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Issue no: 822/16
• MARCH 1 - 3, 2016
• PUBLISHED TWICE WEEKLY
PRICE: GEL 2.50
In this week’s issue...
Georgian Government
Supports Cultural
Entrepreneurship
PAGE 2
Azerbaijan and Iran to
Resume Oil Swap Agreement
FOCUS
ON BETTER
CONDITIONS
The fight goes on for fair pay and fair
conditions in the Tkibuli mines
PAGE
7
One Week Countdown: Panorama
Protesters Demand to Meet the PM
BY EKA KARSAULIDZE
R
epresentatives of Non-Government Organizations
(NGOs) and civil society
activists again protested
against the multifunctional
complex Panorama Tbilisi construction.
This time, they asked to meet with the
Head of State and representatives of the
Opposition. The government seems
unlikely to change its mind regarding
the on-going construction work.
Continued on page 2
PAGE 3
On Education and the
Sacred Duty of Defending
One’s Motherland
ISET PAGE 4
Georgia to Sign Free Trade
Agreement with European
Free Trade Association
PAGE 12
Financial Times Says NATO
Vulnerable on Eastern
Europe’s Borders
PAGE 15
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2
BUSINESS
GEORGIA TODAY
MARCH 1 - 3, 2016
Georgian
Government
Supports
Cultural
Entrepreneurship
One Week Countdown:
Panorama Protesters
Demand to Meet the PM
Continued from page 1
The Panorama Tbilisi project consists of four
major complexes with tourist and business centers, high-rise buildings and hotels. According to
the plan, the complexes are to be located in Sololaki
Hills, Sololaki Gardens, Liberty Square and Erekle
II Square; and will be connected to each other by
cable car. The project will cost USD 500 million
and was created on the initiative of former Prime
Minister of Georgia, Bidzina Ivanishvili. From the
first day of its presentation controversy raged, but,
two years later, the authorities remain fixed and
the construction work has already begun.
Civil society activists and NGOs occupied the
streets of Tbilisi to protest the large-scale constructions, arguing that Panorama Tbilisi will spoil the
unique face of the city and worsen the ecological
condition, highlighting expert opinions to support
their position.
“Informed people, like archaeologists and experts
in this field, always join our protests,” said Nata
Peradze, representative of the ‘Together’ movement. “We have expert assessments from both local
and foreign organizations which confirm the enormous environmental damage which the construction can cause the city.
In addition, the activists have expressed doubts
regarding the closed process of the project, suspecting that Panorama Tbilisi was given a 5th class
construction mark (of strategic importance) to
make its consideration only possible at State level,
and so less transparent.
Besides increasing the transparency of the project, protesters, as before, have asked for all construction works to cease- all of which are located
near the historic district of Sololaki and in the
centrally located Pushkin Square.
At a protest march on February 27, citizens gave
the government one week to arrange a meeting
with Georgia’s Prime Minister Giorgi Kvirikashvili.
In addition, they want to meet with all the politicians who will take part in the parliamentary elections in October 2016.
“We have elections this year, that is why it is so
important to know the point of view of each candidate,” said Tsira Elisashvili, representative of the
BY EKA KARSAULIDZE
T
Civil society activists and NGOs argue that
Panorama Tbilisi will spoil the unique face of the city
and worsen the ecological condition
‘Together’ movement. “We are going to visit each
politician who plans to participate in the election
and ask them to sign our memorandum, which has
a simple aim – to stop the Panorama Tbilisi project.
In this case, we will have a guarantee that if they
come to power, the construction of the complex
will cease.”
As yet, the ruling power seems to have no plans
to stop the on-going works and has offered counterarguments. “Many ecological and economic studies were carried out regarding the Panorama Tbilisi project which made no mention of the risks
[protesters complain about],” said Mayor of Tbilisi,
Davit Narmania. “Nor is it going to bring negative
social impact or damage cultural heritage. The
Panorama Tbilisi project will go ahead.”
The Mayor highlighted the positive economic
benefits of the project, noting that around 2,000 to
4,000 people would be employed during the construction and, following the opening of the Panorama complexes, the city as a whole will become
more attractive to the business sector and tourists.
However, civil society activists insist on their
demands and claim that if they will not be satisfied, the protests will become a permanent fixture.
bilisi City Hall and Tbilisi City Assembly have introduced a souvenirs
catalogue ‘Gift of Tbilisi,’ as the final
stage of the Cultural Entrepreneurship Festival 2015. Its creators believe
that the catalogue will popularize Georgian folk
arts and crafts abroad and present Tbilisi’s history in a very accessible form.
The catalogue consists of the works of 32 artists who create dolls, figurines, jewelry, bags,
traditional dishes, and pictures. The works are
produced using various materials – ceramic,
enamel, wax, thick felt, wood, textile and more,
all of which represent a part of Tbilisi’s history
and show the country in the best possible light.
“I’m 100% convinced that each product in the
catalogue is a unique piece of art. This is a coproduction of talent and the hard work of our
masters. This catalogue serves to enliven the
history of Tbilisi and says more about it than any
other art work or poetry masterpiece,” said Tamar
Taliashvili, the Head of the Education and Culture Commission of Tbilisi City Hall.
Taliashvili also stated that the main principle
behind the idea of the local government was to
support the business side of the field of art. To
The edition is designed with foreign guests in mind,
making it easier for them to choose a colorful
high-quality souvenir and be able to contact the
artist
this aim, they launched the first Cultural Entrepreneurship Festival in 2015 and conducted
various workshops, trainings, and established
a Masters League and created a Business Guideline for them. The works of the masters were
presented and sold during Tbilisoba 2015 (Day
of the city Tbilisi). As a result, the ‘Gift of Tbilisi’ catalogue is considered as the final stage of
the entrepreneurship support program for folk
art masters.
The catalogue is presented in two languages,
Georgian and English, and, under each product
of art you can find the name of the artist and
their contact details. The edition is designed
with foreign guests in mind, making it easier for
them to choose a colorful high-quality souvenir
and be able to contact the artist.
“It’s the very least Tbilisi City Hall and the City
Assembly can do to support cultural entrepreneurship in the country. Their oeuvre is directly
connected with the sales of the works within,
and I hope that this catalogue will serve as one
component of their better realization and promotion,” said Nino Khtiskatsi, Deputy Mayor of
Tbilisi.
The local government will continue to support
cultural entrepreneurship and plans to futher
make a special focus on the promotion of Georgian designers in the frameworks of the Cultural
Entrepreneurship Festival 2016.
Georgia to Introduce
‘Innovation Strategy 2020’
from Spring
BY ANA AKHALAIA
T
his spring, Georgia is to introduce a
new strategy ‘Innovative Georgia 2020
– Innovation Strategy of Georgia 20162020’, which aims to expand the innovation market in Georgia. After reviewing the strategy within different circles, it will be
sent to the government for approval.
According to the Head of Georgia’s Innovation
and Technology Agency, Irakli Kashibadze, the
strategy includes objectives which will strengthen
cooperation between the scientific and business
communities.
The strategy focuses on introducing needed skills
in pre-school, primary, vocational and university
education. In particular, it is seen as necessary to
introduce entrepreneurial and professional skills.
As Kashibadze notes, many countries, including
Korea and the United States, develop similar trends
from pre-school age.
