Issue no: 1118/164

ISET PAGE 4

• • JANUARY 22 - 24, 2019 • PUBLISHED TWICE WEEKLY

In this week’s issue...

PRICE: GEL 2.50

Continued on page 2

MarketsAs of 18 Jan 2019

STOCKS Price w/w m/m BONDS Price w/w m/mBank of Georgia (BGEO LN) GBP 15.50 1,0% +14,1% GEOROG 04/21 101.30 (YTM 6.12%) +0,6% +0,6%Georgia Capital (CGEO LN) GBP 10.30 +0,7% +1,5% GEORG 04/21 105.68 (YTM 4.17%) +0,2% +0,3%GHG (GHG LN) GBP 2.05 +4,6% 8,9% GRAIL 07/22 104.23 (YTM 6.37%) +0,4% +0,4%TBC Bank Group (TBCG LN) GBP 14.62 +0,4% +4,0% GEBGG 07/23 97.77 (YTM 6.58%) +0,1% +0,1%

COMMODITIES Price w/w m/m CURRENCIES Price w/w m/mCrude Oil, Brent (US$/bbl) 62,70 +3,7% +11,4% GEL / USD 2,6596 0,3% 0,3%Gold Spot (US$/OZ) 1 282,11 0,6% +2,6% GEL / EUR 3,0226 1,2% 0,0%

GEL / GBP 3,4242 0,0% +1,6%INDICES Price w/w m/m GEL / CHF 2,6704 1,4% 0,6%FTSE 100 6 968,33 +0,7% +4,0% GEL / RUB 0,0402 +1,0% +1,8%FTSE 250 18 764,47 +1,2% +7,3% GEL / TRY 0,4991 +2,2% +0,2%DAX 11 205,54 +2,9% +4,3% GEL / AZN 1,5680 0,3% 0,1%DOW JONES 24 706,35 +3,0% +4,4% GEL / AMD 0,0055

NASDAQ 7 157,23 +2,7% +5,5% GEL / UAH 0,0952 +0,2% 0,4%MSCI EM EE 164,07 +1,9% +5,7% EUR / USD 0,8800 +0,9% 0,0%MSCI EM 1 018,00 +1,7% +5,7% GBP / USD 0,7767 0,3% 1,8%SP 500 2 670,71 +2,9% +4,9% CHF / USD 0,9954 +1,2% +0,3%MSCI FM 2 627,08 +1,0% +5,2% RUB / USD 66,1807 1,1% 1,8%GT Index (GEL) 1 582,68 TRY / USD 5,3276 2,5% 0,3%GT Index (USD) 1 208,13 AZN / USD 1,6958 0,2% 0,2%

Prepared for Georgia Today Business by

BUSINESS PAGE 7

BUSINESS PAGE 5

POLITICS PAGE 11

Georgia’s GDP Growth Softens at Year-End, Exports, Remittances, & Tourism Continue to Expand

Georgia-Gazprom Agreement on Gas Transit to Armenia Expires

HUAWEI Presents HUAWEI P Smart 2019, Sporting the Latest Technologies & Design

German Bundestag Includes Georgia on Safe Country List

NEWS PAGE 2

Weekly Entrepreneurial News @entrepreneur.ge

BY THEA MORRISON

Ahead of the UN-initiated Inter-national Day of Education on January 24, international organ-ization WorldAtlas has pub-lished a list of countries with

the worst education systems, which includes Georgia.

On the list of countries with poor educa-tion, which is led by Equatorial Guinea, Myanmar and the Central African Republic, Georgia takes 25th place.

Image source: mes.gov.ge

WorldAtlas Lists Georgia among Countries with Worst Education Systems

FOCUS ON GEORGIA'S Q3 2018 CURRENT ACCOUNT SURPLUSTbilinomics reports on what the surplus actually means PAGE 8

Chat with us

GEORGIA TODAY JANUARY 22 - 24, 20192 NEWS

Follow the Entrepreneur Georgia Instagram page to get the latest updates from Georgian Entrepreneurs. For doing business with Georgian Entrepreneurs, write us on

business@entrepreneur.ge

Gamarjoba! I’m the Editor-in-Chief of the Georgian edition of Entrepreneur magazine and I’m here to share the top weekly Entrepreneurial news with you:

Tempered glass is used in construction, furniture production and façades. New entrant to the Georgian market, ‘Glass Service,’ is soon to open in Tbilisi within the scope of the ‘Enterprise Georgia’ project with an investment of 1.800,000 GEL. Glass Service will produce at least 120,000 sq.m of glass, initially for the local market. 3 507 sq.m was given to the company by the National Agency of State Property to support the business.

Brand-new company ‘TATARA’ from David Ramazashvili, operating under

the label of the ‘Grape’ company, will be a hit with those who love Georgian sweets. After Germany and Austria, packaged tatara (boiled grape juice

thickened with wheat fl our) has been launched on the US and Polish markets

and will appear in France soon. Approximately 200-300 kilos of tatara is

produced daily.

Wine company Badagoni recently launched a new concept, named ‘Badagoni Home,’ aiming

to create and manage hotels, restaurants, shops, recreation

complexes, and to restore historical tourist centers and wine cellars – a huge project

interesting for commercial, cultural and economic reasons. Badagoni’s upcoming spacious

tourist complex of 260 hectares will feature a 5-star hotel, a hotel

for pilgrims, three historical wine cellars, forest, wine restaurants

and wine shops.

@entrepreneur.geWorldAtlas says that government

expenditure on education as part of each country’s Gross Domestic Product (GDP) is an indicator of the importance nations place on education in their budgetary considerations.

“This fi gure is achieved by summing the total of all government expenditures for educational purposes, both public and private. This is not limited to instruc-tion services, but also includes any ancil-lary services provided for students. Provisions for research performed by educational institutions may also be included,” the report reads.

The organization noted that many countries have demonstrated a great deal of oversight by underestimating the importance of education, and thus have failed to invest adequately in their edu-cational infrastructures.

Georgia’s Education Minister Mikhail Batiashvili admits that there are fl aws in the education system, but says he

doubts the accuracy of the WorldAtlas statistics.

“This is not an organization which has a high reputation in the education fi eld…Countries which have the best education systems were also included on the list, so this survey raises doubts about the trustworthiness,” Batiashvili said.

Analysts believe that Georgia needs to increase funds for education in order to improve the system as a whole.

Education researcher Mariam Mosiash-vili believes not only funding but also effi ciently using the allocated money is very important for the proper function-ing of the education system.

“How the government spends money on education and whether it implements education development programs is of utmost importance for advancing the education quality and level in Georgia,” she noted, adding that it is necessary to decentralized schools rather than increase control of them. “This would reduce the existent political influence on our schools,” she said.

