Construction Business 2015

The FINANCIAL

Vienna has the world’s best quality of liv-ing, according to the Mercer

2015 Quality of Living rank-ings. Overall, European cit-ies dominate the top of the ranking along with major

cities in Australia and New Zealand. Zurich, Auckland, and Munich are in second, third, and fourth places respectively. In fi fth place, Vancouver is the highest-ranking city in North Amer-ica and the region’s only city in the top 10.

News Making Money http://www.fi nancial.ge9 March, 2015

© 2015 The FINANCIAL. INTELLIGENCE BUSINESS PUBLICATION WRITTEN EXPRESSLY FOR OPINION LEADERS AND TOP BUSINESS DECISION-MAKERS

Read on p. 21

Women Earned on Average 16% Less Than Men in 2013 in the EU

Industrial Producer Prices Down by 0.9% in Euro AreaRead on p. 18

Mar 7 Feb 28

1 USD 2.1740 2.16541 EUR 2.3844 2.4315100 RUB3.6407 3.53651 TRY 0.8339 0.8604

CURRENCIES

See on p. 10

Continued on p. 15

GEORGIA ONE OF THE WORLD’S MOST SOBER NATIONS, PUBLICALLY AT LEAST

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Risk of Additional Uncompleted Construction Projects in Georgia

The FINANCIAL

A recent boom of residen-tial apart-ments in the G e o r g i a n

construction market has resulted in an oversupply in this niche. The current fi nancial crisis that has already caused a slump in the population’s solvency carries the risk of an addi-tional wave of uncomplet-

ed projects. Nikoloz Uru-shadze, Partner at BHP International Georgia, recommends developers to carefully analyze risks associated with oversup-ply for particular neigh-bourhoods before starting a new project. The most promising segment of the real estate market appears to be two-three-star ho-tels.

Continued on p. 2

Hospitality and F&B Sectors to Boom on the Georgian Real Estate Market

The FINANCIAL

De v e l o p m e n t of the com-mercial real estate market in Georgia re-

mains fi rmly focused on the tourism and hospital-ity sector. The expansion of international food and beverage brands is still high on the agenda for 2015, which makes the hospitality and F&B sec-tors the most promising for investors. As for resi-

dential apartments - “de-mand exceeds supply,” said Steve Brown, Manag-ing Partner at Cushman & Wakefi eld | Veritas Brown. So until this dynamic changes, Brown suggests that most new, well-locat-ed and constructed proj-ects should yield returns.

“If mortgages become unaffordable the residen-tial sector will become saturated with empty or half-fi nished buildings.

Continued on p. 18

MERAB PACHULIAGORBI

It always makes me proud to read or hear some in-formation about my country’s rich

cultural heritage. As with many other ancient countries that have sur-vived in one form or an-other till present, wine is often an enduring theme.

Baku, Tbilisi, Yerevan at the Bottom of Quality of Living Rankings

Continued on p. 16

constructionbizMETRA DEVELOPMENT BRINGS INNOVATION TO CONSTRUCTION - CONVERTING USD 1 TO GEL 1.75

The FINANCIAL

Current economic condi-tions are having a serious impact on many business-es in Georgia. However, the company Metra Devel-

opment is launching a new marketing campaign, converting USD 1 to GEL 1.75. The company plans to maintain a stable environment even during the current devaluation of the national currency. Offering unprecedented payment terms is a form of social re-sponsibility that Metra Development will offer to its customers throughout the existing tough fi nancial crisis.

Continued on p. 4

Continued on p. 6

Unison: “Bonds Insurance willincrease investor interest in Georgia”

The FINANCIAL

Contract and customs bond insurance will attract more investors to Geor-gian construction and infrastructural projects,

believes Vasil Akhrakhadze, Direc-tor General at insurance company Unison. With more than USD 48 million written premium, Unison advanced its position in the country from 8th to 3rd in 2014, taking 19% market share. Isolation from univer-sal healthcare insurance and good management are what helped Uni-son to end the last year with profi t.

Planning to Purchase an Apartment via Mortgage Loan?

FEMALE MILLENNIALS ARE THE MOST CONFIDENT AND AMBITIOUS OF ANY FEMALE GENERATION

The FINANCIAL

Opportunit ies for career pro-gression tops the list of most attractive em-

ployer traits.49% of female millen-

nials starting their careers believe they can reach the very top levels with their current employer.

Continued on p. 20

2 HEADLINE NEWS & ANALYSIS FINANCIALC M Y K

9 MARCH, 2015 | FINCHANNEL.COM

The FINANCIALBy MADONA GASANOVA

A recent boom of resi-dential apartments in the Georgian construction mar-ket has resulted in

an oversupply in this niche. The current fi nancial crisis that has already caused a slump in the population’s solvency carries the risk of an additional wave of uncompleted projects. Nikoloz Urushadze, Partner at BHP International Georgia, recom-mends developers to carefully analyze risks associated with oversupply for particular neigh-bourhoods before starting a new project. The most promising segment of the real estate mar-ket appears to be two-three-star hotels.

“In 2014 we encountered quite a dangerous environment for both developers and buyers. The supply started to gradually exceed demand. Some compa-nies appeared with neither the management, nor the intellect and skills required to run con-struction projects. They have been making use of the liberal legislation existent in Georgia.

Such legislation contributes to the development of the con-struction business in the coun-try. Meanwhile it also contains a high risk. Lots of construction projects have appeared, while the prospect of their comple-tion remains questionable, highly dependent on economic processes. Devaluation of the national currency is having a negative impact on processes.

If economic processes do not get stabilized soon the events of 2008 may be repeated. By this I mean the failure to complete many already-started projects,” Nikoloz Urushadze, Partner at BHP International Georgia, told The FINANCIAL.

In Urushadze’s words, eco-nomic processes are refl ected in real estate business as well, however, they do not carry a

direct and instant impact. The business reacts relatively slow-ly. “Accordingly the years 2012-2013 were pretty good for this sector. It was quite an active period in terms of sales. Since 2008 crisis period, the resi-dential apartment segment has also revived itself. Development companies backed by commer-cial banks have contributed to this process. These companies restored the reputation of the sector which was destroyed by developers years ago. Such de-velopment companies are char-acterized with a relatively high level of management. They have the fi nancial resources. Mean-while, they attract fi nances not from their mother companies, but manage to successfully co-operate with international fi -nance institutions. Despite a negative PR campaign that was launched on the market against them, their appearance brought a huge, positive shift to the mar-ket. The restored reputation of developers contributed to the sales of real estate property and projects under construction. So, during the past three years we

9 March, 2015

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CURRENT PRICES ON GASOLINE AND DIESEL 9 MARCH, 2015, GEORGIA

Prices in GELSuper 0.00Premium 1.84Euro Regular 1.75Regular 1.64Euro Diesel 1.84 Diesel 1.69CNG 1.15

Prices in GEL

Eko Super 1.84Eko Premium 1.79Eko Regular 1.66Eko Diesel 1.79Eko Super 100 2.20Euro Regular 1.63Diesel Energy 1.64

Prices in GEL

Eurosuper 1.82Premium Avangard 1.74EuroPremium 0.00Euroregular 1.59Eurodeasel 1.74

Prices in GEL

Super 1.84Nano Premium 1.74Euro regular 1.66Nano Regular 1.63 Nano Diesel 1.61Euro Diesel 1.79

Prices in GEL

Efi xS Euro 98 1.99Efi x Euro Premium 1.79Euro Regular 1.59Efi x Euro Diesel 1.85Euro Diesel 1.69

GASOLINE PRICES PRESENTED BY BUSINESSTRAVELCOMHOTEL AND AIRTICKET BOOKING: 2 999 662 | SKY.GE

construction construction businessbusiness

Continued on p. 17

KHACHAPURI INDEX AS A PREDICTOR OF STRUCTURAL CHANGES IN THE ECONOMY

In February, the average cost of cooking one standard Imeretian Khachapuri fell to 3.29GEL, which is 3.4% lower month-on-month

(compared to January 2015), and 4.8% lower year-on-year (compared to February 2014).

The main ingredient of Khacha-puri is Imeretian cheese, and, nat-urally, its price is the main driver of ISET’s Khachapuri Index. Over the years, we have been observing a sharp upward movement in the price of cheese from July till Janu-ary, and an equally sharp down-ward movement from February till June.

These seasonal price dynam-ics are closely tied to the annual production cycle of the Georgian dairy industry. The price of milk is the exact mirror of image of this production cycle. It goes up when there is little production, and goes down when there is plentiful sup-ply.

The driving force behind these ups and downs is technological backwardness. In the absence of artifi cial insemination, the vast majority of Georgian cows calve at roughly the same period, in the three winter months. This is

the time when milk production resumes, applying downward pressure on the prices of all dairy products, including cheese. After peaking in spring, by July milk production starts declining until cows get dry two-three month be-fore giving birth.

2014/15 seems to break away from this traditional roller coaster dynamic. As shown in the chart, the fl uctuations in the price of cheese that we observe this year are much less pronounced than in 2013/14. The price of cheese did spike in December, refl ect-ing a one-time sharp increase

in demand just prior to the New Year holiday season. Other than that, however, the price of Imere-tian cheese stayed quite fl at ever since September 2014, in the 7-7.30GEL/kg band. Likewise, the price of cheese did not decline as much in the March-June 2014 period.

What’s going on? One possi-bility is that improved farmers’ awareness about the advantages of producing (more expensive) winter milk has fi nally led to the introduction of artifi cial insemi-nation, smoothening milk pro-duction over the four seasons.

Another (complementary) ex-planation is entry by industrial cheese factories or intermediar-ies that have the ability to store large quantities of cheese and supply the market in fall and win-ter time, when supply tradition-ally falls short of demand. In fact, improved storage would explain both higher summer prices and lower winter prices, consistently with our data.

If this is true, the story told by the Khachapuri Index is one of infrastructure improvement and technological upgrading. A story of modernization, in short.

Risk of Additional Uncompleted Construction Projects in Georgia

3HEADLINE NEWS & ANALYSISFINANCIALC M Y K

FINCHANNEL.COM | 9 MARCH, 2015 construction construction businessbusiness

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Divan SuitesBatumi

Congratulates All Women on InternationalWomen’s Day


9 MARCH, 2015 | FINCHANNEL.COMconstruction construction businessbusiness


Current economic conditions are hav-ing a serious im-pact on many busi-nesses in Georgia.

However, the company Metra Development is launching a new marketing campaign, converting USD 1 to GEL 1.75. The company plans to maintain a stable environ-ment even during the current devaluation of the national currency. Offering unprec-edented payment terms is a form of social responsibility that Metra Development will offer to its customers through-out the existing tough fi nan-cial crisis.

Metra Development en-tered the Georgian market in 2007. Since then the compa-ny has gained an important place in the Georgian real es-tate fi eld.

Metra Group has been op-erating in the real estate mar-ket for more than 10 years, overseeing the development of multiple real estate projects with the company’s extensive experience. Metra Group is developing new housing es-tates, adjusted to modern life, oriented towards both com-fort and quality.

The international experi-ence of Metra Group gives a successful refl ection of the activities of Metra Develop-ment Company in Georgia. The Company is also the co-author of one of the most ad-vanced residential complex developments in Tbilisi - Park Town.

Metra Development’s mis-sion and aim is the develop-ment and rehabilitation of new districts. Park Town and Metra Park projects are clear examples of this.

Natalia Glinskaya, CEO at Metra Development, talked about the new conditions of purchasing apartments at Metra Development. In her interview with The FINAN-CIAL, Glinskaya underlined the advantages of Metra De-velopment.

