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Issue no: 1058/134 • JUNE 19 - 21, 2018 • PUBLISHED TWICE WEEKLY PRICE: GEL 2.50

In this week’s issue... FOCUS ADB President Holds Offi cial ON CARING FOR OUR CITY Meetings in Georgia Tbilisi City Hall calls for clean-up NEWS PAGE 2 and care campaigns to raise awareness. The competition is on! PAGE 5 Georgia’s and Armenia’s “Deplorables” and “Desperados” – No Longer a Basket Case! ISET PAGE 4 Georgian Airline Gets EASA Authorization

BUSINESS PAGE 5 MRDI Unveils $2 Billion Road Construction Project What Bakhtadze’s Policies as Finance BUSINESS PAGE 6 TBC Capital Releases Minister Hint about his Leadership Report on Fixed Income for Georgian Railways from 2005, including as BY SAMANTHA GUTHRIE CEO from 2013-2017. He studied microeconomics Securities in Georgia and management at Tbilisi State University and BUSINESS PAGE 7 has a PhD in technical sciences from the Georgian ne June 14, 2018, Mamuka Bakhtadze Technical University. At Georgian Railways, he was nominated to be the next lobbied on behalf of the Georgian position for Economy & Nationalism: Prime Minister of Georgia. While Project Viking, ZUBR and the South-West cor- he still has to go through confi r- ridor. Bakhtadze also actively contributed to Changes in the Russian mation procedures, he is expected Georgia joining China’s One Belt One Road ini- toO be confi rmed, whereby he will begin to build tiative – focusing on Georgia’s role as a regional Western Borderlands a new government around him. As Georgia’s transport hub. Minister of Finance from November 13, 2017 to Bakhtadze moved from the private sector to the June 13, 2018, Bakhtadze’s policy positions can Ministry of Finance just eight months before being shed some light on his potential platform as nominated for prime minister. prime minister. This March, the National Democratic Institute Speaker of the Georgian Parliament and GD conducted a poll where 43% of respondents said member Irakli Kobakhidze called Bakhtadze, that were not familiar with Bakhtadze’s name, “distinguished by his education and versatility. 31% had neutral feelings towards him, 5% nega- He is a very serious expert in economy.” Before tive, and 9% positive. becoming Minister of Finance, Bakhtadze worked Continued on page 2 BUSINESS PAGE 11

Prepared for Georgia Today Business by Markets Asof15ͲJunͲ2018 STOCKS Price w/w m/m BONDS Price w/w m/m BankofGeorgia(BGEOLN) GBP19.27 Ͳ3,2% Ͳ14,1% GEOROG04/21 101.00(YTM6.36%) Ͳ0,2% Ͳ0,3% GeorgiaCapital(CGEOLN) GBP12.33 +10,9% na GEORG04/21 106.30(YTM4.47%) Ͳ0,3% +0,2% GHG(GHGLN) GBP2.70 Ͳ3,6% +2,3% GRAIL07/22 105.42(YTM6.22%) +0,1% Ͳ0,1% TBCBankGroup(TBCGLN) GBP17.06 +0,1% Ͳ2,4% GEBGG07/23 99.97(YTM6.01%) Ͳ0,1% Ͳ0,8%

COMMODITIES Price w/w m/m CURRENCIES Price w/w m/m CrudeOil,Brent(US$/bbl) 73,44 Ͳ3,9% Ͳ6,4% GEL/USD 2,4582 +0,2% +1,1% GoldSpot(US$/OZ) 1278,94 Ͳ1,5% Ͳ0,9% GEL/EUR 2,8545 Ͳ1,0% Ͳ0,8% GEL/GBP 3,2634 Ͳ0,6% Ͳ0,6% INDICES Price w/w m/m GEL/CHF 2,4564 Ͳ0,9% +1,2% FTSE100 7633,91 Ͳ0,6% Ͳ1,2% GEL/RUB 0,0389 Ͳ1,0% Ͳ0,3% FTSE250 21005,52 Ͳ0,7% +1,1% GEL/TRY 0,5197 Ͳ5,1% Ͳ5,0% DAX 13010,55 +1,9% +0,3% GEL/AZN 1,4459 +0,4% +1,1% DOWJONES 25090,48 Ͳ0,9% +1,6% GEL/AMD 0,0051 Ͳ +2,0% NASDAQ 7746,38 +1,3% +5,4% GEL/UAH 0,0933 Ͳ0,5% +0,6% Chat with us MSCIEMEE 153,90 Ͳ2,9% Ͳ6,2% EUR/USD 0,8615 +1,4% +2,0% MSCIEM 1113,76 Ͳ1,9% Ͳ3,2% GBP/USD 0,7529 +0,9% +1,7% SP500 2779,66 +0,0% +2,5% CHF/USD 0,9976 +1,2% Ͳ0,4% MSCIFM 2742,32 Ͳ3,2% Ͳ4,7% RUB/USD 63,1426 +1,3% +1,4% GTIndex(GEL) 1582,68 ͲͲTRY/USD 4,7305 +5,8% +6,4% GTIndex(USD) 1208,13 ͲͲAZN/USD 1,6915 Ͳ0,2% +0,0% GEORGIA TODAY 2 NEWS JUNE 19 - 21, 2018 ADB President Holds Offi cial Meetings in Georgia BY THEA MORRISON