Analyst Revaz Apkhazava says equip-ping schools with modern technologies is not enough when the country lacks good teachers.

“If the teachers do not use the latest equipment bought by the schools, the money is wasted. It is necessary to increase the salaries of the teachers to motivate them. We also need to intro-duce new specialists who use different programs to teach the students,” he said.

The Georgian education system con-sists of the following main fi elds:

• Early and pre-school education• Secondary education• Higher education • Vocational education• Science, Technology and InnovationsThe Unifi ed Strategy for Education and

Science for 2017-2021 of Georgia reads that ensuring a quality and affordable education and science system is one of the main priorities of the Government of Georgia and has been declared the cornerstone of the development of the country.

Continued from page 1

WorldAtlas Lists Georgia among Countries with Worst Education Systems

BY AMY JONES

A new student campus will be built in Didi Digomi district in Tbilisi as part of education reforms.

The new campus on David Agmasheneveli Alley will include sci-ence laboratories, a library, art school, indoor recreational space, outdoor sta-diums, conference rooms, sports halls, a kindergarten and a residential campus.

The 129,778 square meters of land will also house a science museum, technopark and natural science laboratories.

Announcing the new project, Tbilisi Mayor Kakha Kaladze said, “all this is being done for the future generation,

New Student Campus to Be Built in Tbilisi

and for there to be as many educated young people as possible so they can use their knowledge for the country’s well-being."

The new education reforms hope to

improve educational infrastructure, national exams, security, innovation and technology, fi nancial support, and ensure better quality in institutions of higher learning.

Photo source: Study Breaks Magazine

GEORGIA TODAY JANUARY 22 - 24, 2019 3

PM: Debt Forgiveness Program Successfully Completed

BUSINESS

BY THEA MORRISON

Georgian Prime Minister Mamuka Bakhtadze stated that the loan annulment program of black-listed bank debtors has been

successfully completed.Starting on December 15, 2018, the

Government of Georgia began annul-ling the debts of over 600,000 citizens, 150,000 of whom are socially vulnerable, whose loans at banks do not exceed 2000 GEL ($748).

Cartu Foundation, established by the Founder and Chair of the ruling Geor-

gian Dream Bidzina Ivanishvili, agreed to take full responsibility for paying off the debts of those 600,000 people on the fi nancial black list.

The PM noted that 38 fi nancial organ-izations participated in the process within the period of December 15-31, 2018, while 14 more creditors expressed their willingness to engage in the ini-tiative in the period of January 1-15, 2019.

"Unfortunately, a small number of fi nancial organizations were left beyond the scope of the project. We call upon them to write off the loans of their black-listed debtors on their own, as those did that already announced will-ingness to follow the initiative,” he said.

BY AMY JONES

The Southern Gas Corridor, a major construction pro-ject for a natural gas supply route, is due to be completed by 2020. The European

Commission’s initiative will reduce Europe’s dependency on Russian gas and diversify energy supply sources by creating a gas supply route from the Middle Eastern and Caspian regions to Europe.

The route, expected to cost a total of $45 billion, has secured $4.4 billion of funding to complete the fi nal segment, the Trans Adriatic Pipeline. The fi nal section runs 878 kilometers from the Greek-Turkish border through Albania and the Adriatic Sea before terminating in Southern Italy.

The Southern Gas Corridor is made up of three pipelines: the South Cauca-sus Pipeline through Azerbaijan and Georgia, the Trans-Anatolian Pipeline through Turkey, and the Trans-Adriatic Pipeline through Greece, Albania, and Italy. Together, the pipelines are 3,500

Southern Gas Corridor to Be Completed by 2020

kilometers long. 17 commercial banks, as well as the

European Investment Bank, the Euro-pean Bank for Reconstruction and Devel-opment and export credit agencies from France, Germany, and Italy, are funding the project.

TAP is highly important to the EU. Currently, the EU depends largely on other countries for its energy; approxi-mately 54% of the EU’s gross inland energy is imported from abroad, espe-

cially from Russia. “Many countries in Central and South-East Europe are dependent on a single supplier for most or all of their natural gas,” reads a state-ment on the European Commission's website. “To help them diversify their supplies, the Southern Gas Corridor aims to expand infrastructure that can bring gas to the EU from the Caspian Basin, Central Asia, the Middle East, and the Eastern Mediterranean Basin.”

Nonetheless, the project is not without

controversy. Fossil fuels are known to be a huge contributing factor to climate change. The EU aims to cut its green-house gas emissions by 40% in 2030 compared to 1990 as part of its climate policy. Moreover, the European Invest-ment Bank, an investor in the corridor, has committed to fi ghting climate change. Yet, the project facilitates using gas as a source of energy, instead of looking at environmentally-friendly alternatives.

In addition, many NGOs and watchdog

organizations have criticized the project as it contributes fi nancially to Azerbai-jan’s government. The Azerbaijani gov-ernment is regularly condemned for its repressive treatment of journalists and activists, as well as its corruption. In 2015, the International Federation for Human Rights wrote: “for more than a decade, Azerbaijan has made shameless use of caviar diplomacy to charm Euro-pean governments, its more important oil and gas clients.”

The construction of the pipeline has been met with protests in some coun-tries. In Italy, environmentalists pro-tested TAP due to its environmental impact. In March 2017, more than 300 protestors blocked a construction site to prevent trucks from entering. Over 60 olive trees have been removed from historical olive groves due to TAP con-struction works.

The Southern Gas Corridor is expected to have an annual capacity of 10 billion cubic meters of gas, enough to provide energy to around 7 million European households. In the future, the European Commission hopes to increase this to 80 to 100 billion cubic meters. It is expected to begin operating in 2020.

BY THEA MORRISON

Georgia’s Minister of Econ-omy and Sustainable Devel-opment, Giorgi Kobulia, met with the representa-tives of the Investors'

Council to discuss challenges and topi-cal issues facing the tourism sector.

The Investors’ Council is an independ-ent consultative body of the Prime Min-ister of Georgia aimed at creating a dia-logue between the private business community, international organizations, donors and the Government of Georgia for the development of a favorable, non-discriminatory, transparent and fair busi-ness and investment climate in Georgia.

During the meeting at the Ministry, Kobulia made a presentation to the audi-ence and introduced in detail the strat-egy of the Ministry of Economy, which implies numerous important directions for the development and promotion of

Economy Minister Meets with Representatives of Investors' Council

the tourism sector.“We are glad to know that the Inves-

tors’ Council approved our vision, con-fi rming that our strategy for tourism development is correct and that we are well-aware of the aspects that need more attention. We talked about such infrastructure projects as the creation of large capacity conference spaces in Tbilisi and Batumi. Of course, we are

ready to take into consideration all the comments of the Council and I believe that joint efforts with tourism sector representatives will provide grounds for better outcomes,” he stated after the meeting.