Glinskaya was appointed the CEO of Metra Develop-ment in 2014. Up until then she was the CFO of the com-pany. Glinskaya has been involved in the development sector since 2008. From 2004-2007 she worked for USAID, and she holds a Mas-ter’s degree in fi nance.

Q. The recent dramatic devaluation of the Geor-gian Lari against the USD has already caused a price growth for con-struction materials,

which accordingly has caused an increase in the cost of apartments. Against this background, how do you manage to offer such unprecedented conditions?

A. Providing different and high quality products has al-ways been the main goal of Metra Development. How-ever, in the existing economic situation we carry the respon-sibility to create comprehen-sive and stable conditions of cooperation with consumers. Call it our corporate social re-sponsibility.

Q. Is this campaign only valid in the case of single payments, or can con-sumers that choose a par-tial payment programme also benefi t from it?

A. The offer works in the case of a single payment. Con-sumers are also offered inter-nal interest-free instalments till the complex gets fully fi lled up.

Q. Besides the price, what are the additional advantages of your proj-ects?

A. The uniqueness of Metra Development is its location. The Bagebi residence has be-come the best place to live in Tbilisi for many reasons. Fresh air, space, greenery and being just a short distance from the

centre of the city is a small list of reasons why people should choose an apartment at Metra Development. The project also has other advantages. Specifi -cally, we offer apartments with Metra Standards conditions. This means: a full frame heat-ing system, radiators, air con-ditioning and fi re alarm.

Q. Which projects are you offering as part of your campaign?

A. As part of the campaign we are offering customers apartments at the Metra De-velopment residential com-plex (Vake-Saburtalo district, Bagebi). The cosy accommo-dation of Metra Park consists of twenty 5-6 storey residen-tial blocks. Each of the apart-ments ranges from 59-215 square meters of living space.

All interested individuals will be able to benefi t from the terms of our campaign from 1 March.

Metra Development Brings Innovation to Construction - Converting USD 1 to GEL 1.75

NATALIA GLINSKAYA, CEO at Metra Development

In today’s busy times, the home is the one place where we are guaranteed rest and relaxation. For that

reason people do their best to choose the right location and conditions for their home so that it is both close to the in-dustrial centre of the city and at the same time means that they can live in a comfortable and healthy environment. In addition, the devaluation of the GEL has reached a level where there has been a dan-ger that the expectation of infl ation could be refl ected in price growth. Given the current conditions Metra De-velopment decided to allow consumers to invest in real estate by purchasing apart-ments with an exchange rate of USD 1 to GEL 1.75.

METRA DEVELOPMENT CONVERTS USD 1 TO GEL 1.75

Despite the existing eco-nomic conditions, Metra Development is giving con-sumers the unique chance to purchase an apartment at Metra Park. It will be a wise investment and despite the exchange rate volatility, will avoid foreign exchange risks. Given the fact that the GEL devaluation trend has in-creased, the company decided to return a stable monetary rate to consumers - with USD 1 worth GEL 1.75.

CLEAN AIR

The air quality in Tbilisi is not in line with the stan-dards stated by the World Health Organization (WHO). The content of carbon ox-ides and nitrogen dioxide in the air are especially high on Rustaveli, Agmashene-beli and Tsereteli avenues, as well as in the Gldani and Isani districts. A total of 71% of air pollution is estimated to come from vehicles. Ac-cording to the data of 2012, over 900,000 vehicles are moving regularly in Tbilisi. Most of them are over 10 years old. As of yet, the issue remains out of control.

In 2014 WHO published new data on the issue. Ac-

cording to it, over 7 million people have died worldwide as a result of the effects of air pollution.

Bagebi is not overloaded with transport vehicles. Accordingly, the environ-ment there is less polluted. Consequently, the health of Bagebi residents is not at risk of diseases caused by pollution.

MORE GREEN COVER

The number of parks and green areas is increasingly shrinking in the central ar-eas of Tbilisi. Meanwhile, Bagebi is located on a hill-side. There are lots of decid-uous trees there, as well as

Pinophyta trees. These are especially good for children. The green cover of Bagebi is clearly visible even on Google Maps.

According to a certain U.S. environment protection NGO, one tree can absorb 21.7 kilo-grams of carbon dioxide per year while one large tree can provide enough oxygen for two people.

PROXIMITY TO THE CITY CENTRE

Some people may have the impression that Bagebi is far away from the central dis-tricts, rather than some of the streets in Saburtalo for

example. However, this is ab-solutely not true.

Bagebi is just a few min-utes’ drive from the central districts. It takes about 10-15 minutes to get from Freedom Square to Bagebi by car. Meanwhile, to get from the same place to Nut-subidze Street, it will take 15-20 minutes by car. Ac-cording to Google Maps, Bagebi is 7 kilometres from Freedom Square. In addi-tion, all modes of public transport, including mini-buses, frequently travel to and from Bagebi, taking around 20 minutes to get from there to the centre of the city.

Top Reasons to Choose an Apartment at Metra Park

Continued on p. 7


FINCHANNEL.COM | 9 MARCH, 2015

Advertiser: Metra Development. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com

construction construction businessbusiness




Contract and customs bond insurance will at-tract more investors to Georgian construc-tion and infrastructural

projects, believes Vasil Akhra-khadze, Director General at insur-ance company Unison. With more than USD 48 million written pre-mium, Unison advanced its posi-tion in the country from 8th to 3rd in 2014, taking 19% market share. Isolation from universal health-care insurance and good manage-ment are what helped Unison to end the last year with profi t. The separation of insurance compa-nies from other sectors and im-plementing compulsory types of insurance are the main challenges that the Georgian insurance sec-tor currently faces.

“Since its establishment Uni-son has always chosen the right strategy. That led to it passing through this diffi cult period suc-cessfully. We have gained the status of an important player in the market. The proper approach of the management is based on 15 years of working experience in the insurance fi eld. Having a diversifi ed portfolio has always been our main strategy. We nev-er depend on just one source of funding, even if it is state funding. We were initially against involve-ment in the universal healthcare insurance project. It was clear for us that it would not be prof-itable. In our case, this strategy worked. Our company is growing, and turning a profi t from year to year. Profi ts, as well as the gross premium, are increasing,” Vasil Akhrakhadze, Director General at Unison, told The FINANCIAL.

Unison was established in 2011. The company soon managed to become one of the most promi-nent players on the Georgian in-surance market. The company is leader in the property insurance business segment and positions itself as pure insurer.

The company is a partner of strong international fi nancial in-stitutions and cooperates with leading and well-known reinsur-ers such as (Lloyd’s Syndicate, Hannover Re, Polish Re, SCOR, Transatlantic Re, Ace European Group, VIG Re) which ensures their reliability and gives the pos-sibility to provide full coverage for high capacity risks.

“The reinsurance of contract and customs bond insurance is one of the most diffi cult areas. It is linked to the stability of the country. Georgia is the exception and pioneer among its neighbours in that it managed to achieve this deal with its foreign partners es-pecially on UK (London) market. A good accounting system of the banking and insurance sectors contributed to it. Our coopera-tion with premium list reinsur-ance companies is not only our advantage, it is a big benefi t for the whole country. Contract and customs bond insurance simpli-fi es the relationship between in-vestor and developer. It encour-ages investors to issue funding for a project which exists as a draft of a business plan. The investor re-ceives a high level of performance guarantee, which signifi cantly minimizes the risks. It is in es-sence equivalent to the guarantee provided by a fi rst class European bank. This service is a great ben-efi t for the state as well, because it is more fl exible and better than a local bank guarantee,” said Akhrakhadze.

Over 85% of Unison’s custom-ers are from the corporate sector. For 2015 the company plans to increase its market share in the retail as well as corporate sec-tor. Modern and technologically developed services will be issued soon. Offering more fl exible ser-vices to its consumers is the main goal of the company.

In his exclusive interview with The FINANCIAL, Akhrakhadze evaluated the insurance market of Georgia and named the main steps that need to be implemented for the development of the sector.

Q. 2014 was diffi cult for insurance companies. Many of them ended the year with losses. How would you eval-uate it for Unison?

A. 2014 was a challenging year for Unison. Great changes

on the fi nancial market, as well as the legislative level, took place. However, we managed to strengthen our positions on the corporate and retail levels. It was a year of success for us. Uni-son improved its position in the rankings and went from 8th to 3rd place overall. This was achieved by a growing portfolio. We at-tained a market share of 19%, which is signifi cant.

Q. What was the volume of attracted premiums?

A. The volume of attracted pre-miums exceeded USD 48 million

in 2014. Unison is one of those companies which collaborates with reinsurance companies in a big way. We are named as the most reinsured insurance com-pany in Georgia . We only cooper-ate with ‘A’ class companies. Our principle and strategy lies in hav-ing a more balanced portfolio and being closely linked to fi nancial institutions. It ensures we are able to compensate any loss when it becomes necessary. So compensa-tion does not carry signifi cant risk for our portfolio. It is provided by our reinsurance partners. All this

provides maximum harmoniza-tion. On its side these benefi ts extend to our consumers. This is how we understand implementa-tion of global practice locally. So, with our standards we are close to European practice.

Meanwhile, we should not judge a company by its gross premium alone. The number of complaints and cases of suing and compensation for loss are what determines the success of an insurance company. Unison has one of the lowest numbers of complaints. In our practice we have compensated GEL 1.5 mil-lion per policy. It was linked to a huge infrastructure project which was not completed on time.

Q. Which are the most popular insurance products amongst your customers?

A. Corporate property insur-ance is dominating in our service portfolio. It is followed by health insurance and auto insurance. Unison is the rare exception in that it has big experience in coop-eration with the energy sector.

Property insurance even on the corporate level is fairly low. Com-panies founded with foreign in-vestments are rare. They make up over 90% of this segment. I would like to see more local companies and individuals using property insurance. We live in a highly seismic zone. We all remember the incidents that took place in our neighbouring countries sev-eral years ago. Accordingly, prop-erty insurance in such a region should be compulsory like it is in Turkey, Iran and etc.Q. You support the implementation of compulsory insurance. Meanwhile, the general sol-vency of Georgians is quite low. Therefore don’t you think that it is a little too early?

A. On the contrary. Not being insured contributes to impover-ishment. Healthcare insurance is a good example of that. Today it is clear to everyone that medical treatment with insurance is much cheaper than without it.

Insurance companies are living in an unstable environment as the legislative level is quite weak. Bills are made without any consulta-tion with the representatives of the sector. There is still the opin-ion that compulsory insurance will be a heavy burden for the population. This is absurd. There are various types of compulsory insurance in all developed coun-tries. There was the same opinion

regarding the state’s compulsory healthcare programme which was initiated in 2007. Although it did have some faults initially, it did a really great job of developing awareness, the culture of the in-surance sector and trust towards companies involved in this busi-ness. Eight years later, we can say that medical insurance is a useful product. Today we cannot fi nd a company in which the health in-surance of employees is not on the agenda. However, eight years ago it was unimaginable that it would develop on such a scale.

Currently we hear the same concerns about whether third-party car insurance should be-come compulsory. We hear the same arguments - that an ad-ditional USD 120 per year will become a heavy load for citizens. However, we need to realize that insurance brings relief to its own-ers especially those who have low incomes. Over 50% of Georgians presently live under the poverty line. The latest statistics show that the number of car accidents has increased approximately by 23% during last 4 years. So, let’s imagine a person responsible for compensating not only his car, but the damage of a second party. It directly contributes to impover-ishment. This can only be solved by state regulation. Therefore, I believe that our new regulator has a very positive attitude on this is-sue. There is a promise from his side that the case will be solved with the Government.