“Learning professional skills should start from
higher grades and if students desire they should
be able to learn some prospective professions. In
this regard, the training of teachers plays an important role. It is also important to involve the business community in the process, which should contribute to the process of creating specialized
laboratories,” the strategy layout informs.
As for vocational education, the strategy offers
Irakli Kashibadze, Head of Georgia’s Innovation and
Technology Agency
the so-called dualistic model, meaning that vocational education should be developed with the
requirements of the business sector.
In terms of higher education institutions, the
strategy states that mechanisms should be set up
to ensure the establishment of venture funds for
students in which a group of students will be able
to decide itself whether to invest in a start-up.
The most important component is creating corresponding infrastructure- business incubators,
technology parks and development Fab Labs, both
inside and outside of the educational institutions.
The strategy also notes that limited access to
financing is one of the main preventative factors
in the development of enterprises in Georgia.
Therefore, there is a need for both traditional and
innovative mechanisms to be introduced to finance
innovation at all levels.
BUSINESS
GEORGIA TODAY
MARCH 1 - 3, 2016
3
Azerbaijan and
Iran to Resume Oil
Swap Agreement
Minister Janelidze met with the Minister of Economy and Energy of Germany, Matthias
Machnig, to discuss the existing economic and trade relations between the two
countries
German Experts to
Assess Investment
Opportunity in Georgia
BY NICHOLAS WALLER
A
zerbaijan and Iran will in
the coming days reinstate
a bilateral oil swap agreement after a five year break
due to sanctions levied
against Tehran, Iran’s Deputy Oil Minister Rukneddina Javadi said Sunday.
“After a five year cessation, we will
resume an oil swap with Azerbaijan. Iran
will begin importing oil into our Caspian
Sea ports and deliver an equivalent
amount on behalf of our Azeri partners
to the Gulf countries. The agreement
will come into force in the coming days,”
Javadi said.
The agreement was signed on February 23, during a visit to Iran by Azeri
President Ilham Aliyev. During a meeting with his Iranian counterpart, Hassan
Rouhani, Aliyev stressed the regional
importance of joint Azeri-Iranian cooperation.
“The Caspian region is our common
heritage. We must continue to cooperate
in pursuit of regional safety and peace.
At present, there is excellent work being
carried out in the energy field. Cooperation in this area is not limited to
Iranian-Azeri cooperation. Our neighboring countries may also join, which
BY EKA KARSAULIDZE
Azeri President Ilham Aliyev and his Iranian counterpart, Hassan Rouhani. Source: AP
would turn the endeavor into a transnational, regional project.’’
Azerbaijan has repeatedly noted that
Baku and Tehran now have several opportunities to expand their cooperation in
the oil and gas sector after Iran actively
participated in major investment projects
in Azerbaijan.
The two respective governments have
made significant recent moves towards
closer cooperation as Iran prepares to
re-enter the global market following
more than a decade of international
sanctions due to Tehran’s nuclear development program.
Azerbaijan’s economy has been reeling
since the country’s central bank abandoned its dollar peg in mid-December
2015. The Azeri Manat has lost more than
a third of its value against the greenback,
due to the collapse of oil prices.
The energy-rich economies of the former Soviet Union, which enjoyed stability and economic growth over the past
decade on the back of rising hydrocarbon
revenues, have been ravaged by the sharp
decline in oil prices.
Azerbaijan, Kazakhstan and Russia
have all seen their economies shrink in
the last year and their national currencies listed as some of the worst performing on international exchange markets.
A
n expert group from Germany will visit Georgia to
assess the investment
opportunity for German
small and medium-sized
businesses. The plan was announced
during a business trip of the Minister
of Foreign Affairs Mikheil Janelidze to
Germany.
Minister Janelidze met with the Minister of Economy and Energy of Germany, Matthias Machnig, to discuss the
existing economic and trade relations
between the two countries and the possibility of deepening it. Janelidze talked
about preparing a new package of reforms
in the field of payments, management
and professional education. The reforms
are being developed on the initiative of
the Prime Minister of Georgia, which
should improve the business environment and make the country more attractive in this area.
Especially highlighted was the growing potential of Georgia in the fields of
tourism, agriculture, energy and infrastructure. The German side named
tourism as the driving force of Georgia’s
economy, which is also proved by a
steady increase in the number of tourists.
The Ministry of Economy and Energy
of Germany is already a supporter of
the Georgian economy- the program
for the Professional Development of
Managers in Georgian is one of them.
Minister Janelidze visited Germany
last week. He also negotiated with his
German counterpart Frank-Walter Steinmeier and representatives of the Bundestag. In addition, he held several
meetings in different cities throughout
Germany, meeting with city authorities,
experts and journalists.
4
BUSINESS
GEORGIA TODAY
MARCH 1 - 3, 2016
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.
On Education and the Sacred Duty
of Defending One’s Motherland
BY ERIC LIVNY
G
EORGIA’S ‘DEAD SOULS’?
Rati, Lasha and Irakli are first year
engineering students at the Georgian
Technical University (GTU). Rather
unusual students, one should add.
At 22-23, all three are very much alive. Yet, they
never attend classes and are not taking exams.
BSc in engineering would be their third educational degree, yet neither one of them has any
intention of completing his studies at GTU. And
one more interesting detail: their ‘studies’ at GTU
are paid for by the Georgian taxpayers because
engineering (as well as mathematics and natural
sciences) is considered to be a priority subject by
the Georgian government.
To avoid any misunderstanding, Rati, Lasha
and Irakli are not enrolled in a distance learning program offered by Georgia Tech. The trio
simply found a hassle-free way to avoid the
sacred duty of serving in the Georgian military.
50 WAYS TO LEAVE YOUR
LOVER, AND 21 WAYS NOT TO
SERVE YOUR COUNTRY
Georgia prides itself on the simplicity of its tax
system. Simplicity and fairness, however, are not
the most prominent features of Georgia’s “Military
Duty and Military Service Law”. Nominally, all
Georgian men aged 18 to 27 are “subject to performing compulsory military service” of 18 months.
As straightforward as it gets. Yet, Article 30 (Deferment of Conscription) contains no less than 21 legal
excuses to defer military service:
• Poor health condition (including mental health
issues);
• Being an only child;
• Having one small child, or more than two kids
of any age,
• Having a dependent sibling;
• Having a disabled family member
• Registering for the Unified National Examinations;
• Studying in a college or university (in Georgia
or abroad);
• Being a priest of studying in a “theological
school” (does not require taking the Unified National
An excellent illustration of young men wasting their time instead of getting proper training to serve the
country. Source: Wikimedia/Commons
Examination!)
• Working as a teacher/doctor in a village;
• Having a doctoral degree and being engaged in
academic research activities;
• Registering as a candidate for membership in
the Parliament of Georgia
Of particular interest is clause 30(n) which allows
one to buy his freedom for a fee, currently set at
2,000 GEL per 18 months (payable until one reaches
the age of 27). This option practically guarantees
that no kid from Vake is ever forced to wear military uniform.
Finally, if, for some reason, none of the above
legal excuses are applicable, one can be set free by
decree (of the Georgian Prime Minister).
50 Ways To Leave
Your Lover: by Paul
Simon and Art
Garfunkel.
