betania: Georgia’s Lost Monastery Just 16 kilometers (9.9 miles) from Tbilisi, Betania is a perfect day trip to escape from the capital. The monastery, Whether you are short on money or short on time, Georgia has plenty to see offi cially called Betania Monastery of the and do on the weekend, from adventure tourism to wine tasting and nearly Naivety of the Mother of God, was built everything in between. Investor.ge spoke with three tour agencies about day in the 12-13th century and is known for trips and weekend getaways from the capital. its wall paintings.
AUG.-SEP. 2012 35 Investor.ge
While its religious history is signifi - modates both. hike up to Saint Trinity Church located cant, it is Betania’s location that made it Nino Nebieridze, head of interna- at the foot of Kazbek Mount, looking famous. Located just 40 minutes from tional relations at AST Travel, noted that over the village of Stepantsminda (Ka- the capital, the church and monastery are in a weekend, people can enjoy wine zbegi). However, trails continue even so hidden from the road and surrounding tours in Sighnagi, as well as hiking trips higher, leading to the Kazbek summit area that it was forgotten for decades, in the lush wilderness of Tusheti and (5,033m) – one of the highest summits only to be rediscovered by a royal hunt- Ladodekhi. in the Caucasus. ing party in the 19th century. The mountain village of Kazbegi Ilia State University established an (now known as Stepantsminda) is also Alpine Club for the popularization of Sighnagi: The Great Wall of popular. Alpinism in Georgia. They also prepare Georgia internationally qualified guides. Ilia While not as long as the Great Wall Off Road Adventures in the Berulava, a professional guide from the of China, the wall of 23 towers in Sigh- Backyard Alpine Club, says that alpine tourism has nagi is much closer at 115 kilometers At Ladodekhi National Park in become more popular in recent years. – roughly a two hour drive from Tbilisi, Kakheti, groups can take short or long “More foreign and local visitors want into the country’s eastern wine country, hikes through the protected wilderness. to ascend the Kazbek summit, as hikers Kakheti. Trails in the park wind though amazing beyond a healthy lifestyle see a kind of Some portions of the wall can be forests and mountains, leading to the 40 self-confi dence in it,” he said. walked; other portions of it can be driven. meter high Gurgeniani waterfall. The “The tour usually lasts three days; it There are also wineries for wine tasting tourist route – roughly a 7 - 8 kilometer really depends on the physical shape of tours located in and around the town. hike – continues up to Black Cliff Lake our visitors. The Kazbek summit, unlike Other easy day trips include wine nestled in the mountains at 2,900 meters other summits in the Caucasus, is very tasting tours through Kakheti, including above sea level near the Georgian- convenient to climb for beginners,” Ber- the historic Tsinandali, the former home Dagestan border. ulava noted. Descending the mountains of Alexander Chavchavadze – now a The Lagodekhi National Park also can be even more exiting for extreme museum - and his unique wine cellars, provides nature lovers with a plethora of sport lovers, with rafting tours on Mtiu- where he once hosted the likes of Alex- wild animals to watch and photograph, leti and Pshavi Aragvi mountain river. andre Dumas. including wild brown bear, wolves, “Rafting provides a good opportunity to However, according to Kasradze, lynx, chamois, roe deer, red deer, East release adrenalin; it is very exciting and, mixed tours – two or three day trips that Caucasian goats and wild boar. For at the same time, it is relatively safe, as combine the historic, the cultural, and the birdwatchers, there are local populations the river stream is not that fast,” noted great outdoors – are more popular with of lammergeyer, golden eagle, peregrine 24 year old Ani Robakidze. tourists. “Foreign guests initially take falcon and the Caucasian Snowcock. wine tours, and afterwards they continue Trips to Kazbegi, taking hikers For more information about these with eco-camping and hiking tours,” she through Dariali Gorge, also make a trips and others, visit: said, noting that Kakheti easily accom- popular weekend trip. Usually, tourists www.georgia.travel
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Ten Things You Didn’t Know About… Aghmashenebeli Avenue
38 AUG.-SEP. 2012 Investor.ge
In the race to see Georgia, there is a tendency to forget Tbilisi. Despite popular opinion, the capital is more than just Vake, Vera, and Meidani Square. Like any small city, Tbilisi is full of colorful neighborhoods and, over the next several issues, Investor. ge will (re)introduce you to their charms.