sia Development Bank (ADB) Presi- Photo source: Sukhishvili National Ballet dent, Takehiko Nakao, paid an offi cial visit to Georgia on June 13-16. During his three-day stay, Takehiko Nakao met President of Georgia Giorgi Georgian National Ballet AMargvelashvili and Acting Minister of Finance and ADB Governor, Mamuka Bakhtadze, who was nominated as candidate for Prime Minister last week. Nakao visited ADB-assisted projects during his Sukhishvili in Euronews Spotlight During his visit, Nakao announced that ADB plans stay. Along with Tbilisi City Mayor Kakha Kaladze, tumes from different social backgrounds, and from to mobilize over $1.2 billion in fi nancing during he visited the University Metro station which has BY THEA MORRISON various regions of the country. 2019–2021, including support for two fl agship pro- improved mobility for over 300,000 passengers a Some dances from the mountain regions look like jects of the government: the development of the day. ADB provided $34 million in fi nancing to refur- real battles or competitions of bravery and cour- East-West and the North-South transport and eco- bish the station. opular news agency Euronews dedicated age. nomic corridors. The ADB President also met the Minister of an article to Georgia’s National Ballet "Isn’t it amazing? You can see the fascinating He noted that these projects are very important Regional Development and Infrastructure Maia Sukhishvili, saying that in parallel with show of the Georgian National Ballet Sukhishvili for Georgia as they pursue a goal of its becoming Tskitishvili, Minister of Education and Science Georgia’s natural beauty and fi ne cuisine, at the Rike Park every Saturday until August the a regional hub through increased connectivity and Mikheil Chkhenkeli, and the Head of the National the National ballet is one of the nation's 25th," reports Wolfgang Spindler for Euronews. trade, opening the land-locked markets of Armenia Bank of Georgia, Koba Gvenetadze. Pcultural “crown jewels.” The Georgian National Ballet was founded by and Azerbaijan, and extending the Central Asia Nakao then had a meeting with the representa- Wolfgang Spindler, Art Editor of Euronews visited Iliko Sukhishvili and Nino Ramishvili in 1945 and Regional Economic Cooperation corridors to the tives of TBC Bank, which has received ADB loans Tbilisi to meet the Georgian National Ballet Sukh- was initially named The Georgian State Dance Black Sea and Europe. through non-sovereign operations. ishvili, the national folk ensemble, which brings Company. It was the fi rst professional state dance “ADB will continue to support transformative Partnering with local banks and microfi nance together traditional Georgian Folk dance, classical company in Georgia. After them, many other com- energy as well as urban transport and water pro- institutions, ADB supported more than 14,000 ballet and modern dance elements. panies were founded on their example. jects, while helping the government to implement micro, small, and medium-sized enterprises The authors of the article explain that Sukhishvili Nino Ramishvili and Iliko Sukhishvili became reforms in such areas as pensions, capital markets (MSMEs) in agribusiness, retail, small manufactur- started out over 70 years ago as a family enterprise, inseparable partners both on stage and in life. Filled and private sector promotion. It will strengthen ing, and tourism in 2014–2016. During the meeting, when the husband and wife team of Iliko Sukhish- with determination, they made their dream a real- non-sovereign operations. It will also expand assis- it was noted that ADB will continue to support vili and Nino Ramishvili founded the Company. ity. Their life together was an adventure of creativ- tance to education, including technical and voca- MSMEs through sovereign and non-sovereign “The Ballet has since survived the red terror of ity, which was fully realized through new genera- tional education and training and using solar energy operations. Stalin’s Soviet Union, the Cold War and the break- tions of dancers. in schools,” he stated. Georgia became an ADB member country in 2007 up of the Soviet Union, growing into an interna- The Georgian National Ballet has been hosted by The ADB President also commended Georgia’s and since then it has supported both infrastructure tionally renowned company,” the article reads, many world renowned impresarios and companies. impressive economic progress over the last decade, and institutional development. adding now the grandchildren - Iliko Sukhishvili, The Georgian National Ballet has appeared at the noting the government’s sound management of the Georgia has received over $2.4 billion in develop- the Artistic Director and Choreographer-in-Chief Albert Hall, The Coliseum, The Metropolitan Opera, economy amid regional economic pressures. ment assistance from the ADB since 2007. Moreo- and his sister Nino, Director General and Costume Madison Square, and dozens of famous venues. In “The country has become an important gateway ver, the bank’s operations and staff in Georgia have designer, run the ensemble and continue the tradi- 1967, La Scala welcomed them - it is the fi rst and only between European and Asian markets,” he said. doubled in the last two years and continue to grow tions of their grandparents. time a folklore group was given a chance to perform “Georgia’s economic growth has accelerated to to bring better services and infrastructure to the The ballet integrates traditional dances and cos- there. The curtain was lifted 14 times, a record. 5.0% in 2017 from the 2.8% recorded in 2016.” people of Georgia. The perfect pairing of Business and Lunch! What Bakhtadze’s Policies as Finance Ambassadori Club cordially invites you Minister Hint about his Leadership Continued from page 1 of property not listed as collateral in the loan agree- ment. Bank of Georgia and TBC Bank hold 72% of The response was mirrored in an April poll by the country’s fi nancial assets, indicating a bulky, the International Republican Institute (IRI), in ineffi cient system. which 55% of respondents had not heard of Bakhtadze, With Bakhtadze as Finance Minister, the govern- 22% said they viewed him unfavorably, and 9% said ment announced a Four Point Reform Program they viewed him favorably. aimed at promoting savings, productivity and export During a speech accepting his nomination for growth, diminishing vulnerabilities, and guaran- prime minister, Bakhtadze listed as one of his four teeing more robust, healthy and inclusive economic main principles of governance, “A new economic growth. Bakhtadze has also expressed strong sup- model with new fair rules,” promising to deliver port for the ongoing de-dollarization/larization reforms “in all directions,” affecting every Georgian program. In a March interview with Emerging family. Another of his principles is small govern- Europe, Bakhtadze also promised “an automatic ment, and he has a vision of stronger institutional VAT credit refund system, and insolvency reform and public control, with less corruption, “the start- are coming soon, as well as several important ing point is that we need a small, effective and reforms that will ease tax administration.” fl exible government. Small government, of course, In plans announced since his nomination, means that certain agencies may be united,” said Bakhtadze discussed wanting to reform the bank- Bakhtadze. ing sector, most notably: Cutting the effective annual Until his nomination, Bakhtadze’s most signifi cant interest rate ceiling on loans to 50% instead of move in public offi ce was introducing sweeping 100%; Recalculation of late fees on loans, including reforms of the banking sector. In April, he called lowering them; Prohibiting banks from seizing Georgia’s very profi table banks an impediment to property not listed as collateral in a loan agree- the national economy by encouraging growing debt ment. He also plans to create a “fi nancial arm” of among citizens. While, as Finance Minister, bank the Georgian Government to spend up to 1% of reform was not in his purview, as Prime Minister, GDP on affordable loans for small, local start-ups. Bakhtadze will have the power to initiate any Banking sector reforms could lessen the burden reforms he sees fi t – with the support of his party, of debt on a nation with low salaries and high of course. unemployment. Predatory lending practices are In a healthy economy, the banking sector should common in Georgia, used as a stop gap for urban provide businesses and individuals with funding and rural families who cannot make ends meet. to grow and expand, but in the last few years, banks “Precarious self-employment and high structural have profi ted mainly on retail credit, which has unemployment, especially among young people,” dominated banking sector loans, rather than loans comments Khundadze, “drives many Georgians for small and medium sized businesses. “Consumer towards risky debt practices.” loans and retail fi nancing tend to promote imports Bakhtadze has been nominated to replace Giorgi rather than encouraging local production which Kvirikashvili, who served as Prime Minister from would create employment and bring added value December 30, 2015, until he resigned on June 13, to the economy,” says development economist Tato 2018. Kvirikashvili stepped down after weeks of Khundadze, pointing to research by the World Bank protests against the country’s justice system, but and EBRD which “puts access to credit as the third blamed his resignation on differences on “funda- biggest obstacle to Georgian businesses.” mental issues” with party leader Bidzina Ivanishvili. The IMF ranked Georgia as having some of the If confi rmed, Bakhtadze will be the fourth Prime highest number of individuals in debt, with 680 Minister since his political party, Georgian Dream Lunch times: 12:00 $ 14:00 In order to book a table, please, contact us on: out of every 1,000 adults having at least one active (GD) came to power in 2012. GD has 116 seats in Dinner times: 18:00 $ 20:00 +995 32 243 9494 or +995 599 57 16 40 Delicious dishes, soft drinks and desert Visit us at: Ioane Sahvteli Street 17, loan in 2015. By the end of 2016, there were 2.4 mil- Georgia’s 150 member parliament. Mamuka Cozy atmosphere, high-class service. Ambassadori hotel. Ground Floor. lion active loans in the country. Penalties for non- Bakhtadze needs votes from at least 76 MPs to be Prices 20 - 25 USD per person Italian-Georgian restaurant. repayment are harsh, including permanent seizure confi rmed as Georgia's next Prime Minister.

GEORGIA TODAY 4 BUSINESS JUNE 19 - 21, 2018 THE ISET ECONOMIST A BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS www.iset-pi.ge/blog

The ISET Policy Institute (ISET-PI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). Our blog carries economic analysis of current events and policies in Georgia and the South Caucasus region ranging from agriculture, to economic growth, energy, labor markets and the nexus of economics, culture and religion. Thought-provoking and fun to read, our blog posts are written by international faculty teaching at ISET and recent graduates representing the new generation of Georgian, Azerbaijani and Armenian economists. Georgia’s and Armenia’s “Deplorables” and “Desperados” – No Longer a Basket Case!

