Issue no: 944/77

MarketsAs of 05 May 2017

STOCKS Price w/w m/m BONDS Price w/w m/mBGEO Group (BGEO LN) GBP 36.48 +1,3% +7,9% GEOROG 04/21 105.28 (YTM 5.26%) 0,2% 0,1%GHG (GHG LN) GBP 3.66 +3,0% +1,5% GEORG 04/21 111.15 (YTM 3.79%) +0,1% +0,1%TBC Bank Group (TBCG LN) GBP 16.40 +0,9% +9,3% GRAIL 07/22 110.55 (YTM 5.38%) +0,1% 0,1%

BGEOLN 07/23 101.12 (YTM 5.78%) +0,1% 0,0%COMMODITIES Price w/w m/mCrude Oil, Brent (US$/bbl) 49,10 5,1% 9,7% CURRENCIES Price w/w m/mGold Spot (US$/OZ) 1 228,01 3,2% 2,2% GEL / USD 2,4400 0,2% +0,6%

GEL / EUR 2,6695 +0,2% +3,3%INDICES Price w/w m/m GEL / GBP 3,1644 0,1% +4,6%FTSE 100 7 297,43 +1,3% 0,5% GEL / CHF 2,4720 +0,6% +2,4%FTSE 250 19 699,61 +0,4% +3,3% GEL / RUB 0,0421 1,9% 2,3%DAX 12 716,89 +2,2% +4,1% GEL / TRY 0,6884 0,0% +5,0%DOW JONES 21 006,94 +0,3% +1,7% GEL / AZN 1,4209 0,2% 0,2%NASDAQ 6 100,76 +0,9% +4,0% GEL / AMD 0,0050

MSCI EM EE 147,83 1,9% 2,4% GEL / UAH 0,0921 +3,3%MSCI EM 978,27 +0,0% +0,9% EUR / USD 0,9092 0,9% 3,0%SP 500 2 399,29 +0,6% +2,0% GBP / USD 0,7703 0,2% 3,8%MICEX 2 002,41 0,7% 2,6% CHF / USD 0,9877 0,7% 1,7%MSCI FM 2 641,68 +1,3% +0,7% RUB / USD 57,9368 +1,8% +2,8%GT Index (GEL) 1 133,22 +0,0% TRY / USD 3,5439 0,2% 4,2%GT Index (USD) 931,07 0,6% +3,2% AZN / USD 1,6972 0,2% 0,5%

ISET PAGE 4

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• • MAY 9 - 11, 2017 • PUBLISHED TWICE WEEKLY PRICE: GEL 2.50

In this week’s issue...

Tourism Market Watch

Continued on page 2

Prepared for Georgia Today Business by

FOCUS ON US SUPPORT

PAGE 2

In Georgia's development we trust...Trump signs act recognizing Russian occupation and aggression

SOCIETY PAGE 14

PAGE 9

PAGE 10

Yet Another (Questionable) Farewell to Street Vendors?

Response to Nord Stream-2: How Europe Will Support Russian Competitors on the Gas Market

New Driving License System to Take Effect on July 1

EU Bank Introduces Financial Instruments to Support Georgian SMEs

Japanese Wine Master Tests Georgian Wine Potential

BY THEA MORRISON

The European Union (EU) is to allo-cate GEL 83 million in a fi nancial agreement that will be used to facilitate the implementation of the Association Agreement, approx-

imation of laws, and institutional reinforcement in Georgia.

Georgia’s State Minister for European and Euro-Atlantic Integration, Victor Dolidze, and European Commissioner for Neighborhood Policy and Enlargement Negotiations, Johannes Hahn, signed a Financing Agreement which launched the 2016 Technical Cooperation Pro-gram.

EU Provides GEL 83 mln to Help Georgia Meet EU Integration Commitments

Victor Dolidze and Johannes Hahn sign the fi nancing agreement. Source: Offi ce of the State Minister of Georgia on European and Euro-Atlantic Integration

GEORGIA TODAY MAY 9 - 11, 20172 NEWS

Through this program, which will run until 2024, the EU will allocate GEL 83 million (EUR 32 million) to Georgian public institutions to help them comply with commitments set out in the EU-Georgia Association Agreement and Visa Liberalization and Readmission Agreement, as well as to support par-ticipation of Georgian benefi ciary insti-tutions in select EU Programs.

The program will provide support to the Georgian government in the fi elds of: general assistance and training for government institutions, energy, trade facilitation, intellectual property rights, banking services, public procurement, migration, and the participation of Georgia in the EU’s Horizon 2020 and Creative Europe programs.

"The European Commission will con-tinue providing support for Georgia on its European path. We will also intensify our cooperation with Georgia as the regional frontrunner in the pre-paratory process ahead of this year's Eastern Partnership Summit," said Commissioner Hahn after the signing ceremony.

Georgia’s Foreign Minister, Mikheil Janelidze, said the assistance from the EU contributes to the implementation of the Association Agreement and will be directed towards the strengthening of respective institutions.

“Georgian export to the EU during the fi rst three months of 2017 increased

by 44%, clear proof just how important the DCFTA and our institutional reforms are. These reforms not only encourage the export of Georgian products to the EU market but also make them inter-nationally competitive,” Janelidze said, adding that the allocated funds under this Agreement will also go towards the Horizon 2020 and Creative Europe programs, which will, for their part, open up new opportunities for repre-sentatives of science, innovation and culture.

Janelidze noted that Hahn had sent out important messages regarding Georgia’s European perspective.

“The priorities of the Eastern Part-nership are fully in line with the Geor-gian government’s goals and priorities in the area of development. The EU has a very clear vision of the steps that need to be taken to bring not only Georgia but all six countries of the Eastern Partnership closer to the EU,” Janelidze said.

The minister underlined that the key message of the European Commis-sioner’s statements is that Georgia must keep on the path leading it to its ultimate goal.

Johannes Hahn visited Georgia on Friday. He met the President of Geor-gia, Giorgi Margvelashvili, Prime Min-ister Giorgi Kvirikashvili and other governmental offi cials to discuss the implementation of the Association Agreement and preparation for the Eastern Partnership Summit.

EU Provides GEL 83 mln to Help Georgia Meet EU Integration Commitments

Continued from page 1

BY THEA MORRISON

The President of the United States (US), Donald Trump, has signed a leg-islative act which says that Georgia’s breakaway

regions – Abkhazia and South Ossetia - have been occupied by Russia.

The legislative act also imposes restrictions on any US funding of a state that does not recognize the ter-ritorial integrity of Georgia and pro-hibits US representatives in interna-tional financial institutions from supporting programs that violate Geor-gia's territorial integrity and sover-eignty.

President Trump signed the legisla-tive act on May 6. Prior to that, the document was supported by the House of Representatives and the Senate.

Furthermore, the signed act commis-sions the US Secretary of State to report on the occupational actions of Russia to the Congress within 90 days.

The document also provides addi-tional assistance to the Eastern Part-nership countries to tackle Russian aggression and to support the imple-mentation of the Association Agree-ment and Free Trade Agreement.

Georgian Foreign Minister Mikheil Janelidze stated that the fact represents an unprecedented support for Geor-gia's territorial integrity, sovereignty and non-recognition policy.

"The supporting text and additional funding for Georgia once again con-fi rms the unwavering support of the United States for Georgia's territorial integrity and sovereignty, as well as our close bilateral cooperation. This is an important tool in the peaceful settlement process,” he said.