Head of the Investors’ Council Secre-tariat, Mariam Meghvinetukhutsesi, stated that the Tourism Working Group of the Council exchanged ideas with the

Minister about solving issues related to the further rapid and sustainable devel-opment of the tourism sector.

Moreover, one of the members of the Tourism Working Group, the founder of the CBC Georgia Saba Kiknadze, noted that the meeting was fruitful as the par-ties discussed all the challenges the tour-ism sector in Georgia is facing.

“It was agreed that we need to switch

to high solvent markets, develop infra-structure and promote the growth of staff qualifi cation in order to provide higher quality services in the tourism sector,” he stated.

Georgia hosted 8,679,544 international travelers in 2018, showing an increase of 9.8% year-on-year. Of these travelers, 4,756,820 were tourists, which is 16.9% more compared to 2017.

Image source: Ministry of Economy

GEORGIA TODAY JANUARY 22 - 24, 20194 BUSINESS

BY THEA MORRISON

From January 14 to January 17, when the so-called smart cam-eras were involved in detect-ing uninspected cars, police imposed 6,654 fi nes on drivers.

“Until the activation of smart cameras, the number of fi nes from January 1 to 15 was 2,420,” said Beka Liluashvili, Head of the Ministry of Internal Affairs Research and Reforms Division.

He said the aim of the smart cameras was to increase the effi ciency of execu-tion mechanisms.

“Many cars had a legal obligation to go through technical inspection, but it did not happen, so we got the smart cameras going alongside the work done by police

offi cers,” he said, noting that the tightened measures had increased the number of cars that were taken to technical inspec-tion centers for obligatory inspection.

“Where before there were around 600 records of technical inspection in the centers, after the measures were tight-ened, this indicator has increased fi ve-fold,” he added.

If a car has not undergone technical inspection, the driver will be fi ned GEL 50 and legal entities by GEL 200 every month until they undergo inspection.

Obligatory technical inspection of vehicles took effect on January 1, 2018. The fi rst stage required trucks of over 3.5 tons and passenger cars with more than eight seats to undergo safety checks.

The second stage launched on July 1, 2018, required all vehicles registered to state entities to undergo a mandatory

check, which was followed by the third stage from October 1.

From October 1, 2018, the third stage of mandatory technical inspections of vehicles was launched in Georgia, envis-aging inspection of all automobiles with 3.0 engines and above.

From January 1, 2019, the government launched the fi nal phase of the campaign that requires all other vehicles to undergo mandatory testing.

Vehicles which are four years old or less do not have to undergo an inspec-tion. Cars that are four-six years old have to undergo testing once every two years and cars older than six years have to be tested every year.

Under the Georgia-EU Association Agreement signed in 2014, Georgia is obligated to ensure all vehicles are in line with EU standards.

Smart Cameras Detect 6,654 Uninspected Cars in 4 Days

BY DAVIT KESHELAVA AND YASYA BABYCH

ISET-PI has updated its forecast of Georgia’s real GDP growth rate for the fourth quarter of 2018 (fi nal update), and the fi rst quarter of 2019. These are the highlights of

this month’s release:

HIGHLIGHTS• Geostat updated its preliminary esti-

mate of real GDP growth for the third quarter of 2018. The Q3 estimate was

revised downward to 3.7% (0.3 percent-age points lower than the previous esti-mate).

• The real GDP growth rate reached only 2.2% year-on-year for November 2018. Consequently, the estimated real GDP for the fi rst eleven months of 2018 was revised downward to 4.7%.

• ISET-PI’s real GDP growth forecast for the fourth quarter of 2018 was reduced to 3.4%.

• Based on November’s data, annual growth in 2018 is expected to be 4.5%.

• According to the most recent (second vintage ) forecast for 2019, the growth rate in the fi rst quarter is expected to be 2.8%.

• The National Bank of Georgia’s fore-cast for real GDP growth in 2018 remained the same at 5.5%, while the World Bank predicts 5.3% growth. It is notable that NBG has maintained the growth forecast at 5% for 2019. This number coincides with the WB’s recent estimate.

In the ISET-PI GDP forecast model, very few variables changed in a mean-

ingful way between the months of Octo-ber and November. The most signifi cant changes were observed for variables related to national and foreign currency deposits, monetary aggregates, the real effective exchange rate, and external sector statistics.

NATIONAL AND FOREIGN CURRENCY DEPOSITS, MONETARY AGGREGATES The fi rst set of variables that have had a signifi cant positive effect on our fore-cast relate to national currency deposits in commercial banks. In November, all types of national currency deposits expe-

rienced double-digit growth in annual terms. In particular, the national cur-rency total deposits increased by 20% in yearly terms. The main contributors to this growth fi gure were national cur-rency time deposits (12 percentage point increase) and national currency demand deposits (6 percentage point increase).

Moreover, national currency deposits allocated by legal entities also increased by 16% yearly, while short-term and long-term deposits of legal entities increased

by 42% and 34%, respectively. According to our model, these variables have a sig-nifi cant positive contribution to estimated GDP growth. Such a signifi cant increase in deposits by legal entities can be in part due to changes in the tax code (as a consequence of the corporate income tax reform which came into effect in 2018). This reform effectively increased the amount of liquidity available to fi rms by shifting the timing of profi t tax.

In contrast to domestic currency depos-its, all types of foreign currency total deposits increased moderately by 4% compared to the same month the previ-ous year. Moreover, foreign currency current accounts had a negative contri-bution to this growth fi gure (-3 percent-age points), while time and demand deposits accounted for 3 and 4 percent-age points of the growth in foreign cur-rency total deposits. In addition, foreign currency total deposits allocated by legal entities went down by 10% yearly - short-term deposits were reduced by 6%, while long-term deposits increased by 14%. As a result, deposit dollarization was reduced to 64%, compared to 67.5% in the same period of the previous year. According to our model, the trends in foreign cur-rency deposits put a downward pressure on overall economic growth.

In addition, all the monetary aggregates, including the largest - broad money M3 (9% increase YoY) and M2 (14% increase YoY) – continued the upward trend. Moreover, currency in circulation (CCIR) increased by 9% in yearly terms. Improved monetary statistics positively contrib-uted to the growth estimates.