Just slip out the back,
Jack
Make a new plan,
Stan
You don’t need to be
coy, Roy
Just get yourself free
Hop on the bus, Gus
You don’t need to
discuss much
Just drop off the key,
Lee
And get yourself free
With so many holes in the law it is clear that the
only people unfortunate enough to serve in the
Georgian military are under-educated village boys
who are not quick enough to reproduce. It is also
quite obvious what kind of morale these boys have
when they come to perform their duties.
THE WORST LAW EVER?
It is increasingly common across the OECD countries (and not only) to use the so-called Regulatory
Impact Assessment (RIA) technique to critically
assess laws and regulations. What one would normally do as part of a RIA exercise is analyze the
costs and the distortionary effects of a regulation
(say, licensing procedures for new medications) to
its benefits (improved health outcomes).
A back-of-the-envelope RIA of the Georgian Law
on Military Duty and Military Service would inevitably conclude that this law is extremely ineffective.
Generally, the main advantage of compulsory
military service is that it enables countries to easily muster a large force (including reservists who
went through military training as part of their
compulsory service) in the event of a crisis. Additionally, one may argue that military service provides individuals with useful skills such as teamwork, discipline, stress management, etc.
The irony of it all is that Georgia’s Law on
Military Duty and Military Service does NOT
serve the very purposes for which it had been
ostensibly drafted. The Georgian Armed Forces
do not have much use for the vast majority of
the poorly motivated village boys who end up
being recruited. According to Defense Minister
Tina Khidasheli, very few conscripts go through
proper military training, comprising no more
than 10% of total military personnel. Rather than
readying for future combats or jobs, the remaining 90% are employed as free (unqualified) labor
to guard Georgian prisons, military bases and
government buildings.
Now, while failing to meet Georgia’s military
needs, this law comes at a tremendous cost for
Georgia’s national security, its human and social
capital, and, ultimately, its economic development.
• First, it goes almost without saying that an army
of illiterate and poorly motivated peasants is ill
suited for the military and technological challenges
of the 21st century: counter-terrorism, electronic
warfare, drones, robots, long-range missiles and
precision-guided weapons.
Continued on page 6
BUSINESS
6
BUSINESS
GEORGIA TODAY
MARCH 1 - 3, 2016
On Education and the Sacred Duty
of Defending One’s Motherland
Continued from page 4
• Second, this law harms Georgia’s
national ethos by incentivizing thousands of Georgian youth to cynically
game the system (through useless studies, early reproduction, or fake suicide
attempts). Horace, who thought that
dying for one’s country is “sweet and
beautiful”, would have never approved
of a law teaching young people that
civic duties are not to be taken seriously.
Yet, this is what the Georgian Law on
Military Duty and Military Service does.
• Third, by segregating the Georgian
people into ‘haves’ and ‘have nots’ the
law misses a huge opportunity to bolster the country’s scarce social capital.
Having immigrated to Israel at 13, I
started feeling a proud Israeli citizen
only when I wore the military uniform
of an elite paratrooper unit. Given its
complicated ethnic and social mosaic,
Georgia could also use its military (and/
or an obligatory civil service) as a melting pot in which people from all walks
of life would learn to live with each
other and form broader social and professional networks. This is not something to be taken lightly. Georgians tend
to cluster in family groups and clans,
and many of the country’s challenges
– in business, politics and government
– stem from people’s limited ability to
let go of these primitive parochial bonds.
• Fourth, the purely economic costs
of this law go well beyond a few lari
pocketed by Georgian Technical University. Rati, Lasha and Irakli in our
example are learning nothing at all, but
most Georgian students are also learning very little because Georgian universities and colleges are not facing
competitive pressure to improve and
deliver a good educational product. The
product they happily sell (and students
buy) consists of a piece of paper
(“diploma”) certifying that its holder is
not as bad as underprivileged village
boys and girls, and a legal excuse not
to serve in Georgia’s peasant army.
• Finally, the threat of military service
provides young people with the wrong
motive to acquire a degree (any). It
occurs to me that 18 months of military
service (especially of the kind that I
went through in Israel) are, in fact, a
very small price to be paid compared
to 4 years of being lectured by Soviettrained professors pretending to teach
marketing or management, and/or being
stuck in the wrong profession for the
rest of one’s life.
Fundamentally, Georgia faces the
choice of going for a compulsory Israelistyle national military (or civic) service
or opting for a small American-style
professional army of volunteers. Both
options have their pros and cons. One
thing is clear, however: Georgia cannot
afford staying with the current law,
which fails to achieve its stated objectives while undermining Georgia’s great
nation-building and modernization
project.
ARMY AS A HOTBED
OF INNOVATION
As Georgia is thinking through its future
strategy, it may just as well look to the
experience of other countries in using
their military to jump start economic
and social development.
A key point is that education and
military service can go hand-in-hand.
Some of the best professional armies
LAW OF GEORGIA ON MILITARY
DUTY AND MILITARY SERVICE
Article 9 – Age of persons subject to
compulsory military service
“Citizens of Georgia aged from 18
to 27, who are registered or are
obliged to be registered for
conscription and who have no
grounds to be released from
conscription into compulsory military
service, or to enjoy deferment from
conscription, shall be subject to
performing compulsory military
service.”
Law of Georgia No 2554 of 29 July
2014.
in the world – America being a strong
example in this case – require their
officer corps to have an education. In
the US, colonels have to have a master’s
degree and the highest-ranking generals have PhDs. By funding the education
of its officers, not only would the Georgian military become on the whole
smarter and more capable, it would also
be seen as an employment destination
for some of the brightest young men
and women.
Moreover, this model doesn’t have to
apply only to aspiring battlefield commanders. A good military has excellent
engineering, healthcare, diplomatic, and
legal structures as well. For example,
Israeli military’s IT and elite intelligence
units have long become recognized as
hotbeds of technological talent, as
reflected in headlines like ”From Israeli
Army Unit 8200 To Silicon Valley”. On
the one hand, these units recruit the
best young minds through a very competitive process (people, both men and
women, compete to get in, not to get
out!). On the other, they supply Israel’s
Start Up Nation with whole teams of
experienced developers, professional
networks, and ideas.
Georgia certainly has the raw individual talent, but to make good on its
promise as a nation it has to urgently
fix ineffective laws and institutions,
such as its military and universities.
The author is President at Tbilisi’s International School of Economics (ISET) and Advisor to Georgian Minister of Economic and
Sustainable Development.
BUSINESS
BUSINE
ESS
GEORGIA TODAY
MARCH 1 - 3, 2016
Georgian Miners’
Dig In as Protest
Enters Second Week
BY NICHOLAS WALLER
G
eorgian coal miners
demanding better pay and
improved working conditions appear to be digging
in.
Over 1,000 miners from the Dzidziguri
and Mendeli coal mines near the western
Georgian city Tkibuli have refused to
work, saying their wages have not
increased despite the rising cost of living and precipitous devaluation of the
national currency, the Georgian Lari.
The Lari has lost nearly half of its value
against the Dollar since late 2014, which
has caused a severe spike in inflation
and cut the value of the coal miners’
salaries to an average of $225 per month.
The exchange rate of the Lari against
the greenback opened Monday at 2.48
Lari = $1.00, down from 1.74 Lari = $1.00
on 1 March 2014.
The protests grew violent on 24 February when hundreds of miners stormed
managing company Saqnakhshiri’s headquarters in Tkibuli.
“None of our petitions or statements
has brought results. The administration
simply laughed at us and they aren’t
going to respond to any of our demands,”
said Dmitry Khuskivadze, one of the
protester told the Western media.