The President of Georgia, Giorgi

US President Signs Legislative Act Recognizing Abkhazia & Tskhinvali as Regions Occupied by Russia

Margvelashvili welcomed the signing of the act. Through this law, both houses of the US Congress, the executive gov-ernment and President Trump have directly strengthened the strategic partnership between Georgia and the United States, he said.

"Through this law the United States protects Georgia's sovereignty and adds special strength to the non-rec-ognition policy… I would like to thank our strategic partner for such support. I would also like to thank the Ministry of Foreign Affairs of Georgia and the Embassy of Georgia to the United States

for their active and fruitful efforts," read the statement of the President of Georgia.

Prime Minister Giorgi Kvirikashvili said that the bill signed by Trump fea-tured a passage on Georgia's occupa-tion for the fi rst time.

“This reiterates the support of our strategic partner, the United States of America, for the territorial integ-rity and sovereignty of the Georgian state, and reaffirms unconditional trust in the country's ongoing demo-cratic and economic development,” the PM stated.

GEORGIA TODAY MAY 9 - 11, 20174

THE ISET ECONOMISTA 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 economicgrowth, 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.

BUSINESS

BY IRAKLI SHALIKASHVILI

Tbilisi residents have already experi-enced a fair number of cycles in street vending regulations where local authorities tolerate, then regulate, and then evict street vendors. These cycles

correspond with economic trends and election cycles, starting in 2006, when street vending was declared illegal by the Tbilisi Government and the fi rst attempts were made to enforce the ban.

Just recently, the Tbilisi Mayor’s Offi ce restarted its efforts to restrict trading in the streets of Tbilisi, claiming that illegal stalls in the busiest places prevent movement on the sidewalks and disturb the local population and tourists with noise and unsanitary conditions.

While many welcome such efforts from the local government, their economic and social conse-

Yet Another (Questionable) Farewell to Street Vendors?

quences need to be thoroughly evaluated and con-sidered in order to develop economically and socially sustainable long-term solutions.

Street trading is pervasive across the globe, espe-cially in developing countries. It provides an impor-tant source of earnings for the unemployed in urban areas, as well as a source of relatively inexpensive goods and services for fi nancially vulnerable citi-zens. Even though it is the most visible segment of the urban informal economy, the accurate number of vendors and their contribution to the economy is virtually unknown and is still in fl ux.

Street vending markets provides access to paid work for groups with poor educational or voca-tional qualifi cations, and/or those who have been out of formal work for an extended period of time. Informal paid work can have a positive role in peo-ples’ lives in preventing them from falling into abject poverty, and developing their confi dence and skills to build social capital (Travers, 2000). In developing countries, half to three quarters of

the non-agricultural labor force participates in the informal sector; street vending constitutes quite a high portion (nearly 65%) of that work force (Mar-tha Alter Chen and Marilyn Carr, 2001). In addi-tion, street vending provides for important eco-nomic opportunities for women due to its fl exibility. Women can more easily combine street vending with life events such as having children, and childcare, as well as other household duties. Hence, it is not surprising to see that women dom-inate street vending in Tbilisi and beyond.

Vendors in the informal market can either sell their products in bazaars (specially segregated places for trading where vendors pay daily fees for stalls), or in the streets for free. Some of the ven-dors choose to trade in the streets, because they do not have to pay a fee for permission to trade (stall fees), and they have more fl exibility in choos-ing the best place to sell their goods and services (in terms of consumer activities). Moreover, they can charge higher prices than in bazaars, since some consumers’ willingness to pay is higher due to their desire not to go inside a given bazaar and spend time searching for needed goods. They are willing to pay higher prices because they save time, and vendors take advantage of this fact. But it is not that street vendors necessarily earn more than off-street vendors. Street vendors also incur costs such as having their merchandise confi scated – a risk to which off-street enterprises are not subject to, as well as daily fees levied or bribes demanded in exchange for their use of public space.

Therefore, one might argue that this kind of mar-ket allocation is stable and optimal, because both parties fi nd relevant consumers for their goods and services, and consumers are able to self-select in differentiated markets. Street and off-street vendors can exercise their economic rights, and, possibly, resources are optimally allocated.

However, street-trading is not a typical market activity for one simple reason: the economic activ-ity does not take place on private property, but on public property. Not surprisingly, therefore, indi-vidual economic rights clash with collective rights in these public spaces. Opponents of street vendors argue that collective rights are violated when street vendors appropriate public space for their own use, impede the free fl ow of pedestrians and motorized traffi c, and congest transportation networks. Tem-porary structures like sheds and kiosks, unsanitary conditions, noise, and little regard for the intrinsic beauty and suitability of vending in certain public spaces deter citizens from enjoying the impacted public spaces. In this view, governments must defend public space from such intrusions by strictly regu-lating or even outlawing street vending.

Outlawing street vending was a decision made by the Georgian government many years ago, but its enforcement in many ways has been costly, inconsistent and characterized by political cycles. Incidentally or not, the recent renewal of efforts coincides with the beginning of the new political cycle, when Georgian politicians have much less incentive for political populism. Georgian citizens engaged in this economic activity represent a sig-nifi cant share of Georgian constituents, and we might argue that they exert signifi cant infl uence on political decisions during elections, which makes us suspect that the solution offered by the govern-ment will only last up until the next important elections.

An alternative strategy that could be considered by the Tbilisi Government is to treat street vend-ing as an essential, viable feature in economic gov-ernance. Street vending, as has been argued, con-tributes to the economic and social wellbeing of a society by offering dependable retail outlets for a wide range of affordable goods. Because street vendors sell affordable goods in small quantities, they offer low-income customers access to other-wise unaffordable goods. It is mostly poor public management that generates problems of conges-tion and pollution, which could be avoided by well designed, innovative and inclusive policies which many countries (e.g. Greece, Italy and Spain) have effectively embraced.

Outlawing street vending was a decision made by the Georgian government many years ago, but its enforcement has been costly, inconsistent and characterized by political cycles

GEORGIA TODAY MAY 9 - 11, 20176 BUSINESS

10 Galaktion StreetTel: (995 32) 2 45 08 08

E-mail: info@peoplescafe.ge

The Galt & Taggart Research team comprises Georgian and Azerbaijani fi nance and economic experts who have broad experience of covering the macro and corporate sectors of the two countries. Our current product offering includes Georgian and Azerbaijan macroeconomic research, Georgian sector research, and fi xed income corporate research.

For free access to Galt & Taggart Research, please visit gtresearch.ge or contact us at gt@gt.ge.

BY KAKHABER SAMKURASHVILI

Sector research is one of the key directions of Galt & Taggart Research. We currently provide coverage of

Energy, Healthcare, Tourism, Agriculture, Wine, and Real Estate sectors in Georgia. As part of our tourism sector coverage, we produce a monthly Tourism Market Watch, adapted here for Georgia Today’s readers. Previ-ous reports on the sector can be found on Galt & Taggart’s web-site - gtresearch.ge.

COMPLETION OF INTERNATIONAL BRANDED HOTELS IN GEORGIA IS BEHIND SCHEDULEExpected completion dates for 11 of the 26 international branded hotels in our 2016-2018 pipeline (see our June 2016 tourism report, Shifting into High Gear) have been pushed back by a year. That represents 36.7% of the hotel rooms included in the aforemen-tioned pipeline. The delays vary signifi cantly across regions. For Tbilisi, only two of 14 hotels have been postponed, whereas four of the six in Batumi and fi ve of the six in other regions have been offi cially delayed by a year. The delays can be largely attributed to regional instability in 2016, along with the currency fl uctua-tion and election year in Georgia. Even so, the international branded hotel stock is expected to increase by 1,203 rooms (+69.9%) in Tbi-lisi and 224 rooms (+24.1%) in Batumi by the end of 2017. With new hotel projects announced since June 2016, there are now a total of 19 international hotels in the pipeline for Tbilisi, nine in Batumi, and nine in other regions.