IMPROVED EXTERNAL STATISTICSAfter a rapid recovery period, Georgia’s neighboring countries are struggling to maintain high growth rates. In Novem-ber, the Armenian economy advanced by only 3.6%, yearly, while the real GDP of Azerbaijan increased by only 1% com-pared to the same month of the previous year. According to the Eurasian Devel-opment Bank (EDB), Armenia’s economic growth will continue to slow down, but will remain at a rather high level of 5.9% at the end of 2018. In addition, the main reasons for the GDP growth slowdown were a decline in agricultural produc-tion caused by unfavorable weather

conditions and a decrease in ore mining due to increased requirements for com-pliance with environmental standards .

The State Statistics Committee of Azer-baijan claims that in the fi rst three quar-ters of 2018, growth was observed in all sectors of the economy except construc-tion (the construction sector decreased by 15.9% yearly in January-September 2018) . The Russian economy was up by 1.8% in November, however, government offi cials expect a slowdown in the fi rst quarter of 2019 due to the volatility of fi nancial markets, sanctions and a deval-ued ruble which puts further pressure on the infl ation rate . Lastly, Turkey’s economic growth is expected to hit 2.8% for 2018 with record-high infl ation and the lingering effects of a currency crisis. The main contributor to the positive growth fi gure in Turkey was high posi-tive net exports .

Another set of variables which had a signifi cant positive effect on our GDP growth forecast was related to external trade. Georgia’s exports continued to expand, increasing by 19.6% yearly in November (the main contribu-tors were growth in export of motor cars, cigarettes, and cigars to Azerbaijan), while imports shrunk by 3.1% (due to reduced imports from Azerbaijan, the EU and China). As a result, the trade defi cit declined by 13.3% year-on-year and amounted to 454.7 million USD. Furthermore, other external variables, such as remittances (9% increase), number of international visitors (5.8% increase) and tourism (14% increase) maintained their growing trends in November.

REAL EFFECTIVE EXCHANGE RATE The Georgian lari appreciated against the majority of trading partner curren-cies in November. The most signifi cant appreciation was observable with respect to the ruble (2% in monthly and 14% in annual terms), euro (1% in monthly and 5% in annual terms) and US dollar (0.5% in monthly and 1% in annual terms). Furthermore, the lari appreciated against the Turkish lira by 24% in yearly terms, but depreciated by 7% in monthly terms. In addition, the real effective exchange rate (REER) depreciated by 1.7% relative to the previous month, and appreciated by 4.6% relative to the same month in the previous year. Notably, the NBG purchased 20 million USD worth of for-eign exchange reserves in November (which may have contributed to the slight weakening of the national currency in monthly terms). Overall, REER-related variables had a small negative contribu-tion to the real GDP growth projections.

Our forecasting model is based on the Leading Economic Indicator (LEI) meth-odology developed by the New Economic School, Moscow, Russia. We constructed a dynamic model of the Georgian econ-omy, which assumes that all economic variables, including GDP itself, are driven by a small number of factors that can be extracted from the data well before the GDP growth estimates are published. For each quarter, ISET-PI produces fi ve consecutive monthly forecasts (or “vin-tages”), which increase in precision as time goes on. Our fi rst forecast (1st vin-tage) is available about fi ve months before the end of the quarter in question. The last forecast (5th vintage) is published in the fi rst month of the next quarter.

Georgia’s GDP Growth Softens at Year-End, Exports, Remittances, & Tourism Continue to Expand

GEORGIA TODAY JANUARY 22 - 24, 2019 5BUSINESS

BY AMY JONES

The Airbnb booking platform has released a statement confi rming they will remove all listings from Abkhazia and South Ossetia.

Airbnb allows customers to rent accommodation in 191 countries and more than 81,000 cities. However, they have developed a

Photo source: airbnb

Airbnb to Remove Abkhazia and South Ossetia Listings

framework which evaluates how they should han-dle listings in disputed territories, realizing that their operation could increase tensions.

“In applying the global framework of these dis-puted territories, Airbnb determined that the exist-ence of the listings in these disputed territories has a direct connection to the larger confl ict in the region,” read the statement.

In accordance with this framework, they are to remove listings from South Ossetia, Abkhazia, and settlements in the West Bank.

BY THEA MORRISON

Georgia’s agreement with the Russian energy giant Gazprom on gas transit to Armenia expired on December 31, 2018.

The agreement was reached on January 10, 2017 under which Georgia, as a transit country for the transportation of Russian gas to Armenia, during 2018 received payment from Gazprom.

Under the previous agreement, which expired on December 31, 2016, Russia was paying Georgia for gas transportation by supplying natural gas to the amount of 10% of the volume of the trans-ported gas.

The recently expired agreement was many times criticized by the opposition and non-governmen-tal sector, which claimed that for Georgia it was more profi table when it was getting gas, and not money, in exchange for transit to Armenia.

At present, the transit of natural gas from Rus-sia to Armenia continues without an agreement and it remains unknown what kind of agreement will be reached between the sides, and when.

While commenting on the issue, Georgian Prime Minister Mamuka Bakhtadze told reporters that Georgia has no plans to abandon the function of being a transit country for Russian gas, and that

Image source: Gazprom

Georgia-Gazprom Agreement on Gas Transit to Armenia Expires

it will continue to receive benefi ts.The Prime Minister noted that Georgia receives

quite a signifi cant benefi t from the transit, which complies with the interests of the country.

Asked whether Georgia plans to sign a new tran-sit treaty with Gazprom, Bakhtatdze said if a new agreement is signed, the economy ministry will report the details.

Speaking about the future deal with Gazprom, Bakhtadze said as far as he knows, no changes have been made to the agreement.

Georgian Economy and Sustainable Develop-ment Minister Giorgi Kobulia confi rmed that Georgia expects to complete talks on a new deal with Gazprom on the transit of Russian gas.

"At present, we are discussing a new agreement on the transit of Russian gas to Armenia. The terms of the previous contract will remain in force pending the end of those negotiations," he said.

"After the talks with Gazprom, which are expected to be completed within the coming two weeks, we will make the results public," he added, noting that the exact details of the negotiations them-selves will be confi dential.

Russia’s Gazprom owns the world’s largest gas transmission system with a total length of 172.1 thousand kilometers.

Gazprom sells more than half its gas to Rus-sian consumers and exports gas to more than 30 countries within and beyond the former Soviet Union.