istoric and majestic, Davit Aghmashenebeli Avenue is the Hperfect place to be a tourist in your own city. The wide avenue hosts block after block of exquisite architec- ture, an eclectic mixture of Classical, Renaissance, Moorish, and Art Nouveau buildings. Aghmashenebeli, as it is known to- day in honor of King Davit the Builder, was originally known as Mikhail Street – named after Russian Viceroy Mikhail Romanov – although it is more com- monly known as Plekhonov, its Soviet- era name. The avenue stretches from Dighomi Stadium to the Dry Bridge on the left side of the Mtkvari River. While it is well known today for the government’s (con- troversial) efforts to restore the buildings that grace it, Aghmashenebeli offers a lot more than just architecture. Great parks for hot city nights. Back 1in the old days, before the renovation works, Aghmashenebeli was infamous for dusty traffic jams, and warring marshrutkas. Today, however, although reconstruction work continues on the east side of the avenue, the street is a nice place for a stroll, with sidewalks wide enough – and smooth enough – for a baby stroller. Nestled between shops, restaurants, and museums, there are two great parks where locals walk their dogs and pensioners gossip away their afternoons. Rose Park, two blocks east of
AUG.-SEP. 2012 39 Investor.Innveestoro .ge
Marjanishvili Square, is a large expanse that includes a covered table tennis room and two squares closed to traffi c. Up the street, at 136 Aghmashenebeli, there is a lovely fountain and splash park, with upgraded benches and plenty of room for kids to cool down in the water. If you keep going straight through the rose garden, there is a new playground as well. Great outdoor lighting from the Marjanishvili Metro station to Tamar Mepe makes it the perfect place for an evening stroll. Shop, shopping, shopped. From six 2lari bikinis to 500 lari watches, if you need it, Aghmashenebeli has got it. The newly renovated facades now house an eclectic mix of inexpensive Turk- ish brands and high end Italian chains. There are also a number of bookshops and stationary stores, as well as the oc- casional green grocer. On the east end of the street, where renovation works are just starting, a large, Turkish household goods store provides a quick Target-like fi x for those longing to peruse aisles of dishware and Tupperware knock offs. The street is also home to some of Tbilisi’s best fabric shops, which offer everything from buttons to glitter dots. Gowns. While purists would argue 3this belongs with shopping, they have not witnessed the phenomena that is the wedding and fancy gown shops on Aghmashenebeli, where there are liter- ally city blocks of dress shops. Denim and lace wedding dress? Check. Red shiny formal ware? Check. Window shopping has never been so good. Eating Out. There is a plethora of 4places to eat in Tbilisi, but among the nimiety of cafes and restaurants, Agh- mashenebeli stands out for its variety. It is literally a one stop destination for any group of guests with widely different eating expectations. But the street’s stand out specialty is Turkish, from yummy-
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sticky bakhlava by the kilogram to up- great exhibits that blend art and Georgian on 70 buildings on Aghmashenebeli. scale cuisine, Aghmashenebeli has got culture. The Folklore State Center, 68 Two years later, the project is still going it. And, for dessert, there are competing Aghmashenebeli, includes a restaurant, strong, and the public’s reviews have French bistros across the street from each as well, in case centuries of creativity been mixed. Since the rehabilitation is other at Marjanishvili Square. inspires an appetite. ongoing, however, you have the unique Breakfast. Okay, so technically this Have you been to the theater lately? chance to judge for yourself. To check 5is part of the whole ‘eating’ motif 9A block from Aghmashenebeli is out the new, which includes landmark mentioned above. But, as any breakfast Tbilisi’s famous Marjanishvili Theater… buildings like the historic Apollo – lover wasting away in Tbilisi knows, but don’t stop there. From the delight- Tbilisi’s fi rst movie theater – and the eating breakfast out in this city is no ful “Second Home” children’s theater former palace of Prince Oldenburg, easy feat: most eateries open their doors at 58 Aghmashenebeli, to the Kakha which currently houses the Museum of at the crack of noon. Aghmashenebeli, Bakuradze Movement Theatre at 182 Theater, Music, Cinema, and Choreogra- however, is different. It boasts three Aghmashenebeli, the avenue is Tbilisi’s phy, head west from Marjanishvili metro – THREE – breakfast-offering, trend- Broadway. Other venues include the station. To bask in the originals, head bucking cafes within a 50 step radius Vaso Abashidze Music and Drama east from the metro. Which is better? at Marjanishvili Metro (full disclosure: State Theater, also at 182 Aghmashene- You decide. But bets are that, regardless one of them is McDonalds, but still). beli, and Turmanishvili Theater at 164 of your preference for the oldest or the All advertise opening at, gasp, 8am, Aghmashenebeli, a real treat that also newest facades, you’ll be wowed by this too, when most people from the western includes a lovely café. Tbilisi treasure. hemisphere actually, well, eat breakfast. Restoration, in real time. In 2010, * Due to all the construction and Turkish barbers. Baby, if you are 10the Tbilisi Mayor’s Offi ce started renovation work on and around Agh- 6missing Istanbul – and you need a an ambitious program to repair, restore, mashenebeli Avenue, some museums and trim – this is your place. Brush up on and in some cases, rebuild the facades theaters might not be open. your Türkçe while you are getting a cut at several locations around the 120 block of the street. Travel agency central. Whether you 7are in the market for some air tickets, Jansugh Kakhidze Garden or just want to dream a little dream while gazing at beautiful posters of distant lands, Aghmashenebeli has you covered. HQ for Turkish Airlines, the avenue also boasts a titillating number of tour and booking agents. In case you need some excuse to travel, the Georgian Railway Museum at 136 Aghmashenebeli will put you in the mood. …along with Aghmashenebeli’s 8many other museums*. From Folk History to Georgian Dance, the avenue and neighboring streets are peppered with museums that are often overlooked. The House-Museum of Galaktion Tab- idze, one of Georgia’s many talented poets, is at 4 Marjanishvili, while the Museum of Theatre, Music, Cinema and Choreography, 6 Kargareteli, hosts