THE HOTEL PIPELINE IN GEORGIAN

Tourism Market WatchREGIONS OUTSIDE OF TBILISI AND BATUMI REMAINS STRONG, WITH THE KAKHETI REGION ATTRACTING A LOT OF INTERESTAdjara Group Hospitality has announced plans to enter the Kakheti market with a 40-room farm hotel concept in Sagarejo. A 100-room Golden Tulip in Telavi is expected to be com-pleted by end-2017 and a 120-room Radisson Blu in Tsinandali by end-2018. The Partnership Fund signed a partnership agreement with Lopota Resorts and will invest US$ 5.4mn in the expan-sion of the resort, which will include the addition of 85 hotel rooms and a 300-person confer-ence room, along with other amenities to the complex.

TWO INTERNATIONAL MIDSCALE BRANDS ENTERED THE GEORGIAN MARKET IN 2017Maqro construction unveiled its second international midscale brand, Ibis Styles, in Tbilisi, after introducing Mercure Tbilisi Old Town in 2015. The 3-star Ibis Styles opened its doors in April and features 118 rooms. Another international midscale brand, Wyndham Hotel, opened in Batumi in February, adding 146 rooms to the stock of branded hotel rooms. Rooms Hotel and Best Western VIB are also expected to open in Batumi in 2017.

THE SHARE OF VISITORS ARRIVING BY AIR TO GEORGIA IS INCREASING19.1% of international arrivals came in through the Georgian airports in January-April 2017, compared to 13.3% during the same period in 2016. The main driver was Tbilisi airport, with the number of international arriv-als up 61.0% y/y to 295,000, while the Kutaisi airport has recorded almost 28,000 international vis-itors (+62.7% y/y) since the begin-

Of the top fi ve source markets, there was strong growth from Armenia (+13.2% y/y), Azerbaijan (+7.1% y/y), Russia (+16.5% y/y), and Ukraine (+27.2% y/y). The number of arrivals from Turkey continues to exhibit a downward trend (-19.2% y/y), as border delays persist in Sarpi. Arrivals from the EU were up 44.8% y/y to over 26,000 visitors.

THE NUMBER OF INTERNATIONAL ARRIVALS WAS UP 11.1% Y/Y TO 1.78MN VISITORS IN JANUARY-APRIL 2017The number of visitors increased from all major source countries except for Turkey (-15.5% y/y). Armenia (+14.6% y/y) and Russia (+24.1% y/y) were the largest contributors to overall growth, with Ukraine also posting double-digit growth (+20.2% y/y). The number of visitors from Azer-baijan posted a modest increase of 4.9% y/y, but from the high base of January-April of 2016 (+22.9% y/y).

WHILE THE TOP FOUR SOURCE MARKETS ACCOUNTED FOR 82.6% OF INTERNATIONAL ARRIVALS SINCE THE

BEGINNING OF 2017, SECONDARY SOURCE MARKETS ALSO POSTED ROBUST PERFORMANCESThe number of Iranian visitors was up 3.3x to 66,000 visitors in fi rst four months of 2017, mainly due to an infl ow from Iran dur-ing Novruz Bairam. The number of Indian visitors was up 139.8% y/y to over 16,000, while the number of Israeli visitors increased 66.8% y/y to almost 19,000 visitors. Arrivals from the EU were up 26.3% y/y to over 65,000 visitors in January-April of 2017, with Germany (+43.2% y/y), Poland (+29.8% y/y), and United Kingdom (+26.0% y/y) driving the growth.

THE TOURIST CATEGORY CONTINUED TO DRIVE ARRIVAL GROWTH IN APRIL 2017The number of overnight visitors (‘tourist’ category) was up 29.7% y/y and accounted for 43.6% of international arrivals. Same-day arrivals were down 2.1% y/y, while the number of transit visitors was fl at. The number of tourist arrivals is up 26.9% y/y to 0.74mn in January-April of 2017, while the number of same-day visitors is down 1.8% y/y and the number of transit visitors up 11.3% y/y.

ning of the 2017. The growing share of air arrivals goes hand in hand with the diversifi cation of direct fl ight routes out of Geor-gian airports. Georgia’s air con-nectivity with the Middle East is improving, with a Jordanian low-cost airline, Air Arabia Jor-dan, now operating flights between Tbilisi and Amman. Connectivity with Russia is

expected to increase further, as several Russian carriers have announced plans to expand their offering during the summer sea-son.

THE NUMBER OF INTERNATIONAL ARRIVALS WAS UP 10.2% Y/Y TO 0.51MN IN APRIL 2017

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Fitness CenterA 375m2 fully equipped gym with experienced trainers is available 24/7.

Event HallAn event hall and magnifi cent terrace is the right place for louder events and meetings.

Swimming PoolA 25-meter and children’s pool are located within a total area of 1100 m2, where you can relax and enjoy a healthy lifestyle the whole year through.

Green AreaItalian designers have been working to create the green area of Tbilisi Gardens. The location of the building in the garden is idyllic, while the selected trees guarantee the quietness and green environment.

KindergartenA colorful space and caring teachers will always be there for the smallest residents of Tbilisi Gardens.

GEORGIA TODAY MAY 9 - 11, 20178 BUSINESS

Samghebro St. 9/11+995514001122

Mixture of Cafe and Theatre under a single space in the very heart of the old city.

Warm environment, Georgian & European Food, Art and Music

Open everyday from 12:00 pm to 01:00 am

BY THEA MORRISON

Kenichi Ohashi, Japanese Master of Wine, is visiting Georgia for a week-long wine market investigation.

During his trip to Georgia, Kenichi Ohashi is accompanied by the repre-

sentative of Japanese Sommelier Association jour-nal (JSA), wine writer Akihiko Yamamoto, who will publish an article about Georgian wine in JSA next year.

The Georgian National Wine Agency reports that Ohashi is the only wine master in Japan and his visit aims at studying Georgian wines in order to recommend them to Japanese consumers.

On the fi rst day of his visit to Georgia, the Japa-nese guests held a meeting in the Georgian National Wine Agency, visited the museum and enoteca of the Agency and visited wine company Chateau Mukhrani.

The visit continued in Kakheti where the guests

Japanese master of wine, Kenichi Ohashi. Source: Georgian National Wine Agency

Japanese Wine Master Tests Georgian Wine Potential

had opportunity to taste over 100 different varie-ties of Georgian wine.

Georgian wine made quite an impression on the Japanese wine master.

“My impression of Georgian wine is absolutely fantastic. I am very ashamed for not having been familiar with it before now. Once I came here, I learnt a lot of new information, number one being the 8,000 year history of Georgian wine,” he said.

Ohashi said he believes that Georgian wine has a brilliant future in Japan.

“Japanese cuisine is on the list of UNESCO Her-itage, as is Qvevri winemaking. The combination of these two is a double World Heritage, and they perfectly fi t each other,” he added.

After visiting Kakheti, the Japanese guests also tasted some wines in the Kartli region.