GEORGIA TODAY JANUARY 22 - 24, 20196 BUSINESS

BY VICTOR KIPIANI

The old world has died but has by no means died com-pletely. Equally, a new world is emerging but its outlines remain imprecise; its bor-

ders and contours are unclear. Its con-tent, however, is forcing us to revert to the Hobbesian theory that hostility and disorder are the natural state of mankind (something that is painful to contemplate and even more painful to admit). Indeed, history continues to alternate between a state of complacency and a sense of fear that tends to magnify risks and per-ils. The end of the Cold War seemed to indicate that we were moving in the right direction, and we recalibrated our expec-tations accordingly—but the last decade or so has proven that our expectations were based upon the far-fetched illusion of an increasingly peaceful and prosper-ous world. The real world is turning out to be much gloomier and more precari-ous. The 2008 war between Georgia and Russia was a volte-face event that directly underlined the rosiness of our world view, and Russia’s 2014 annexation of Crimea was the fi nal proof that our expectations of a post-Cold War world were far in excess of the possibilities available to the new world order. More-over, there are of course those who self-ishly welcome the emergence of a new world with new rules that will suit their own interests, those who wish for an increasingly disunited world ruled by revisionism, betrayal, confl ict and force. This world is arriving at a startling rate of speed: wisdom’s seat is increasingly (irretrievably?) vacant, and hubris is increasingly meeting nemesis.

NEW WORLD, NEW RULESOur highly fractured modern world is made up of several disentangled poles seeking to ‘enlighten’ the global system according to their preferences. Their policy-making toolkits are firmly grounded in realpolitik, but the more transactional the system becomes, the more tempting it becomes for them to brush aside the complexities of political and historical differences and to ignore the technocratic expertise which is so badly needed when seeking to strike foreign-policy bargains. And besides, the system’s capacity to reconcile engage-ment with containment is unpredictable. Furthermore, what makes the process idiosyncratic is the fact that attempts to achieve stated goals are not based upon preserving and furthering value-based alliances, but instead upon ‘running the show’ through functional power-sharing on a case-by-case basis. As a result of the demise of the post-Cold War order

and the powerful aftershocks that have followed, we are living in a world in which no clear and universal system exists for major powers to effi ciently react to and deal with ongoing challenges. There also seems to be no (geo)political willingness to attempt to redesign our world in a spirit guided by the nineteenth-century ‘Concert of Europe’, i.e. seeking to reverse the apparent decline of the international system and prevent it from collapsing entirely. Instead, each major power is striving to rebuild the world’s ‘security’ architecture according to their own whims and to suit their own reasons and resources, disregarding the interests of others and, perhaps most importantly, ignoring the painful lessons of the past. Let us now touch upon the geopolitically ‘egocentric empires’ that are fracturing the world by making it increasingly multipolar, disconnected and in confl ict.

The Sino-centric World: The history of our world is one of power shifts, and our era is no exception. We are witnessing a new version of the Thucydides trap with China's active efforts to acquire the inter-national status it believes it is entitled to on the world stage. This makes sense, considering the political and economic might of the world’s largest population, but is a cause for concern when one con-siders the system of government the country has developed at home and exports abroad. China’s quest for leader-ship is not limited to her immediate neighbourhood, and reaches out to a number of locations across the world. Naturally, China’s leaders regularly claim that their foreign policies are guided by good intentions, but it is vital to never stop monitoring how this mega-country is increasingly shifting away from the guiding principle of ‘hide your strength, bide your time’ towards undisguised efforts to increase its military and non-military means of coercion. In this regard, various changes to the structure of the People’s Liberation Army aiming to increase the operational capabilities of the country’s armed forces when deployed far from mainland China are of particular interest, as the 2018 Report to Congress of the US-China Economic and Security Review Commission notably underlines. Even the most cursory glance at China’s effective implementation of her well-publicized Belt and Road Initiative, with USD 400 billion already spent, raises serious questions in terms of commercial soundness. Numerous cases of ‘debt diplomacy’, the funding of projects that fail to meet bankability tests, disbursing

loans with no strings attached, imposing Chinese standards and criteria when measuring work performance, etc. are all serious concerns that Beijing must do her best to allay. In addition, the potential ‘dual-purpose’ use of commercial ports leased or owned by Chinese companies around the world also needs to be care-fully considered. When expanding abroad, China tries to skilfully follow a ‘cherry-picking’ approach to the existing inter-national order rather than simply trying to dismantle and substitute it, e.g. by using her right of veto at the UN Security Coun-cil, World Bank infrastructure facilities, etc.

A World with little Order: Essentially, this is a world in disarray rather than any kind of order. The proponents of this type of order are states ranging from the clear champion of the ‘disorderly ordered’, Russia, to those qualifi ed as ‘rogues’ (e.g. North Korea). The ideol-ogy of this camp, as expressed in real deeds and actions on a regular and daily basis, has already been discussed exten-sively and need not be repeated here.

The U.S.-led Order: Many are wonder-ing whether the Pax Americana has fi nally and irretrievably been shelved—an acutely pressing question, particularly given the foreign-policy implications of ‘America First’.

This type of order has organically been related to the notion of a liberal order, since the latter is deemed to be the per-fect modus operandi by which the United States can incentivize (mostly non-com-munist) countries to accept its primacy and ensure that Western gains following World War II remain clear and tangible. Once recognized as a ‘liberal leviathan’ and an ‘empire by invitation’, the US-led order is disintegrating under the onslaught of external pressure and domestic policy U-turns—the latter strangely opposed to Washington’s post-WWII policy of global engagement. Instead of recoiling and retrenching herself, it would be in America’s (and the world’s) best interests to focus her efforts upon strengthening and improv-ing remaining elements of the old order and upon introducing new elements capable of coping with current chal-lenges. The current administration should reverse its course, returning from a zero-sum to a positive-sum outlook by creat-ing new platforms for partnership, by leading regional democracies and by stepping up economic programmes for key regional allies (an equivalent of Mar-shall Plan for Georgia?). Since the U.S.

played such a major role in designing the system that is currently crumbling, it is her moral duty to not only resist its dismantling but also to pool her resources with those of other Western democra-cies, to more actively fi ght the ‘Finland-ization’ (or worse) of countries by revi-sionist states, and to prevent some of her allies from sliding away from liber-alism towards more authoritarian forms of government.

It is also clear that the so-called Rules-Based Order—the model currently under debate as a result of ‘America First’, and comprising Western democracies such as the EU and Canada—would not be as fi rm and sustainable due to these coun-tries’ limited political and military resources, and should be considered as a last-chance option in a desperate attempt to save the remnants of the liberal order.

The Liberal Order: Two decades ago, the international liberal order (primarily led by the U.S.) seemed to be on the rise, ensuring an even distribution of powers and equality among the members of global institutions. Most importantly, this was the order which stood out for its adher-ence to the universally recognized norms of international comity, non-interference in sovereign matters, the promotion of free and non-politicized trade, unfettered development and (reasonably) free fi nan-cial fl ows. But this order is no longer on the rise, and its principles are now sadly reminiscent of the bipolar days when the free world co-existed with the totalitar-ian. The bright hopes that followed the Cold War are crumbling one by one.