Saqnakhshiri’s parent company, Tbilisibased Georgian Industrial Group (GIG)
has thus far refused to meet the demands
of the protesters, only conceding that
they will review the possibility of revising the miners’ salaries by mid-April.
Further infuriating the miners was a
government decision to revoke the socalled ‘highlander status’ that the mines’
14 surrounding villages had previously
enjoyed.
The new law suspending the Imereti
region’s mountainous areas of their
privileged status went into effect on 1
January. The result forced the Tkibuli
miners to pay an income tax that exceeded
20 per cent.
Georgia’s Finance Minister Nodar Khaduri announced on 25 February that the
government would meet the miners’
demands to cancel the law on highland
status.
“We’ve prepared an amendment to the
original bill that suspended tax breaks
for those individuals working and living
in mountainous regions. Specifically, this
deals with the demands of the miners,
who will keep the benefits they received
before 1 January. We are already consulting with members of parliament on how
to revise the law. The bill will be brought
to a vote sometime in the near future,”
Khaduri said at a press conference on
25 February.
Despite the federal government’s
attempt to calm the situation, the protestors again stormed and briefly occupied Saqnakhshiri’s administrative offices
on 26 February. They continue to demand
an immediate 40 per cent increase in
their salaries and direct government
action
Both the government and GIG have
flatly rejected the miners’ demands, saying both are unrealistic and financially
unattainable in the short term.
GIG’s chief financial officer Zurab
Gelenidze has openly disparaged the
protestors and has demanded that they
need to return to work or face consequence if the company’s contractual
obligations are not met.
7
Over 1,000 miners from the Dzidziguri and Mendeli coal mines near the western
Georgian city Tkibuli have refused to work
“We’re only talking about…a couple
hundred people who are on strike. The
other 1,300 that we employ need to get
back to work immediately. Regarding an
increase in salaries, we will review the
matter in two months and do everything
to optimize the wage system and provide
some improvement.”
The protestors have frequently cited
a 2011 agreement, endorsed by Georgia’s
Labor Union Chair Irakli Petriashvili,
which obligated the company to increase
their salaries based on the current inflation rate.
Kakha Kozhoridze, an advisor to Georgian President Giorgi Margvelashvili
and an acting emissary between the miners and GIG’s management, said Sunday
the company rejects the 2011 agreement
as they claim the document is not legally
binding because the signatures of GIG’s
representatives were forged.
Kozhoridze has rebuffed GIG saying
the company’s claim that the signatures
are forgeries is ridiculous, as the management never questioned their authenticity in the five years since being signed.
He has consistently demanded that the
company meet the protestors’ requests.
Local NGOs and human rights observers have also lined-up in support of the
miners, saying the company’s disingenuous overtures to the protestors are
meant to table the issue as they will not
be subject to legally binding agreements.
“The problems that workers in Georgia
experience today arose from the lack of
an effective government labor policy.
No adequate standards to protect workers’ rights were ever created. Most
importantly, there are no mechanisms
for monitoring their implementation,”
Human Rights Education and Monitoring Centre’s legal counsel Lina Gvinianidze told the Western media.
With support for the miners’ plight
spilling over into a weekend protest by
Tbilisi students, the current government
finds itself in a position where it may
need to act swiftly, with concrete legal
solutions, in order to avoid further labor
unrest as the economy continues to falter.
8
BUSINESS
GEORGIA TODAY
MARCH 1 - 3, 2016
Georgia to Sign Free Trade
Agreement with European Free
Trade Association
BY ANA AKHALAIA
G
eorgia is set to sign a Free
Trade Agreement (FTA)
with the European Free
Trade Association (EFTA)
on 27 June, 2016 during the
EFTA Ministerial Meeting in Bern, Switzerland.
The third and final round of negotiations
on an FTA between the EFTA States (Iceland, Liechtenstein, Norway and Switzerland) and Georgia was held from 24th to
26th February, 2016 in Tbilisi, Georgia.
The Agreement will comprise the following: Trade in Goods, Rules of Origin,
Trade in Services, Establishment, Intellectual Property Rights, Government
Procurement, Competition, Trade and
Sustainable Development and Legal and
Institutional Issues (including Dispute
Settlement, General and Final Provisions).
The Georgian delegation was led by
Genadi Arveladze, Deputy Minister of
Economy and Sustainable Development,
while the EFTA Spokesperson was Jan
Farberg, Director-General of the Ministry of Trade, Industry and Fisheries of
Norway.
“We have reached an agreement with
the EFTA that industrial products are to
be completely exempt from tariffs, which
means that all kinds of industrial products will be exported to the four countries without additional customs duties,”
Arveladze announced.
Arveladze added that regarding agri-
cultural products, all four countries’
markets are sensitive to the issue, but
that Georgia has reached an unprecedented agreement with them by which
there will be zero tariffs placed on Georgia’s most important export products.
Some of the products also have almost
halved in cost and are being given minimum rates.
The first international agreement for
Georgia signed with Iceland and Liechtenstein, this FTA with the EFTA will
open another highly efficient market of
four countries and 14 million customers
for Georgia.
The positive decision on launching
FTA negotiations with Georgia was made
at the EFTA ministerial meeting in Geneva
on November 17th, 2014.
According to the EFTA, the total value
From Left. Mr Genadi Arveladze, Deputy Minister of Economy and Sustainable
Development and Mr Jan Farberg, Director-General of the Ministry of Trade, Industry
and Fisheries of Norway
of commodity trade between EFTA States
and Georgia has more than doubled since
2009, reaching USD 60 million in 2014.
The stock of foreign direct investment
in Georgia’s economy originating from
EFTA States has also grown significantly,
and stood at approximately USD 400
million in 2012.
Turkish-Romanian
Company SU MARKETS
to Enter Georgia
The $5.1 billion Black Sea Pearl project
Foreign Investors to Carry Out
$5 Bln Project in Adjara
Turkish-Romanian consortium SU MARKETS plans to enter the Georgian agribusiness
and logistics market in the near future
BY ANA AKHALAIA
T
urkish-Romanian company
SU MARKETS has
expressed its interest in
developing a logistics
center and fruit and vegetable refrigeration industry in Georgia.
The Partnership Fund’s Executive
Director, Davit Saganelidze, who is currently on an official visit to Romania,
met with the heads of the Romanian
logistics center and leading Romanian
companies of the agricultural sector. He
also inspected refrigeration facilities in
Romania and met with SU MARKETS
management and leading specialists in
agriculture.
10 Galaktion Street
Partnership Fund representatives discussed the investment potential of developing a Tbilisi Logistics Center and
refrigerator facilities. Turkish-Romanian
consortium SU MARKETS plans to enter
the Georgian agribusiness and logistics
market in the near future.
The JSC Partnership Fund was established by the Government in 2011. The
State owns 100 percent of the Fund
and it has assets exceeding 5 billion
GEL. The Fund holds shares of Georgian Railway, Georgian Oil and Gas
Corporation, Georgian State Electric
System, Electricity Commercial Operator, and Telasi, distributor of electric
power in Tbilisi. One of the main
objectives with investment directions
is the proper corporate management
of these shares.
BY ANA AKHALAIA
U
AE, American and Czech
investment groups plan
to invest in the former
military range territory of
the Gonio settlement, a
popular Black Sea resort in Adjara. The
$5.1 billion Black Sea Pearl project was
revealed by the head of the Business and
Tourism International Center, Archil
Dolidze, to Georgian media outlet The
Business Contact, though no specific
companies were named.