Over 5-7% of the private auto park is insured for now. More than 90% of vehicles are not insured. This is a catastrophe. Implement-ing this law will be a calling card of our country, aiding integration with the EU. Compulsory auto in-surance will increase the industry by USD 100 million and will create many job opportunities.

Q. Have the reinsurance companies revised their tar-iffs due to the ongoing insta-bility in the region?

A. The rating of Georgia has not been downgraded. In general, the revision of tariffs in the fi eld of insurance takes place when talk worsens in respect to a particular danger. Today we have very good status, and therefore it does not touch us.

Q. How would you evalu-ate the insurance culture of the population?

A. The culture of insurance in Georgia is on a lower level than

in developed countries as well as solvency. Moreover, we are even behind our immediate neigh-bours. State regulations are the main determinant of insurance culture in any given country. In Georgia there is no manda-tory insurance law. Meanwhile, some types of compulsory insur-ance do exist in our neighbour-ing countries. It provides serious insurance compensation for the population and entrepreneurs. The low solvency of our citizens also contributes to the low level of insurance culture.

Q. Which exact regula-tions need to be implement-ed for the development of the insurance sector?

A. A regulating sector with clear

and transparent law is essential. We should move from superfi cial regulations to fundamental initia-tives and changes. The separation of insurance companies from the banking, medical and pharma-ceutical sectors is also necessary. This system fi rstly diminishes the quality of the insurance sector. When a consumer borrows from a bank, he becomes obliged to get insured by the company stipu-lated by that very bank. So, con-sumers are left no choice, which is against their rights.

Today, we have leading com-panies which are affi liated with one of the groups, which include a bank, insurance company, the hospital sector and pharmaceu-tical group. In this case, these fi nancial institutions are guided by their own fi nancial interests. There is no link remaining to pro-tect the rights of consumers in the event they complain. Each of the fi elds will protect the other as they are guided by one holding. All the above mentioned not only damag-es the insurance but medical ser-vice quality and other services as well. Lots of mistakes which occur in the medical sector are as the result of that. Problems are not dealt with on a proper level. Such interventions in the insurance in-dustry should be carried out.

The advantage of Unison is that we are independent decision-makers in the market. We offer wider choice to our customers. We have a lot of providers, so con-sumers can freely choose and get the highest quality. We cooperate with all providers of high-quality service. Those individuals that are insured with us do more than just make a choice, but are free in their decision-making.

Q. What are the main chal-lenges of the insurance sec-tor in Georgia?

A. Separation of the insurance fi eld from other sectors is neces-sary at the moment. Otherwise we will face dire consequences. The insurance industry is gradu-ally coming out of the previous recession period. One of the re-quirements of EU integration is the signifi cant growth of the capital of the insurance sector. A large number of insurance companies are still not managing to generate profi t. This is being made with their non-core assets. It means that insurance business is not profi table, and this is the main challenge of the industry. Mandatory insurance products

should be implemented in the country, this will result in mas-sive development of the indus-try. Finally, this will encourage businessmen to invest in the sector.

Unison: “Bonds Insurance willincrease investor interest in Georgia”

VASIL AKHRAKHADZE, Director General at Unison

CONTRACT AND CUSTOMS BOND INSURANCE WILL ATTRACT MORE INVESTORS TO GEORGIAN CONSTRUCTION AND INFRASTRUCTURAL PROJECTS, BELIEVES VASIL AKHRAKHADZE, DIRECTOR GENERAL AT INSURANCE COMPANY UNISON.

THE COMPANY IS A PARTNER OF STRONG INTERNATIONAL FINANCIAL INSTITUTIONS AND COOPERATES WITH LEADING AND WELL-KNOWN REINSURERS SUCH AS (LLOYD’S SYNDICATE, HANNOVER RE, POLISH RE, SCOR, TRANSATLANTIC RE, ACE EUROPEAN GROUP, VIG RE) WHICH ENSURES THEIR RELIABILITY AND GIVES THE POSSIBILITY TO PROVIDE FULL COVERAGE FOR HIGH CAPACITY RISKS.

UNISON IMPROVED ITS POSITION IN THE RANKINGS AND WENT FROM 8TH TO 3RD PLACE OVERALL. THIS WAS ACHIEVED BY A GROWING PORTFOLIO. WE ATTAINED A MARKET SHARE OF 19%, WHICH IS SIGNIFICANT.

UNISON HAS ONE OF THE LOWEST NUMBERS OF COMPLAINTS. IN OUR PRACTICE WE HAVE COMPENSATED GEL 1.5 MILLION PER POLICY. IT WAS LINKED TO A HUGE INFRASTRUCTURE PROJECT WHICH WAS NOT COMPLETED ON TIME.



NECESSARY FACILITIES

Some believe that as Bage-bi is a new district, there is a lack of useful facilities. This is an incorrect belief and we will prove the opposite. There are several private schools in the territory of Bagebi. Shopping facilities, supermarkets and sports centres, for example Vake swimming pool, an open swimming pool and fitness centre, and a football field are located nearby as well. And Vake Park and Turtle Lake are also close.

COMFORTIt is very diffi cult to live in

the city centre and avoid the noise of the streets. Howev-er, Bagebi is an exception in this regard. Living in Bagebi is the same as living in the countryside in that respect. It is about ten minutes away from the central districts of Tbilisi. At the same time it is away from the city’s noise and dust. It is a clean place and the air is fresh. As well as these benefi ts, purchas-ing apartments is another reason. It is a very good in-vestment. About 10 years ago the price per square metre in Bagebi was USD 280. Today, the cost in the same area per square metre is more than USD 950.

THE LOWEST PRICE ON THE CONSTRUCTION MARKET

Metra Development always tries to consider custom-ers’ needs. Today, the main problem affecting all of us is the depreciation of the Geor-gian Lari. It is itself a sub-ject of anxiety. The situation frightens any buyer. They are avoiding making any major decisions. Taking this into account, we developed a user-friendly system - at Metra Development USD 1 = GEL 1.75. In these circum-stances buyers can purchase an apartment with a stable exchange rate.

METRA PARK - GREEN DISTRICT

A green area near the city centre is the concept of Metra Park. The residential complex area of 5.5 hectares of land is mainly populated with Pi-nophyta trees. In addition to the natural vegetation, the project envisages the con-struction of additional green squares and playgrounds for children.

A large part of the residen-tial complex will be a green area. It is one of the main ad-vantages of the project. Metra Park’s existence means that it is now possible to live in envi-

ronmentally protected condi-tions without leaving the city centre.

20 RESIDENTIAL HOUSES

Metra Park is a settlement of 20 houses. Their number of storeys is from two to six. The fact that the buildings are all low-rise is no coincidence. The company’s management believes that it creates greater comfort, which is a central concept of Metra Park.

Flats vary from 59 to 215 square metres. Underground parking is also provided, which is connected to the resi-dential fl oors by elevator.

EUROPEAN BUILDING MATERIALS

Another advantage of Metra Park is its European high-quality building mate-rials. The plastic windows of German REHAU, energy efficient water pumps of German WILO, Italian wa-ter pipes, passenger and freight elevators of OTIS, and sound isolating floors are materials which Metra Development uses during construction.

As for the acceptance con-ditions, the starting condition is Metra Standard. It includes a white-frame with other con-ditions: heating system and radiators, air conditioning and fi re alarm.

Top Reasons to Choose an Apartment at Metra Park

Continued from p. 4



The FINANCIAL

HeidelbergCe-ment is the global market leader in ag-gregates and

a prominent player in the fi elds of cement, concrete and other downstream activities, making it one of the world’s largest manufacturers of building materials. The company employs some 52,500 people at 2,500 locations in 40 countries.

At a local level Heidel-bergCement Georgia is a leading brand in the Georgian cement market. The company has been carrying out its activities in Georgia since 2006 and up to date has made more than 200 million Euro investments that were mainly oriented on the modernization of exist-ing cement plants and expansion of the concrete business line. The com-pany supplies cement and concrete to almost every major construction project in Georgia. Today the company operates 4 cement plants with a total capacity of 2 million tons of cement.

HeidelbergCement Georgia meets European standards in all its fi elds of management and production activities. The company is working according to 3 pillars on sustainable development: Economy, Ecology and Social Responsibility. The installation of new fi lters, scientifi c project “Quarry Life Award”, charitable event “TbilisiMarathon”, waste management - all of these are in response to HeidelbergCement’s mission and sustainable development guideline.

In 2008, HeidelbergCe-ment established the company HeidelbergBeton Georgia Ltd and began concrete production.

Since its establish-ment, HeidelbergBeton started solid and stable development on the local market. The First concrete

plant started operation in Ponichala in 2009. In 2010 two plants (Ponicha-la and Gldani) supplied Tbilisi and nearby terri-tory with concrete.

In 2011 the company started offering the con-struction sector a mobile plant service that means concrete production lo-cally, and the fi rst mobile plant started operation in the city of Rustavi. At the end of 2012 the company expanded its operation area, and on the 1st of February 2013 offi cially opened a new concrete plant in Batumi. Two concrete plants for the construction of the Ruisi-Agara highway section and plants in Kakheti and Tbilisi for the construc-tion of HPP and a large shopping mall respectively followed. 2014 saw further expansion with the new mobile concrete plants in Tsalka and Rustavi.

Currently, Heidelberg-Beton runs 10 concrete batching plants all over Georgia and has annual production of 0.5 million cubic meters (2014).

Being customer-orient-ed, the company offers a full package of services related to ready-mixed concrete and special prod-ucts. It is the fi rst time in Georgia of a concrete heating system being used that gives the possibility to produce and deliver “warm“ concrete even in wintertime.

Among the major projects of Heidelberg-Beton Georgia are : the South Caucasus Pipeline Extension project run by BP (Rustavi, Tsalka, Akhaltsikhe); Agara Ruisi section of the E60 high-way; Poti Terminal; Mil-lennium Hotel in Tbilisi; and Babillon Tower in Batumi.

In spite of its solid position in the regions, HeidelbergBeton is con-tinuing its development on the local market and in 2015-2017 plans to add several more mobile concrete plants.

HEIDELBERGBETON GEORGIA



Advertiser: HeidelbergCement. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com



TBC BANK MORTGAGE CENTER

Anastasia DGEBUADZE

For those planning to purchase an apart-ment via mortgage loan, TBC Bank of-fers a solution that

saves both time and energy. Mortgage Center opened in Tbilisi some months ago. The Center’s employees help Georgian as well as foreigner customers to choose their desired apartment and offer loans with special conditions, adjusted to their income.

TBC Bank’s Mortgage Cen-ter offers customers simpli-fi ed procedures for fi nding and fi nancing an apartment. The new Center is located in Vake, at 11 Chavchavadze Ave., and at the TBC Bank branch located inside the Public Service Hall.

Those who plan to purchase an apartment will be able to use this service in one space, as well as receive loan state-ments.

To obtain a loan, a 30% down payment is needed. As a guarantee the real estate to be purchased can be used. It is possible to receive a mortgage loan without a time-consum-ing income review.

TBC Bank’s Mortgage Cen-ter is already cooperating with more than 20 development companies, which recom-mend newly-built and under construction apartments to customers. By the end of the year it is planned number of proposals to increase till 100 projects. Those who want to purchase a secondary apart-ment will not be disappointed either, as they will be referred to a brokerage company.