BY ERIC LIVNY AND LAURA MANUKYAN

eorgian and Armenian rul- ing parties have been until recently basking in the glory of high GDP growth rates. Armenia’s stellar Ggrowth performance of 7.5% in 2017 and Georgia’s respectable 5% are, indeed, worthy of praise. However, do these fi g- ures really matter for the objective well- being of the majority of Georgians and Armenians? Second, how does economic growth, as measured by GDP, affect peo- ple’s subjective perception of happiness? Third, what does it do to crime rates? And, fi nally, does economic growth diminish people’s appetite for political representation, social justice and fair- ness? Georgian state budget. feel about it. For one, people’s percep- war-and-corruption torn Ukraine (138th) nia’s geography and social classes. Restor- THE THEORY AND PRACTICE OF Unfortunately for both Georgia and tions of existing social and economic and not very far from Africa’s failed ing social solidarity appears to be at top TRICKLE-DOWN ECONOMICS Armenia, however, economic growth, disparities may be determined by cultural states at the very bottom of the ranking: of Nikol Pashinyan’s priorities and his A belief traditionally held by liberal eco- even when accompanied by a reduction factors (one may argue that Nordic peo- Burundi, Central African Republic, vision for Armenia’s Velvet Revolution: nomic thinkers and ideologues is that in absolute poverty, does not automati- ple tend to place a higher value on social South Sudan, Tanzania, Yemen and “healthier institutions, less corruption, wealth tends to ‘trickle down’ from the cally translate into improved subjective solidarity, whereas caste-based societies Rwanda. Not surprisingly, the happiest fair pay, stronger regulation, better edu- upper echelons of society to the lower perceptions of well-being of either the tend to accept inequality as a given, fi ve nations in the world are those that cation, advancement for all.” classes. The implication of this trickle- poor or the budding middle classes. refl ecting the will of God). Additionally, place social harmony and fairness on The eagerness with which thousands down proposition is that economic growth perceptions are affected by the speed par with individual success: Finland; of Georgians are gathering to protest benefi ts everybody by increasing the ECONOMIC GROWTH, with which social gaps are closed (or Norway, Denmark, Iceland and Swit- perceived injustices suggests that Geor- overall size of the pie. The entrepre- INEQUALITY AND HAPPINESS not) through the political system. Stag- zerland. gia’s “deplorables” and “desperados” neurial class may be the fi rst to benefi t There is a fairly broad consensus in the nation or slow progress in addressing Importantly, a perceived lack of social have also reached a point of no return. from expanded business opportunities, social science literature, as discussed in social disparities is likely to generate justice is a powerful trigger of anti-social Corruption may not be Georgia’s main but more business (and businesses) also a recent CityLab piece, that money alone frustration, desperation, anti-social or and radical political behaviors. As Jordan concern, however, for much of its recent means more jobs, and more income does not make people happy. For exam- radical political behaviors, as we have Peterson put it in his vodcast, “what history, Georgia has been ruled by dom- redistributed to the poor – directly, ple, a study by Shigehiro Oishi (Univer- recently observed in both Georgia and causes crime, especially, aggressive crime, inant parties and powerful individuals through the tax system, and indirectly, sity of Virginia) and Selin Kesebir (Lon- Armenia. is relative poverty. And relative poverty who have been able achieve a near- through public education and healthcare don Business School) fi nds that happiness is not the same thing as poverty at all… monopolistic status in the country’s systems. Economic growth thus helps (“subjective well-being”) in 16 developed (UN)HAPPINESS, DESPERATION, Poverty is when you don’t have enough political arena. This objective weakness reduce the absolute level of poverty in countries is correlated positively with AND POLITICAL ACTION to eat. Relative poverty is when the guy of the Georgian political system and the a society. GDP per capita and negatively with For all their differences, Georgians and next door has a much better car than country’s fundamental inability to address The ‘trickle down’ theory makes a lot income inequality (measured by the Gini Armenians share much in common. Both you.” By the same token, what causes persistent social gaps appear to be at the of sense … in theory. Whether it actually coeffi cient). Much more surprisingly, are small ancient nations that survived radical political behavior is a feeling that root of the current crisis. works in practice depends on a few when looking at 18 less-developed Latin through centuries of imperial domina- the guy next door is somehow above the Giorgi Kvirikashvili was one of the fi n- important nuances. First, if economic American economies, Oishi and Kesebir tion and conquest. Both proudly embraced law or is able to get special treatment est prime ministers in Georgia’s modern growth is generated in just a few capital- fi nd that not only inequality tends to independence 100 years ago and, again, from the courts, the law enforcement history, and his departure will not address intensive sectors of the economy, such dampen happiness, but – in contrast to in early 1990s. And both are seriously agencies, and the political system. either of these causes. If anything, the as Azerbaijan’s oil and gas sector, it is advanced nations, – happiness does not unhappy with the current state of their Armenian people’s success in bringing manner in which Kvirikashvili has been likely to create relatively few jobs. More- increase alongside economic growth. political institutions. down a corrupt regime is truly inspiring. thrown under bus serves to illustrate over, these new jobs may not be suitable What can explain the fact that economic Out of 156 countries included in UN’s An unprecedented wave of social soli- Georgia’s weakness as a democratic pol- for the uneducated and unskilled urban growth cannot buy happiness in the less- World Happiness Report 2018, Georgia darity swept through the entire society, ity and the urgent need for political and and rural poor. Second, economic growth developed Latin American nations? One and Armenia have been ranked 128th manifesting itself in civil disobedience economic reforms going beyond PR and certainly increases the amount of taxable reason may be the very high initial lev- and 129th, only a few notches ahead of acts and protests cutting across Arme- the quick ease-of-doing-business fi xes. income in an economy, but whether and els of inequality in Latin American soci- when the extra tax revenues will benefi t eties, and the failure of their political the poor depends on a country’s politi- systems to make sure that a fair share of cal priorities. At one extreme, the gov- newly created wealth trickles down fast ernment may choose to increase social enough to the poor masses. pensions; at another, it may increase When it comes to income inequality, public spending on defense or reduce Georgia and Armenia do more or less the tax rate on businesses (so as to fi ne relative to their level of develop- encourage investment and future growth). ment. As reported by the World Bank, At least in Georgia, economic growth the level of income inequality in Georgia does seem to have had a mitigating impact and Armenia (Gini coeffi cients of 38.5 on poverty, and extreme poverty in par- and 32.4 in 2015, respectively) is much ticular, as refl ected in UNICEF’s 2017 lower than in African, Asian and Latin Welfare Monitoring Survey (WMS). American societies divided by caste, clan First, Georgia’s economic growth has and race (the most unequal societies, been primarily driven by labor intensive such as South African Republic and Haiti, sectors – tourism, trade and traditional have Gini coeffi cients above 60). As agriculture. Second, since early 2013, could be expected, it is quite a bit higher Georgia’s has been aggressively engag- than in some of the wealthiest and most ing in redistribution policies – it intro- egalitarian societies of the world, such duced universal healthcare coverage and as Finland and Iceland, with Gini coef- free preschool education, and increased fi cients around 25. targeted social assistance (TSA) and However, what is important in the con- pensions. In 2017, at 24.6% of central text of subjective well-being and happi- Tel: (995 32) 2 45 08 08 public expenditures, social protection ness is not the absolute degree of income 10 Galaktion Street E-mail: [email protected] was the largest spending item in the inequality, but how people in a society GEORGIA TODAY JUNE 19 - 21, 2018 BUSINESS 5 PM Candidate Pledges Support for Startups, the Green Economy & Angel Investors