AUG.-SEP. 2012 41 CONTENT
50 Social: AmCham Annual 4th July Picnic
43 AmCham Hosts Congressional 45 AmCham Hosts Goodbye 46 Goodbye and Good Luck Keti Delegation Luncheon for Ambassador Sidamonidze Bass 44 Opportunities in Rural 52 Social: Annual Breast Cancer Development for Small 46 NDI: Documenting Changes Awareness Walk Farmers: an overview of the in Voter Perceptions Before CARE conference Elections 52 Social: American Friendship Club 45 AmCham Supports Race For 46 AmCham Committees: the Cure Commercial Law and Tax Committee Discusses Tax Code
42 AUG.-SEP. 2012 AmCham Hosts Delegation from Congress
On July 3, AmCham held a cocktail Forces, and portions of the Department thold (Republican-Texas) and Adam reception for a Congressional delegation of Energy. Kinzinger (Republican-Illinois), who at the Tbilisi Marriott. The other members of his delegation represent a number of other Congres- U.S. Congressman Bill Shuster include Congressmen Jason Altmire sional Committees, including the Vet- (Republican-Pennsylvania) lead the del- (Democrat-Pennsylvania), Brett Guthrie erans Affairs, Energy and Commerce, egation of six Members of Congress to (Republican-Kentucky), Jeff Denham and Transportation and Infrastructure Tbilisi July 2-4 to discuss U.S.-Georgian (Republican-California), Blake Faren- Committees. relations. The Congressmen met with President Mikheil Saakashvili and First Deputy Minister of Defense Nodar Kharshiladze, as well as with opposi- tion leaders. In addition, the delegation also observed U.S. and Georgian service members training together in preparation for deployment to Afghanistan as part of the International Security Assistance Force (ISAF). Shuster has been a member of the U.S. House of Representatives since 2001 and sits on its Armed Services Committee, which is responsible for funding and oversight of the Department of Defense, the United States Armed
AUG.-SEP. 2012 43 More than 50 percent of the popula- Government participants, however, Opportunities tion is employed in agriculture, making stressed that, since infrastructure proj- in Rural rural development essential for the coun- ects are already being implemented, the try in order to fi ght poverty and ensure main problem is a lack of demand in the Development social stability. While agriculture is not market and production quality. the only component of rural develop- In his presentation, George Welton, for Small ment, it is a substantial and important AmCham in Georgia’s executive di- part of it. rector, noted that a lack of electricity, Farmers: an During the conference, which was or- equipment, and machinery – as well as ganized by AmCham, CARE, EU, FAO, irrigation problems – have all played a overview Swiss Agency for Development and Co- role in Georgia’s low productivity rates. of the CARE operation SDC, and USAID, participants Despite plentiful water resources and a discussed the most important problems Soviet-era history of high production, conference facing Georgian agriculture today. The Georgia now ranks last in the region in lack of equipment, lack of knowledge, terms of productivity. The lack of invest- ment – just one percent of all investments in Geor- gia go to agribusiness – means the majority of small farmers are under- employed, Welton said. For example, SANTE, a local dairy producer, noted that while there is a high demand for quality natural milk, local dairy farmers do not produce the quan- tity or quality necessary for their products. There are signs, however, that the investment climate for agro business is im- proving: Welton said food prices are not expected to decrease in the near future, a factor that could contribute to investment. He stressed that Am- Cham’s Agribusiness low accessibility to markets, and the Committee is dedicated to continuing lack of funds for buying new seeds or the discussion about measures that can pesticides topped the list of concerns. be taken to improve the sector, especially Other issues included a lack of open- potential investment opportunities. For ness in farming communities for new more information about the committee, ideas or knowledge, as well as problems please contact Konstantine Koridze, with irrigation and local infrastructure. [email protected].
44 AUG.-SEP. 2012 AmCham Supports Race For the Cure
On June 10, AmCham CSR Com- Care Alliance HERA and the U.S.-based ing cause of death for Georgian women mittee supported the Race for the Cure Susan G. Komen for the Cure foundation. and providing screening and treatment at Turtle Lake. In its fourth year in All funds raised went to Women Well- services for women. This year’s race at- Tbilisi, the Georgia Race for the Cure is ness Alliance HERA’s work to increase tracted a lot of people who came to show a partnership between Women Wellness awareness of breast cancer as the lead- their support for women’s health.
AmCham Hosts Goodbye Luncheon for Ambassador Bass
On June 21, Ambassador John Bass Norland later this year. New members were also introduced was honored during his last meeting with During the meeting at Sheraton Mete- during the meeting by newly elected AmCham members. chi Palace, Bass provided an overview of President Sarah Williamson: Luca Po- Bass, who has returned to Washing- the recent visit by U.S. Secretary of State lare, Bank Constanta, Thermarsenal, ton, is set to be replaced by U.S. Am- Hillary Clinton, as well some highlights Nodia, Urumashvili & Partners and bassador-designate to Georgia, Richard from his time with AmCham. Lucy Flynn.