Customers arriving at the Mortgage Center are consult-ed by managers, who assist them in fi nding the apartment of their choice with a mort-gage loan based on their in-come. TBC Bank’s Mortgage Center employees are already negotiating with interested customers. Among them are foreign residences that are interesting in purchasing an apartment in Georgia. Con-ditions and offers are slightly different for them.

David Nozadze visited the Center after deciding to buy a newly-built apartment. The Center’s Manager Nana Chubinidze talked with him and noted his requests. Da-vid’s only requirement was to fi nd an apartment in the suburbs. The negotiations were concluded within 20 minutes. Nana promised to fi nd an apartment according to David’s needs, an interest rate was agreed upon, and a follow-up meeting was sched-uled for a few days later.

“We have agreed that the manager will fi nd an adapted option for us. We have already calculated the percentage of the mortgage loan and it is a very low percentage. Banks do not offer such comfortable loan conditions,” explained David, noting that he has nev-er obtained a loan with such convenient conditions.

“So far, the most popular districts are Saburtalo and

Didi Digomi,” Head of Mort-gage Center Teona Bragvadze pointed out. She says that “the majority of those who de-sire to buy an apartment are looking for apartments that are about 60-70 sq.m, which cost around USD 50-70,000.”

Mortgage Center’s partner development companies offer a large variety of apartments and customers can buy af-fordable, as well as luxury up-scale apartments.

The Center’s proposals in-clude 7 districts in Tbilisi, al-though it also has projects in Batumi, Gudauri, Bakuriani and Marneuli. Through its help, you can buy apartments there too. The partner compa-nies of Mortgage Center only cooperate with TBC Bank which means that if you want to buy an apartment from one of the companies’ projects, you need to enquire through Mortgage Center.

Before cooperating with a developer company, Mort-gage Center studies the fi nan-cial history of the companies. Mortgage Center is a reliable intermediary, and its cooper-ation with TBC Bank is com-fortable for both sides.

Using Mortgage Center is free; consultations and other services can be obtained with-out a fee or charge.

Planning to Purchase an Apartment via Mortgage Loan?



Advertiser: TBC Bank. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com


9 MARCH, 2015 | FINCHANNEL.COM

TRUE

Tamar JIKIAFactCheck

On 30 December n 30 December 2014, guests of the 2014, guests of the talk show, talk show, Arche-Arche-vanivani, the show’s , the show’s host asked Davit host asked Davit

Bakradze, one of the leaders Bakradze, one of the leaders of the United National Move-of the United National Move-ment, a question about the leg-ment, a question about the leg-islative amendments to the law islative amendments to the law on television advertisements. on television advertisements. Mr Bakradze replied: “We are Mr Bakradze replied: “We are told that we have to adopt this told that we have to adopt this law (on broadcasting) as soon law (on broadcasting) as soon as possible because the EU as possible because the EU demands it so. It is a lie. The demands it so. It is a lie. The Association Agreement signed Association Agreement signed with the EU says that the law with the EU says that the law should be adopted after three should be adopted after three years from the start of the pe-years from the start of the pe-riod when the Agreement has riod when the Agreement has been ratifi ed.”been ratifi ed.”

The European Union and The European Union and Georgia signed the Association Georgia signed the Association Agreement on 27 June 2014. Agreement on 27 June 2014. Chapter XVIII of Title VI of the Chapter XVIII of Title VI of the EU-Georgia Association Agree-EU-Georgia Association Agree-ment envisages cooperation ment envisages cooperation in the audio-visual and media in the audio-visual and media fi elds. On that ground, Georgia fi elds. On that ground, Georgia made a commitment to har-made a commitment to har-monise its national legislation monise its national legislation with the legislative acts of the with the legislative acts of the EU; namely, according to Ap-EU; namely, according to Ap-pendix 33 of the Association pendix 33 of the Association Agreement, Georgia is required Agreement, Georgia is required to harmonise its legislation to harmonise its legislation with Directive 2010/13/EU of with Directive 2010/13/EU of the European Parliament and the European Parliament and of the Council on Audio-visual of the Council on Audio-visual Media Service which was ad-Media Service which was ad-opted on 10 March 2010. Geor-opted on 10 March 2010. Geor-gia has a three-year period af-gia has a three-year period af-ter the Association Agreement ter the Association Agreement is ratifi ed to fulfi l this obliga-is ratifi ed to fulfi l this obliga-tion. The only exception con-tion. The only exception con-cerns one specifi c regulation cerns one specifi c regulation which should be implemented which should be implemented within a fi ve-year period. Ac-within a fi ve-year period. Ac-cording to Section 2 of Article cording to Section 2 of Article 431 of the Association Agree-431 of the Association Agree-ment, this particular regulation ment, this particular regulation enters into force following the enters into force following the ratifi cation of or after deposit-ratifi cation of or after deposit-ing the approval instrument. ing the approval instrument. It is true that the provisional It is true that the provisional use of some chapters of the As-use of some chapters of the As-sociation Agreement started sociation Agreement started from 1 September 2014. That from 1 September 2014. That said, however, the norms en-said, however, the norms en-visaging cooperation in the visaging cooperation in the audio-visual and media fi elds audio-visual and media fi elds remain inactive. Additionally, remain inactive. Additionally, as not all of the EU member as not all of the EU member states have fi nished the ratifi -states have fi nished the ratifi -cation process, the countdown cation process, the countdown for Georgia’s commitment has for Georgia’s commitment has not yet begun.not yet begun.

The Law of Georgia on The Law of Georgia on Broadcasting defi nes the pre-Broadcasting defi nes the pre-cise intervals when TV com-cise intervals when TV com-panies are allowed to air tele-panies are allowed to air tele-marketing and commercials. marketing and commercials. It is much stricter when it It is much stricter when it comes to the issue of airing comes to the issue of airing commercials than the EU di-commercials than the EU di-rective. The Law prohibits in-rective. The Law prohibits in-terrupting the broadcast of an terrupting the broadcast of an

offi cial state event, an offi cial offi cial state event, an offi cial speech of a top government speech of a top government offi cial, a religious ceremony offi cial, a religious ceremony or any socio-political, reli-or any socio-political, reli-gious or pre-election debate as gious or pre-election debate as well as any programme whose well as any programme whose duration is less than 15 min-duration is less than 15 min-utes with any advertising or utes with any advertising or telemarketing. According to telemarketing. According to Section 2 of Article 20 of the Section 2 of Article 20 of the aforementioned EU directive, aforementioned EU directive, the airing of commercials is the airing of commercials is prohibited only in the case of prohibited only in the case of a broadcast of a religious cer-a broadcast of a religious cer-emony. There are no further emony. There are no further restrictions. According to the restrictions. According to the Law of Georgia on Broadcast-Law of Georgia on Broadcast-ing, a news programme may be ing, a news programme may be interrupted with advertising or interrupted with advertising or telemarketing for a maximum telemarketing for a maximum of once every 15 minutes whilst of once every 15 minutes whilst a feature fi lm, TV fi lm or fi lm a feature fi lm, TV fi lm or fi lm series may be interrupted every series may be interrupted every 30 minutes. The EU directive, 30 minutes. The EU directive, however states that a 30-min-however states that a 30-min-ute interval is required for a ute interval is required for a news programme instead of a news programme instead of a 15-minute interval. 15-minute interval.

The most important restric-The most important restric-tion envisaged by the Law tion envisaged by the Law of Georgia on Broadcasting of Georgia on Broadcasting concerns the total duration concerns the total duration of advertising time. Accord-of advertising time. Accord-ing to the Law of Georgia on ing to the Law of Georgia on Broadcasting, commercials Broadcasting, commercials and telemarketing should not and telemarketing should not exceed a 20% threshold of a exceed a 20% threshold of a broadcasting hour, limiting broadcasting hour, limiting them to 12 minutes accord-them to 12 minutes accord-ingly. The same restriction is ingly. The same restriction is envisaged by Section 1 of Ar-envisaged by Section 1 of Ar-ticle 23 of the directive. How-ticle 23 of the directive. How-ever, the Law of Georgia on ever, the Law of Georgia on Broadcasting rejects Section Broadcasting rejects Section 2 of Article 23 of the directive 2 of Article 23 of the directive which says that the 12-minute which says that the 12-minute restriction rule will not apply restriction rule will not apply to announcements made by to announcements made by the broadcaster in connection the broadcaster in connection with its own programmes and with its own programmes and ancillary products directly de-ancillary products directly de-rived from those programmes, rived from those programmes, sponsorship announcements sponsorship announcements and product placements. It and product placements. It must be noted that Georgia must be noted that Georgia was given the previously men-was given the previously men-tioned fi ve-year implementa-tioned fi ve-year implementa-tion time precisely for this tion time precisely for this regulation. In fact, the Law of regulation. In fact, the Law of Georgia on Broadcasting en-Georgia on Broadcasting en-visages harsher restrictions in visages harsher restrictions in contrast to the directive and contrast to the directive and says that TV companies have says that TV companies have to put programme-related an-to put programme-related an-nouncements in the 12-minute nouncements in the 12-minute period. Of mention is the fact period. Of mention is the fact

that there was no need to ac-that there was no need to ac-celerate the implementation of celerate the implementation of this norm in the directive as it this norm in the directive as it was possible to reduce the time was possible to reduce the time for commercials to 12 minutes for commercials to 12 minutes in the given fi ve-year period.in the given fi ve-year period.

Additionally, a closer look Additionally, a closer look should also be taken as con-should also be taken as con-cerns a restriction imposed cerns a restriction imposed upon those programmes which upon those programmes which are fully or partially fi nanced are fully or partially fi nanced by a sponsor. Until 15 Janu-by a sponsor. Until 15 Janu-ary 2016, information about ary 2016, information about sponsors must not exceed 5% sponsors must not exceed 5% of a broadcast hour; that is, of a broadcast hour; that is, three minutes. From 15 Janu-three minutes. From 15 Janu-ary 2016, this time will be fur-ary 2016, this time will be fur-ther reduced to 90 seconds. ther reduced to 90 seconds. Contrary to the Law of Georgia Contrary to the Law of Georgia on Broadcasting, the directive on Broadcasting, the directive does not envisage such a type does not envisage such a type of restriction at all.of restriction at all.

On 5 February 2015, the fi rst On 5 February 2015, the fi rst hearing of the Law of Georgia hearing of the Law of Georgia on Broadcasting took place on Broadcasting took place at the Parliament of Georgia at the Parliament of Georgia and produced lively debates. and produced lively debates. Members of the Parliamentary Members of the Parliamentary Minority assessed the initia-Minority assessed the initia-tive as an assault to indepen-tive as an assault to indepen-dent media and accused the dent media and accused the ruling party of curbing media ruling party of curbing media freedom. The Parliamentary freedom. The Parliamentary Minority assumes that the Minority assumes that the Law is against one specifi c TV Law is against one specifi c TV channel, Rustavi 2, as its rev-channel, Rustavi 2, as its rev-enues from commercials well enues from commercials well exceed the same advertising exceed the same advertising revenues of other TV com-revenues of other TV com-panies. Therefore, Rustavi panies. Therefore, Rustavi 2 will suffer the most if the 2 will suffer the most if the Law of Georgia on Broadcast-Law of Georgia on Broadcast-ing is implemented. It must ing is implemented. It must be noted that even members be noted that even members of the Majority, whilst talking of the Majority, whilst talking about the Law, have also often about the Law, have also often mentioned Rustavi 2, thereby mentioned Rustavi 2, thereby fuelling the beliefs of the Par-fuelling the beliefs of the Par-liamentary Minority that the liamentary Minority that the Law is of a politicised nature. Law is of a politicised nature. Finally, after time-consum-Finally, after time-consum-ing deliberations, the Law of ing deliberations, the Law of Georgia on Broadcasting was Georgia on Broadcasting was adopted at the fi rst hearing – adopted at the fi rst hearing – 63 votes were cast in favour 63 votes were cast in favour and 30 votes were cast against. and 30 votes were cast against. The Parliament of Georgia The Parliament of Georgia also did not take the resolu-also did not take the resolu-tion of the Council of Europe’s tion of the Council of Europe’s Parliamentary Assembly into Parliamentary Assembly into account which declared that account which declared that the amendments to the Law of the amendments to the Law of Georgia on Broadcasting were Georgia on Broadcasting were poised against the fi nancial poised against the fi nancial and editorial independence of and editorial independence of private TV channels.private TV channels.