A brief conceptual description and urban
planning were introduced at the presentation of the Black Sea Pearl project, held
in Batumi on February 25th, 2016, attended
by Adjaran government members.
The project aims to develop a free
Tel: (995 32) 2 45 08 08
E-mail: info@peoplescafe.ge
industrial zone (FIZ), free information
and technological zones, free tourism
and high-class residential zones, as well
as establishing stock exchange, insurance and leasing companies and international finance institutions on 315 hectares of land. The project also aims to
create a FIZ zone on 98 hectares land in
Khelvachauri, Adjara region, and an
agro-industrial zone on 500 hectares in
the Guria Region, in Western Georgia.
“The near future will show how real-
istic this project is. Representatives of
the group have held a number of meetings not only in the (Adjara) Region, but
also at the Ministry of Economy in Tbilisi. Specific activities will be revealed
shortly,” Batumi City Council member,
Levan Kintsurashvili stated.
The Black Sea Pearl project was first
announced in 2015. The companies
expected to obtain the status of ‘free
industrial zone’ in September, but that
agreement has yet to be signed.
BUSINESS
10
BUSINESS
GEORGIA TODAY
MARCH 1 - 3, 2016
Villages in Russia’s Dagestan McCain’s Kramer and
to Receive Hi-Speed Internet Former US Ambassador
Access
to Georgia Courtney
Agree: the West Needs
to Do More
BY ANNA KALANDADZE,
VOICE OF AMERICA
BY NICHOLAS WALLER
A
t least 350 villages in Russia’s volatile
North Caucasus republic of Dagestan
will for the first time receive hi-speed
internet access by 2018, the republic’s
transport, energy and communications
ministry said in an official statement on Monday.
According to the ministry, only 70 per cent of the
Muslim republic’s 3 million-strong population have
Internet access.
The local government’s communication expansion, dubbed ‘Bridging the Digital Divide,’ envisages providing a third of Dagestan’s population
with fourth generation (4G) technology by 2018.
Russia’s main mobile companies are actively
building a network to immediately expand 4G
technologies beyond the capital Makhachkala to
the republic’s main settlements Kizilyar, Kaspiysk,
Khasavyurt, Buinaksk and Derbent, the communications ministry said.
“High-speed Internet access will provide our
schools, hospitals, postal offices, and government
agencies the opportunity to carry out activities in
an efficient electronic form that will cut both costs
and time for the local population. It will also reduce
the risk of corruption and increase our authorities’
ability to combat extremism in the republic,” Dagestan’s Interior Ministry said in a statement.
The ministry was also quoted as saying the total
cost for the implementation of the project would
exceed USD 14 million, or in excess of 1 billion
Russian Rubles.
Dagestan is a Scotland-sized republic located in
Russia’s North Caucasus, home to dozens of isolated ethnic groups. The impoverished mountainous region has been plagued by a low level Islamic
insurgency that has killed hundreds since emerging
in the wake of the outbreak of the Second Chechen
War in 1999.
T
he progress and failures of 25 years
independence, as well as ongoing challenges in democratisation and rule of
law spheres for former USSR countries
have been discussed in Washington.
Georgia was singled out as a relative leader among
the South Caucasus countries, while Armenia was
viewed as a direct target of Russian influence, and
Azerbaijan continues to regress in its human rights
record. In Central Asia, Kyrgyzstan was said to be
doing better than any other regional state. VoA
Georgia spoke to two experts on the issues.
DAVID KRAMER,
MCCAIN
INSTITUTE FOR
INTERNATIONAL
LEADERSHIP
AND FORMER
PRESIDENT
OF FREEDOM
HOUSE
“The US needs to
pay more attention
and provide more
help to countries in
t h e p o s t- S ov i e t
space, especially in
the fields of rule of
law, institutional resilience, media, party building
and civil society.
“Russia constantly blocks Georgia’s Euro-Atlantic aspirations and its Western integration. In this
context, the US should express a Presidential-level
interest towards the region and stay more active,
more present in the regional developments. Georgia’s integration with the West is an important
aspect. We have to make sure the upcoming NATO
Summit in Warsaw does not result in similar outcomes to the NATO Summit in Bucharest in 2008
which lead to frustration among Georgians and a
resurgent Russia.
“At this point, there is a need on the part of Georgians to see more recognition of its efforts by NATO.
The West, including the US, at the same time need
to say that Georgia’s membership in the Alliance is
also within our interests. All post Soviet countries
have achieved independence and maintained it to
this day. Russia invaded Georgia and still occupies
20% of its territory. Georgia has long standing separatist conflicts yet it continues to develop on a
Euro-Atlantic path. The US should help it more. I
hope we can get talking about the Western integration of all Soviet countries in the next 25 years.”
WILLIAM
COURTNEY,
FORMER US
AMBASSADOR
TO GEORGIA
“Most visibly, Georgia has achieved two
main things in the
last 25 years: it
secured independence, maintained it
and conducted democratic reforms.
Georgia and Ukraine
regularly conduct
elections, and have
viable opposition players. However, the West should
continue its engagement since the challenges are
substantial. For example, Russia will remain as a
threat. But I would say the major challenge is developing economic reforms and raising the standard
of living for Georgians: given the per-capita quality of education of Georgians, agriculture potential
and key positioning of Georgia as a transit country
between East and West, this challenge should not
be hard to overcome.”
Full article in Georgian: http://www.amerikiskhma.
com/a/kramer-courtney-on-25-years-sinceindep/3211871.html
World Class Bankers to
Head TBC Capital
T
BC Bank has appointed Levan Shanidze and Avtandil Gigineishvili as
managing directors to co-head TBC
Capital, an investment banking arm
of TBC Bank offering Corporate Advisory, Research and Brokerage solutions in Georgia.
Both, Shanidze and Gigineishvili are highly experienced professionals, each with 20 years at global
investment banking institutions in London and
Hong Kong.
Avtandil Gigineishvili, former Managing Director
and Head of Asset Management at Jefferies International in London, initially a key member and
subsequently leader of the team who build a successful business managing $3 billion assets for
institutional and retail clients in Europe and US.
Throughout nearly 20-year long track record navigated several critical periods in the market and
was involved in every aspect of the business development and operation from the start. Before that
he served at Jefferies International Limited as a
Research Analyst, producing global convertible
bonds research and generating trading ideas for
the international equity-linked desk. Avtandil Gigineishvili has MBA from Tulane University (New
Orleans, LA) and a B.Sc in Electrical Engineering
from the Georgian Technical University (Tbilisi).
Levan Shanidze served as a Managing Director
at Silverhorn Investment Advisors in Hong Kong
before joining TBC Capital where he managed a
flagship macro fund. Prior to taking asset management responsibilities he held various capital market positions in Hong Kong at Nomura, Lehman
Brothers, JP Morgan and Jardine Flemings. His
roles included building equity derivative business,
heading India equity trading, proprietary trading
with global coverage among others. Levan holds a
Master of Business Administration in Finance and
Corporate Accounting from the Simon Graduate
School of Business Administration, University of
Rochester, USA, and a B.Sc in Biophysics from the
Tbilisi State University, Georgia.