AUG.-SEP. 2012 45 in the country’s political climate. This was the fi rst time NDI released its po- litical party polling data to the general public. Its fi ndings show the ruling party holds a ten point lead on issues concern- ing NATO, education, health care, and democracy, while the Georgian Dream coalition, lead by opposition candidate NDI: Documenting Changes in Bidzina Ivanishvili, is increasing popu- larity on other issues, like relations with Voter Perceptions Before Elections Russia. Voters are also showing “less engagement” on issues like electoral US Embassy Deputy Chief of Mis- Navarro provided more detailed reform while they have fi rm opinions sion Bridget Brink and NDI Country analysis of the trends and opinions head- on “bread, butter, and security” issues. Director of the National Democratic ing into the pre-election period for the Respondents’ views tend to depend Institute Luis Navarro provided an parliament vote, scheduled for October on demographics, rather than economic overview of the pre-election period for 2012. On July 16, NDI released a survey status, according to the data collected by members during the last AmCham meet- on public opinion concerning political NDI via polling done by the Caucasus ing of the summer. developments, political parties, and Resource Research Center. The survey Brink spoke about recent develop- politicians. was funded by the Swedish Interna- ments, and answered members’ ques- The survey, which was conducted tional Development Cooperation Agency tions during a frank discussion on July over 18 days in June, and contained the (SIDA). 25 at the Hotel Radisson Blu Iveria for views of 6299 voters from around the The presentation is available at AmCham’s monthly roundtable meeting. country, and documents some changes www.amcham.ge.
Ketevan Sidamonidze: AmCham “Farewell or till we meet again…” Committees: Emotional, grate- AmCham gave me a lifetime oppor- Commercial Law ful, courageous and tunity to discover my capabilities and and Tax Committee hopeful - all just fl aw- helped me grow professionally. I never Discusses Tax Code lessly describe my dreamed about success, I worked hard for current state as I write this farewell note. it and it paid off! I led dozens of projects At the end of August I am leaving Am- and events; earned a Valued Support On July 6, members of the Com- Cham Georgia, and moving to Barcelona Award for AmCham at the 11th Georgian mercial Law and Tax committee dis- to do my MBA at ESADE, an interna- International Oil, Gas, Infrastructure cussed ambiguous articles in Tax code tionally top ranked business school. and Energy Conference & Showcase that require further comments from the A little over seven years ago, Am- (GIOGIE) in March 2012; organized, Revenue Service. Other issues were Cham offi cially walked into my life. I managed and helped raise money for also discussed, including the frequent still clearly remember my fi rst day at the fi rst IT innovation conference, and number of changes made to the tax work as if it were yesterday - with Levan much more. Four Presidents and three code and problematic provisions in tax walking in and offering a chewing gum Executive Directors later, I know I’ll security measures. and a life-time friendship, Dato joyfully miss AmCham terribly from September! In other committee news, the Am- commenting on my extremely long hair, Thank you is the least I can say to you Cham CSR committee met on July 11 Johanna looking at me with hopeful eyes to demonstrate my sincere appreciation to discuss its policy regarding solicita- and Amy saying a cheerful “welcome for everything you have done for me. Till tions for charity. on board.” we meet again!
46 AUG.-SEP. 2012 AUG.-SEP. 2012 47 AmCham Company Members as of August 2012