Marketing and PR Department of National Wine Agency, Irakli Cholobargia, stated that Kenichi Ohashi represents the contractor marketing com-pany Red Bridge, which is organizing a marketing and advertising campaign for Georgian wine in Japan this year.

BY NINO GUGUNISHVILI

New perspectives for and approaches to the construction sector and Geor-gian innovative technologies were discussed at an event organized by Infrastructure Construction Com-

panies Association (ICCA) at Rooms Hotel Tbilisi last Wednesday.

Attended by Georgian and international company representatives operating in the construction sphere on the Georgian market, and Georgian government and French Embassy in Georgia offi cials, the event consisted of presentations and signing of a memo-randum between the ICCA and French-Georgian consultancy company Experto Consulting.

“It is critical to eliminate the problems the Geor-gian construction sector is facing today. Together with the Infrastructure Construction Companies Association, we are working very actively in this regard,” said Zurab Alavidze, Minister of Regional Development and Infrastructure.

Vice Mayor of Tbilisi, Lasha Abashidze, talked about the infrastructure projects realized by the city municipality, in particular the ongoing New Tifl is project and the reconstruction of the Shindisi-Krtsanisi road, with the budget for the next year enabling an intensifi cation of road

Ana Sabakhtarishvili, Executive Director ICCA, Zurab Alavidze, Minister of Regional Development and Infrastructure, and Levan Dvali, Managing Director at Sakenergoremonti, at the event

ICCA Signs Memorandum with French-Georgian Experto Consulting

infrastructure improvement. “Support of the economic development of Geor-

gia is our priority, being a country of high interest for its business climate and economic perspectives,” said Didier Leroy, Charge d’Affaires of France in Georgia, underlining the importance of the con-struction sector development for the country. “The recent visa liberalization is a unique chance for Georgian construction sphere representatives to attend numerous fairs, exhibitions and business meetings in France”.

Louis Toulorge, Economic Attache for the French Embassy to Georgia, spoke about the infrastructure projects the Government of Georgia is working on, noting that the construction sphere tends to be an extremely attractive area for foreign investment possibilities, especially for private enterprises in the energy, hospitality, and real estate sectors.

Other speakers at the conference included Nino Gventsadze, Head of Spatial Planning and Con-struction Policy Department at the Ministry of Economy of Georgia; Giorgi Isakadze, Editor-in-Chief Forbes Georgia; Ana Sabakhtarishvili, Exec-utive Director of Infrastructure Construction Companies Association, and the representatives of Georgian and French companies- Jeu Group, Sakenergoremonti, Doro Group LTD, Basalt Fibers, Rebas, Borun Mining and of French Menard Vibro, all of whom gave detailed presentations and intro-duced their activities to the attendees.

BY NINO GUGUNISHVILI

With the support of the Georgian National Wine Agency and the Embassy of Georgia to Lithuania, eight Georgian wine producing companies: Winery Khareba,

Besini Winery, Georgian Wine Corporation, Giuaani, Zakro Vino, Kardenakhi 1, Kindzmarauli Marani and Askaneli Brothers, were presented at a special wine tasting titled ‘Georgia - Homeland of Wine’.

Headed by Giorgi Tevzadze, Advisor to the Geor-gian National Wine Agency Director, the presenta-tion focused on the aldest traditions of winemaking in Georgia, Qvevri wine producing and the Geor-gian grape varieties.

Held in Vilnius’s largest exhibition center LIT-EXPO, the VYNO DIENOS was held for the 13th

Georgian Wines Showcased at VYNO DIENOS in Vilnius

time this year, with thousands of guests attending, including sommeliers, wine importers and dis-tributors, wine experts, journalists and bloggers.

Lithuania is among the Top 10 countries export-ing Georgian wine.

GEORGIA TODAY MAY 9 - 11, 2017 9BUSINESS

BY DIMITRI DOLABERIDZE

Russia's strengthened posi-tion on the European energy market is raising serious concerns among Western colleagues overseas. The

Atlantic Council, a traditional platform for the exchange of opinions of military and international leaders, has issued a report showing forward movement in the idea of Europe's withdrawal from Russian gas and transition to Azerbaijani. Which means Europe is going to remove itself from the Russian gas needle.

The Atlantic Council’s report promotes the need for Europe to support an alter-native pipeline from Azerbaijan to Europe via Georgia - the Southern Gas Corridor, in order to "weaken Europe's dependence on Russian gas," and in fact redistribute fi nancial fl ows to other destinations. Europe's interest in this context is to cre-ate a full-fl edged competitor of Russia in the gas market by weakening Russia's position through "convenient" agreements with "non-Russian suppliers." No less interesting is the author of the report, Bad Kut, who recently resigned from the CIA where he worked as an energy ana-lyst. Among other things, he also advised American politicians on energy markets.

As a guide to action, the Atlantic Coun-cil proposes the provision of favorable conditions for "non-Russian gas suppli-ers", which should help in the competi-tion with Russia. Interstate agreements and agreements between supplier and recipient countries can be a key instru-ment for creating those favorable condi-

Response to Nord Stream-2: How Europe Will Support Russian Competitors on the Gas Market

tions. It is further expected to enter into profi table supply contracts. To provide competitive advantages for "non-Russian suppliers" it is proposed to involve inter-national fi nancial institutions. A year ago, Azerbaijan requested $5 billion for a pipeline project from the World Bank and the European Bank for Reconstruc-tion and Development.

Another proposal of the Atlantic Coun-cil is the creation of gas infrastructure which includes the organization of trans-portation and processing of gas. In Europe, redistribution of the received Russian gas between the European countries through the "addition" of pipelines in Central and Southern Europe to the Rus-sian gas pipelines is already planned. This will allow gas "to move in all direc-tions" in Europe.

The expansion of the Bulgarian gas pipeline system and the creation of new pipeline connections between Bulgaria and Turkey, Greece, Serbia and Romania, as well as the expansion of the Romanian gas transportation network towards Hungary, are envisaged to expand the domestic gas system of Europe. In the north of Central Europe, it is currently planned to build new gas pipelines from Poland to Lithuania, Slovakia and the Czech Republic, and between Austria and the Czech Republic.

A very important role in the redistri-bution of gas fl ows is played by LNG (Liquefi ed Natural Gas) terminals, into which gas will be pumped for further distribution throughout Europe. New terminals for LNG are expected to be established in the Thrace region in Greece and on the island of Krk in Croatia. In connection with this, connecting pipe-

lines are to be built to transport gas from Krk eastwards to Serbia, Bosnia and Hungary. The redistribution of gas fl ows is planned in Western Europe via the Midcat gas pipeline between Spain and France. This will transport gas from the LNG terminals on the coast of Iberia through France to Central Europe.

The goal of this broad plan is the lib-eration of parts of the European gas market from isolation. Further expansion

of the gas infrastructure will enable other external suppliers, including the USA, to fi nd new routes for gas distribution.

The report also lobbies the creation of the North-South corridor, which will use a new bidirectional gas pipeline from Poland to Croatia that connects the LNG terminals in Swinoujscie and on Krk. The corridor will connect with existing and planned pipelines that will unite it with national networks throughout Cen-

tral and South-Eastern Europe. It is planned to supply gas to Ukraine via the North-South gas pipeline from Poland, with supplies there planned to increase to eight billion cubic meters per year. “This project primarily benefi ts suppli-ers of liquefi ed gas,” President of Poland Andrzej Duda announced, himself an ardent opponent of Nord Stream-2.

