May 29 - June 4, 2015 WEEKLY PUBLISHED EVERY FRIDAY www.georgiatoday.ge Price: GEL 2.50 Georgia Today 24 p., Travel Today 4 p. ISSUE No.768 UNMUNM DODOWNWN FOURFOUR Travel Today BUSINESS HEADLINES GOMI Rebranded: New Speculation of UNM Disunity Look, Best Quality P.14 as Four Opposition MPs Resign Make the Future Green - P.6 Successful Project Noble Partner - Riga Summit Seven FIFA with “GIZ” P.14 U.S.-Georgia Leaves Georgia Officials FLIGHT SCHEDULE Strategic without EU Visa- Arrested By Free Regime Partnership P.2 P.8 Swiss Police P.23 P.4 GEORGIA’S UNDERGROUND ECONOMY P.4 2 MAY 29 - JUNE 4 NEWS The EYOF Olympic Khidasheli Visits Georgian Flame 2015 Troops in Afghanistan Defence Minister of Georgia, Tina Arrives in Georgia Khidasheli is visiting Georgian soldiers participating in NATO-led “Resolute Support” mission in Afghanistan. Min- ister celebrated Georgia’s Independence Day on May 26 with Georgian peace- keepers and held a ceremony on Bagram Air Base in the province of Parvan. The event was customarily opened with the Georgian national anthem and a minute of silence in commemoration of the Georgian troops that have died in ISAF mission. The ceremony was fol- lowed with the awarding ceremony, dur- ing which Khidasheli endowed medals of “General Mazniashvili” and General Kvinitadze” to Chief of GLT, Major James Geiger and Sergeant Major Scott Perry for their support in enhancing the military cooperation between Georgia and United States. Thirty Georgian peacekeepers were also awarded with certificates for their contribution in the By Nino Melikishvili Olympic torch to Georgian tennis player mission. Mariam Bolkvadze. Khidasheli was also aired during the Georgia is fighting for global security makes Georgia the second largest troop The Olympic flame for the 2015 Eu- “The flame arrived in Georgia! It’s oath taking ceremony of up to 200 hun- among other members of the civilized contributor to the peacekeeping opera- ropean Youth Olympic Festival (EYOF) unprecedented! It’s great that flame will dred soldiers in Tbilisi, and congratu- world,” said Minister in a video aired at tions in the region. was lit in the ancient Greek city of Ath- be transported across other municipali- lated Georgian soldiers on their decision the leading ceremonies held on Freedom Georgian soldiers are deployed in ens and on 26th of May, (Georgian Inde- ties of Georgia. The infrastructure built from Afghanistan. Square in Tbilisi. Kabul, Bagram Airfield as well as pendence Day) landed in Georgia’s sea- for the EYOF 2015 will, of course, stay “I am honored to congratulate Geor- 885 of Georgian servicemen are de- Mazar-i- Sharif and are mainly concen- side city Batumi ahead of the Tbilisi in Georgia, which means young people gian soldiers from Afghanistan today, ployed in Afghanistan in Resolute Sup- trated on the duties of security and rapid 2015 torch relay. will be able to further enhance their sport- from the place where we prove that port Mission in Afghanistan, which reaction force. The design of the torch unites ele- ing success,” said Nona Gaprindashvili, ments of the festival, as well as Geor- the sixth women’s world chess champion. gian traditional components. On May 28, the Olympic flame left The flame was lit at a special cer- Batumi on its journey across 67 munici- Noble Partner - U.S.-Georgia emony at the Panathenaic Stadium in palities of Georgia before its intended Athens and handed to Lasha Shavda- arrival in Tbilisi on July 14 ahead of the tuashvili, a Georgian sportsman who is international competition which will be the official first torch bearer of the held from July 25 to August 2, 2015. Strategic Partnership EYOF 2015. For EYOF 2015 (Tbilisi 2015), more Many other torch bearers and Geor- than 4000 youth athletes from 49 Euro- By Zviad Adzinbaia “This is a confirmation of the rela- army was, is and will be a worthy and gian athletes were the first to welcome pean countries will come to Georgia’s tionship between the U.S. and Georgian loyal partner of global security, inter- the Olympic flame to Georgia at a spe- capital to participate in nine sports: Judo, On May 11, the joint U.S.