SAN DIEGO STATE THE BREATHTAKING CROWDFUNDING, UNIVERSITY OPENS IN BEAUTY OF GEORGIA’S GEORGIA’S NEWEST TBILISI MOUNTAINS ANGEL INVESTOR Investor.ge A Magazine Of The American Chamber Of Commerce In Georgia ISSUE 47 OCT.-NOV. 2015 Fashion, Festivals and Forums: Georgia’s Convention Center OCTOBER-NOVEMBER/2015 • Investor.ge | 3 Investor.ge CONTENT 6 Explainer: The National Bank of Georgia’s Financial Supervisory Council 8 A Foreign Education At Home: San Diego State University Opens its Doors for Business 12 Georgian Mountains: Breathtaking Beauty Attracts a Growing Number of Tourists 12 17 Svaneti Prepares for Over 4,000 Skiers at Tetnuldi Resort 18 Georgia’s Economy Running on MICE and FDI 20 KPMG: Chemical Industry Ripe for Investment 22 Chinese Investment in Georgia: The Start of a Beautiful Friendship? 24 Meet Crowdfunding, Georgia’s Newest Angel Investor 28 Tapping into the Business End of Tourism: Georgia plans for a Convention Bureau 34 Checking on the Road Map for Reform of 18 Georgia’s Money Markets 38 Rhea’s Squirrels: Breaking Bread and Breaking Stereotypes 41 Building an inclusive Georgia 17 NEWS ...... 42 4 | Investor.ge • OCTOBER-NOVEMBER/2015 OCTOBER-NOVEMBER/2015 • Investor.ge | 5 WHAT IS THE FINANCIAL made more accountable. EXPLAINER: SUPERVISORY COUNCIL, AND One of the authors of the initiative, WHY WAS IT INITIATED? MP Tamaz Mechiauri, said the new The National he Financial Supervisory Coun- Council will increase public “confi- cil is a council made up of seven dence” in the NBG. Speaking at Parlia- Tmembers that are in charge of ment debates before the bill was adopted, Bank of monitoring and providing oversight for Mechiauri said the new Council would the banking sector. The Council operates ensure that “fl uctuations in lari’s ex- Georgia’s under the National Bank of Georgia, but change rate will no longer depend on one has its own separate board. Prior to the man’s wishes,” Civil.ge website reported creation of the Financial Supervisory on July 17. Financial Council, the main Board of the National A range of other players in the Geor- Bank of Georgia (NBG) fulfi lled those gian political scene continue to disagree. Supervisory roles. President Giorgi Margvelashvili has The council was first initiated by repeatedly come out against the Council. the ruling coalition in Parliament as a He vetoed the law after it was initially Council way to bring transparency to the work passed in July. of the NGB and increase public trust in “As this wrong decision has already the NBG. been enacted, now the Georgian govern- ment, the Georgian National Bank, and ON SEPTEMBER 21, THE WHO IS CONCERNED ABOUT THE the newly created fi nancial supervisory PARLIAMENT APPOINTED COUNCIL AND WHY? agency should do joint coordinated work There had been widespread con- so that the public will avoid further THE HEAD OF THE NEW cern that the creation of the Council losses triggered by the exchange rate [of SUPERVISORY COUNCIL would have a nega- Georgian currency FOR THE NATIONAL BANK tive impact on the lari],” Margvelas- OF GEORGIA. THE NEW economy. A wide The Constitutional hvili’s advisor, COUNCIL, INITIATED BY range of organiza- Giorgi Abashish- THE PARLIAMENT EARLIER tions (including Court voted to vili, told Rustavi IN THE YEAR, HAS BEEN AmCham) have ar- 2 TV. WIDELY CRITICIZED gued that the NGB suspend the Financial Two opposition BY PRESIDENT GIORGI has, over the years, political parties, demonstrated its Supervisory Council the United National MARGVELASHVILI AND competence. It was on 12 October, Movement and the THE FREE DEMOCRATS therefore argued Free Democrats, OPPOSITION PARTY. that any change in pending the court’s have fi led a case in BUSINESS GROUPS its status would be the Constitutional AND INTERNATIONAL seen as an attack verdict. Court against the FINANCIAL INSTITUTIONS on the political in- law that created the HAVE ALSO EXPRESSED dependence of the Council, arguing CONCERNS ABOUT institution. that even though the Council is formally under the NGB, it is now practically THE COUNCIL’S The Georgian Dream coalition in Par- liament, as well as government offi cials, separate, and as a result, the NBG can POTENTIAL EFFECT have rejected these claims, arguing that no longer fulfi ll its constitutional duties. ON THE NATIONAL since the National Bank has become such Other groups, including some busi- BANK OF GEORGIA’S a hot political issue, it is important that ness associations and international fi - INDEPENDENCE. its supervision of the banking sector is nancial institutions, have also expressed 6 | Investor.ge • OCTOBER-NOVEMBER/2015 There had been widespread WHO MAKES UP THE COUNCIL TODAY? concern that the creation Four members of the seven-member council, plus its chairman, have already been appointed by Parliament. They are: of the Council would have Konstantine Sulamanidze, the former CEO of a negative impact on the Progress Bank, as the head of the