With new introductions into the Euro-pean energy market, Turkey's position may not be on the side of Russia at all. With the Southern Gas Corridor, Ankara can create an infrastructure independ-ent from Russia. In addition, it is well-known that Turkey wants to become a center for the distribution of gas fl ows to Europe, allowing Ankara to directly infl uence the European market.

Director of the Center for Political Con-juncture, Dmitry Abzalov, believes that Washington will rather support the expan-sion of the network of gas terminals in Europe than the Southern Gas Corridor. Against the background of the fall in energy prices, the Southern Gas Corridor does not present as particularly profi table. Further, the implementation of this pro-ject relies on a resource base from which to "reinforce" this gas. Azerbaijani gas is one option, an idea which was supported by Europe, but it is extremely diffi cult to pump the entire South outline. It is much easier to do what Washington does now: create a LNG terminal system and deliver gas through the US. This is also econom-ically impractical, but for the US it at least means supporting its producers. Such plans suggest the maximum desire of Washington that the European Union create a system of LNG terminals through-out Europe.

GEORGIA TODAY MAY 9 - 11, 201710 BUSINESS

Delivering on its key objective of pri-vate sector development in Georgia, the EIB Group (European Investment Bank and European Investment Fund) is implementing two new programs

developed jointly with the European Commission, both of which were prepared in the context of the Association Agreement of Georgia with the EU: the DCFTA Initiative East and the EU Research and Innovation Program Horizon 2020: InnovFin – EU Finance for Innovators.

The two program were presented at a conference held on May 8 in Tbilisi, bringing together around 200 representatives of business, banks, microfi -nance institutions, fi nancial advisors and industry associations. The conference guests were addressed by high ranking representatives of the European Union, the Georgian government, and the EIB: Janoš Herman, Ambassador of the European Union to Georgia; Dimitry Kumsishvili, First Vice Prime Minister and Minister of Finance of Georgia; Levan Davitashvili, Minister of Agriculture of Georgia; Giorgi Cherkezishvili, Deputy Minister of Economy

EU Bank Introduces Financial Instruments to Support Georgian SMEs

and Sustainable Development of Georgia; and Heinz Olbers, Director of the Neighboring Countries Department of the EIB.

The Deep and Comprehensive Free Trade Agree-ment (DCFTA) Initiative East aims to strengthen economic development in the countries which have signed an association agreement with the EU, namely Georgia, Moldova and Ukraine, by provid-ing fi nancial and technical support targeted at small and medium-sized enterprises (SMEs) in these three countries.

The EIB Group is joining forces with the EU’s Neighborhood Investment Facility (NIF) to provide a package of instruments designed to support the three countries in addressing the market needs and underpin the objectives of the DCFTAs, aiming for the progressive removal of barriers and creation of the necessary conditions to allow SMEs to ben-efi t from the new market environment.

The overall objective of this initiative is to sup-port economic growth and the generation of employ-ment in the three countries. It will also enhance access to fi nance in the form of improved lending

terms and conditions and provide fi rst loss SME portfolio guarantees, enabling local intermediary banks to take on more risk and reach out to under-served segments of the economy.

The initiative will strengthen the capacity of the private sector, in particular SMEs, to compete in local and international markets, by:Offering SME loan guarantees to local banks

and other fi nancial intermediaries in cooperation with the European Investment Fund (EIF), enabling them to improve lending terms and conditions and thus providing wider access to fi nance for SMEs.Providing technical assistance to counterpart

fi nancial intermediaries via institutional and capac-ity-building activities and advisory services to the small and medium-sized enterprises at regional and local level by promoting rural development with a particular focus on agri-food value chain development. Supporting micro-enterprises through local

microfi nance institutions."InnovFin – EU Finance for Innovators" is a joint

initiative launched by the EIB Group in coopera-tion with the European Commission under the EU Research and Innovation Programme Horizon 2020 and consists of a series of integrated and comple-mentary fi nancing tools and advisory services covering the entire value chain of research and innovation in order to support investments from the smallest to the largest enterprise.

In February, the European Investment Fund (EIF) and ProCredit Bank JSC (Georgia) signed the fi rst agreement for SMEs and small midcaps in Georgia under InnovFin. The agreement, supported by the InnovFin SME Guarantee facility is expected to enable ProCredit to provide EUR 50 mln in loans to innovative companies over the next two years. This fi rst InnovFin SME Guarantee Facility in Georgia was presented during the conference.

“It is in the interests of both Georgia and the EU to work towards strengthening private businesses in Georgia,” said Dario Scannapieco, EIB Vice-President responsible for the fi nancing of SMEs and midcaps. “A well performing private sector, represented particularly by SMEs, is strategically important for growth and job creation in Georgia and for further diversifi cation of the country’s economy”.

“These programs are further proof that the EU is committed to supporting the development of Georgian SMEs,” said Ambassador Herman. “In close cooperation with the EIB, we provide tangi-ble support to innovative businesses that seek to take advantage of the new opportunities with the EU."

“Projects of great signifi cance for Georgia are being implemented with the fi nancial support of the EIB in roads, energy, water and municipal infra-structure sectors,” said Minister Kumsishvili. “The EIB is also supporting the country’s private sector. The operations and future plans of the EIB mani-fest themselves in the great support for the Four Point Reform Agenda initiated by the Prime Min-ister of Georgia for the acceleration of infrastruc-ture projects and support for entrepreneurship”.

“The tools presented today are tangible for rais-ing private sector competitiveness, absorbing inno-vation and for developing the right skills, it is also opportunity for wider access to fi nance,” said Giorgi Cherkezishvili, Deputy Minister of Economy and Sustainable Development, Ministry of Economy and Sustainable Development of Georgia. “I hope the startups, SMEs, mid-caps, as well as large com-panies and commercial banks will take the advan-tage from the opportunity the EIB is providing”.

“The Government of Georgia pays huge attention the development of agriculture sector, one of the most important priorities for the Georgian govern-

ment is to support farmers and SMEs to have access to the affordable fi nances,” said Minister Davitash-vili. “After signing the DCFTA agreement, export to the EU has been increasing. In order to fully enjoy the benefi ts, fi rstly, Georgia will have to com-ply with the EU norms and regulations and sec-ondly, should have quality products to be com-petitive in the international market. After successful negotiations with EIB, the Government of Georgia concluded fi nancing agreement worth EUR 100 million. The EIB credit facility will be diverted for the development of Georgian horti-culture, including nuts, and wine value chains. With long-term fi nancing schemes, farmers and SMEs will have the possibility to produce high value crops and quality products to gain full access to the inter-national market and with allocated funds, in close cooperation with the banking sector, we will make huge impact for the positive development of the agro-food sector”.

The EIB, the European Union’s bank, fi nances projects in Georgia on the basis of the EU External Lending Mandate. The mandate provides the EIB with a guarantee covered by the EU budget for projects in the areas of social and economic infra-structure, local private sector development, in particular SMEs, and climate change mitigation and adaptation.

The EIB is a AAA-rated, policy-driven EU fi nan-cial institution raising funds in capital markets to on-lend to eligible investments supporting EU policies and priorities. The EIB passes on the fi nan-cial advantage it obtains through benefi ts such as attractive interest rates and long maturities to pro-jects that score highly in terms of EU objectives and are consistent with the Bank’s commitment to supporting sound, sustainable investments. The EIB’s extensive experience in fi nancing projects, its in-house sector expertise and its deep knowl-edge of European policies facilitate the identifi ca-tion of projects that match both national and EU priorities. The EIB’s project appraisal covers tech-nical, economic, fi nancial, environmental and social aspects as well as credit risks, provides for the appropriate mitigants and conditionality and helps structure projects in line with EU standards. The EIB thus acts as a fl ag carrier for EU policies out-side the EU, contributes to the dissemination of best practices and facilitates the participation of other fi nanciers in EU priority projects.