IT departments. At the same time, he BY SHAWN WAYNE promised fi nancial incentives for Geor- gian tech start-ups, and spoke of the need to attract talent also from the amuka Bakhtadze, can- neighboring countries (Armenia, Bela- didate for the next rus, Kazakhstan and Ukraine were men- Prime Minister from tioned). the ruling Georgian Responding to a question from his Dream party, chose to audience, Bakhtadze said the govern- holdM his fi rst meeting in his new role ment will present proposals for attract- with young representatives of Georgian ing angel investors from abroad, as well tech start-ups, at Technopark Tbilisi, a as encouraging high-technology com- public-private project supporting the panies to open their representations in development of a new economy. Georgia by easing or completely abol- During an almost two-hour meeting, ishing their corporate tax. where Bakhtadze made a presentation Aside from these, he also pledged and fi elded questions from the audi- concrete initiatives to support the green ence, he exposed his vision of the coun- economy and highlighted education as try’s development steeped in the gov- being the focal point for the new gov- ernment supporting a high-tech ernment’s investment. economy, entrepreneurship and com- Bakhtadze, perhaps attuned to the petition. needs of the audience, refrained from Specifi cally underlining his intention touching upon other, wider, issues of to support FinTech startups and boost poverty, social support or security. Georgia’s competitive advantage in the Georgia has a tradition of technocratic which would fully enter into force this Georgia’s Finance Minister since kashvili stepped down amid public pro- fi nancial services sector, he pledged to Prime Ministers primarily responsible coming autumn, foresees a much wider November 2017, Bakhtadze, a political tests as well as apparent “differences curb unfair competition to private IT for the country’s economic stability and executive role for the Prime Minister novice, was tapped to be the country’s of opinion” with the ruling party lead- start-ups from governmental agencies’ growth. But Georgia’s new Constitution, as the full-fl edged Head of Government. new head of government after PM Kviri- ership. Care for Georgian Airline the City Gets EASA Campaign Authorization he Public Information Com- munication Agency of Tbi- The Georgian Civil Aviation Agency BY THEA MORRISON lisi City Hall has announced (GCAA) reports that EASA's Air Safety a six-month contest for the Security will enable GEO SKY to oper- social campaign “Care for ate on the European aviation market and Tthe City.” fter two Georgian airline will also promote the airline's further On June 18, the press conference for companies, Georgian Air- development. the campaign was held in Stamba Hotel ways and TCA, received The authorization permit has been Tbilisi by the Mayor of Tbilisi, Kakha authorization from the Euro- mandatory for any non-EU country Kaladze. The members of the commis- pean Aviation Safety Agency operator wishing to fl y into the territory sion also attended the event. (EASA)A in 2016, GEO SKY, Georgia’s cargo of the European Union since 2016. It The goal of the campaign is to develop airline, has become the third local com- means that before a newly developed a sense of social responsibility and care pany to be granted the right to operate aircraft model may enter into operation, for the city among the community; to in 28 EASA member European Union it must obtain a certifi cate from the create a valuable product that will initi- countries and in four from the European EASA, responsible for the certifi cation ate irreversible processes lasting in our Association for Free Trade - Iceland, of aircraft in the EU and for some Euro- memories and habits, encouraging the Liechtenstein, Norway and Switzerland. pean non-EU Countries since 2003. population to act in favor of the city. EASA is an agency of the European The certifi cate testifi es that the type Long-running awareness-raising and Union responsible for civil aviation safety. of aircraft meets the safety requirements campaigning through various activities It carries out certifi cation, regulation set by the European Union. will illustrate how crucial it is to take care of the city and encouraging a sense Agencies ACAG; Founder of Marketer.ge and standardization, and also performs Other missions and tasks of the EASA care of the city. This campaign will unite of responsibility from early age is par- 8. Goga Chanadiri - Photographer investigation and monitoring. It collects are to: not only society, but also the state, non- ticularly important. In addition, it is 9. George Sharashidze - General Man- and analyses safety data, drafts and • Ensure the highest common level of governmental and private sectors. essential to actively involve leaders who ager of Media Holding Georgia Today advises on safety legislation, and coor- safety protection for EU citizens; To maintain the implemented projects have high social responsibility. The cam- Group dinates with similar organizations in • Ensure the highest common level of and the effi ciency of the relevant activ- paign will include various types of use- 10. Soso Galumashvili - Senior Consult- other parts of the world. environmental protection; ities and services by Tbilisi City Hall, it ful and result-oriented action activities, ant of PRP and Marketing Communica- The EU safety authorization for foreign • Single regulatory and certifi cation is vital raise a sense of responsibility in which citizens of Tbilisi will actively tions Company GEPRA air operators (PART-TCO) confi rms the process among Member States; among the population. Vandalism and participate. 11. Giorgi Kekelidze - General Director full compliance of the airline operator • Work with other international avia- theft is frequently recorded within Geor- The new campaign follows the exam- of the National Parliamentary Library with International Civil Aviation Organ- tion organizations and regulators; gian society. Millions of GEL are spent ple of Singapore which set a campaign of Georgia, Writer ization (ICAO) and EU standards, as • Certify and approve products and on amenities and infrastructure projects of similar content in the 1970s, resulting 12. Tamar Amashukeli - Art Critic; Cul- well as highlighting the safety and super- organizations, in fi elds where EASA has throughout the year. These projects need in its gaining and maintaining the status tural Heritage Expert vision of international safety standards. exclusive competence; not only material, but also human of the cleanest and best regulated city 13. Tinatin Rukhadze - General Man- The permit is valid until the operator • Promote the use of European and resources. Due to negligence and van- in the world. ager of "ACT Global"; Psychologist, meets the PART-TCO regulation stand- worldwide standards; dalism, it becomes necessary to carry The members of the Commission Sociologist ards or the state issuing of the Airborne • Cooperate with international actors out additional repairs. Moreover, there include: 14. Ekaterine Jojua - Director of Com- Operator's Certifi cate (Georgia) stops in order to achieve the highest safety are cases when the population pollutes 1. David Birman - Head of Electronic munication Development Agency of or cancels the relevant certifi cate. level for EU citizens globally. the city, which needs additional mobili- Bank Management Service of Bank of Tbilisi City Hall. zation and resources. The above-men- Georgia "Its a really positive initiative which tioned circumstances impede the process 2. Nana Janashia - Executive Director will have an impact on our city and more of the city’s development, affecting its of the Caucasus Environmental NGO importantly will create a good example appearance and the everyday lives of Network (CENN) to other citizens, encouraging them to citizens. 3. Nino Lomadze - Founder and Editor take responsibility for their neighbor- The concept winner will be selected, of Magazine "Indigo" hoods," said commission member and jointly by the specifi cally created Com- 4. Giorgi Popiashvili - Creative Direc- Georgia Today GM, George Sharashidze. petition Commission and Tbilisi City tor, Director "Its time to get outdoors and look after Hall, for being interesting and result- 5. Giorgi Kalandia - Director of the our public spaces which belongs to all oriented. Only legal entities can par- State Museum of Theater, Music, Cinema society. I expect some very interesting ticipate in the contest and must have at and Choreography; Historian, Professor projects, the best of which will be selected least three years’ experience in the rel- 6. Giga Khatiashvili - Professor of Inter- for the maximum benefi t of our city and evant fi eld. The participants should sub- national School of Design, Founder and the environment." mit their related work and a proposal of Director of Creative Lab 919 Projects can be submitted until July 9, the concept by July 9th, 2018. The involve- 7. Ako Akhalaia - President of the Asso- 2018. The results of the competition will ment of the young generation in taking ciation of Georgian Communications be announced no later than 30 July 2018. Image source: Flickr GEORGIA TODAY 6 BUSINESS JUNE 19 - 21, 2018 MAY: Average Hotel Prices in Georgia and Hotel Price Index