-Georgia Armed Forces and the strategic rela- national peace and strategic friend- cial ceremony which was held in Batumi tennis, artistic gymnastics, track cycling, exercise Noble Partner - a demonstra- tionship between our countries. Euro- ship,” Khidasheli added. International Airport. track and field athletics, swimming, vol- tion of the two countries’ strategic re- Atlantic cooperation between Georgia Giorgi Margvelashvili, Georgian Later, Shavdatuashvili handed the ley ball and basketball. lations - was launched at the Vaziani and the United States today is stronger President and the High Commander of training area. than it has even been,” said Lieutenant the Georgian Armed Forces at the clos- Georgia is hosting the Noble Part- General Ben Hodges, U.S. Command- ing ceremony of the training addressed ner exercise for its first time, which ing General, Army Europe. He also Georgian soldiers: “Remember that aims to increase the interoperability of congratulated Georgia on its Indepen- your professionalism and enthusiasm the Georgian military with the U.S. dence Day of May 26 which involved are a guarantee for peaceful existence units for participation in the NATO a visit from U.S. soldiers to the oath- of our citizens”. Response Force (NRF). According to taking event conducted by Georgian “These exercises will advance the official information, the military exer- soldiers. Georgian armed forces and the Geor- cise provides an excellent opportunity “We and our partners’ close and gian people’s purpose – to integrate to enhance Georgian Armed Forces’ worthy cooperation reinforces the con- with NATO. I would like to thank all capability to contribute to NRF and to viction that the implemented reforms the people who were involved at the deepen military cooperation between and contribution to international opera- highest political and diplomatic levels the countries. tions will be followed by logical con- to ensure that this historic exercises Nearly 600 Georgian and U.S. mili- tinuation and Georgia will advance in were held on the Georgian ground, but tary personnel participated in the terms of NATO integration,” Tina the biggest contributors are the people trainings including Georgian Alpha of Khidasheli, Georgian Defense Minis- who wear uniforms today and serve 12th Battalion of I Infantry Brigade, I ter commented at the closing ceremony Georgia as well as global peace,” Mechanized Company of 42nd Battal- of Noble Partner. Margvelashvili concluded. ion of IV Mechanized Brigade and “Joint exercises between the two Noble Partner ended successfully Military Police Platoon. The U.S. in- countries are an important step toward May 25 and will be continued in the fantry combat vehicles “Bradley” and strengthening multi-year military coop- future, as the United States has been several wheeled support vehicles were eration. These exercises were another Georgia’s strategic partner through engaged in the training. example of the fact that the Georgian much of its history. HAVE YOUR HAIR CUT AT OUR SALON AND GET HAIR DIAGNOSTIC AS A GIFT! 4 MAY 29 - JUNE 4 ECONOMY 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. GeorGeorgia’gia’ss UnderUnderggrroundound EconomEconomyy By Lasha Lanchava stood at 68.3%, just 6 percentage points have worked hard, is used to provide away from the 2007 level. Unfortu- jobs to relatives of government offi- Economic activities which are not nately, data are not available for the cials. And the snobbish cars of many registered (and therefore not taxed) are years after 2007, yet up to that point, government representatives, sometimes commonly called Shadow Economy or the size of the underground economy even escorted by police, evoke the im- Underground Economy. Are there shad- remained surprisingly unaffected by the pression that politicians consider their owy corners in Georgia’s economy? long period of government’s massive offices at least partly as opportunities Not just corners! crackdown on corruption, which was to appropriate benefits to themselves. According to Schneider, Buehn, and starting in 2003. Apparently, classical To gain legitimacy (and improve tax Montenegro (“Shadow Economies All corruption was effectively reduced, but morals), Georgian politicians should over the World – New Estimates for 162 the shadow economy was not included follow the examples of European poli- Countries from 1999 to 2007”, Policy in this process. ticians: in Amsterdam, the prime min- Research Working Paper 5356, The ister of a country with 17 million citi- World Bank 2010), based on estimates THE SLIPPERY SLOPE zens and a GDP of almost 800 billion for 2007, Georgia has by far the larg- OF TAX EVASION was coming to his office by bicycle, and est shadow economy (as a share of Kirchler, Hoelzl, and Wahl (“En- in Berlin one could see ministers go GDP) among all surveyed 21 transition forced versus Voluntary Tax Compli- around by metro. countries. 62.1% of all economic ac- ance: The ‘Slippery Slope’ Frame- The threat of Islamic terrorism and tivity in Georgia was taking place in work”, Journal of Economic Psychol- the need for bodyguards has made this the underground! Places 20, 19, and 18 ogy 29, 2008) identify two sources of more difficult for prominent politicians, are taken by Ukraine, Moldova, and tax compliance: enforced and volun- but ordinary members of parliament are Russia, with 46.8%, 44.3%, and 40.6%, tary.