IN BRIEFThe bipolarity of the world after the Sec-ond World War has been superseded by the interwoven duo of unipolarity and (somewhat unsuccessful) attempts to establish a liberal world order. This com-bination is now steadily receding, replaced by an increasingly multipolar world char-acterized by competition between great powers. Another feature of the current system is that this competition is mainly fought along the periphery (e.g. Georgia, Ukraine, Syria) with little or no direct contact between major powers. Not yet. The existing system is also marked by proxy wars fought through ‘rollbacks’—e.g. attempts to prop up regimes locally or on the contrary to topple them in various ways for a variety of pretexts. All in all, however, the lessons of history demonstrate that rising powers are almost always keen to overtake dominant ones, and that gains and losses in ‘major power’

status very often determine the viability of the prevailing order. Promotion to such status can be achieved by peaceful means (e.g. as a refl ection of ‘soft power’), by pursuing hybrid geo-economic methods (e.g. by adopting a ‘sharp power’ approach), or through the shameless exercise of hard power (e.g. ‘humanitarian interventions’, ‘restoring peace’, etc.) if the conditions are right and impunity guaranteed. Last year showed us that the worst conse-quence of the ongoing competition between major powers, as reflected through their instinctive transactional-ism, is states trying to grab everything in reach. More than ever, international rela-tions are about winning instead of co-operating, and interdependence and interconnectedness, as well as bonds of trust, are waning.

OUR OWN RULESAs we suffer from the effects of a highly fl uid (and somewhat chaotic) situation in international relations—one whose politics have no fi xed lines between ‘white’ and ‘black’ but instead a wide grey area of uncertainty—it is more important to adhere to an emerging strategy rather than to a ‘grand’ one. Doing so would grant Georgia the tacti-cal mobility and fl exibility that the coun-try would need to effectively pursue its strategic national interests on the regional stage and beyond. A ‘transactional curve’ would certainly involve better and deeper foreign-policy ties with our allies, nota-bly on matters of security. As far as the latter domain is concerned, partnership packages could involve a wide range of questions including intelligence-sharing and joint contingency planning—and ideally more regular military drills. Even if the relative small scale of such exer-cises would render them largely sym-bolic, they would demonstrate commit-ment to the country. Beyond matters of security, the level of Georgia's interna-tional ‘game’ could also be raised by a return to a deep (but not overly proto-colic) diplomacy, pursued through a politically neutral and professional dip-lomatic cadre. Such resources would be a precondition to Georgia defending her national interests and pursuing her long-term foreign policies based upon func-tional groupings. Ideological dogmatism must be abandoned. Stronger national security, a more favourable geopolitical environment, better means at the coun-try’s disposal and true statecraft must be made the real lodestars of Georgia’s national agenda.

When ‘New Normals’ Become Abnormal

As a result of the demise of the post-Cold War order, we are living in a world in which no clear and universal system exists for major powers to effi ciently react to

GEORGIA TODAY JANUARY 22 - 24, 2019 7BUSINESS

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GEORGIA TODAY JANUARY 22 - 24, 20198 BUSINESS

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It’s Russia, Stupid!milk or meat products are not produced in suffi cient quantity to supply even the local Georgian market, and are way too expensive for European consumers.

Georgia is competitive in the produc-tion of nuts, which were the greatest early success story of Georgia-EU eco-nomic relations in 2014 and 2015. Since then, however, hazelnut production has been decimated by the infamous “mar-morated stink bug”. In the fi rst 10 months of 2018, hazelnut exports to Europe decreased by 16.5 percent, after a whop-ping 64% drop in 2017. What’s more, as reported by JAM news, in November 2018, “Russia replaced the European Union as the main destination for Geor-gian hazelnut exports.”

Exports to Russia and other CIS coun-tries did contribute to balancing Geor-gian current account. As these countries recover from the crisis of 2014-2016, they are able to absorb a larger share of Geor-gian traditional products, such as wine, mineral water, fruit, greens and vegeta-bles. But is it necessarily a good thing?

IT’S TRADE IN SERVICES!As we have seen, Georgia’s success in balancing its current account in Q3 2018 cannot be attributed to any breakthroughs in customs-free exports of agricultural or any other products to Europe. The country is still very far from becoming a modern agriculture paradise or an export platform for manufactured goods. In fact, the main driver of Georgia’s cur-rent account surplus – and of the Geor-gian economy as a whole – is exports of services, not products.

A closer inspection of the structure of the current account shows that the pos-itive trade balance in services is actually mostly due to the USD 1.2 billion infl ow from the travel and tourism sectors, which constitutes a 12.3% increase year-over-year. According to the Georgian National Tourism Administration, the number of international visitors increased by 720,520 people in 2018. Of these extra visitors, 37 percent were from Russia, while 35 percent were from Azerbaijan, Turkey, and Israel, combined.

EVERY CLOUD HAS A SILVER LININGThe great news about Georgia being able to balance its current account (even if only in a single quarter) comes with serious questions concerned with the manner in which this feat has been achieved. Instead of product and market diversifi cation, the Georgian economy appears to be increasingly dependent on one particular sector of the economy – tourism and hospitality. Instead of reaching out to new markets, Georgia follows the easy road to its traditional buyers in Russia and other CIS coun-tries.

Such development comes with serious risks. The Georgian economy cannot afford to put all of its eggs in the Russian basket. Any shocks to the Russian econ-omy, such as recessions, fi nancial crises, or political sanctions, can have adverse effects on the Georgian current account and push the economy back into the net borrower position from which it has barely escaped.

The share of Russian visitors has been steadily increasing since 2011. At about 1,4mln in 2018, Russian visitors constituted almost 20% of the total

BY ERIC LIVNY AND REZO SURGULADZE

The red headline in last week’s “Georgian Weekly Market Watch” by Galt & Taggart was something of a shock: “Georgia recorded its fi rst

ever quarterly current account surplus since 1995.” Mind you, Georgia’s current account was far from positive before 1995 either. Until then, Georgia simply had not maintained a balance of pay-ments records worthy of the name.

The G&T headline referred to Geor-gia’s achievement in a single quarter, Q3 2018, in which the country’s current account balance reached positive USD 11.9 million, compared with negative USD 124.9 million in Q3 2017. And even though it is about a single quarter, this achievement may represent a watershed event in Georgia’s economic history.

Why is this important, you ask? Well, a current account surplus implies that the country is no longer borrowing from the rest of the world in order to fi nance its consumption. Put differently, in Q3 2018, Georgia received more revenues from exports, foreign aid, and money sent home by Georgian workers abroad (“remittances”) than it spent on imports and interest payments to foreign lend-ers. Thus, the country was left with extra foreign currency reserves, which, in turn,

improved its monetary position, and strengthened investors’ confi dence in the Georgian economy.