PATRON MEMBERS CH2M Hill Iberia Refreshments, JSC Radisson BLU Iveria Hotel 5th Floor, GMT Plaza, Freedom Tetri Khevi Hesi District, Orkhevi 1 Rose Revolution Sq. APM Terminals Square Tel: 2241091; Fax: 2241090 Tel: 2402200; Fax: 2402201 52 D. Aghmashenebeli St., Poti Tel: 2474040; Fax: 2470210 www.pepsi.ge www.radissonblu.com Tel: 493-20660; Fax: 493-20688 www.ch2m.com www.apmterminals.com Imedi L International SEAF Management LLC Chartis Europe S.A. Georgia 20 Chavchavadze Ave. 7, Niko Nikoladze St. II Floor. Branch BP Exploration Georgia Tel: 2223520; Fax: 2293075 Tel: 2998115; Fax: 2923533 7 Bambis Rigi St., 0105 38 Saburtalo St. www.imedi-l.com.ge www.seaf.ge Tel: 2439025; Tel: 2593400; Fax: 2593488 Sheraton Metechi Palace Hotel Fax: 2439026 KPMG CIS Ltd. Tbilisi Branch www.bp.com 20 Telavi St. www.chartisinsurance.com 3rd Floor, Besiki Business Center, Tel: 2772020; Fax: 2772120 4 Besiki St., 0108 Exxon Azerbaijan Ltd Chemonics International www.sheraton.com/tbilisi Landmark Suite 300, 95 Nizami St., 6a N. Ramishvili St., 0179 Tel: 2935713; Fax: 2982276 Baku, AZ1010 Azerbaijan Tel: 2234311; Fax: 2234309 www.kpmg.ge T&K Restaurants (McDonald’s Tel: (994-12) 4982460; Fax: (994-12) www.chemonics.com Georgia) Levon Travel 4982472 1 Dzmebi Kakabadze St. Deloitte 20 Chavchavadze Ave. www.exxonmobil.com Tel: 2921246; Fax: 2251422 36a, L. Asatiani St., 0105 Tel: 2250010; Fax: 2232399 www.mcdonalds.ge Tel: 2244566; Fax: 2244569 www.levontravel.ge PricewaterhouseCoopers www.deloitte.ge TBC Group 7 Bambis Rigi St., 0105 Maersk Georgia LLC 7 Marjanishvili St. Diplomat Georgia Tel: 2508050; Fax: 2508060 6 Khetagurov St. Tel: 2272727; Fax: 2228503 65, Kakheti Highway www.pwc.com/ge Tel: 2200800; Fax: 2200815 www.tbc.com.ge Tel: 2984950 www.maerskline.com UGT www.diplomat.ge TBSC Consulting 6 Marjanishvili St. 17a Chavchavadze Ave., 7th fl oor DLA Piper Georgia LP Magticom Tel: 2959019; Fax: 2420215 Tel: 2220211; Fax: 2220206 10 Melikishvili St. 5 Politkovskaya St. www.tbsc.ge www.ugt.ge Tel: 2509300; Fax: 2509301 Tel: 2171717; Fax: 2171171 www.dlapiper.com www.magticom.ge CORPORATE A MEMBERS CORPORATE B MEMBERS Economic Prosperity Initiative Marriott Hotels, Resorts & Suites ABRIS Distribution AG. (EPI) 13 Rustaveli Ave. Aliance Georgia Ltd 21 Liubliana St. 6 Samghebro St. Tel: 2779200; Fax: 2779210 33 Samurzakano St. Tel: 2527271; Tel: 2438924 www.marriott.com Tel: 2243773 www.abrisdc.com www.epigeorgia.com www.groupaliance.com Alliance Group Holding, JSC Metromedia International Group 47/57 M. Kostava St., 0179 Ernst & Young 8000 Tower Point Dr., Charlotte, NC GZ American Academy in Tbilisi Tel: 2424181; Fax: 2998112 44 Kote Abkhazi St. 28227 37a Chavchavadze Ave. www.agh.ge Tel: 2439375; Fax: 2439376 Tel: 2171201; Fax: 2210101 Tel: 2227441; Fax: 2227889 www.ge.ey.com www.metromedia-group.com www.aat.ge Avon Cosmetics Georgia LLC Georgian American University 117 Tsereteli Ave.. Microsoft Georgia LLC Bagebey City Group 8 Aleksidze St. Tel: 2226805; Fax: 2226806 34 Chavchavadze Ave. 49b Chavchavadze Ave. Tel: 2206520; Fax: 2206519 www.avon.com Tel: 2970123 Tel: 2913152; Fax: 2290169 www.gau.ge www.bagebeycity.com F H Bertling Georgia Ltd. www.microsoft.com 9 Tarkhnishvili St. Georgian Audit & Consulting Baker Tilly Georgia Ltd. Mobipay (OpenRevolution Tel: 2443356; Fax: 2443376 Company Meidan Palace, 44 Kote Abkhazi St. Georgia) www.bertling.com 47 Kostava St. Suite 29 Tel: 2505353; Fax: 2505353 19 T. Abuladze St. 0162 Tel: 2984039; Fax: 2438352 www.bakertillyinternational.com Betsy’s Hotel / Prosperos Books www.gacc.com.ge Tel: 2235403 32/34 Makashvili St. / 34 Rustaveli www.mobipay.ge Bank Constanta GMT Group Ave. 117 Tsereteli Ave. 4 Freedom Square Tel: 2987624, Fax: 2923592 MSD (Schering Plough Central Tel: 2401401 Tel: 2988988; Fax: 2988910 www.betsyshotel.com East AG) www.bankconstanta.ge.com.ge www.gmt.ge 44 K. Abkhazi St. 0105 Booz Allen Hamilton, Inc. Bank of Georgia Grant Thornton LLC Tel: 2438978 7 Bambis Rigi St., 0105 3 Pushkin St. 3 Mamardashvili St. www.merck.com Tel: 2439072; Fax: 2439059 Tel: 2444134; Fax: 2983269 Tel: 2604406 www.boozallen.com NRC www.bog.com.ge www.grantthornton.ge British American Tobacco 9 Khvichia St. 0160 Bank Republic 71 Vazha Pshavela Ave. Greco Group Tel: 2244141, 2382825 2 Gr. Abashidze St. Tel: 