The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access fi nance. EIF designs and develops venture and growth capital, guarantees and microfi nance instruments which specifi cally target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

Since the beginning of 2016, all EU activities that support small and medium-sized enterprises (SMEs) in the Eastern Partnership countries have come under the umbrella of EU4Business.

EU4Business provides:1. Support to national authorities, helping to

change and improve laws and regulations, building a better regulatory framework to improve investor confi dence;

2. Support to Business Support Organizations (BSOs) as membership organizations enable a dia-logue between government and business. EU4Busi-ness can organize PPD (Public-Private Dialogue), co-operation and networking;

3. Direct support to small and medium-sized enterprises (SMEs), for example by providing fi nance, training, coaching and advice, and import and export support and matchmaking.

GEORGIA TODAY MAY 9 - 11, 2017 11BUSINESS

BY NINO GUGUNISHVILI

Bank Republic has become a part of TBC Bank, success-fully ending the several month-long merger process; making TBC number 1 in all

banking segments on the market. TBC Bank is now the number1 bank

in Georgia for loans and deposits. As of March 31, its market share in loans was 38.7% and 37.6% in deposits. Its market share in retail loans increased by 11% to 43.9%. TBC Bank’s clientele reached over 2 million, giving it the highest number of clients on the mar-ket. TBC Bank has expanded its service network, with a growing number of branches (167) and the number of ATMs up to 530 on the territory of Georgia. The Bank also strengthened its position with highly qualifi ed personnel offering extensive experience in the banking sector.

“We’re delighted that the largest merg-ing of two companies in Georgia has ended,” Vakhtang Butskhrikidze, CEO of TBC Bank said at a press conference on Friday. “We underwent a several month-long diffi cult process in order to make integration comfortable for our clients. I would like to thank both bank teams for the work they’ve done. We assure Bank Republic clients that we will provide them with the highest qual-ity service, one that made us stand out

TBC Bank Successfully Finalizes Merger with Bank Republic

on the market”.Former Bank Republic clients will ben-

efi t from the full spectrum of TBC Bank’s innovative products and services, includ-ing internationally acknowledged online and mobile banking, the fi rst chat bot in Georgia (Ti-Bot), a variety of credit and deposit products and an extended net-work of branches and ATMs from May 8, when the technical migration of the two banks will be ended and former Bank Republic clients will become cli-ents of TBC Bank, able to receive the

full range of services in all TBC Bank and Bank Republic branches.

“It’s the largest transaction not only in Georgia, but also regionally. With all the indicators, TBC Bank today is the big-gest fi nancial institution in Georgia; however, for us the most important thing is the highest quality service to be pro-vided to our customers.” Butskhrikidze noted as he spoke about the advantages and outcomes of the recent merger. “Since the period of acquisition, we’ve managed to increase Bank Republic’s

shares both in deposits and loans, and it happened thanks to Bank Republic’s employees”.

Approximately 500,000 new customers were added to TBC Bank’s client port-folio.

“Our primary objective is to have cli-ents that are satisfi ed with our service, to develop together with them and bring tailored products and services to as many people as possible, enabling them to fulfi l their wishes. Having 500,000 new customers that are now TBC Bank cli-

ents is the beginning of a brand new stage for our bank and we hope to use the strengths of TBC Bank in order to meet their needs,” Butskhrikidze empha-sized.

“We fi nalized the merging very quickly and effectively,” said Vano Baliashvili, Deputy CEO, TBC Bank. “It was a dif-fi cult process, and this weekend we’ll be upgrading the technical systems of the two banks”.

Butskhrikidze also noted that no staff cuts were made in front offi ce during the merging process.

Nika Kurdiani, Deputy CEO of TBC Bank talked about new services and products soon to be offered to SME cli-ents. He said by the end of the month, TBC Bank will be introducing a new service to its SME clients. However, he didn’t go into detail, moving on to briefl y describe yet another change TBC Bank plans to launch in the near future which will enable SMEs to be more competi-tive.

“We’re also extremely active in corpo-rative business and we hope that 2017 will be the most successful in this regard. We believe it to be a very positive one for the Georgian economy, giving a chance to Georgian business to operate much more successfully. It was critical for us to maintain all the corporate clients Bank Republic had and we managed not to lose any of them. We’re working with them on a day to day basis, offering a long-term strategic partnership,” But-skhrikidze concluded.

GEORGIA TODAY MAY 9 - 11, 201712 BUSINESS

Within the framework of the Georgian Hotels’ Regional Network Development Project “12 hotels in 12 regions” by

been opened in Kutaisi under the Best Western International brand.

The hotel accommodates 45 guest rooms, including 40 standard rooms and 5 suites. The hotel was designed taking into consideration special conditions and safety for guests with disabilities.

Three mobile conference halls are available with a total capacity of about 100 persons.

and a grill-bar menu in the roof top restaurant with panoramic views over the city.

The International Hotels Management Company “T3 Hospitality Management,” providing the hotel management, has 20 years’ experience in hotel management in different countries globally.

Address: 11 Grishashvili Str., 4600, Kutaisi, GeorgiaTEL 219 71 00 info@bwkutaisi.com

FIRST BRAND HOTEL IN KUTAISI UNDER BEST WESTERN INTERNATIONAL

Source: s.iha.com

BY THEA MORRISON

The Adjara tourism development and promotion budget is to increase by GEL 1.116.200 (+15%) next year in order to facilitate tourism develop-ment and improve quality of service

in the region.A total of GEL 8.557.800 is planned to be spent

on the implementation of tourism development programs in Adjara in 2018.

This year, the budget of the department is GEL 7.441.800.

Discussions regarding the 2018 tourism develop-ment budget were held this weekend, attended by members of the Regional Advisory Board of Tour-ism, representatives of NGOs and governmental structures.

In 2018, around GEL 6.094.700 will be spent on advertising and PR campaigns in order to attract local and foreign tourists to Adjara.

The increase of the advertising budget planned for next year is 929.700 GEL (+18%).

GEL 5.594.700 will be spent on advertising the country's tourism opportunities in 16 target coun-tries, while GEL 500.000 will be spent on advertis-ing within Georgia.

The Department will spend GEL 195.000 to improve

Adjara Tourism Development Budget to Increase

tourism services in the region in 2018.The projects "Tourism Development School",

"Recommended by the Tourism Department" and "Magnolia 2018", which is an award for the best tourist services, will also continue next year.

A new project will be launched from 2018 “Mys-

tery Guest”, which will establish the level of service quality in Adjara.

In 2018, the Department will also study foreign tourists in Adjara and determine the level of their satisfaction and problems encountered- GEL 275.000 will be allocated from the budget for these studies.

The Department will spend GEL 517.000 on the development of tourism products and routes in mountainous Adjara in 2018.

The Agency will also host the Village Tourism and Bird Festival next year, and will organize a special ceremony opening the tourist season.