Council. economy. Irakli Kovzanadze, previously the CEO of the government-run Partnership Fund); some concern that the new, weaker NGB Ekaterine Galdava, previously employed at will create problems for the banking Ivanishvili’s Cartu Bank and, for two years, served as sector. “The government pins great hope Vice President of NGB; on the board [of the agency] that it will be able to stabilize the exchange rate. Sascha Ternes, previously the CEO of ProCredit On the other hand, some view points Bank Georgia and Deputy CEO of Bank of Georgia; have been expressed, questioning the EfremUrumashvili, a partner at Nodia, independence of the board, which could Urumashvili & Partners law fi rm. have a dramatic impact on the monetary and banking system in general,” Radio The current head of the NBG, Giorgi Kadagidze, and a member of the Liberty reported. NBG’s board will take two seats on the Council. ADVERTISEMENT OCTOBER-NOVEMBER/2015 • Investor.ge | 7 A FOREIGN EDUCATION AT HOME: San Diego State University Opens its Doors for Business Ken Walsh, the dean of San Diego State University-Georgia. GEORGIA IS MAIA EDILASHVILI puter engineering, electrical engineering and chemistry/biochemistry. Three more PRIORITIZING SCIENCE uture Georgian scientists and specialties – computer science, civil AND ENGINEERING engineers are studying for an engineering and construction engineer- EDUCATION. TO FAmerican degree this fall, much ing – will be added next academic year. like bright and promising students have Upon graduation, the students will re- ATTRACT LOCAL done for years. But unlike generations ceive both Georgian and U.S. diplomas. TALENT, THE before them, they won’t have to travel SDSU-Georgia has accepted slightly GOVERNMENT HAS thousands of miles from home to achieve over 80 students: 25 percent for the TEAMED UP WITH A their dreams. chemistry program, 25 percent for This year, eligible student scan work electrical engineering, and remainder U.S.-GOVERNMENT- toward a U.S. degree in classes and for computer engineering. The list of FUNDED PROGRAM lectures held in Georgian universities students includes a handful of interna- AND SAN DIEGO thanks to a $140 million compact signed tional students, including those from between the U.S. Millennium Challenge Azerbaijan and Kazakhstan. STATE UNIVERSITY Corporation (MCC) and the Georgian “I liked that I would have a chance to TO TEMPT YOUNG government. study in my country, while my lecturers PEOPLE WITH Under the project, California’s San will be U.S. professors, and I will get a AN AMERICAN Diego State University (SDSU) is offer- double American-Georgian degree,” one ing bachelor degree programs in Georgia of SDSU’s new students, Nika Alavidze, EDUCATION AND A in science, technology, engineering told Investor.ge. CAREER IN SCIENCE. and mathematics (known as STEM) in partnership with three local public MISSION TO IMPROVE GEORGIA universities: Ivane Javakhishvili Tbilisi The program is one part of the Geor- State University, Ilia State University and gian government and MCC’s efforts Georgian Technical University. to counter the mismatch between the Three majors are available to aspiring modern labor market and Georgia’s pool students in the program this year: com- of graduates. 8 | Investor.ge • OCTOBER-NOVEMBER/2015 OCTOBER-NOVEMBER/2015 • Investor.ge | 9 The STEM Academy, organized by SDSU-Georgia for the freshmen class. Before classes started on September very optimistic. He has been involved companies will be more interested to 28, SDSU Georgia organized two-week with this project from the beginning and come. And we will have an innovative intensive orientation meetings, called visited Georgia many times already. “We economy here in Georgia,” he told In- theSTEM Academy, to get to know the have been working on this for a long vestor.ge. students, explore their English and pre- time – 2-3 years now – and fi nally, I see One of the advantages for SDSU- pare them to work in a U.S. curricula. the students this time! They are very Georgia students will be an opportunity Ken Walsh, the dean of San Diego motivated; they ask good questions; they to receive hands-on experience at the State University-Georgia, said one thing are excited to be in this program, and we newlyinstalledcutting-edge laboratories was clear after the STEM Academy: are also very excited,” noted Tong, who at the three partner universities. incoming students are driven by entre- serves as the director and chair of the “All our students will be required to preneurship. Department of Chemistry and Biochem- do undergraduate research to have hands “They have a strong feeling – of a istry at SDSU. on experience with all the equipment and mission to help improve the economy For Tong, SDSU-Georgia’s mis- research topics,” Tong said. According to of Georgia,” Walsh told Investor.ge in sion is to produce a highly skilled and him, this will be possible in a number of an interview.