n Georgia, the average cost of a room1 in a 3-star hotel was GEL 137 per night in May 2018. The most expensive 3-star hotels in May in Georgia were found in TbilisiI (exceeding the average price by 15%). The average cost of a room in a 4-star hotel in Georgia in May was GEL 232 Table 2: Distribution of monthly average number of visits made by inbound visitors of per night. The most expensive 4-star age 15 and older by visited regions, thousand, Geostat hotels in May were in Tbilisi (exceeding the average price by 13%). The average cost of a room in a 5-star of inbound tourists increased signifi - ter of 2018, only 3.4%were recorded in hotel in Georgia in May 2018 was GEL Table 1: Percentage change of prices in May 2018 over April 2018 cantly in Imereti (by 66%) and Mtskheta- Samegrelo-Zemo Svaneti, Guria, Racha- 399 per night. In Tbilisi, the average price Mtianeti (by 47%). Letchkhumi and Shida Kartli regions was GEL 610, followed by Kakheti- 358 hotel rooms increased mostly in Adjara decreased by 1.8% in May 2018 compared Of all visits to Georgia in the fi rst quar- combined. GEL, Samtskhe-Javakheti-GEL 354, and (6.5%), while the daily rates decreased to April 2018. Among regions, in this Adjara-GEL 269. the most in Kakheti region (8.1%). type of accommodation, the biggest per- In May 2018, the average cost of a room In May 2018, compared to April 2018 centage price increase for standard dou- in a guesthouse2 in Georgia was GEL 72 the number of international travelers ble rooms was recorded in Guria, the per night. The highest daily rates for increased by 6.1%, of these interna- biggest percentage price decrease in guesthouses like previous months were tional travelers, the proportion who Kakheti region. found in Kvemo Kartli and Guria. stayed in Georgia for 24 hours or more In terms of apartments, on Airbnb in (classifi ed as tourists) increased by NUMBER OF VISITS MADE BY Georgia among self-governing cities the 29.4%4. INBOUND VISITORS BY REGION highest average cost of an apartment in The 3-star, 4-star and 5-star hotel price The National Statistics offi ce of Georgia May was recorded in Batumi-US$48, index increased by 2% in May 2018 com- has published the breakdown of the followed by Tbilisi-$44, Poti-$42, pared to April 2018. In these types of monthly average number of visits made Kutaisi-$28 and Rustavi-$20. hotels, the highest price increases were by inbound visitors aged 15 and older recorded in Adjara, whereas the prices for each region. The results are based HOTEL PRICE INDEX for standard double hotel rooms on a survey of inbound visitors conducted In May 2018, the hotel price index3 decreased the most in Mtskheta-Mtian- at border checkpoints. In the fi rst quar- increased by 0.9% compared to April eti compared to the previous month. ter of 2018, the regions of Tbilisi, Adjara 2018. The daily rates for standard double For guesthouses, the price index and Mtskheta-Mtianeti were the three 1 The results are based on the surveying of standard double hotel room prices of 3, 4, most popular destinations for inbound 5-star hotels and guesthouses in 10 regions of Georgia. Hotels were chosen arbitrarily visitors. according to random sampling principle. The study contains 71% (312) of all 3, 4 and In the fi rst quarter of 2018, compared 5-star hotels and 25% (456 guesthouses) of all guesthouses registered on www. to fi rst quarter of 2017, the monthly aver- booking.com The 3, 4 and 5-star hotel price data was collected by contacting hotels age number of visits made by inbound individually, while the prices of guesthouses were taken from booking.com. The average prices are arithmetic mean of standard double hotel room prices. visitors aged 15 and older increased in every region except Kvemo Kartli, which 2 Guesthouse: a type of accommodation that is characterized by having a small recorded a decrease of 12%. Although, number of rooms and services are usually offered by the resident family. it has to be noted that, during the fi rst quarters in the last four years, the num- 3 The calculation of the hotel price index is based on the recommendations given by ber of visits made in Kvemo Kartli by the International Monetary Fund (IMF). The elementary aggregate price index is calculated by Jevons index (Consumer Price Index Manual-Theory and Practice (2004), inbound visitors is quite high. This can Practical Guide to Producing Consumer Price Indices (2009)). partially be explained by the borders with Armenia and Azerbaijan. Many of 4 According to the Georgian National Tourism Administration, in April 2018, the visits to this region are from people 596,703 international travelers visited Georgia. Of these, 278,032 travelers stayed in from neighboring Armenia and Azer- Georgia for 24 hours or more. In March 2018, the number of international travelers baijan who are visiting family members5. was 578,514, of whom 292,017 travelers stayed in Georgia for 24 hours or more. Graph 1: In the graph, average prices for standard double rooms in 3 and 4-star In the fi rst quarter of 2018, compared 5 44.7% of Kvemo Kartli population are ethnic Georgians, 45.1% azeris, hotels and guesthouses are given by region. 5-star hotel prices are provided below. to the fi rst quarter of 2017, the number 6.4%-Armenians. Source: http://kvemokartli.gov.ge) MRDI Unveils $2 Billion Road Construction Project 2018, and ADB eligibility rules and pro- shows excellent expertise in high-altitude BY KYRA DEVDARIANI cedures will govern the process. The areas and relief specifi cs. The project second lot, with a 9km tunnel, is expected was designed in full compliance with to go under an Advanced Construction modern European regulations and best n June 12, the Ministry of Notice shortly. The construction works practices, by the designers representing Regional Development are estimated to be completed in 2021, fi rms from Italy, Spain, UK and Turkey. and Infrastructure (MRDI) just in time for the 2023 Freestyle Ski Breaking with the post-Soviet traditins of Georgia has unveiled and Snowboard World Championships of shady dealings in the construction an infrastructure develop- that Georgia will host. In May 2018, industry, compromised quality and safety, mentO plan that focuses on East-West and International Ski Federation (FIS) has MRDI has shown its willingness to ensure North-South automobile routes. announced that Georgia’s winning bid transparency on every step of the way, The First Deputy Minister and Chair- was based on ski resorts of Gudauri and from pre-tender announcements, to the man of the Roads Department, Irakli Bakuriani. FSS championships aside, fi nal delivery of the project by the con- Karseladze, addressed the diplomatic numerous benefi ts of Kvesheti-Kobi road tractors. The openness of the Ministry is corps, business associations and donors, include improved experiences and safety a welcome change, as is the call to the outlining the main features of the ambi- for both visitors and local population, diplomatic corps and business associa- tious plan. with destinations such as Kazbegi tions to encourage reputable construction The large-scale project is being fi nanced National Park, spectacular valleys and companies to enter the Georgian market. by the European Investment Bank (EIB), picturesque villages opening up for hik- “Increase in the number of strong con- Asian Development Bank (ADB), Euro- ers and campers from all over the world. struction fi rms participating in the tenders pean Bank for Reconstruction and Devel- “It is important that the design of the will give us a deeper, more competitive opment (EBRD), Japan International broken into 4 portions that will be put driving speed. road creates one continuous fl ow, and fi eld, leading, in turn, to better results”, Cooperation Agency (JICA), World bank up for tender separately. The four lots The North-South corridor connects is very sensitive to environmental issues said Karseladze. “The Ministry is expect- (WB) and the Government of Georgia will have various degrees of diffi culty: Kvesheti and Kobi, located on two oppo- and social impact”, said Karseladze while ing to attract top construction fi rms that (GoG) with the total estimated cost of ADB-fi nanced F2 has 35 bridges and 20 site ends of Gudauri Recreational Area. the 3D clips showing the design of each will become our reliable partners.” the construction reaching 2 billion USD. tunnels in its 12.2 km interval, while F1, The construction is fi nanced by ADB, interval were played to the audience. It Among the pre-requisites for the fi rms The East-West corridor development jointly fi nanced by WB, EIB and the with the invitation for prequalifi cation is not just the main roads and the qual- entering the bidding process, the Chair- envisions construction of 52 km of a Government of Georgia, of roughly the notice for the larger lot posted on their ity of their surfaces, or the designs of man of the Roads Department mentioned 4-lane asphalt-beton road from Chuma- same length, has 20 bridges and 3 tun- website on June 5. The 12.72 km 2-lane bridges and tunnels, but also the auxil- experience in construction of mountain- teleti to Argveta, in the central part of nels. Among the benefi ts of the Chuma- road will have 4 tunnels and 6 bridges, iary infrastructure such as exits, service ous relief-specifi c elements, a history of Georgia. The total estimated cost of teleti-Argveta corridor are the reduction among them – the 426m long arched roads, maintenance areas and ventilation successful management of large-scale East-West direction is 1.2 Billion USD. of road length by up to 30km, reduction bridge. The deadline for submission of requirements. The selection of the fi rms projects, fi nancial stability and excellent The Rikoti pass road construction is of travel time by 50% and increase in prequalifi cation applications is July 18, working on the design of the project reputation. GEORGIA TODAY JUNE 19 - 21, 2018 BUSINESS 7 TBC Capital Releases Report on Fixed Income Securities in Georgia