Microsoft Georgia and Degustate Wine Club Startup last week announced their cooperation. As a BizSpark member, Degustate will be running its business on the

Microsoft Azure platform. “We are delighted to announce our partnership

with Microsoft,” Nodar Baghishvili, Partner, Degus-tate said. “Such partnership comes at the right time for us, as the BizSpark program will help us with our IT infrastructure environment enabling us to run software on a secure, redundant and scalable platform, and will let us save on hosting and deploy-ment of services. Besides the regular benefi ts of the secure Microsoft Cloud, we plan to use analyt-ics to profi le customers’ wine preferences, make predictions and the full power of the Artifi cial Intelligence of the Cloud platform. With the access to Microsoft Azure via BizSpark, we can effi ciently support the demand for resources of Degustate’s

Microsoft Georgia & Degustate Wine Club Startup Announce Cooperation

rapidly growing business”.Founded in 2017 in Tbilisi, Georgia, Degustate is

the fi rst Georgian company to connect two differ-ent areas, Wine and Technology, introducing and implementing the respective new technologies and areas of future development.

“More and more entrepreneurs are putting stake in the Microsoft Azure Cloud platform and making the right choice,” said Nikoloz Doborjginidze, Gen-eral Manager at Microsoft Georgia. “The fl exibility of the service allows resources to be scaled depend-ing on real traffi c needed and to manage businesses effectively. There’s no need to use resources on technical support of infrastructure as it is done by Microsoft. As a result, these resources can be invested in the main thing – business development”.

Microsoft BizSpark is a global program that helps startups succeed by giving them free access to Microsoft Azure Cloud services, software, and sup-port.

GEORGIA TODAY MAY 9 - 11, 2017 13BUSINESS

Business Café Holds 9th General Meeting

National Bank of Georgia & Microsoft Georgia announce cooperation

BY DIMITRI DOLABERIDZE

Last week, the head of the Rus-sian Ministry of Economic D eve l o p m e n t , M a x i m Oreshkin, said during a press conference that it is more

profi table for Russians to buy foreign currency. The forecast for the average dollar exchange rate for 2017 is 64.4 Rubles, but by the end of the year it is expected to grow to 68 Rubles. As a result, many citizens have become pre-occupied with buying currency, not only those that are going abroad this sum-mer.

A recommendation to buy assets can be given by any analyst of a private fi nan-cial company or by banks that manages assets in the stock or bond market. He risks only his reputation: his priority is the profi t of his clients. However, the Minister of Economy is a governor, his salary is paid from the budget, not from the income of a private fi nancial com-pany operating at its own risk. He is sup-posed to recommend to his fellow citizens domestic tourism and Ruble deposits; to invest their savings in shares of Sber-bank, Norilsk Nickel, MTS, Lukoil or Surgutneftegaz, and not to buy foreign currency. Active PR of the Russian Ruble and the Russian capital market in the 1990s was very well done, even by such a liberal “Westerner” as Anatoly Chubais.

Apparently, those who believe that patriotism and the modern liberal eco-nomic blocs are different are right. Peo-ple come and go, but basically nothing changes. Orientation to the West and, above all, the US for Russian ministers is formatted in the brain.

Russian Economy Minister: Let’s Dump the Ruble

The National Bank of Geor-gia and Microsoft Georgia have held discussions on the topic of cloud comput-ing and the supervision of

outsourcing risk and announced their readiness for cooperation in the sphere of Cloud computing in the fi nancial sec-tor within the country. The operational

risk regulation of the National Bank of Georgia does not prohibit outsourcing for Georgian commercial banks, which also includes cloud computing, but the outsourcing of primary banking activi-ties as well as the associated supporting information systems needs the approval of the NBG.

Cloud computing is a major shift from

the traditional way organizations think about IT resources. Key benefi ts are speed, acceptable costs, productivity and customized scalability. Today cloud tech-nologies are secure and transparent like never before. Thus, they will help banks in Georgia to be up-to-date with the lat-est software and be aligned with EU practices.

“Clouds are fundamentally changing the world, impacting everything around us. We believe that eventually it will be the core for all future fi nancial opera-tions not only in Georgia, but all over the world,” said Nikoloz Doborjginidze, General Manager at Microsoft Georgia”.

The National Bank is the regulator for all banks and fi nancial institutions in

Georgia. NGB issued its operational risk regulation that includes requirements for outsourcing, in 2014. As mentioned above, the regulation allows subcontract-ing, including partnerships in sphere of Cloud computing implementation. If a commercial bank decides to outsource their infrastructure to the cloud, they should request approval from NBG.

BY TAMZIN WHITEWOOD

On May 3, the 9th meeting of Business Café was held at Holiday Inn Tbilisi.

Sascha Ternes, Managing Partner at TERNES Real

Estate Fund LLC and former CEO of ProCredit Bank, spoke about organiza-tional culture, business ethics and cor-porate management.

Business Café is a project initiated by the consulting company “Insource”, which has been supported by PASHA Bank since 2015.

Business Café meetings are attended by top managers of large and medium-sized companies on a regular basis. Each meeting offers a convenient platform for the sharing of knowledge and experi-ences, as well as discussion of the recent trends in various industries and the

economy as a whole.Interesting discussion topics and inter-

active events attract the participants and contribute to the rising popularity of the project.

As of 2017, two new sponsors have joined the initiative - ACT and Orient Logic.

“Today’s meeting, just like the previous ones, was very informative and dynamic. This was a result of the speaker’s exper-tise and relevancy on the topic presented. PASHA Bank is a partner of Business Café for the third year running and we are excited to see the growing interest and positive feedback towards the pro-ject,” said Anano Korkia, Head of PR and Marketing Department of PASHA Bank.

Among the speakers and presented topics of previous Business Café meet-ings were:

- Lado Gurgenidze, former Prime Min-ister of Georgia, an executive chairman of the supervisory board of Liberty Bank

- “Thoughts about management and leadership”.

- Giorgi Kadagidze, former president of National Bank of Georgia - “Innova-tion management”.

- Alexander Jejelava, Minister of Edu-cation of Georgia - „Organizational cor-porate culture”.

- David Gogichaishvili, general manager of Night Show Studio - „Management of human resources”.

- Andro Dgebuadze, business advisor – ”Management 3.0 or MBA books in mirror”.

- Papuna Toliashvili, founder and man-aging partner of Synergy Group – “Cir-cular Organizational Structures”.

- Tinatin Rukhadze, Co-founder and General Director of the research and consulting company ACT- “Who is the leader of the future?”

- Guga Tsanava, businessman and entre-preneur - “Stanford Model of Manage-ment”.

The only problem is that Russia needs a strong Ruble. And this question is more political than economic. The fate of Eurasian integration largely depends on whether the Russian currency is strong or weak. First of all, it will be determined by the attitude to Russia of people in the former Soviet republics and neighboring states. At the same time, modern nations are completely bourgeois, personal fi nancial interests, comfort and quality of life are always placed fi rst and foremost. Therefore, Russia will be attractive for Eurasian integration if and only if dollar salaries and other incomes are much higher than that of its neighbors and potential part-ners for integration- when Moscow, not only in words, but in fact, becomes an international fi nancial center, when it is much more profi table to live and work in Russia, and not in Belarus, Kazakh-stan, etc. And this requires a very strong Ruble. Of course, a strong Ruble hits Russian import competitors, exporters and partially the budget. However, the geopolitical poles from a strong Ruble outweigh all the economic disadvan-tages.

There are a lot of leverages to main-taining a stable Ruble rate. Russia's inter-national reserves are about $400 billion. And the patriotic, and completely loyal to the Kremlin, Surgutneftegaz holds a cash pillow in currency of more than $36 billion. Other export companies have a good stash, not to mention the private offshore aristocracy, whose aggregate foreign exchange assets are estimated at $1.3 trillion.