FREE TRADE AGREEMENTS WORKING IN GEORGIA’S FAVOR?One possible explanation for the upswing in Georgia’s current account balance is the country’s success in leveraging the free trade agreements it has signed in recent years with the European Union (the so-called Deep and Comprehensive Free Trade Area agreement, or DCFTA) and the European Free Trade Associa-tion (EFTA), consisting of Iceland, Liech-tenstein, Norway, and Switzerland.

Let us examine the data. According to GeoStat, Georgia’s total exports in 2018 stood at USD 3.362 billion, an increase of 22.9% year-over-year. Our leading export products were copper ores, beverages, ferro-alloys, pharmaceuticals, and tobacco. Contrary to our logic, however, the share of EU in total exports comprised only 22%, a two-percentage point decline relative to 2017. In the meantime, the share of Russia and CIS in Georgia’s total exports increased from 43% to 50%.

Moreover, instead of improving, Geor-gia’s trade balance with European mar-kets has actually worsened. Net exports of goods covered by DCFTA and EFTA agreements, for example, dropped from negative USD 978.7 million in Q3 2017 to negative USD 1,004.5 million in Q3 2018. Thus, Georgia has become more

of a net importer from Europe since the previous year and has only slightly improved its position since Q3 2014 when net exports of goods stood at negative USD 1,099.8 million.

The DCFTA agreement with the EU and EFTA are worth further scrutiny. Of Georgia’s total exports to the EU, only about 11% were foodstuffs and agricul-tural products that can be said to have directly benefi ted from the DCFTA. Exports to Europe are dominated by copper ores, beverages, gold, and nitro-gen fertilizers. Most of these products could be exported to Europe custom-free under the GSP+ regime which Georgia enjoyed since late 2000s.

While growing in value, food and agri-cultural exports to Europe are not hav-ing a great impact on Georgia’s current account or its economic development. The country was able to penetrate the (Eastern) European market with some of its premium wines and mineral waters, but it had no success whatsoever with animal products, including the much touted Georgian honey, which at some point was thought to have the potential to “sweeten Tbilisi’s EU dream”.

The reasons for Georgian failure in this regard are quality and consistency of supply, on the one hand, and price com-petitiveness, on the other. Georgian mandarins, to take one example, are more expensive than their Spanish equivalent, and their fl avor and visuals are not suit-able for the European market. Georgian

GEORGIA TODAY JANUARY 22 - 24, 2019 9BUSINESS

Image source: azernews.az

BY EMIL AVDALIANI

Russian economic infl uence in the Central Asia has rebounded over the past six months. A focal point in Russia’s advances in the

region is Turkmenistan and the economic woes the country is experiencing.

Both countries have had diffi cult rela-tions since the break-up of the Soviet Union. First, the Turkmen government interpreted the role of the country in the modern world as neutral. This resulted in Ashgabat avoiding membership in any military blocs, such as the Russian-led Collective Security Treaty Organization (CSTO). Yet all major infrastructure projects have always been directed from Turkmenistan to north Russia’s mainland - heritage from Russian imperial and Soviet times.

In the late 2000s, energy cooperation was brought to a minimum. Additionally, in early January 2016, Gazprom offi cially stopped purchasing Turkmen gas, which made Turkmenistan solely dependent on its revenues from gas export to China (albeit sold at a low price).

Relations started to improve after 2016. Arguably, this was caused by a major shift in Russian geopolitics seeing problems with the West and chances opened for it to increase its infl uence in Central Asia. There is also the issue of Afghanistan, where the security situation, according to reports, has worsened. The Turkmen-Afghan border is a primary focus, seeing Moscow regularly question Turkmenistan and Tajikistan’s ability to contain Afghan

Turkmenistan & Russia: Resuming Economic Partnership

threats. Turkmenistan too has much to worry about as, following 2001 (when the US-led coalition began operations in Afghanistan), the northwestern provinces had remained relatively calm, yet now, with the US planning to pull out at least a portion of its troops from Afghanistan, this may create additional troubles for Ashgabat. Indeed, there have been reports of small-scale clashes between Turkmen troops and militants from Afghanistan, but Turkmen authorities have denied, or more often said nothing about such inci-dents, insisting that the Afghan frontier is secure.

Russia aside, Turkmenistan is also cur-rently interested in improving relations. Ashgabat has economic problems and in 2017, Turkmenistan suspended sup-plies of natural gas to Iran (claiming Tehran owed some $1.8 billion accumu-lated over 10 previous years). This actu-ally left Turkmenistan with just one gas customer – China, which had loaned Turkmenistan billions of dollars to develop gas fi elds that would supply it and build the pipelines to carry that gas to China.

Russia has developed several large fi elds since then and added thousands of kilometers of gas pipelines. Russia and Gazprom did need Turkmen gas in the fi rst decade of this century, but that is arguably no longer true.

At the same time, over the past several months, Russia has initiated a veritable economic offensive. This changed on October 9, 2018 when Gazprom CEO Aleksei Miller visited Turkmenistan and both sides agreed Gazprom will resume buying Turkmenistan’s gas from January 1, 2019. It is also interesting that the

agreement follows the resolution on the Caspian Sea. Offi cially, no third party can intervene if Turkmenistan and Azer-baijan decide to build the Trans-Caspian Pipeline (TCP). Fear on the Russian side that Ashgabat might succeed in selling its resources to other regions might have been a driver behind Miller’s visit and the agreement.

Viewed from a global perspective, these Russian moves, although also likely caused by Turkmenistan’s openness at this particular moment, are nevertheless a result of Russian troubles elsewhere. The successful western expansion into what was always considered the “Rus-sian backyard” limited Moscow’s projec-tion of power and diminished its reach

to the north of Eurasia. The only region where Russia can more or less freely operate is the Central Asian region. Other geopolitical competitors such as China are also present and might hinder Rus-sian advances, but still there is a much larger space for Russian actions in com-parison with Ukraine or the South Cau-casus.

GEORGIA TODAY JANUARY 22 - 24, 201910 BUSINESS

BY THEA MORRISON

Georgia’s Ministry of Internal Affairs (MIA) reports that two employees of the KazTransGaz company were arrested in connection with the deadly gas explosion that took place in Tbi-

lisi on the evening of January 16, claiming the lives of four, including a minor.

The MIA says the detainees checked the building several hours before the explosion after they had

2 KazTransGaz Employees Arrested for Deadly Explosion in Tbilisi

been called by the residents.“Two specialists of KazTransGaz– V.M. and T.T.

improperly checked the building and told the res-idents that the smell they suspected to be gas was actually paint. The explosion came a few hours after the employees left, leaving four people dead,” the ministry reports.

An investigation into the case is underway under Articles 240 and 220 of the Criminal Code of Geor-gia.