Davit akradze:“Amendments to the law on advertising are not an immediate necessity.”

CONCLUSIONTherefore, Therefore, FactCheckFactCheck concludes that Davit Bakradze’s statement is concludes that Davit Bakradze’s statement is TRUE.TRUE.

The views expressed in this website are those of FactCheck.ge and do not refl ect the views of The FINANCIAL or the supporting organisations

FactCheckFactCheck

TBC Bank, Entre-preneurship De-velopment Agency (Enterprise Geor-gia) and IFC, a

member of the World Bank Group, on March 5th signed a Memorandum of Under-standing in TBC Bank’s Tbilisi headquarters.

Vakhtang Butskhrikidze, TBC Bank CEO, George Tsikolia, CEO of the Entre-preneurship Development Agency (Enterprise Georgia), and Thea Gigiberia, IFC’s Georgia Country Represen-tative, co-signed the agree-ment.

Trilateral cooperation will be a key part of the new SME support project of the govern-ment’s Produce in Georgia program. The new project

aims to support of micro and small entrepreneurs. To en-courage local production, in-dividuals in remote and rural regions interested in starting a new business will receive fi -nancial and technical support from the Entrepreneurship Development Agency.

IFC will work with both partners to disseminate online resources available through the SME Toolkit, a free online business portal launched by TBC Bank and IFC in Georgia in 2013. This web platform is available in Georgian at www.tbcbusiness.ge.

The platform offers a spe-cial application to TBC Busi-ness Academy, which can help new entrepreneurs gain much needed knowledge on starting and running a busi-

ness. The application offers lectures and other materials on management, the funda-mentals of fi nance, creating a business plan, and launching a business. In addition, TBC Business Academy applicants can check their knowledge via tests and receive certifi -cates.

The SME Toolkit, an in-novation of IFC developed in partnership with IBM, provides smaller businesses with tools and educational resources that will help them become more profi table and competitive. The SME Tool-kit is part of IFC’s effort to support the private sector in Europe and Central Asia. The work is funded by the Swiss State Secretariat for Econom-ic Affairs.

Memorandum of Understanding in Support of Micro and Small Business

are nnnnnnnnnnnnnnnnnnnnnnnoooooooooooooooooooooooooooooooooooooooooooottttttttttttttttttttttttt aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaannnnnnnnnnnnnnnnnnnnnnnnnnnn eeeeeeeeeeeeeeeeeeeeeeeeesssssssssssssssssssssssssssssiiiiiiiiiiiiiiiiiiiiiiiittttttttttttttttttttttttyyyyyyyyyyyyyyyyyyyyyyyy....””””””””””””””””””””””””

During the fourth quarter of 2014, household final consumption ex-penditure rose

by 0.4% in the euro area and by 0.5% in the EU28 (after +0.5% in both zones in the previous quarter). Gross fixed capital formation in-creased by 0.4% in both the euro area and the EU28 (after 0.0% and +0.3%).

Exports rose by 0.8% in the euro area and by 1.3% in the EU28 (after +1.5% and +1.1%). Imports increased by 0.4% in the euro area and by 0.8% in the EU28 (after +1.7% and +1.6%).

Household final consump-tion expenditure had a posi-tive contribution to GDP growth both in the euro area and the EU28 (+0.2 and +0.3 percentage points

respectively). Gross fixed capital formation also had a positive contribution to GDP growth in the euro area and the EU28 (+0.1 pp for both zones). The contribution of the external balance to GDP growth was positive for both zones, while the contribu-tion of changes in invento-ries was negative (-0.2 pp in both the euro area and the EU28).

EU EU NewsNews

Seasonally adjusted GDP rose by 0.3% in the euro area (EA18) and by 0.4% in the EU28 during

the fourth quarter of 2014, compared with the previous quarter, according to a second estimate2 published by Euro-stat, the statistical offi ce of the European Union. In the third quarter of 2014, GDP grew by 0.2% in the euro area and by

0.3% in the EU28.Compared with the same

quarter of the previous year, seasonally adjusted GDP rose by 0.9% in the euro area and by 1.3% in the EU28 in the fourth quarter of 2014, after +0.8% and +1.2% respectively in the previous quarter.

During the fourth quarter of 2014, GDP in the United States increased by 0.5% compared with the previous

quarter (after +1.2% in the third quarter of 2014). Com-pared with the same quarter of the previous year, GDP grew by 2.4% (after +2.7% in the previous quarter).

Over the whole year 2014, GDP rose by 0.9% in the euro area and by 1.3% in the EU28, compared to -0.5% and 0.0% in 2013. In the United States, GDP grew by 2.4% in 2014 and by 2.2% in 2013.

GDP up by 0.3% in the euro area and by 0.4% in the EU28

GDP growth by Member StateGDP growth by Member State

Among Member mong Member States for which States for which data are available data are available for the fourth for the fourth quarter of 2014, quarter of 2014,

Estonia and Sweden (both Estonia and Sweden (both +1.1%), Hungary (+0.9%), +1.1%), Hungary (+0.9%), Germany, Spain and Poland Germany, Spain and Poland (all +0.7%) recorded the (all +0.7%) recorded the highest growth compared highest growth compared

with the previous quar-with the previous quar-ter. Cyprus (-0.7%), Greece ter. Cyprus (-0.7%), Greece (-0.4%), Austria and Finland (-0.4%), Austria and Finland (both -0.2%) registered de-(both -0.2%) registered de-creases.creases.

GDP components and contributions to growth



TRUE

The views expressed in this website are those of FactCheck.ge and do not refl ect the views of The FINANCIAL or the supporting organisations

Giorgi GATENASHVILIFactCheckFactCheck

On 15 January 2015, n 15 January 2015, as a guest on Mae-as a guest on Mae-stro TV, the Min-stro TV, the Min-ister of Economy ister of Economy and Sustainable and Sustainable

Development of Georgia, Development of Georgia, Giorgi Kvirikashvili, stated Giorgi Kvirikashvili, stated that the new visa regulations that the new visa regulations have signifi cantly hindered have signifi cantly hindered the infl ux of both tourists and the infl ux of both tourists and labourers from China.labourers from China.

Since September 2014, Since September 2014, Georgia has introduced a new Georgia has introduced a new law entitled the Law on the law entitled the Law on the Legal Status of Aliens and Legal Status of Aliens and Stateless Persons. According Stateless Persons. According to the Law, a C1-type visa will to the Law, a C1-type visa will be issued for those persons be issued for those persons who visit Georgia for tour-who visit Georgia for tour-ism purposes and a C2-type ism purposes and a C2-type visa will be issued for those visa will be issued for those individuals who plan to visit individuals who plan to visit family members. One has to family members. One has to obtain a C3-type visa to come obtain a C3-type visa to come to Georgia for business meet-to Georgia for business meet-ings and other activities or ings and other activities or to perform journalistic work. to perform journalistic work. D1-type visas will be issued D1-type visas will be issued for those who visit Georgia to for those who visit Georgia to conduct labour activities and conduct labour activities and a D2-type visa is required to a D2-type visa is required to conduct entrepreneurial ac-conduct entrepreneurial ac-tivity in the country.tivity in the country.

Visitors were able to obtain Visitors were able to obtain all of these types of visas at the all of these types of visas at the state border of Georgia and at state border of Georgia and at Public Service Halls before 1 Public Service Halls before 1 September 2014. However, September 2014. However, after the new Law went into after the new Law went into force visitors have to apply force visitors have to apply for their visas at Georgia’s for their visas at Georgia’s diplomatic representations diplomatic representations and consulates abroad. As a and consulates abroad. As a result of legislative changes, result of legislative changes, the duration of stay for for-the duration of stay for for-eigners who have obtained eigners who have obtained

those aforementioned visas is those aforementioned visas is a maximum of 90 days within a maximum of 90 days within a 180-day period. Visa free a 180-day period. Visa free nationals are subject to the nationals are subject to the same duration of stay condi-same duration of stay condi-tions. Visas are also divided tions. Visas are also divided into long-term visas and into long-term visas and short-term visas, single entry short-term visas, single entry visas and multiple entry vi-visas and multiple entry vi-sas. Multiple entry visas are sas. Multiple entry visas are issued for no more than fi ve issued for no more than fi ve years but even in this case, the years but even in this case, the duration of the stay for a visi-duration of the stay for a visi-tor is limited to a maximum tor is limited to a maximum of 90 days within a 180-day of 90 days within a 180-day period. For instance, if a visi-period. For instance, if a visi-tor is able to obtain a multiple tor is able to obtain a multiple entry D1-type visa, he or she entry D1-type visa, he or she has to leave Georgian terri-has to leave Georgian terri-tory after 90 days and come tory after 90 days and come back after a further 90 days back after a further 90 days which is a signifi cant problem which is a signifi cant problem for those labourers who work for those labourers who work on a contractual basis.on a contractual basis.

With respect to tourist vi-With respect to tourist vi-sas, they are issued for 30 sas, they are issued for 30 days. A C1-type visa for 90 days. A C1-type visa for 90 days can be issued in the case days can be issued in the case of a person visiting the coun-of a person visiting the coun-try for a second time. If we try for a second time. If we look at the particular issue of look at the particular issue of Chinese tourists travelling to Chinese tourists travelling to Georgia on the Urumqi-Tbili-Georgia on the Urumqi-Tbili-si fl ight, the fact that there si fl ight, the fact that there is no Georgian consulate in is no Georgian consulate in Urumqi means that a visitor Urumqi means that a visitor

must fi rst go to Beijing, some must fi rst go to Beijing, some 3,177 km away, and spend 3,177 km away, and spend ten-to-30 days there while the ten-to-30 days there while the visa is being processed and visa is being processed and then issued before return-then issued before return-ing to Urumqi and fl ying to ing to Urumqi and fl ying to Tbilisi. Naturally, this creates Tbilisi. Naturally, this creates a very complicated set of pro-a very complicated set of pro-cedures for a tourist who typi-cedures for a tourist who typi-cally has both limited time cally has both limited time and resources.and resources.

According to statistical According to statistical data of the National Tourism data of the National Tourism Agency of Georgia, a total of Agency of Georgia, a total of 8,830 visitors from China 8,830 visitors from China came to Georgia in 2013. The came to Georgia in 2013. The number dropped to 8,598 in number dropped to 8,598 in 2014 which is a 3% decrease 2014 which is a 3% decrease as compared to the previous as compared to the previous year. It must be noted that the year. It must be noted that the period of the very sharp re-period of the very sharp re-duction in the number of visi-duction in the number of visi-tors coincides with the fourth tors coincides with the fourth quarter of the year; that is, quarter of the year; that is, when the new Law went into when the new Law went into force (Graphs 1).force (Graphs 1).