The issue is in the political decision and political will. Of course, coming from the Kremlin, and not from the Ministry of Economic Development.

GEORGIA TODAY MAY 9 - 11, 201714 SOCIETY

BY THEA MORRISON

In order to reduce the number of increased road accidents in Georgia, the Ministry of Internal Affairs (MIA) of Georgia will launch the new, 100-point driving license system from July 1.

The contactless patrolling initiative will also take effect on the same day. According to the parlia-mentary bill, the points system will be attributed to driving licenses issued in Georgia as well as in foreign countries.

Each administrative offense in traffi c safety will result in deprivation of a respective number of points and if the points are reduced to zero during the calendar year, the license will be terminated and the driver will have to apply for the exams no earlier than two months upon termination.

On May 8, the MIA opened the Traffi c Safety Week, during which the ministry will provide soci-ety, the non-governmental organizations and all interested people with information about the new

New Driving License System to Take Effect on July 1

system and changes to the traffi c law.The ministry says various offences will result in

the deprivation of license points:Drunk driving: 30-40 pointsDriving without seatbelt: 5Using mobile while driving:15Violation of exploitation rules of vehicles:5-20Failure to comply with police / regulator's request:

15-35 pointsSpeeding: 10-20Violation of safety rules while transporting chil-

dren: 20 points.Last week, the parliamentary majority Georgian

Dream’s Archil Talakvadze said that the govern-ment is thinking of encouraging the most law-abiding drivers who do not violate road rules and who maintain their driving license at 100 points per year.

The exact details of this initiative are not yet clear, but according to Talakvadze, one of the forms of incentives for drivers of this category may be pref-erential terms of vehicle and life insurance of cars. Moreover, various prizes may be awarded to the most law-abiding drivers.

BY THEA MORRISON

Media outlets, the Wall Street Jour-nal and National Geographic, are to make a short fi lm about Geor-gia’s mountainous village Ushguli in the Upper Svaneti region.

Recognized as a UNESCO World Heritage Site, Ushguli is one of the highest continuously inhab-ited settlements in Europe. Compared to somewhat more developed towns like Mestia, Ushguli has been "saved" by its particularly inaccessible loca-tion, which helped preserve the village's timeless feel.

The press tour of journalists to Ushguli was organ-ized by Georgia’s National Tourism Administration (GNTA) under the Ministry of Economy.

The guests will prepare a short fi lm and article about Ushguli, which will be included on the Wall Street Journal, National Geographic and Star Air-lines websites and social media.

Six guests were involved in the tour, including

Wall Street Journal & National Geographic to Make Film about Georgia’s Ushguli

National Geographic journalist Robert Reid, who participated in a specially organized horse race.

Head of the GNTA, Giorgi Chogovadze, under-lined that placing a documentary fi lm about Ush-guli on such infl uential publication websites as the Wall Street Journal and National Geographic will help to promote Georgia and increase tourism in the country.

“Such projects help potential tourists to get infor-mation about Georgia and plan their journey, refl ecting in an increased infl ow of tourists. That is why the GNTA aims to regularly organize press tours from various countries,” Chogovadze said.

BY NINO GUGUNISHVILI

On May 13, at 4pm in East Point Mall, Tbilisi, the Science Festival: ‘Touch the Science’ will kick off with the participation of over 120 talented students. Young scientists and suc-

cessful students will introduce various activities and science projects to festival visitors alongside a two-hour program offering numerous hands-on experiments. The works of young inventors that have won in past competitions will also be show-cased during the festival.

This year the Science Festival is to focus on the fi eld of natural sciences, giving visitors the oppor-tunity to see some 50 interesting experiments and

Touch the Science: Tbilisi to Host Science Festival

20 innovative inventions related to this theme. The aim of the festival is to show the importance of natural science to students and its role in the process of education.

The experiment part of the show will be held in East Point’s central area and presented by the students of Demireli College. Festival guests will have the chance to enjoy various inventions and participate in innovative experiments themselves. Apart from Demireli College, students from other Tbilisi schools, young scientists and children with special needs will be taking part in the fes-tival.

Touch the Science festival is organized on the initiative of the students of Demireli College. The winners of the Young Scientists and Inventors Festival 2016 will also be involved in the festival activities, introducing their projects to guests.

GEORGIA TODAY MAY 9 - 11, 2017 15SOCIETY

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BY NINO GUGUNISHVILI

This year, for the second time, Hotels & Preference Hual-ing Tbilisi is hosting a mas-sive wedding show on May 14.

A combination of an exhibition and show, the annual event has made Hotels & Preference Hualing Tbilisi one of the most popular venues for weddings since it opened back in 2015. Uniting all com-panies, performers and artists in one space, the wedding show is a B2B event allowing companies to introduce their products and services to future newly-weds.

The upcoming event on May 14 is planned to be bigger than last year, mov-ing from the hotel’s event hall to its lobby and outdoors, where the most expensive cars will be showcased alongside min-iature retro ones, for couples to choose from for their wedding day transport.

“The idea of the Wedding Show is to offer a whole package of services to cou-ples in the process of planning their wedding, helping them to meet the com-panies and choose from the products they have, and from the available dis-counts they offer,” says Nino Cheche-lashvili, Marketing and Communication Manager at Hotels & Preference Hualing Tbilisi. “There is so much joy and stress in planning a wedding. Often, it’s diffi -cult to choose even which cake you want, which is why at our wedding show, there will be several companies presented in each category”.

The Wedding Show will run from 2 to 6pm and will be accompanied by a show program throughout the duration of the event. Contrary to last year, this time it will be centered around one particular couple soon to be married. The dress of the bride will be done by Dresscode, makeup by Orifl ame, hair by beauty salon Le Bureau, and all of the most important rituals and ceremonies, fl ash mobs and surprises will be for them.

LAKA, a company with extensive expe-

Hotels & Preference Hualing Tbilisi to Host Wedding Show

rience in organizing weddings, is a co - organizer of the event, while Dresscode is the supporter and partner of the wed-ding show. Along with the wedding dresses, Dresscode offers a range of services- from wedding decorations to a special hair and makeup. As Nino Chechelashvili noted, it’s thanks to Dresscode, that the visitors of the Wedding Show will fi nd themselves in a true fairytale.

“Apart from being organizers and hosts,

Hotels and Preference Hualing Tbilisi will also have their services presented at the Wedding Show, introducing our wedding menus and packages, as well as numerous offers with benefi ts,” Che-chelashvili said, promising that there will be lots of prizes during the event, Hotels & Preference Hualing Tbilisi will also present its own stand at the show, where everyone can fi nd out more about the Hotel’s services, taste its food, and choose from a variety of wedding menus.

“The event hall at Hotels & Preference Hualing Tbilisi can host almost 400 guests. One of the many advantages of having a wedding at our hotel is that both the newly weds and their guests can stay after the wedding,” Chechelashvili highlighted.

40 different companies: fl oral, jewelry, pastry producers, beauty salons, DJs, bands, show ballet, Georgian traditional dance performers, a fl ash mob, photo studios, event companies, and wine com-panies are taking part in the Wedding Show, of interest to couples looking for both traditional Georgian and more European style wedding ceremonies.

“At the Wedding Show, we try to max-imally suit the needs of each potential client, offering services with a different price range tailored to individual wishes and needs,” Chechelashvili said.