The Ministry says all persons involved in the case will be identifi ed and proper measures will be taken after the expertise is concluded.

BY AMY JONES

More than 170 business leaders in the UK announced their support for a second referendum on Brexit.

Brexit has heavily divided the UK. On 16 January, British Prime

Minister Theresa May’s Brexit agreement was defeated by MPs by an overwhelming majority of 230, the heaviest defeat for any British PM of the democratic era in the UK. Brexiteers argued that her Brexit agreement could keep the UK tied to the EU indefi nitely whilst losing its say over its rules. Both Remainers and Leavers argued that the deal is worse than staying in the EU.

The move by the business leaders aims to dem-onstrate growing support for a “people’s vote” regarding Brexit. “Many businesses backed the Prime Minister’s Brexit deal despite knowing that it was far from perfect,” reads the letter from the business leaders to The Times newspaper. “But it is no longer an option. The priority now is to stop us crashing out of the EU with no deal at all. The only feasible way to do this is by asking the people whether they still want to leave the EU,” it contin-ues.

The business leaders represent more than £100

Image source: The Guardian

More than 170 UK Business Leaders Support a Second Brexit Referendum

billion of annual contributions to the UK economy. They warn that a ‘chaotic crash-out from the EU,’ could damage the UK economy further. Although some of said business fi gures had previously sup-ported Brexit, they now believe a people’s vote is the only way to avoid a no-deal Brexit.

Signatories of the letter include renowned designer Terence Conran; Lord Foster, the architect of the iconic Gherkin skyscraper in London; architect Sir David Chipperfi eld; Nobel laureate and research scientist Paul Nurse; and former chairman of Brit-ish Telecomunications Mike Rake.

Both political parties in the UK have so far dis-missed the prospect of a second referendum. The leader of the Labor party, Jeremy Corbyn, is push-ing for a general election after the vote of no con-fi dence in the government marginally lost last week. The Prime Minister, on the other hand, has pledged to speak to senior MPs to fi nd a compromise deal.

Many fear that the UK is heading for a catastrophic no-deal Brexit on 29 March, 2019, after the dismissal of May’s Brexit plan, an event that could heavily affect the UK economy. Indeed, the UK economy is already approximately 1.5% smaller than it would have been without the Brexit vote due to the uncer-tainty surrounding Brexit, according to the Finan-cial Times. The export industry, creative businesses and property businesses are expected to be hit especially hard.

GEORGIA TODAY JANUARY 22 - 24, 2019 11

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POLITICS

BY AMY JONES

On 18 January, the German Bun-destag, the lower house of Germany’s government, voted to include Georgia on its safe countries of origin list with a

resounding 509 votes to 138. The vote will make it easier for German authorities to deport Georgian migrants arriving in the country without a visa. The northern Afri-can states of Tunisia, Algeria, and Morocco were also added to the list.

Countries are deemed to be a ‘safe country of origin’ when there is believed to be no political persecution, inhumane or degrad-ing treatment of citizens. The 1951 German Refugee Convention states that people are entitled to seek asylum based on a well-founded fear of persecution, for example, discrimination on the basis of sexual orien-tation or torture, in their home country.

The Georgian Ambassador to Germany Elguja Khokrishvili announced, “the bill will simplify processing of asylum seeker appli-cations from Georgia and other countries as well as fasten the readmission process of those who were rejected for asylum.”

The move is designed to deter Georgians from moving to Germany to claim asylum.

Helge Lindh, a politician from Germany’s Social Democrats Party, SPD, announced that the move was necessary to eliminate false hope that citizens from the listed coun-tries can apply for asylum or refugee status in Germany.

The new measure was supported by the Christian Democrats Union and Social Democrats.

However, representatives of the Greens and Left parties were critical of the move. Luise Amtsberg from the Greens believes the vote to be motivated by political con-cerns as the number of asylum applications from the four countries has signifi cantly decreased. In the second half of 2018, the number of Georgian asylum seekers in Ger-many dropped due to close cooperation between German and Georgian governments.

Politicians from the CSU-SPD coalition tried to pass the bill in 2017 but failed due to political resistance. The Bundesrat, the upper house of the German parliament, must still approve the bill, which is expected to appear before the Bundesrat as early as Feb-ruary 15.

The number of Georgians seeking asylum in EU countries increased massively when Georgia was granted visa-free status to visit EU countries. German news outlet Deutsche Welle reported that 2,976 Georgians applied for asylum in 2018. Image source: Diem 25

German Bundestag Includes Georgia on Safe Country List

BY KETEVAN KVARATSKHELIYA

The Prime Minister of Geor-gia, Mamuka Bakhtadze, has commenced his offi cial visit to Lithuania. Bakhtadze and his delegation were

welcomed by the Minister of National Defense of the Republic of Lithuania, Raimundas Karoblis at the International Airport of Vilnius.

There are various high-level meetings scheduled within the scope of the offi cial visit. The Georgian offi cial will be received by his Lithuanian colleague - Saulius

Mamuka Bakhtadze on Offi cial Visit to Lithuania

Skvernelis. Negotiations will have direct and extended formats, followed by press statements to be made by both leaders.

The Head of the Georgian Government will also have a meeting with the Presi-dent of Lithuania Dalia Grybauskaite.

Mamuka Bakhtadze will pay a visit to the Vilnius University within the frame-work of his offi cial trip to Lithuania, where he will meet with Georgian and Lithuanian students and answer their questions.

The Prime Minister of Georgia is accompanied by David Zalkaliani, Min-ister of Foreign Affairs of Georgia and MP Beka Odisharia, Head of Parliamen-tary Friendship Group between Lithu-anian and Georgian lawmakers.

Image source: IPN

BY AMY JONES

Zohrab Mnatsakanyan and Elmar Mammadyarov, the head of Ministries of Foreign Affairs in Azerbaijan and Armenia have agreed to ‘pre-

pare the populations for peace’, marking

Armenia & Azerbaijan to ‘Prepare the Populations for Peace’

a breakthrough in the long-running Eur-asian confl ict. Meeting in Paris for the fourth time, the ministers spoke for more than four hours on the Karabakh confl ict. The pair made plans for the leaders of Armenia and Azerbaijan to meet.

Nonetheless, both sides are still cau-tious about the breakthrough and the positive statement by the ministers. Strong public opinion hampers the pros-

pect of a peace deal on both sides.The Foreign Ministers met with the

OSCE Minsk Group. In their offi cial statement, they underlined “the impor-tance of possibly mutually benefi cial initiatives designed to fulfi ll the economic potential of the region.”

Despite the potential mutual benefi ts of peace in the region, whether real pro-gress occurs remains to be seen.

Photo source: MFA Azerbaijan