As illustrated by the graphs, As illustrated by the graphs, Georgia received 48% less vis-Georgia received 48% less vis-itors from China in the fourth itors from China in the fourth quarter of 2014 as compared quarter of 2014 as compared to the third quarter of the to the third quarter of the same year immediately after same year immediately after the new regulations went into the new regulations went into force. Comparing these data force. Comparing these data to those of 2014, this repre-to those of 2014, this repre-sents a 41% decrease.sents a 41% decrease.

Giorgi Kvirikashvili:Minister of Economy and Sustainable Development of Georgia

“Visa regulations have signifi cantly hindered the infl ux of both tourists and labourers from China.”

CONCLUSIONThe number of Chinese visitors coming to Georgia was stable throughout 2013. The number of The number of Chinese visitors coming to Georgia was stable throughout 2013. The number of visitors showed a steady increase upon a quarterly basis in 2014 as well. However, the number visitors showed a steady increase upon a quarterly basis in 2014 as well. However, the number of visitors dropped by 48% in the fourth quarter of 2014 as compared to the third quarter of of visitors dropped by 48% in the fourth quarter of 2014 as compared to the third quarter of the same year and by 41% as compared to the same quarter of the previous year. The fall in the same year and by 41% as compared to the same quarter of the previous year. The fall in numbers is attributed to the new visa and emigration regulations imposed by the Government numbers is attributed to the new visa and emigration regulations imposed by the Government of Georgia. of Georgia. FactCheckFactCheck concludes that Giorgi Kvirikashvili’s statement: concludes that Giorgi Kvirikashvili’s statement:“Visa regulations have signifi cantly Visa regulations have signifi cantly hindered the infl ux of both tourists and labourers from China” ishindered the infl ux of both tourists and labourers from China” is TRUE. TRUE.

FactCheckFactCheck

Graph 1: Graph 1: Monthly Statistical Data of Visitors from China for the Period of 2013-2014Monthly Statistical Data of Visitors from China for the Period of 2013-2014

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The FINANCIAL

International Monetary Fund mission led by Mr. Mark Griffiths have called Georgian government for pre-

serving Independence of the National Bank of Geor-gia. Statement was made in response to the recent currency crisis in Georgia and the attacks on NBG President Giorgi Kadagidze, with demands to sell more reserves and keep GEL rate unchamged.

Georgia’s former Prime Minister Bidzina Ivanishvili, who still has a great influ-ence on current government said the nation-wide mone-tary crisis was brought about by the mistakes and inactivi-ty of Giorgi Kadagidze, Head of National Bank who was appointed by the National Movement party, political opposition of current ruling party.

On February 24, the Geor-gian Lari saw its biggest sin-gle-day fall since September 2004. The national currency lost 3% of its value in one day. The National Bank was forced to sell 40 million USD to stop the currency’s de-valuation against USD. The National Bank set a new rate on February 24 (2.29 GEL), while commercial banks of-fer 1 USD for 2.34-2.38 GEL. By selling part of its reserves NBG managed to stabilize GEL rate at 2.10. But Ex-perts predict the currency will continue floating.

During the last 10 days the mission met with Prime Minister Irakli Garibashvili, Minister Giorgi Kvirikash-vili, Finance Minister Nodar Khaduri, Governor Giorgi Kadagidze, other Georgian officials, representatives of the international commu-nity, civil society, and the private sector.

While making final state-ment on situation, Mr. Griffiths said Georgia’s economy has been hit by a combination of severe ex-ternal shocks: the Russia-Ukraine crisis, the deep-ening recession in Russia (both of which create ripple-effects through the region) and currency devaluations in trading partner countries. Because of these shocks, Georgia’s exports are 30 percent lower than one year ago, and remittances from Georgian workers abroad are down 25 percent.

“The economy is slowing as a result. In January, out-put grew by only 0.5 percent compared to one year ago. While growth this year could reach 2 percent, this projec-tion is subject to risks. The economies of many of Geor-gia’s main trading partners are slowing by even more, and the depreciation of their exchange rates is hurting Georgia’s competitiveness”, Mr. Griffiths said.

“Lower exports, remit-tances, and tourism receipts have increased the current account deficit in 2014 to around 9.5 percent of GDP. Because foreign earnings are lower, the Lari has de-preciated by more than 20 percent against the US dol-lar since January 2014. Al-though this depreciation is large, it is in line with the depreciation experienced by many other countries, given the strength of the US dollar. Indeed, most currencies in the region have depreciated by even more. That said, the Lari’s depreciation against the US dollar will increase costs for those who have bor-rowed in foreign currency. This will slow down econom-ic growth”.

“Because of the depre-ciation, inflation will likely pick up somewhat in com-ing months, towards the National Bank of Georgia’s (NBG) inflation target of 5 percent. But this increase in inflation will take place from a low starting point: infla-tion in February was only 1.3 percent, in part because of lower oil prices. Lower im-port prices should also con-tain inflation”.

Mr. Griffiths said the gov-ernment and the NBG need to work together now—in a way that respects each oth-er’s areas of responsibility and central bank indepen-dence—on a comprehensive action plan to address these new challenges. Because of its solid fundamentals, reform-minded authorities, and the Association Agree-ment with the EU, Georgia is well placed to overcome the current challenges.

“The government deserves credit for keeping the budget deficit to 3 percent of GDP in 2014, well below the pro-gram target. However, for 2015, lower growth means that tax revenues will be less than projected in the budget. The government will there-fore need to take measures to keep the budget deficit under

control. The government has appropriately taken steps in this direction, including by limiting employee bonuses and by taking efforts to con-tain administrative spend-ing. The government needs to build on these decisions and pass amendments to the budget that include specific tax increases and spending cuts to limit the increase in the budget deficit. However, spending on the social safety net should be maintained and targeting improved to protect the vulnerable and the poor”.

“The mission fully sup-ports the NBG’s policy to refrain from intervening in the foreign exchange mar-ket and to allow the Lari to float. The main objective of the NBG is to ensure price stability: achieving this goal depends on having a floating exchange rate. In addition, the floating rate allows the exchange rate to absorb ex-ternal shocks. Intervening to resist shocks that will likely be long-lasting would only waste Georgia’s foreign cur-rency reserves and slow the reduction of Georgia’s trade deficit with the rest of the world”.

“Independence of the NBG should be preserved and re-spected, so that it is free to pursue its main objective of price stability, and to make sure that the financial sec-tor stays healthy, which will support long-term, stable economic growth”.

“Finally, we look forward to plans to accelerate re-forms to make Georgia a more attractive place for do-ing business and for invest-ing, for creating jobs, and for boosting growth in the future. These should include easing recent restrictions on foreign businesses, seeking out new private investment, boosting saving through pension and capital market reforms, and raising educa-tional standards.

The mission would like to thank the government and the NBG for productive dis-cussions. We look forward for the government to pre-pare specific amendments to the budget that will limit the budget deficit, and for the authorities to continue adhering to their floating ex-change rate policy. We hope that these steps will be tak-en quickly, so that the IMF mission can return soon to Georgia for the Second Re-view”.

IMF Says Georgia Will Face Infl ation in Coming Months



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Georgia one of the world’s most sober nations, publically at least

MERAB PACHULIAGORBI

It always makes me proud to read or hear some information about my country’s rich cultural heritage.

As with many other ancient countries that have survived in one form or another till present, wine is often an enduring theme. Some esti-mate that the earliest wines were consumed in Georgia circa 6,000 BC. In the mod-ern era, public consumption of alcohol is restricted and in many countries, includ-ing in Georgia, where one can now get slapped with a small fine for drinking in public. However, the law and cultural nuances do not always deter people from enjoying a bottle of beer on the streets.

The 6th and the most re-cent wave of the World Values Survey (WVS) asked repre-sentative population samples in 60 countries how frequent-ly alcohol was consumption in the streets in their neighbor-hoods. Certainly this ques-tion, along with the 200 plus others in this survey, has academic theories behind it and are tested and assessed by scholars and policy mak-ers. In this column, however, I will only present raw data on

visibility of alcohol consump-tion in the streets to pres-ent top countries worldwide where such behavior is still visible and common, as well as where it has been eradi-cated or is likely to rise.

Among the top 10 coun-tries (actually there are 13 because three have an iden-tical percentage) Russia and Mexico are the leaders, with 7 out of 10 respondents saying that drinking in the streets occurs very or quite

frequently in their neigh-borhood. Two former So-viet republics, Belarus and Ukraine, are also among the “champions” in this poll. The champions represent 4 continents and are predomi-nantly Christian countries.

One of the most interesting institutions that I remember from Soviet times was the so-called “drunk tank” (Vy-trezvitel, in Russian). This was a sobering-up station and although I was fortunate

enough never to have been taken there, I know some in-dividuals who spent a night under cold shower and ended up paying 2 kopeeks (cents) for their hangover treatment. In some countries, they are still in service and interest-ingly these are topping the list of champion countries. In the Chart 2 I listed ex Soviet states where people frequent-ly witness others drinking openly in the streets.

Azerbaijan and Georgia are

those two countries were only 6% of respondents reported seeing alcohol consumed in the streets of their neighbor-hood, the lowest fi gure not only among the former Soviet Union but worldwide! Truth to be told, the most publically sober country inlcuded in this survey was Yemen - only 5% witness people dirinking in the streets.

GORBI is a regional hub for partner organizations

and international clients. GORBI is an exclusive

member of Gallup International research

network since 2003 and has over two decades

of experience in survey research in the former

Soviet Union, as well as Mongolia and Iraq.

Chart 1: Top countries where one can witness alcohol consump on in the streets (Figures are given in percentages)

Chart 2: Visibility of alcohol consump on in the streets among Ex Soviet states (Figures are given in percentages.)

Source: World Values Survey, 2014Source: World Values Survey, 2014

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No. ProcedureTime to Complete

Associated Costs

1 Request and obtain extract from the National Public Registry Agency: National Public Registry The extract is proof of the registered ownership right and is the basis for the right to build on a plot. The extract is presented only once, at the beginning of the permitting process.

0.5 days GEL 40

2 Request and obtain terms of construction from Tbilisi Architecture at the Tbilisi Hall Agency: Tbilisi Architecture at the Tbilisi Hall Governmental Decree # 57 of March 24, 2009 on the Procedures and Conditions of Issuance of Construction Permit established that the Legal Entity of Public Law - Tbilisi Architecture under Tbilisi Hall has been created on the basis of Tbilisi Urban Planning Service. All applications regarding construction permits shall be submitted with Tbilisi Architecture. The process of obtaining construction permit is facilitated due to the introduction of online application system.

30 days no charge

3 Request and obtain building permit from Tbilisi Architecture Agency: Tbilisi Architecture The cost is determined by the project value. According to Tbilisi Government Resolution No 2-21, as of February 28, 2008, the fee has been increased to GEL 1.00 per sq. m. and only the ground fl oor space is counted. Thus, the breakdown in the case considered here is 1300.6/2 x GEL 1.00 = GEL 650.30.According to GOG Resolution No. 57 as of March 24 2009, construction projects are classifi ed into risk-based categories. Depending on the complexity of each category, different types of procedures are to be followed by applicants. The fi rst category is the lowest risk, and the fi fth is the most complex one. The Doing Business case study warehouse falls under category III, which does not require project expertise and entails a simplifi ed process of approval that also excludes the need for approval of Architectural-Construction Design.

10 days GEL 650

4 Request and receive connection to water and sewage service Agency: Georgian Water and Power Having obtained the conditions from the water authority, BuildCo starts building the water and sewage pipes to the main water pipeline. Once there is a connection to the main pipeline, the inspector from private water company (Georgian Water and Power) comes to confi rm the connection and sign the protocol.