The report also discusses the support- ing factors for bond market development, including tax breaks, expected increase of corporate governance and transpar- ency and improved regulations on the market. According to the TBC Capital team, the pension reform will further foster the corporate bond market devel- The increased opment. Based on TBC Capital’s assump- tions, it is expected that approximately appetite from 4% of pension assets will be invested in local corporate bonds and during the corporations for medium-term, the outstanding corporate bonds are expected to grow to GEL 1bn. bond fi nancing is “The corporate bond is a relatively new product on the Georgian fi nancial mar- already prominent ket,” says Irakli Elashvili, TBC Capital’s Managing Director. “There are various corporate bond ratings process. During key factors, including tax breaks and the business forum, TBC Capital, NBG, National Bank of Georgia’s pledge rules, the Georgian Stock Exchange, JSC Silknet, which play a pivotal role in supporting BLC Law Offi ce, Scope Ratings and ISET corporate fi xed income market develop- held a panel discussion on the challenges ment in Georgia. The corporate bond and opportunities within the fi xed income market is at the development stage and securities market in Georgia. we believe that more local corporations The report will be published on the will consider fi nancing their business following link: www.tbcresearch.ge activities via the issuing of corporate TBC Capital is TBC Bank’s wholly- bonds. The increased appetite from cor- owned investment banking subsidiary porations for bond fi nancing is already and licensed brokerage fi rm. In 2017, TBC prominent. Additionally, we believe that Capital became an integral part of TBC the pension reform will play a signifi cant Bank’s Corporate and Investment Bank- n June 15, TBC Capital securities market is well developed in to provide local publicly placed bonds role in market development, creating an ing franchise. Its main lines of business presented a research the country. On the other hand, the cor- as collateral for NBG loans. Despite the additional long-term GEL supply on the include corporate fi nance and credit report on “Fixed Income porate fi xed income securities market impressive growth over the last three market.” rating advisory, debt and equity capital Securities in Georgia”. The is at the early stage of development. The years, publicly issued bonds outstanding The Business Forum, organized by TBC markets, brokerage, and private research. report describes the Bond bond market has experienced tangible was only GEL 232m at YE 2017. Market Capital, was attended by representatives TBC Capital is also a shareholder in the MarketO in Georgia and discusses its progress since 2014, when the National capitalization of corporate bond market of the public and private sectors. The Georgian Stock Exchange and plays an future development trends. Bank of Georgia (NBG) launched a new in Georgia is 0.6% of GDP, much less international rating agency, Scope Rat- active role in the development of its According to the report, the treasury regulation enabling the commercial banks than that of the selected peers. ings GmbH, held a presentation on the infrastructure. GEORGIA TODAY 8 BUSINESS JUNE 19 - 21, 2018 Armenian Delegation to Hold Talks in Tehran to Increase Gas Imports from Iran

WinExpo Georgia 2018 Held in Tbilisi foreign wine sectors, and the historical-traditional BY THEA MORRISON values of Georgian wine,” he stated at the opening of the exhibition. The Deputy Chairman of the National Wine he 11th International Exhibition of Agency, Andro Aslanishvili, also delivered a speech Wine and Spirits WinExpo Georgia and welcomed the participants of the exhibition. 2018 took place in Tbilisi on June 14-16. "We will always support such events which con- The event was organized by Exhibi- tribute to the development of viticulture and win- tion Center ExpoGeorgia Fairground emaking. This exhibition is important for raising Tin Tbilisi and supported by the Ministry of Agri- awareness of Georgian wine. The competition jury culture of Georgia and National Wine Agency of members are world-renowned wine experts, spe- Georgia. cialists and wine journalists. Their assessments WinExpo is the only international Wine and Spir- and recognition will promote the popularization its Fair in Georgia and the whole Caucasus region, of Georgian wine on the international market,” he presenting the full range of wine industry products stated. and services. It creates a unique chance for pro- WinExpo Georgia, held every year in Tbilisi, cre- ducers and exporters to build success and use new ates a profi table climate for: business opportunities. • Taking advantage of historical recognition and The exhibition, which lasted for three days, saw decades of cumulative investment in the Georgian tricity, Babazadeh said that Armenia is asking for BY DIMITRI DOLABERIDZE 150 companies from 12 countries taking part, from: brand in the huge wine market of Eastern Europe; an increase in natural gas supplies from 1 million Georgia, France, Italy, Spain, Portugal, Austria, the • Blending of the best of both western and tradi- to 1.6 million cubic meters, something, he says, that USA, Germany, Hungary, Ukraine, Armenia and tional Georgian practices in winemaking; Iran is willing to agree to. Russia. • Encouraging the formation of a wine cluster in he Armenian delegation will leave for The Iranian side notes that Iran's pipelines are WinExpo Georgia 2018 was opened by Giorgi Georgia using Western expertise and machinery; Tehran this week to negotiate new capable of pumping more gas into Armenia, and Khanishvili, Deputy Acting Minister of Environ- • Attracting a large number of buyers and experts prices and increase gas exports from Iran has no problems increasing the volume of gas mental Protection and Agriculture of Georgia. He from CIS countries and others through a high- Iran to Armenia, noted Behzad Babaza- exports since Yerevan can pay or give Iran more thanked Expo Georgia, which had organized the quality visitor promotion campaign. deh, Director of International Affairs electricity in return. exhibition for the 11th year already. Within the frames of WinExpo Georgia 2018, the Tof the Iranian National Gas Company. Iran and Armenia in 2004 signed a contract on "This exhibition gives a great opportunity for 10th International Wine Competition was held. He added that the Yerevan Thermal Power Plant the exchange of gas for electricity for a period of consumers interested in Georgian wines to taste Members of the international jury revealed "Tro- is asking for an increase in the volume of supplies 20 years. the best wine and alcoholic beverages. In addition, phy", Gold, Silver and Bronze medals to 22 winner of “blue fuel” from Iran. The National Iranian Gas Company was estab- WinExpo is an excellent opportunity for business wines in several categories. Around 250 samples Noting that the contract between the Iranian lished in 1965 as one of the four principal compa- entrepreneurs to get acquainted with the develop- from 60 companies were nominated for the com- National Gas Company and the Yerevan Thermal nies affi liated to the Ministry of Petroleum of the ment trends and innovations of the Georgian and petition. Power Plant concerns the exchange of gas for elec- Islamic Republic of Iran. Georgian Railway, Deutsche Bahn Become Offi cial Partners