TBC Capital is committed to playing an active
role in the development of capital markets in Georgia and supports both institutional and strategic
investors in exploring investment opportunities in
Georgia while at the same time giving access to
additional forms of financing to domestic companies – currently dominated by traditional bank loan
financing.
TBC Capital was established in 1999 and provides
services tailored for the Georgian market.
Its Parent company, TBC Bank is the leading
financial institution in Georgia, listed on the London Stock Exchange (LSE: TBCB LI).
BUSINESS
GEORGIA TODAY
MARCH 1 - 3, 2016
11
Top 5 Gadgets at MWC 2016
BY BEQA KIRTAVA
T
he 2016 Mobile World Congress
(MWC), which took place in Barcelona from February 22-25, brought to
light numerous incredible wonders
of the latest hi-tech and we’ve got all
you need to know about the five that got everyone
talking.
SAMSUNG
GALAXY S7
AND S7 EDGE
Specifications
• Dimensions - 142.4
x 69.6 x 7.9 mm; 150.9 x
72.6 x 7.7 mm (Edge)
• Corning Gorilla
Glass back panel
• Single or dual SIM
(Nano-SIM)
• Samsung Pay (VISA,
MasterCard)
• Dust proof and water
resistant under 1.5
meters for 30 minutes
• Super AMOLED
capacitive touchscreen,
16 million colors
• 5.1 inch; 5.5 inch
(Edge) screen with 1440
x 2560 pixels
• Corning Gorilla
Glass screen protection
• Android 6.0 Marshmallow
• Chipset - Qualcomm MSM8996 Snapdragon
820, Exynos 8890 Octa
• CPU - Dual-core 2.15 GHz Kryo & dual-core 1.6
GHz Kryo, Quad-core 2.3 GHz Cortex-A53 + quadcore 1.6 GHz Cortex-A53
• GPU - Adreno 530, Mali-T880 MP12
• 32/64 GB internal storage with 4 GB RAM +
expandable storage (SD card up to 200 GB)
• Primary camera - 12 MP, f/1.7, 26mm, dual pixel
autofocus, OIS, LED flash
•Video-2160p@30fps,1080p@60fps,720p@240fps,
HDR, dual-video rec.
• Secondary camera - 5 MP, f/1.7, 22mm, dual
video call, Auto HDR
• Non-removable Li-Ion 3000; 3600 (Edge) mAh
battery
It’s pretty obvious that Samsung chose quality
over drastic changes. The flagship’s design is very
similar to its predecessor’s, while the specs aren’t
much different either. However, Samsung did make
some important changes: added a micro SD slot,
which users have been demanding for a very long
time, provided an extra GB of RAM for more multitasking and made the phone water resistant. The
primary camera has seen an MP decrease, but
boasts even faster dual pixel auto-focus and a 95%
increase in light capture compared to the S6.
LG G5
• CPU - Dual-core 2.15 GHz Kryo & dual-core 1.6
GHz Kryo
• GPU - Adreno 530
• 32 GB internal storage with 4 GB RAM + expandable storage (SD card up to 200GB)
• Primary camera - 16 MP (f/1.8) + 8 MP (f/2.4),
laser autofocus, OIS, LED flash
• Video - 2160p@30fps, 1080p@60fps, HDR, stereo sound rec.
• Secondary camera - 8 MP, f/2.0, 1080p@30fps
• Removable Li-Ion 2800 mAh battery
If you’re looking for drastic changes, look no further than the latest smartphone from LG as something you probably haven’t seen before. G5 is a
modular phone, meaning you can remove the lower
side of the phone and attach a new slot. For example, the LG CAM Plus expansion module adds an
1100 mAh additional battery and physical camera
controls.
Although customers have been demanding a
removable battery for a long time, many tech experts
have expressed doubts about whether people will
want a phone with so many different modules to
attach and remove in different situations.
SONY XPERIA X
Specifications
• Dimensions - 142.7 x 69.4 x 7.9 mm
• Single or dual SIM (Nano-SIM)
• IPS LCD capacitive touchscreen, 16 million
colors
• 5.0 inch screen with 1080 x 1920 pixels
• Scratch-resistance glass with oleophobic coating
• Android 6.0.1 Marshmallow
• Chipset - Qualcomm MSM8956 Snapdragon 650
• CPU - Dual-core 1.8 GHz Cortex-A72 & quadcore 1.4 GHz Cortex-A53
• GPU - Adreno 510
• 32/64 GB internal storage with 3GB RAM +
expandable storage (SD card up to 200GB)
• Primary camera - 23 MP, f/2.0, 24mm, phase
detection autofocus, LED flash
• Video - 1080p@30fps
• Secondary camera - 13 MP, f/2.0, 22mm, 1/3”
sensor size, 1080p
• Non-removable Li-Ion 2620 mAh battery
Sony’s latest release is the death of the Z line. The
new Xperia X, which tops the list of the three new
X smartphones, is definitely a beautiful gadget with
full metal body and solid display, outperforming
its predecessor – the Z5. That said, the company is
not planning to release it either in the US or Europe,
thus Georgian customers will probably not be able
to lay their hands on this device.
HTC VIVE
Specifications
• Dimensions - 149.4 x 73.9 x 7.7 mm
• Single or dual SIM (Nano-SIM)
• IPS LCD capacitive touchscreen, 16 million
colors
• 5.3 inch screen with 1440 x 2560 pixels
• Corning Gorilla Glass screen protection
• Android 6.0.1 Marshmallow
• Chipset - Qualcomm MSM8996 Snapdragon
820
Specifications
• Display - OLED
• Resolution - 2160 x 1200
• Refresh Rate - 90 Hz
• Steam VR platform
• 15 x 15 feet tracking area
• Accelerometer, gyroscope, laser position sensor, front-facing camera
MWC is not all about phones. And this year was
a clear confirmation of that fact, as HTC’s virtual
reality (VR) headset stole the show. HTC and
Valve’s collaboration has been lauded by critics,
calling it “the future of gaming” and a “match made
in heaven.”
The VR will cost around $800 and will go on sale
sometime this April, competing against its main
rival the Oculus Rift, which is $200 cheaper.
HUAWEI MATEBOOK
Specifications
• Size - 278.8 x 194.1 x 6.9 mm
• 12-inch 2160 x 1440 IPS TFT LCD display
• 6th Gen Intel® Core™ m processor, dual core
up to 3.1GHz
• OS - Windows 10 Pro or Home
• RAM - 4GB/8GB LPDDR3
• Storage SSD - 128GB/256GB/512GB
• Front camera - 5 MP, fixed focus
• 33.7Wh(4430mAh@7.6V) battery
Huawei is not settling only for the smartphone
business. Their latest release – the Huawei MateBook - is set to rival the Microsoft Surface Pro 4,
as it is the company’s first 2-in- 1 Windows convertible. The MateBook is designed to be used as both
a tablet and a laptop at your convenience and boasts
pretty impressive specs. The company has yet to
make any announcements about the price and
release date.
So, which of these devices stole your heart? Or
are you waiting for the iPhone 7 and HTC One M10
to arrive? Head over to our Facebook page with
your comments and check out the brands’ webpages for additional details about release and availability.