10 days no charge

5 Request and obtain layout survey and protocol from a private survey company Agency: Private survey company This procedure is part of the architectural planning contract.

1 day no charge

6 Request and obtain protocol of completion of major building structure from the Technical and Constructions Inspection Agency: Technical and Constructions Inspection At the end of construction, BuildCo must request this permit and submit all the inspection certifi cates obtained in the previous procedures.

1 day no charge

7 Request and obtain exploitation of building construction from Tbilisi Supervisory Service Agency Agency: Tbilisi Supervisory Service Agency After the completion of construction and prior to registration at the Public Registry, BuildCo submits a request to the Department of Supervision of Tbilisi for a certifi cate of completion. The list of documents required for the submission are approved by the Resolution of Government of Georgia № 57 on March 24, 2009 “On the Procedures and Conditions of Issuance of Construction Permits”, Article 96, Paragraph 3.

15 days no charge

8 Register the building with the National Public Registry Agency: National Public Registry The company must submit the document obtained in the previous procedure and the exploitation permit. The time line is faster under the Georgian Law on Registration of Rights on Immovable Property (December 28, 2005).

1 day GEL 150

Below is a detailed summary of the procedures, time and costs to build a warehouse in Georgia. This includes obtaining necessary licenses and permits, completing required notifi cations and inspections and obtaining utility connections.

This information was collected as part of the Doing Business project, which measures and com-pares regulations relevant to the life cycle of a small- to medium-sized domestic business in 189

economies. The most recent round of data collection was completed in June 2014.



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The FINANCIAL

Vienna has the world’s best quality of liv-ing, according to the Mercer

2015 Quality of Living rank-ings. Overall, European cities dominate the top of the rank-ing along with major cities in Australia and New Zealand. Zurich, Auckland, and Mu-nich are in second, third, and fourth places respectively. In fi fth place, Vancouver is the highest-ranking city in North America and the region’s only city in the top 10. Singapore (26) is the highest-ranking Asian city, whereas Dubai (74) ranks fi rst across the Middle East and Africa. Montevideo in Uruguay (78) takes the top spot for South America.

Mercer conducts its Quality of Living survey annually to help multinational companies and other employers compen-sate employees fairly when placing them on international assignments. Employee in-centives include a quality-of-living allowance and a mobility premium*. Mercer’s Quality of Living Reports pro-vide valuable information and hardship premium recom-mendations for over 440 cit-ies throughout the world; the ranking covers 230 of these cities.

“Taking a short- or long-term work assignment in a new country is both an excit-ing and challenging experi-

ence for employees and their families,” said Slagin Para-katil, Principal at Mercer. “Cultures, societies, and com-paratively different climates, as well as political instability, high crime rates, and poor infrastructure can be diffi cult to navigate and settle down in for employees and their fami-lies. Employers need to assess whether their staff and fami-lies will encounter any drop in quality of living when relocat-ing and ensure they are fairly compensated for it.”

EUROPEDespite concerns about

economic growth, the cities of Western Europe continue to offer a stable environment for employees and employ-ers. Vienna (1) is followed by Zurich (2), Munich (4), Düs-seldorf (6), and Frankfurt (7). With Geneva and Copenha-gen in 8th and 9th places, re-spectively, Western European cities take seven places in the top 10. The lowest-ranking

cities in Western Europe are Belfast (63) and Athens (85).

Cities in Central and East-ern Europe have a wider range of quality-of-living standards. The highest-ranking cities are Prague (68), Budapest, and Ljubljana (both ranked 75th). Emerging city Wroclaw (100), Poland, has a thriving cultural and social environ-ment and good availability of consumer goods. The re-gion’s lower-ranking cities are Kiev (176), Tirana (180), and Minsk (189), with Kiev expe-

riencing a considerable drop in the rankings following po-litical instability and violence in Ukraine overall.

In the UK, London (40) is the highest-ranking city, fol-lowed by Birmingham (52), Glasgow (55), Aberdeen (57), and Belfast (63). “UK cities overall enjoy high standards of quality of living and re-main stable and attractive locations for businesses,” said Ellyn Karetnick, Principal at Mercer. “Security has been tightened in many major Eu-ropean cities following the attacks in Paris and Copen-hagen, and Mercer is closely monitoring any potential im-pact on the living standard for expatriates and their families in these locations.”

AMERICASIn North America, Canada

and the United States contin-ue to offer a high standard of living. Vancouver (5) tops the list for this region, followed by fellow Canadian cities To-ronto (15) and Ottawa (16), whereas San Francisco (27), Boston (34), and Honolulu (36) are the highest-ranking US cities. Mexico’s highest ranking city is Monterrey (109), while Mexico City is ranked 126th. The lowest-ranking cities in the North American region are Havana (193) and Port-au-Prince (228).

In South America, Mon-tevideo (78), Buenos Aires

(91), and Santiago (93) are the highest-ranked cities, whereas La Paz (156) and Caracas (179) rank lowest. In Brazil, Mercer has identifi ed Manaus as an emerging city –it is ranked 127th. The city is already a thriving indus-trial centre and has a free eco-nomic zone – its good supply of consumer goods and rela-tively advanced infrastruc-ture partially counteract the impact of Manaus’ lack of in-ternational schooling options for expatriates and remote location.

ASIA-PACIFICAsia is the region with the

largest range in quality-of-liv-ing standards, with the high-est-ranking city, Singapore, in 25th place and the lowest-ranking, Dushanbe, Tajiki-stan, in 214th place. Topping the ranking across East Asian cities is Tokyo in 44th place; Other key cities in this part of the region include Hong Kong (70), Seoul (72), Tai-pei (83), Shanghai (101), and Beijing (118). Notable emerg-ing cities in this part of Asia include Cheonan (98), South Korea, and Taichung (99) in Taiwan. Chinese cities Xi’an and Chongqing (both ranked 142nd) are also emerging as business destinations. Their main challenges to improving quality-of-living standards are clean water provision and air

Baku, Tbilisi, Yerevan at theBottom of Quality of Living Rankings

Continued on p. 20



January 5, 2013 Unleaded (Superbleifrei, Euro sans plomb, Euro95) Diesel (Gazole, Gasóleo)Country Crude Margin Excise duties VAT Retail price Crude Margin Excise duties VAT Retail price

Austria € 0.512 € 0.164 € 0.482 € 0.232 € 1.390 € 0.512 € 0.224 € 0.397 € 0.227 € 1.359

Belgium € 0.512 € 0.226 € 0.614 € 0.284 € 1.636 € 0.512 € 0.293 € 0.428 € 0.259 € 1.492

Bulgaria € 0.512 € 0.179 € 0.363 € 0.211 € 1.265 € 0.512 € 0.253 € 0.322 € 0.217 € 1.304

Cyprus € 0.512 € 0.281 € 0.359 € 0.196 € 1.348 € 0.512 € 0.361 € 0.330 € 0.204 € 1.407

Czech Republic € 0.512 € 0.123 € 0.516 € 0.242 € 1.393 € 0.512 € 0.232 € 0.440 € 0.249 € 1.433

Denmark € 0.512 € 0.187 € 0.587 € 0.321 € 1.607 € 0.512 € 0.212 € 0.444 € 0.292 € 1.460

Estonia € 0.512 € 0.098 € 0.423 € 0.207 € 1.239 € 0.512 € 0.173 € 0.393 € 0.216 € 1.293

Finland € 0.512 € 0.131 € 0.650 € 0.310 € 1.603 € 0.512 € 0.245 € 0.470 € 0.294 € 1.521

France € 0.512 € 0.261 € 0.607 € 0.270 € 1.650 € 0.512 € 0.308 € 0.428 € 0.245 € 1.493

Germany € 0.512 € 0.159 € 0.654 € 0.252 € 1.577 € 0.512 € 0.239 € 0.470 € 0.232 € 1.453

Greece € 0.512 € 0.185 € 0.670 € 0.314 € 1.681 € 0.512 € 0.223 € 0.412 € 0.264 € 1.411

Hungary € 0.512 € 0.161 € 0.419 € 0.295 € 1.387 € 0.512 € 0.223 € 0.386 € 0.303 € 1.424

Ireland € 0.512 € 0.193 € 0.588 € 0.297 € 1.590 € 0.512 € 0.254 € 0.479 € 0.286 € 1.531

Italy € 0.512 € 0.232 € 0.704 € 0.304 € 1.752 € 0.512 € 0.298 € 0.593 € 0.295 € 1.697

Latvia € 0.512 € 0.170 € 0.408 € 0.229 € 1.319 € 0.512 € 0.250 € 0.330 € 0.229 € 1.321

Lithuania € 0.512 € 0.178 € 0.434 € 0.236 € 1.360 € 0.512 € 0.260 € 0.302 € 0.225 € 1.299

Luxembourg € 0.512 € 0.171 € 0.462 € 0.172 € 1.317 € 0.512 € 0.217 € 0.330 € 0.159 € 1.218

Malta € 0.512 € 0.290 € 0.469 € 0.229 € 1.500 € 0.512 € 0.276 € 0.382 € 0.211 € 1.380

Netherlands € 0.512 € 0.231 € 0.730 € 0.309 € 1.782 € 0.512 € 0.289 € 0.431 € 0.259 € 1.491

Poland € 0.512 € 0.203 € 0.380 € 0.252 € 1.347 € 0.512 € 0.267 € 0.330 € 0.255 € 1.364

Portugal € 0.512 € 0.326 € 0.584 € 0.327 € 1.749 € 0.512 € 0.333 € 0.366 € 0.278 € 1.489

Romania € 0.512 € 0.153 € 0.360 € 0.246 € 1.271 € 0.512 € 0.228 € 0.316 € 0.253 € 1.309

Slovakia € 0.512 € 0.227 € 0.515 € 0.251 € 1.504 € 0.512 € 0.295 € 0.386 € 0.239 € 1.431

Slovenia € 0.512 € 0.235 € 0.491 € 0.248 € 1.486 € 0.512 € 0.281 € 0.361 € 0.231 € 1.385

Spain € 0.512 € 0.197 € 0.425 € 0.238 € 1.372 € 0.512 € 0.267 € 0.331 € 0.233 € 1.343

Sweden € 0.512 € 0.185 € 0.620 € 0.329 € 1.646 € 0.512 € 0.248 € 0.554 € 0.328 € 1.642

United Kingdom € 0.512 € 0.167 € 0.674 € 0.271 € 1.624 € 0.512 € 0.242 € 0.674 € 0.286 € 1.714

FUEL PRICES

FUEL TAXES

ELECTRICITY HOUSEHOLDS

FUEL PRICESELECTRICITY HOUSEHOLDS

FUEL TAXES

January 5, 2013 Unleaded (Superbleifrei, Euro sans plomb, Euro95) Diesel (Gazole, Gasóleo)Country Retail Price Price (Excluding VAT) Retail Price Price (Excluding VAT)

Austria € 1.390 € 1.158 € 1.359 € 1.133

Belgium € 1.636 € 1.352 € 1.492 € 1.233

Bulgaria € 1.265 2.49 лв. € 1.054 2.08 лв. € 1.304 2.55 лв. € 1.087 2.13 лв.