2399103/01/02; Fax: 2399104 1 Nutsubidze St. www.nrccintl.com Tel: 2925555; Fax: 2925544 www.bat.com Tel: 2393138; Fax: 2311107 www.greco.ge Pfi zer Luxembourg SARL www.republic.ge Catoni & Co. Georgia Representation Offi ce in Georgia Basis Bank JSC 3 Lesia Ukrainka St. Apt.7 GT Group 58 I.Abashidze St. 1 Ketevan Tsamebuli Ave. Tel: 2989230; Fax: 2922264 48 B. Cholokashvili St. Tel: 2252986 Tel: 2922922; Fax: 2986548 www.hapag-lloyd.com Tel: 2740740 www.pfi zer.com www.gtgroup.ge www.basisbank.ge Caucasia Trading Apt 11, Bld 7, 16 Krtsanisi St. Hall, Booth, Smith & Slover, P.C. Philip Morris Batumi Oil Terminal Tel: 14433050083; Fax: 41 Vaja Pshavela Ave. 0177 7 Bambis Rigi St., 0105 GMT Plaza, 4 Freedom Sq. 14433788388 Tel: 2394417, Fax: 1-404-9545020 Tel: 2439001; Fax: 2439005 Tel: 2241818; Fax: 2241817 www.caucasiatrading.com www.hbss.net www.philipmorrisinternational.com www.batumiport.com Caucasus University Hangar Bar, the ProCredit Bank BDO LLC 77 Kostava St., Bld.6, 4th fl . 20 Shavteli St. 154 Agmashenebeli Ave. 42 Kazbegi Ave. Tel: 2941691; Fax: 2253814 Tel: 2931080 Tel: 2202222; Fax: 2202222-2226 Tel: 2545845; Fax: 2399204 www.cu.edu.ge www.thehangar.biz www.procreditbank.ge www.bdo.ge
48 AUG.-SEP. 2012 BGI Advisory Services Georgia Georgian Resources Company New Construction LLC Wimm-Bill-Dann Georgia Ltd 18 Rustaveli Ave., II fl . 3-5 Kazbegi St. 2 Al. Kazbegi Ave. 0160 Village Ponichala, Tbilisi 0165 Tel: 2997292; Fax: 2996615 Tel: 2936676 Tel: 2373594 Tel: 2475290 www.bgi.ge www.georgianresources.com www.wbd.ru New School - Int-l House BLB (Business Legal Bureau) Globalink Logistics Group 35 Tskneti Highway, Bagebi Wings and Freeman Capital 1 Shevchenko St, Apt.1 14-A Shartava St, 2nd fl , Suite 7 Tel: 2231728 Green Building, 6, Marjanishvili St. Tel: 2995797 Tel: 2253262; Fax: 2439002 www.newschoolgeorgia.com Tel: 2940051; Fax: 2940053 www.blb.ge www.globalinkllc.com Nodia, Urumashvili & Parnters www.wfcapital.ge Offi ce #28, IV Block, BLC Law Offi ce Wissol Georgia Goodwill (G-Mart) 71 Vazha-Pshavela Ave. 4 Gudiashvili Sq. 74b Chavchavadze Ave. 1 Parnavaz Mepe Ave. 0131 Tel: 2207407 Tel: 2922491; Fax: 2934526 Tel: 2915315; Fax: 2915615 Tel: 2243673; Fax: 2243673 www.nplaw.ge www.blc.ge www.goodwill.ge www.wissol.ge Orifl ame Georgia Casino Adjara Gosselin Moving Georgia 57 Uznadze St. 1, 26 May Sq. 3 M/D, Didi Digomi Tel: 2911064; Fax: 2911068 NON PROFIT ORGANIZATIONS Tel: 2335519; Fax: 2334520 Tel: 2596601/02/03; Fax: 2596600 www.orifl ame.ge www.casinoadjara.com www.moving.gosselingroup.eu Overall Management Group American Friends of Georgia CaucasTransExpress Gvinadze & Partners LLC (OMG) Inc. 77 Nutsubidze St. 10a Tashkent St. 0160 44 Kote Abkhazi St, Tbilisi 0155 12 M. Javakhishvili St. Tel: 2397174; Fax: 2388495 Tel: 2375715 Tel: 2438970, Fax: 2438971 Tel: 2436052; Fax: 2436052 www.afgeorgia.org www.cte.ge www.gvinadzeandpartners.ge Policy and Management CARE International in the Consulting Group (PMCG) Caucasus Caucasus Online LLC Holiday Inn 30 Shevchenko St. 49b Chavchavadze Ave, 3rd Fl. 71 Vaja-Pshavela Ave. 1, 26 May Sq., 0171 Tel: 2921171 Tel: 2291941 Tel: 2480048; Fax: 2480048 Tel: 2300099 www..pmcg.ge www.care-caucasus.org.ge www.caucasus.net www.hi-tbilisi.com Publicis Hepta East West Management Institute, Château Mukhrani, J.S.C. HRG Georgia “Sky Travel LLC” 17 V. Jorbenadze St. Inc (EWMI) III fl oor, Didube Plaza, Meidan Palace Business Center, Tel: 2745672; Fax: 2745671 3rd Floor, 5 Marjanishvili St. 116 Tsereteli Ave. 44 Kote Abkhazi St. www.publicishepta.com Tel: 2505404; Fax: 2202441 Tel: 2201878; Fax: 2201878; Tel: 2438958 Rakeen Development LLC www.ewmi-gpac.org www.mukhrani.com www.hrgworldwide.com 2 Baratashvili St. 0105 Eurasia Partnership Foundation, City & Co. Ioli Supermarket Tel: 2933393; Fax: 2933993 the 4 Besiki St. 13 Abuseridze-Tbeli St. www.rakeen.ge 29/31/33 Chavchavadze Ave., Tel: 2920921 Tel: 2745053 Rentals Ltd. 2nd Floor, 0179 Crystal, MFO JSC www.gastronomia.ge 46 Rustaveli Ave. Tel: 2253942; Fax 2252763 (ext. 112) Tel: 