12
BUSINESS
GEORGIA TODAY
MARCH 1 - 3, 2016
Tbilisi to Develop JMK Consulting Wins Legal
Battle to Protect Partners
Bicycle Lanes
Interests in Entrepreneurs Law
BY TAMAR SVANIDZE
A
BY ANA AKHALAIA
G
eorgia’s Urban Management and Development
Group is working on a plan
to create a network of bike
lanes in Tbilisi in an
attempt to curb the city’s endemic traffic problems and promote eco-friendly
transportation, the group’s head Vakhtang Jokhadze said.
“The project currently exists at the
conceptual level. We are working on the
project treatment documents for the
inaugural routes, after which a budget
and deadlines will be determined,” said
Jokhadze.
According to the concept, the bike network project will be carried out in several stages to create safe biking routes,
parking places, equipping above-ground
public transportation with bicycle grips;
and gradual reorganization of traffic in
favor of bicycles.
The initial stage of the project will
cover major routes in the city’s central
core, focusing on both banks of Tbilisi’s
Mtkvari River.
court case in the
Tbilisi Court of
Appeal has been
won by JMK Cons u l t i n g g ro u p
which aimed to change an article of the Entrepreneurs Law
of Georgia which the company
believes is ‘offensive’ for businesses.
According to the statement
released by JMK Consulting,
the court process has been ongoing since 2013, the aim of
which was to cancel changes
in 5/2 paragraph of Article 3 of
the Entrepreneurs Law of Georgia that cancels any registered
right of a Partner or assigns to
such Partner any obligation that
directly and immediately affects the
registered rights of said Partner.
According to the Article, a share
belonging to a Partner could not increase
or decrease without his/her consent.
This would mean that the minority
shareholder had absolute veto power
over the financial issues of the enterprise, including changes in the authorized capital.
“It is difficult to imagine an investor
who will invest money in Georgia on
the condition that only he carries out
funds in the authorized capital, while
other minority partners, without their
contributions, will receive at least as
much benefit as they received before
entering partner into the business,” said
Gia Kavtaradze, former Minister of Justice and partner of JMK Consulting.
In order to protect business interests,
the company appealed to Court to cancel changes to the Entrepreneurs Law
carried out in 2012.
The Tbilisi Court of Appeal
decided in favour of JMK Consulting and satisf ied its
requests. As a result, the company states, the development
of entrepreneurship and
business partnership
has become reasonable
once more in Georgia.
“5/2 paragraph of
Article 3 of the Entrepreneurs Law was clearly
contrary to the essence and principles
of Commercial Law, creating a significant obstacle to the business community’s economic development and hindering investment in Georgia,” JMK
Consulting said.
Regarding this issue, JMK Consulting
group will have one further court case
in the Supreme Court in future.
BUSINESS
GEORGIA TODAY
MARCH 1 - 3, 2016
Georgian Wine
Corner Opens in
Marseille National
Museum
BY ANA AKHALAIA
A
Georgian wine corner has been opened
in the Museum of European and
Mediterranean Civilisations in Marseille, France. The corner will feature
as a permanent promotion of Georgian
wine to the 20,000 daily museum visitors, alongside a number of traditional items historically used
to make Georgian wine.
The opening of the Georgian Wine Corner in the
museum was made possible with the cooperation
of the national museums of Georgia and Marseille.
“Georgia is on its way to European integration,
therefore it’s important to promote Georgia in
Europe as a country of ancient civilization, wine
culture, history and tradition. This will help to
increase awareness of Georgian products in the
European market,” Georgia’s Minister of Agriculture, Otar Danelia, stated at the opening ceremony.
Vice Mayor of Marseille, Jean-Francois Soigne,
emphasized the importance of representing Georgia in the Museum of European and Mediterranean
Civilizations “as an integral part of this civilisation.”
It was noted at the event that Georgia is one of
the oldest wine-making centers in the history of
Mankind and wine has been made in Georgia for
more than 8,000 years. The traditional Georgian
Qvevri (clay earthenware vessel) wine-making
method was approved by UNESCO in 2013 to be
included in the list of Intangible Cultural Heritage.
The Museum of European and Mediterranean
Civilisations is devoted to European and Mediterranean civilisations. With a permanent collection
charting historical and cultural cross-fertilisation
in the Mediterranean basin, it takes an interdisciplinary approach to society through the ages up to
modern times.
Presented with the traditional Qvevri wine vessels, on the Georgian stand are various Georgian
wine cellar attributes including historical artefacts
and important information.
According to the National Statistics Office of
Georgia (Geostat), France was one of the top European countries to import Georgian wine in 2015.
Georgia exported 37,956 bottles of wine to France,
which was 190 percent more than in 2014.
Georgia’s Solidarity
Fund Presents Project and
Future Plans
BY ZVIAD ADZINBAIA
T
he Solidarity Fund, a governmental
agency for socially vulnerable people
in Georgia, has provided resources
worth 7.9 million GEL to cover the
healthcare costs of 215 children and
adolescents, the Fund’s head Marian Jashi said at
a meeting of Georgian government officials and
European representatives.
Jashi presented a list of activities and priorities
for 2016 at the Fund’s fifth session of its supervisory
board last week.
Since July 2014, 5.7 million GEL has been raised
as contributions from the private sector, particu-
larly the banking industry. More than 55,000 civil
servants, 24 private companies and 53 student
organizations have joined the Fund.
Georgian Prime Minister Giorgi Kvirikashvili,
who serves as the Funds’ Chair, spoke glowingly
of the project as successful and said the government should expect the Fund’s activities to expand
in the coming years.
Jashi also emphasized the critical role the Fund
plays concerning innovative financing and cooperation with the United Nations.
The Solidarity Fund of Georgia was launched as
a common platform for philanthropy, innovative
financing and corporate social responsibility initiatives to support individual patients and the most
vulnerable families in need of high-cost life-saving
treatment or social assistance.
13
14
BUSINESS
Asian Development
Bank Expands
Cooperation in Georgia
T
MARCH 1 - 3, 2016
Tbilisi to Open Cheese Museum
Naturally, this gives us a reason to take
an honorable place among the world’s
cheese museums,” said Mikadze-Chikvaidze.
Cheese production in Georgia dates
back nearly 3,000 years. Mikadze-Chikvaidze has gone to great length to preserve various artifacts, including 2,800
year old ceramic milk vessels
from Georgia’s ancient capital, Mtskheta.
The Ministry of Culture,
Tbilisi City Hall and the Tourism Department are currently taking
part in developing the Museum.
BY ANA AKHALAIA
A
cheese museum is to open
in Tbilisi later this year,
according to cheese
researcher and
museum curator,
Ana Mikadze-Chikvaidze.
“I travelled all over Georgia and
started collecting information on different types of indigenous cheese from
different parts of the country. I looked
for information in the museum stores.
Ses And Panasonic Avionics Sign Milestone
High Throughput Capacity Agreements
The Asian Development Bank’s (ADB)
Director General for Central and
Western Asia Department, Sean
O’Sullivan and Prime Minister Giorgi
Kvirikashvili
he Asian Development
Bank’s (ADB) Director
General for Central and
Western Asia Department,
Sean O’Sullivan, met with
officials from the Government of Georgia last week to discuss ADB’s operations
in the country.
ADB commended the government’s
efforts to utilize the country’s borrowing
capacity in the most strategic and impactoriented manner. ADB will continue to
support those efforts through its country
program, which focuses on water supply
and sanitation, roads, urban transport
and energy.