Bahn. Together with DB, we are going to team up BY ANNA ZHVANIA and foster international freight transportation and offer competitive products. This will certainly benefi t us and increase the competitiveness of the eorgian Railway and Deutsche Bahn Georgian logistics market.” entered a new stage of cooperation With Deutsche Bahn, the largest rail freight pro- in an agreement signed by David vider in Europe, Georgian Railway cooperates with Peradze, CEO of Georgian Railway, a reliable and strong business partner. In the con- and Alexander Doll, Member of the text of this cooperation, Georgian Railway will be GBoard of Management for Freight Transport and responsible for cargo transports with the destina- Logistics at Deutsche Bahn, in Berlin. The agree- tion Middle East and India, coming from Constanta ment lays the foundation for future joint projects and passing through Georgia and Azerbaijan, as in the rail freight sector. By signing the agreement, well as for transports to East Asia via the Caspian Georgian Railway and Deutsche Bahn embark on Sea. Deutsche Bahn will be responsible for organ- a strategic partnership to strengthen the European izing transports within the EU by rail freight. Mul- and Asian multimodal transportation corridors. timodal transports will be handled by its subsidiary “This strategic alliance is mutually benefi cial and DB Schenker. marks a cornerstone. Maintaining close ties with The newly-formed partnership will foster mutual Georgian Railway will help us to further grow our support between the companies in multiple ways, business as it puts us closer to the Asian market including the exchange of resources such as knowl- and opens up new perspectives for future endeav- edge, expertise, information as well as employees. ors,” said Doll. The partnership of Georgian Railway and Deutsche “Georgian Railway is very active in developing Bahn sets an outstanding example considering the the Europe-Asia corridors,” Peradze noted. “There- continuous growth of the Asian-European rail cargo fore, it is logical that we partner up with Deutsche market.

GEORGIA TODAY 10 BUSINESS JUNE 19 - 21, 2018 Quarterly Report Shows Georgia’s Real Estate Hot Spots

Image source: mela.work over quarter, to $772 per square meter, and in Kutaisi BY SAMANTHA GUTHRIE increased by 4.4% quarter over quarter to $391 per square meter. The report also included detailed data on sales he ISET Research Institute, in part- within Tbilisi and revealed the most popular and nership with TBC Bank, recently most expensive neighborhoods. Saburtalo saw the released a quarterly report as part of highest number of sales with 2,924 properties, fol- the Real Estate Laboratory Report lowed by Vake with 1,978, and Samgori with 1,286. series. 148 new properties were constructed in Tbilisi in TThe report showed a slight positive growth of Q1, totaling 200,200 m2, which is down from the 0.1% in the fi rst quarter of 2018 from Q4 2017 in fi rst quarter of 2017 - 23.7% in the number of prop- the Georgian real property market. Year-on-year erties and 33.5% in area built. (y/y), there was a 27.2% increase compared to Q1 Regarding real estate prices, Tbilisi saw contin- 2017. In total, there were 27,495 properties sold in ued increases from the previous quarter both in Georgia in the fi rst three months of 2018. Tbilisi the sale and rental markets. Property sales increased drove the increase, with 41.6% of total sales nation- by 5.1% from Q4 2017 and rental prices increased wide this quarter. Regionally, the large, eastern by 1.4%. The average sale price citywide was $860– region of Kakheti, dominated by agricultural land, $906 per square meter, and rentals were an average had the second highest portion of sales with 11.1%. of $6.7– $7.7 per square meter per month. Prices of The Adjara region followed, with 9.9% of sales. course vary by neighborhood. For residential prop- The region with the highest y/y sales growth was erties, Mtatsminda tops the list for sales and rent- Racha-Lechkhumi and Kvemo Svaneti, which saw als, with sales averaging $1,078 per square meter. an enormous 105% increase, followed by Guria at The lowest average prices for residential properties 66.9%, and Kakheti with 31.7%. More than half of all were in Samgori (sales at $529 per square meter) sales in Georgia were registered in Tbilisi and Batumi and Gldani (rentals at $4.40 per square meter). – the two largest cities. In Q1 2018, real property Buying an apartment in Saburtalo, cost an average sales in the capital grew y/y by 37.1%, with the national of $874 per square meter, and Vake, the capital’s market, excluding Tbilisi, growing by 21%. second most popular neighborhood, cost an aver- In Q1 2018, the real property markets in Batumi age of $998 per square meter. and Kutaisi decreased by 11.0% and 6.1%, respec- After three quarters of falling commercial sale tively, from the previous quarter. Batumi and Kutaisi prices, Q1 2018 saw a 12.2% increase from Q4 2017. are the second and third biggest cities of Georgia The rental price index, however, continues to after Tbilisi. Batumi saw 2,377 property transac- decrease. In Q1 2018, one square meter of commer- tions and Kutaisi had 677. In Q1 2018, the average cial property sold for an average of between $1,099 sale prices in Batumi increased by 2.4 % quarter and $1182, or rented for between $8.7 and $9.6. Head of Armenian Ministry of Agriculture Talks of Boosting Armenia- Iran Cooperation in Agriculture