2454566 www.epfound.org 72 Tamar Mepe St. Kutaisi, 4600 JTI Caucasus www.rentals.ge Tel: 431253343 15 Kipshidze St. Foundation - Centre for Training www.crystal.ge Tel: 2604111 Rompetrol Georgia Ltd. and Consultancy Dika Ltd. www.jti.com 39 Navtlugi St. 34 Al. Kazbegi Ave., Plot #3, 0177 40 Rustaveli Ave. Tel: 2910727; Fax: 2910763 Tel: 2206774 Tel: 2990994; Fax: 2990994 Kor-Standard Bank JSC www.rompetrol.com www.ctc.org.ge 43 Chavchavadze Ave. Georgian Wine Association Dutch Design Garden Tel: 2507700, Fax: 2507707 Rustavi Azot Ltd. 5 Marjanishvili St. 20 km, Agmashenebeli Alley www.ksb.ge 2 Mshvidoba St. Rustavi-3702 Tel: 2505456 Tel: 2530779 Tel: 995341270900 www.dutchdesigngarden.com Legal Partners Associated LLC www.azot.ge Offi ce #203, Besiki Business Center, International School of Economics at TSU Financial Brokers Georgia 4 Besiki St. 0108 Saunders Group 16 Zandukeli St. 36a Lado Asatiani St. Tel: 2200203; Fax: 2250458 24 G. Tabidze St. Tel: 2507177; Fax: 2984815 Tel: 2969123 www.lpa.ge Tel: 2182112 www.iset.ge www.fi nancial-brokers.ge www.engsg.com Liberty Bank JSC Silknet Ltd. QSI International School of GeoCapital Microfi nance 74 Chavchavadze Ave. 95 Tsinamdzgvrishvili St. Georgia Organization Ltd. Tel: 2555500; Fax: 2912269 Tel: 2910345; Village Zurgovani, Tbilisi 5 Tsereteli St, Kutaisi www.libertybank.ge www.silknet.com Tel: 2537670; Fax: 2322607 Tel: 431 267070 www.qsi.org www.geocapital.ge Luca Polare SRG Investments LLC 1st fl oor, 3rd entrance, 49a Chavchavadze Ave, 3rd fl oor Salvation Army, the Geocell 14 Chonkadze St. Tel: 2253581 16 Ikalto St. 3 Gotua St. Tel: 2990399 www.silkroad.ge Tel: 2333786; Fax: 2330227 Tel: 2770100, ext. 7435; www.lucapolare.com www.salvationarmy.org Fax: 2770119 Teliani Valley JSC www.geocell.ge Mgaloblishvili, Kipiani, 2 Marshal Gelovani Ave. Save the Children Federation Dzidziguri (MKD) Tel: 2313245; Fax: 2313249 Inc. Georgia Country Offi ce GeoEngineering LLC 71 Vaja-Pshavela Ave., www.telianivalley.com 20 Gotua St. 15a Tamarashvili St. Offi ce 24 Thermarsenal Ltd. Tel: 2244520 Tel: 2311788; Fax: 2311787 Tel: 2553880/81; Fax: 2973884 101, Tsereteli Ave. www.savechildren.org www.geoengineering.ge www.mkd.ge Tel: 2473112 Transparency International www.arsenal.ge Georgian Airways Mina JSC Georgia 12 Rustaveli Ave. 4 Besiki St. VD Capital 26 Rustaveli Ave. 0108 Tel: 2999730; Fax: 2999660 Tel: 2449981/82/83; Fax: 2449980 77 Kostava St., 0175 Tel: 2932129 www.georgian-airways.com www.mina.com.ge Tel: 2363672; Fax: 2364302 www.transparency.ge
AUG.-SEP. 2012 49 SOCIAL PAGE On June 30, the American Chamber of Commerce in Georgia, in cooperation with the American Embassy Community, hosted its annual Fourth of July picnic at the U.S. Embassy in Tbilisi. Many thanks to everyone who celebrated with us – and especially to our generous sponsors who made the event possible. For more information, please see page 47.
50 AUG.-SEP. 2012 SOCIAL PAGE
AUG.-SEP. 2012 51 SOCIAL PAGE
52 AUG.-SEP. 2012 SOCIAL PAGE On the Fourth of July, Ambassador John Bass and his wife Holly celebrated American Indepence Day with the American Friendship Club.
On June 10, AmCham CSR Committee supported the Race for the Cure at Turtle Lake.
AUG.-SEP. 2012 53 Sarah Williamson, PRESIDENT In Tbilisi since June 1998, Sarah Williamson is the co-owner and Vice President of United Global Technologies (UGT), the largest IT company in Board Of Directors 2012 Georgia.
David Lee, Chairman Emeritus R. Michael Cowgill, David Lee is the General Director of Magticom, the First Vice-President largest telecommunications operator in Georgia and In his 12th. year in Georgia, Michael Cowgill is took up his position March 2004. David is also the currently the President and co-founder of Georgian Chairman of the Eurasia Partnership Foundation American University’s business and law schools in and is a Chartered Accountant with an MBA from Tbilisi, Georgia. Warwick Business School. A Russian speaker, he has worked extensively in the former USSR and served as a Royal Naval Offi cer for 9 years.