“ADB’s partnership with the government has been robust since Georgia
joined ADB in 2007, with USD 1.9 billion
in approved support to date and an active
project portfolio of over USD 925 million,” O’Sullivan stated. “ADB is ready
to further deepen our partnership to
GEORGIA TODAY
support Georgia’s development.”
ADB also works closely with the government to implement second-generation
structural reforms, such as pension
reforms, capital market development,
and the establishment of an effective
framework for public-private partnerships.
O’Sullivan met Prime Minister Giorgi
Kvirikashvili; Minister of Finance and
ADB Governor, Nodar Khaduri; Minister
of Regional Development and Infrastructure, Nodar Javakhishvili; and Deputy
Minister of Energy, Mariam Valishvili,
to discuss the current and future partnership.
ADB, based in Manila, is dedicated to
reducing poverty in Asia and the Pacific
through inclusive economic growth,
environmentally sustainable growth, and
regional integration. Established in 1966,
it is owned by 67 members—48 from the
region.
O
ne of the world’s leading
satellite operators, S.A.
(NYSE Euronext Paris
and Luxembourg Stock
Exchange: SESG) and
Panasonic Avionics have announced
two major, multi-year, High Throughput
Satellite (HTS) capacity agreements
serving aeronautical, maritime, and oil
and gas markets across the Americas.
Panasonic Avionics is a leading provider
of inflight entertainment and connectivity systems. These contracts, for SES14 and SES-15, represent their highest
bandwidth commitment to date of highpowered HTS spot beam and wide beam
Ku-band capacity.
SES’ HTS coverage will enable airlines
to offer next-generation inflight Wi-Fi
and live television services to passengers travelling on air routes throughout
the Continental U.S., Alaska, Hawaii,
Canada, Mexico, and the Caribbean.
Panasonic Avionics will also utilize the
HTS capacity to serve growing maritime markets and oil and gas operations
throughout the region.
“These major agreements are another
step-change in the highly dynamic and
buoyant aeronautical connectivity market,” said Ferdinand Kayser, Chief Commercial Officer of SES. “Our new high
throughput satellites, SES-14 and SES-15,
are poised to dramatically change the
airline passenger experience and introduce a new era of inflight connectivity.
SES-14 and SES-15 are designed for
mobility; they are able to dynamically
tailor power allocation and bandwidth
to maximize capacity. This enables
delivery to aircraft across different
geographies and time zones. The design
allows for easy transition from one
region to another, from one gateway to
another, and from one satellite to the
other. The unique designs of both satellites include video broadcast beams
which complement the spot beams,
maximizing throughput for Internet and
video streaming traffic. Both satellites
will be launched in 2017.”
David Bruner, Vice President of Global
Communications Services at Panasonic
Avionics said, “With our communications service expanding rapidly across
several vertical markets, we are always
looking for innovative high throughput
satellite designs that help us deliver the
best connectivity service to our customers. Working with SES, it was clear that
their SES-14 and SES-15 satellites were
the best option for us to supplement
our existing HTS capabilities and ensure
a true broadband experience over the
US, Canada, Mexico and the Caribbean.
Given their vision and conviction, Panasonic is very excited to collaborate with
SES, and we look forward to offering
these ultra-high throughput services to
our air transport, business aviation, oil
and gas, energy and maritime markets
in 2017.”
BUSINESS
GEORGIA TODAY
MARCH 1 - 3, 2016
15
Financial Times Says NATO Vulnerable
on Eastern Europe’s Borders
BY ZVIAD ADZINBAIA
T
he Financial Times Friday
reported that the US-based
Atlantic Council stated that
there are continuous warnings to NATO that the alliance cannot defend Europe’s eastern
border against an increasingly aggressive
Russia.
The FT publication says six defense
experts — including former SecretaryGeneral Jaap de Hoop Scheffer, Deputy
Supreme Commander, Sir Richard
Russia’s forces
would overrun
NATO in the
Baltics and
capture Tallinn
and Riga in a
maximum of 60
hours, with a
‘catastrophic’
defeat for
defending
Alliance forces
Shirreff, and former Italian Defense Minister and NATO Military Committee
Chair, Giampaolo di Paola, contributed
to the AC report, warning of a grave
“lack of progress” in the Alliance’s plans
to reinforce itself in the wake of Mos-
cow’s invasion of Ukraine in 2013.
It is the third serious caution for NATO
from members of the western defense
establishment in a month.
“A RAND corporation paper modelling
dozens of war game scenarios in consultation with the Pentagon and published
in late January, found that Russia’s forces
would overrun NATO in the Baltics and
capture Tallinn and Riga in a maximum
of 60 hours, with a ‘catastrophic’ defeat
for defending Alliance forces,” the article reads.
Non-credible defense efforts will not
impress Putin,” said François Heisbourg,
former French government Defense
Adviser and now Chairman of the International Institute for Strategic Studies.
“Putin only takes symbolic moves seriously if the symbolism has a weight of
its own,” NATO’s current plans, Mr
Heisbourg said, do not appear to have
any such gravity.
According to the publication, NATO’s
greatly increased range and pace of
military war-games, for example, still
pales in comparison to Russia’s now
routine “snap” and sprawling, planned
military drills. Last year’s center-piece
for NATO, dubbed Noble Jump — the
alliance’s largest war game in years —
involved a core of 5,000 men, with
10,000 involved in affiliated exercises
elsewhere and 300 or so tanks. Russia’s
“centre 2015” drill in September mobilised 95,000 troops and 7,000 tanks and
artillery.
The FT cites Heisbourg that the danger
of a strategic miscalculation by Moscow
are higher so long as NATO’s posture is
seen to be uncertain. “It has to be about
soldiers being permanently present there
and rather more equipment than is currently planned . . . we need a tripwire force
like we had in West Germany during the
Cold War.”
It is still unclear just how far the alliance will go in its package of measures
due this year.”
New Reservoir to Be Built for
Kulevi Oil Terminal
BY TAMAR SVANIDZE
T
o expand the storage capacities of the terminal, a new
reservoir is to be built at the
Kulevi Oil Terminal, located
in the Khobi District, on the
eastern Black Sea coast in Georgia.
The Kulevi Oil terminal management
announced that the Institute of Azerbaijan’s State Oil Company SOCAR has
prepared a project for the construction
of an additional storage tank which will
create opportunities for a more flexible
response to the requirements of the current petroleum market.
Construction work will begin as soon
as the company receives an environmental permit for the construction of the
new reservoir.
On February 29th, a public discussion
over the environmental impact of the
Black Sea Terminal’s new project was
held at the administrative building in
Khobi Municipality.
“All environmental risks associated
with the construction and operation
process of a facility should be assessed
and controlled. One of the steps to obtaining an environmental permit is through
the public discussion of Environmental
Impact Assessment,” Kulevi Oil Terminal administration said.
The idea to build Kulevi Oil Terminal
began in 1998. According to special survey forecasts, between 2010-2015 Georgian ports would become unable to
handle the expected volumes of oil and
oil products. Thus, in 1999, under the
late Georgian President Eduard Shevardnadze, the Georgian government signed
an order to construct Kuveli Oil Terminal and port.
Construction began near the village
of Kulevi in 2000 by Terminal 2000 Ltd.
Two years later, the project was interrupted due to environmental concerns
raised by the local community, as well
as due to insufficient funds, but in 2004
it was resumed under an international
consortium of investors led by late Georgian tycoon Badri Patarkatsishvili.
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