Image source: caucasianchallenge.com "I think that the agreements reached earlier will BY DIMITRI DOLABERIDZE be implemented," Khachatryan said. Seyed Kazem Sadjadi, in turn, noted that in Arme- nia and Iran there is much untapped potential in n June 14, Armenian Minister of Agri- the fi eld of agriculture. Among the most realistic culture Artur Khachatryan stated directions of the Armenian-Iranian cooperation, during a meeting with the Iranian the ambassador noted seed-growing, livestock, fi sh Ambassador to Armenia Seyed Kazem farming, horticulture, fl oriculture, automation of Sadzhadi, that “It's time for the Arme- the agricultural sector and the introduction of Onian-Iranian relations to be built on a practical basis.” modern agricultural machinery. According to the ministry's press service, during The sides also discussed the issues of growing the meeting, the head of the Ministry of Agricul- pistachio, olive and other agricultural crops with ture noted that relations with Iran are of vital the assistance of Iranian specialists in Armenia. importance for Armenia and the Republic is ready Ambassador Sajjadi said that the Iranian side will for any mutually benefi cial cooperation in the fi eld put a tomato paste factory into operation in Arme- of agriculture. nia in the near future. GEORGIA TODAY JUNE 19 - 21, 2018 BUSINESS 11 Economy & Nationalism: Changes in A Focus on Element the Russian Western Borderlands Construction ANALYSIS BY EMIL AVDALIANI hen it comes to choos- project-specifi c quality management ing a construction plans that include detailed work plans, company for your outlines of task-specifi c means and meth- ATO expansion in eastern project, we know ods, and fully-coordinated specifi cations Europe as well as the for- there are many com- and contract documents. To further mer Soviet space consti- Wpanies who say they can meet the require- eliminate errors and nonconformities, tutes a problem for Russia. ments. But when you start comparing we encourage stakeholder participation The logic goes that the the services, capabilities and experience at every level of our quality management Npowerful military alliance engulfi ng Rus- these companies bring to your project, process to provide feedback and ensure sia’s western borderlands could poten- the list narrows considerably. And at the standards are not only met but exceeded. tially constrain Moscow’s actions as top of every list, we believe you will fi nd regards exerting its geopolitical infl uence Element Construction: a leader in the CONTINUOUS IMPROVEMENT in Ukraine, Belarus and elsewhere. construction industry since 2007. A core component of Element’s quality The military threat to Russia emanat- Our company is committed to the prin- management program is continuous ing from Europe was essential in Russian cipals of quality construction in order improvement. We communicate lessons- geopolitical thinking. Historically, Euro- to achieve 100% customer satisfaction. learned throughout the organization to peans mounted large scale campaigns At Element, we use construction tech- provide standardized solutions to quality- and there were even cases when the nology to guarantee more than fl ashy related challenges. This practice, combined dismantling of the Russian state was presentations. We are constantly analyz- with our experience in many challenging almost in sight. Quite logically, when the ing trends in the marketplace to fi nd construction markets, allows us to forecast Russians see the modern NATO expan- practical, effective applications of mod- and mitigate issues related to quality before sion, Western exercises and the US Ukrainian fl ags at the pro-EU demonstration. By Sarantis Michalopoulos ern construction technology that result they arise during construction. military equipment sent to Kyiv and was only a matter of time before Ukraine invigorated. That is not to say that this in a superior experience for our clients. Tbilisi, they remember what happened would try to split from its Russian neigh- will happen necessarily against the Rus- Element’s commitment to construction COMMITMENT THROUGHOUT under previous European leaders in ear- bor. sians, but it will nevertheless make the technology includes a wide range of Each project undergoes a quarterly Pro- lier centuries. What is seen today in Ukraine, follow- geopolitical reality more diffi cult for applications for virtual modeling and ject Performance Review (PPR), which However, in geopolitics, it is better to ing the Maidan revolution of 2014, is the them. project management, many of which are is evaluated by Element’s executive team. think and view the events from a longer- splitting of the state from Russia, perhaps If nationalism constituted a virtual standard features on our projects. This ensures that quality permeates all term perspective. NATO expansion is the fi nal stage to what began in the 19th limitation of Russia’s infl uence in its Technology constantly evolves and is levels of the organization. signifi cant, but it is still a military alli- century. For the Russians, NATO in western borderlands, economics plays rapidly changing the landscape of many ance and, like every other alliance in Ukraine is a diffi cult issue to stomach, no less a role. The protection of Belarus different industries, including construc- CERTIFICATION AND TRAINING world history, it will stop operating one but the Ukrainian sense of independence and Ukraine from the Western economic tion. Embracing technological advance- Element’s commitment to quality includes day. What can be longer-lasting though, from the Northern Slavs is more funda- infl uence was one of the fundamentals ments and integrating them into our comprehensive training and certifi cation are those changes which have taken place mental. Whatever the problems are in of the Russian power. But this is also processes has given Element an edge requirements for project staff, including in Ukraine and Belarus over the last the European Union or with US support, changing. Ukraine is now more and more over the competition. Our implementa- our subcontractors, to ensure quality three decades. Among them nationalism Kyiv will likely remain deeply anti-Rus- related to the EU, did not become a tion of construction technology stream- work is a top priority. and economics are major phenomena. sian, as half of the country is national- member of the Eurasian Economic Union lines our processes and creates more I have written previously that both istically charged while the other is at (EEU) and it is for the moment unlikely effi cient and effective day-to-day opera- CORE VALUES Ukraine and Belarus are essential for best neutral or even slightly pro-Russian. that this will happen any time soon. tions on all our projects, providing direct Our goal is to earn each client’s designa- Russia as buffer states against the West. The maximum the Russians can hope With Belarus, it is a different story. The value to our clients. tion as their “Builder of Choice.” At Ele- A major means for Moscow to exercise for is some additional territories in the country in in the EEU, but nevertheless ment, success is measured by the degree this policy was to try to assimilate the east of Ukraine, still much less than what there are signals that Minsk also wants THE HIGHEST QUALITY to which we exceed our client’s expec- Ukrainians and Belarusians and keep Russians controlled historically. to widen relations with Western partners STANDARDS tations and the achievement of their the lands in the Russian economic orbit. The same goes for Belarus. While it is and China. Element’s commitment to quality is evi- project goals and objectives. We earn The Romanov dynasty constrained nas- true that nationalism in the country is Thus, when we discuss what consti- dent in every aspect of our work, from the this privilege by providing the utmost cent Ukrainian and Belarussian nation- nascent and religious, cultural as well tuted Russian fundamental infl uence in planning of our projects to the performance service, value, and quality throughout alism. The late 19th century was crucial as economic relations with Russia pre- the western borderlands, we should of construction and all the way through every client relationship. as it saw the Russian imperial authorities vail. But if we look at the Belarusian always remember that Russian economic fi nal acceptance. Our goal of doing it right realize that nascent Ukrainophilism had independence from a wider – century- dominance as well as weak Ukrainian the fi rst time results in cost effi ciencies transformed into a full-scale movement old perspective – it will be diffi cult for and Belarusian nationalisms were back- and schedule savings for our clients. for attaining larger rights for Ukraine. Russia to dominate this section of its bones to Russia’s state power. This has The Soviet period was relatively calm, western borderlands. It is only a matter been changing since the collapse of the PLAN THE WORK. but it was evident that the western half of time (perhaps years or even decades) Soviet Union in 1991 and there are signs WORK THE PLAN. of Ukraine was nationalistic and that it before Belarusian nationalism will be that the process is quite fundamental. To achieve this goal, Element develops Discover What Forte Village Has to Offer this Summer ment room and three pools, guests are BY ANNA ZHVANIA guaranteed the chance to immerse them- selves in paradise. Moreover, visitors can enjoy morning yoga at the Ayurvedic Park orte Village has announced excit- in a secluded corner of the garden, or relax ing new experiences for its guests in the Winter Spa, a thalassotherapy pool this summer. Sitting among 47 open year-round. hectares of stunning gardens With an endless choice of gourmet and along the beach, the Forte Village buffet restaurants, Forte Village has added Foffers luxury fi ve-star hotel, premium four- the famous Michelin-star restaurant Il Luogo star hotels and lavish villas on the coast of Aimo e Nadia, a Peruvian traditional dining Sardinia. The newly renovated resort now option at Peruvian Restaurant, the vegetar- offers luxury bungalows with private veran- ian restaurant Cookies Cream, tropical das, making it ideal for couples, families or lunch café Mahiki and cocktail bar Piazza. small groups of friends. The recently And the resort offers don’t end there, as enhanced Aquapark also creates an atmos- it boasts numerous fun activities to engage phere of fun for kids. guests in a complete day of amusement, Forte Village offers numerous swimming including the Fencing Academy, Swimming pools with the newly added choice of a Academy, Hockey Academy, Bowling space, private spa. The Private Spa offers an exclu- Nursery and Forte World – exhibiting the sive and elegant experience in the lush history of Forte Village with a new fl agship gardens of Aquaforte SPA, making it perfect store in the piazza. for families and small groups of friends. Don’t have plans for summer? Visit www. With the privacy of a separate entrance, fortevillage.com and discover your dream changing rooms, Hammam, sauna, treat- getaway resort.

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