Irakli Baidashvili, Neil Dunn, Director Vice-President & Treasurer Neil Dunn is the general manager of BP Irakli Baidashvili is the Senior Vice President of Georgia since October 2008. He has 30 years of GMT Group. The company is one of the largest US experience in the oil and gas industry, having direct investments in Georgia, the owner of two various engineering and operations assignments. Marriott hotels, production facility SANTE and several major real estate sites in Tbilisi .
Esben Emborg, Director Lasha Gogiberidze, Director Esben Emborg has been in Georgia since 1999. He Lasha Gogiberidze is a founding partner of BGI has worked a General Manager for Caucasus Region Advisory Services Georgia and the director of for Cadbury Schweppes and Nestle until 2008. Now BGI Legal. Previously, Lasha worked at Ernst & he is working as Principal Partner for an Investment Young’s Georgian offi ce. Lasha graduated from Fund (SEAF) that is currently managing a 30 mil Tbilisi State University, has a LL.M. from the USD portfolio of investments all over Georgia. University of Illinois, and is licensed to practice law in NY state.
Badri Japaridze, Director Steve Johnson, Director Badri Japaridze has been the Deputy Chairman of Steve Johnson is the proprietor of Prospero’s the Supervisory Board of TBC Bank since 1999 Books and the General Manager of The Hotel and the Vice-President of Betsy. Prospero’s Books and Caliban’s Coffee Georgian Glass and Mineral Water Co. (GG&MW) House is the leading English language bookstore since 1995. in Georgia.
Ted Jonas, Director Ketti Kvartskhava, Director Ted Jonas is the Managing Partner of DLA Piper’s Ketti Kvartskhava is a Partner of BLC Law Offi ce. Tbilisi offi ce. He advises clients on international Her professional experience includes her work as business transactions, energy and infrastructure a Commercial Law Advisor at the USAID Georgia projects, government relations, and dispute and as an instructor at Tbilisi State University. resolution. She also worked as a Legal Counsel for the US- Georgian Commercial Bank JSC Absolute Bank and JSC Transcaucasia Bank.
Robin McCone, Director John Ashworth, Ex-Officio Member Robin McCone is a NZ lawyer. He leads PwC’s John Ashworth is the Deputy Chief of Political tax and legal practice in Georgia and Armenia. He and Economic Affairs and Senior Economic/ has been with PwC mainly based in CEE countries Commercial Offi cer at the U.S. Embassy. He for over 16 years. Prior to moving to Tbilisi he worked previously in Uzbekistan, Barbados, spent two years in New York as the leader of and on the State Department’s India Desk in the CEE Desk. He looks forward to utilising his Washington. large international network in his role as a board member.
Betsy Haskell, Founding Advisor George Welton, Exec. Director Betsy Haskell is an 18 year resident of Georgia who George Welton came to Georgia as a university started four successful businesses, and is currently lecturer in 2004. Soon after arriving he started developing a resort hotel and villas in the wine working as a professional researcher and founded country. For the past 15 years, she has been the GeoWel Research in 2008. His company conducts Georgia Contractor for Metrica, Inc, a US Treasury research and analysis for non-profi ts like KfW, Department sub-contractor. GIZ, UNDP, DfID, CARE International and some private companies.
54 AUG.-SEP. 2012 AUG.-SEP. 2012 55 ENERGY AND BEYOND
DLA Piper’s experience in the Energy sector combines our Our lawyers have been at the forefront of the development knowledge of local energy opportunities with our broad of the Georgian energy sector since the early 1990s, and we global capabilities. Our practice delivers first-rate legal are still working to build Georgia’s energy future today. services for pipelines, utilities, oil and gas exploration and project-related development and finance. Key service offerings include:
■ We have acted on behalf of major oil and gas companies Energy project structuring, including project in the negotiation and implementation of host government development and concession type arrangements agreements and associated special tax regimes for large ■ Energy project financing and security structures midstream arrangements. This includes the provision of legal ■ Joint ventures in energy-related projects and tax advice on the planning, construction and operation of oil and gas transit pipelines through Georgia. Our upstream ■ Comprehensive energy-related due diligence work is equally extensive, including the design, negotiation ■ Mineral license issues and implementation on behalf of foreign oil companies of most of Georgia’s production sharing agreements, including ■ Production sharing agreements the first Black Sea off-shore concession. ■ Oil and gas industry commercial agreements and Our work in the electric power sector includes the transactions representation of international financial institutions in ■ Litigation and arbitration of energy-related disputes financing electric power generation and distribution ■ companies, as well as owners in the sale of generation assets. Strategic advice on planning, development and permitting issues, as well as the legislative, political We take a proactive, commercial approach by assembling and regulatory environment teams from various practice areas to provide a full range of ■ Acquisitions and disposals of energy-related assets and service offerings. companies
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Ted Jonas, Office Managing Partner [email protected]( ) | Otar Kipshidze, Partner ([email protected]) DLA Piper Georgia LP, 10, Melikishvili Street, Tbilisi 0179, Georgia | T +(995)32 2509 300 | F +(995)32 2509 301
DLA Piper is a global law firm operating through various separate and distinct legal entities. A list of offices and regulatory information can be found at www.dlapiper.com