Cyprus € 1.348 € 1.152 € 1.407 € 1.203

Czech Republic € 1.393 35.00 Kč € 1.151 28.93 Kč € 1.433 36.00 Kč € 1.184 29.75 Kč

Denmark € 1.607 11.99 kr € 1.286 9.59 kr € 1.460 10.89 kr € 1.168 8.71 kr

Estonia € 1.239 € 1.033 € 1.293 € 1.078

Finland € 1.603 € 1.293 € 1.521 € 1.227

France € 1.650 € 1.380 € 1.493 € 1.248

Germany € 1.577 € 1.325 € 1.453 € 1.221

Greece € 1.681 € 1.367 € 1.411 € 1.147

Hungary € 1.387 407 Ft € 1.092 320 Ft € 1.424 418 Ft € 1.121 329 Ft

Ireland € 1.590 € 1.293 € 1.531 € 1.245

Italy € 1.752 € 1.448 € 1.697 € 1.402

Latvia € 1.319 Ls 0.922 € 1.090 Ls 0.762 € 1.321 Ls 0.923 € 1.092 Ls 0.763

Lithuania € 1.360 Lt 4.70 € 1.124 Lt 3.88 € 1.299 Lt 4.49 € 1.074 Lt 3.71

Luxembourg € 1.317 € 1.145 € 1.218 € 1.059

Malta € 1.500 € 1.271 € 1.380 € 1.169

Netherlands € 1.782 € 1.473 € 1.491 € 1.232

Poland € 1.347 5.49 zł € 1.095 4.46 zł € 1.364 5.56 zł € 1.109 4.52 zł

Portugal € 1.749 € 1.422 € 1.489 € 1.211

Romania € 1.271 5.66 lei € 1.025 4.56 lei € 1.309 5.83 lei € 1.056 4.70 lei

Slovakia € 1.504 € 1.253 € 1.431 € 1.193

Slovenia € 1.486 € 1.238 € 1.385 € 1.154

Spain € 1.372 € 1.134 € 1.343 € 1.110

Sweden € 1.646 14.18 kr € 1.317 11.34 kr € 1.642 14.14 kr € 1.314 11.31 kr

United Kingdom € 1.624 £ 1.321 € 1.353 £ 1.101 € 1.714 £ 1.394 € 1.428 £ 1.162

EU AVERAGE € 1.496 € 1.234 € 1.432 € 1.181

Consumption: 3,500 kWh/year (± 25%) Consumption: 7,500 kWh/year (± 30%)

Country € per kWh Electricity Country € per kWh ElectricityAustria € 0.1988 Austria € 0.1798

Belgium € 0.2134 Belgium € 0.1940

Bulgaria € 0.0829 Bulgaria € 0.0823

Cyprus € 0.2850 Cyprus € 0.2800

Czech Republic € 0.1480 Czech Republic € 0.1276

Denmark € 0.2982 Denmark € 0.2562

Estonia € 0.0989 Estonia € 0.0948

Finland € 0.1566 Finland € 0.1369

France € 0.1412 France € 0.1279

Germany € 0.2541 Germany € 0.2406

Greece € 0.1265 Greece € 0.1553

Hungary € 0.1708 Hungary € 0.1616

Ireland € 0.1920 Ireland € 0.1604

Italy € 0.2031 Italy € 0.2485

Latvia € 0.1187 Latvia € 0.1193

Lithuania € 0.1200 Lithuania € 0.1201

Luxembourg € 0.1707 Luxembourg € 0.1587

Malta € 0.1695 Malta € 0.1829

Netherlands € 0.2208 Netherlands € 0.2439

Poland € 0.1488 Poland € 0.1419

Portugal € 0.1689 Portugal € 0.1547

Romania € 0.1095 Romania € 0.1074

Slovakia € 0.1677 Slovakia € 0.1501

Slovenia € 0.1447 Slovenia € 0.1335

Spain € 0.1959 Spain € 0.1777

Sweden € 0.2098 Sweden € 0.1821

United Kingdom € 0.1419 United Kingdom € 0.1265

Notes:- Amount is in euro (€) per kiloWatthour (kWh).- Price data for non-eurozone countries are in euro. The average exchange rate valid for the referenced month is applied.- Prices include: market price, transmission through main and local networks, administrative charges and all taxes.

Retail (end-user) energy prices for households.Two consumption levels are identified. Research methodology.

energy energy prices in europeprices in europe

had a boom in real estate busi-ness. In fact, we have witnessed a huge rise in the number of constructions, similar to before the crisis in 2008,” said Urush-adze.

Q. What is the reason why the most responsible developers operating in Georgia are backed by other industries, in par-ticular, by banks?

A. The name of the bank might be backing a developer. However, it is significant that such developers are not rely-ing on the financial resources of that bank. High intellectual management is the main dis-tinguishing feature of such de-velopment companies, in com-parison with their competitors. The average Georgian develop-er acts as an architect, project manager, construction com-pany, sales office and a cost manager, basically as Jack of all trades and master of none. In reality they lack expertise in all of it. Accordingly they often make improper planning and calculations. They fail to con-trol quality and expenditure. Finally, all of this negatively reflects on the welfare of the company. They fail to attract financial resources. Therefore, to complete projects they are often dependent on the sale of unfinished spaces to buyers. In this system, a project can be completed successfully if there is an economic boom in the country. As soon as negative processes appear in the econ-omy such companies start fac-ing problems putting buyers in risky situations as well We have already experienced this during post war period when a large part of the population was affected.

The same is happening now. The problem with society is that it relies on friendships and acquaintances; The man-agement of a company and its financial standing , the risks associated with development projects are not considered by them. Today, buyers appear to be approaching same risks as in 2008. Some will be lucky, some may not.

Q. As you say - there might be new cases of people who have paid for apartments, but whose developers will not meet their responsibilities. Don’t you think that these processes should be regu-lated by the Government?

A. Regulation has its ad-vantages and disadvantages. It always leads to business re-strictions. If the Government stipulates the completion of a project by a developer or limits the reduction of issuing licens-es, this will result in reduced projects, reduced employment and investments. Protecting buyers will be the positive side of this however. In many U.S. states there is a law which pro-hibits the sale of apartments before their completion. This is a guarantee that the proj-ect will be completed - for the population as well as the de-veloper. So, implementation of such legislation would restrict and affect negatively the real estate market on the one hand, but protect buyers on the other. Some middle ground should be reached. The regulations should be implemented gradually so that they protect buyers but do not hamper the development of the sector. When the state sees some upcoming risks due to ex-

ternal factors, it should inter-fere with some regulations.

Q. According to the re-cent initiative of the Gov-ernment - projects started before 2008 are free from VAT taxes and the K2 co-efficient fee. Do you think this will encourage de-velopers to complete al-ready-started projects?

A. The profitability of a proj-ect is the key issue for devel-opers. If the earnings will be less than the fine, then it is clear that the company will not complete it. Especially when personal responsibility does not come into play. It is the company’s responsibil-ity to complete the project but when they see that the project is becoming infeasible they abandon it. Consequently, the initiative of the Government will make some projects seem positive from a financial point of view. So, overall it is a very positive step.

Q. Which segment of real estate seems the most profitable for investing in?

A. Contrary to residential apartments there are some segments of real estate which will be more profitable and less risky. There is demand for branded two-three star ho-tels as well as affordable office space. The demand for hotels has been maintained and the crisis has not yet been reflect-ed in this segment.

There are currently some two-three star hotels under de-velopment and construction. Many investors are trying to initiate a similar development. The construction of some five-star hotels has almost been completed. After their comple-tion the market of the luxury hotel niche will be fully satu-rated. As for other segments, the industrial real estate mar-ket is still dead. The situation is stable for office space. The demand and supply is in a bal-anced state.

Q. How would you esti-mate the Georgian invest-ment climate in terms of real estate business?

A. The investment environ-ment has not altered greatly recently. There is a crisis in the whole region. If we look at other countries, we will see that the situation is equal to Georgia. Our neighbour coun-tries are our major trading partners. Accordingly, the sit-uation in the region affected Georgia. Besides external fac-tors, there was internal policy as well. When a country has a social dimension, a lack of capital investment is issued in infrastructure. It is reflected in the economy. If the state gives priority to infrastruc-tural projects and not to so-cial ones, it will have a better result on the economy.

The negative impacts on the market are being caused by other factors. Devaluation of the GEL will have a negative impact on the purchasing pow-er of society.. It has already resulted in a reduction of the solvency of the population. It definitely affects the number of bank qualified buyers of a real estate. The risks are high-er this year to start a new resi-dential development and more money needs to be invested in preliminary feasibility studies.

Q. If the Government had a different policy, do you think we would avoid external risks?

A. I cannot say that the state has no business-friendly poli-

cies. The business legal en-vironment is not worse than in previous years. The only change is that priority is being given to the social sphere and not to infrastructure develop-ment. Today, the state does not invest in the economy. It spends the budget on pensions and other social benefits. The spending appears in the fields where social wealth is not cre-ated. This inevitably leads to problems in the economy. The Government’s shift to spend-ing in the economy is not a popular step since it does not have immediate affect on poor population though it has long term effects.

Q. A labour inspection process will come into force this year. What will be its impact on business-es?

A. There is no event without negative implications. More regulation, more monitoring will be negatively reflected on businesses. However, there might still be some companies in Georgia where the rights of employees are being violated. So it will bring positive results in these terms. Actually the problem is not what is done, the problem is how it is done. The success of any reform de-pends on the mechanisms and their implementation.

Q. What kind of regu-lations should be imple-mented in the construc-tion business?

A. I welcome regulations in areas such as harmful and dangerous construction mate-rials that affect the health of the population. The usage of zinc roofs and asbestos-con-taining materials, lead paints should be not only banned but strict mandatory procedures need to be implemented for the removing of such materials and creating special waste ter-ritories. These have very seri-ous effects on health. Banning the usage of materials that are prohibited in many countries is crucial. Regulations are nec-essary when health risks are in question.

Q. There are lots of un-completed constructions in Georgia. What is the solution to this problem?

A. Tax exemption is one of the positive steps in this re-gard. Unfortunately, courts in Georgia have no mecha-nism to deal with such prob-lems, while in many countries cheated buyers can unite and and have the court oblige the company to meet their respon-sibilities. The court should force the developers who, not due to a crisis, but because of poor management have failed to complete a project resulting in financial losses of buyers. The law of bankruptcy is quite complicated in Georgia. I have never heard of the precedent of the bankruptcy of a devel-oper company in Georgia. By the current bancruptcy law nobody benefits but the state bancruptcy agency. This is quite a meaningless law.

Risk of Additional Uncompleted Construction Projects in GeorgiaContinued from p. 2



Q. How would you summarize 2014 for the Georgian real estate sec-tor?

A. The market began to stabilise after the period of “cohabitation” and 2014 was another successful year for Cushman & Wakefi eld | Veri-tas Brown in the Caucasus Region - commission and ser-vice fee revenue saw a year-on-year increase of 35% and new improved offi ce premises were found in Tbilisi as staff numbers expanded to 18. We also opened a second offi ce in Batumi primarily to take advantage of the continued focus on the development of tourism in the region.

Q. In your words, the period of “cohabitation” in 2013 had a negative effect on the state of the commercial real estate market in general. Has the situation changed for the better since the presi-dential elections?

A. There seems to be in-creased confi dence amongst developers, although there is still a degree of caution due to the continued regional in-stability and local currency is-

sues. But generally things are improving, albeit slowly.

Q. The recent devalua-tion of the national cur-rency towards the USD has had a negative im-pact on the solvency of the population. What will be its impact on the real estate sector?

A. Residential development is on the increase, these proj-ects are only successful if the population can gain access to affordable mortgages and of course be in a position to pay them. Currency devaluation can have a damaging impact for both developers and home owners alike, a fl uctuating currency is not welcomed, and the Government should consider options to stabilize the situation. We were in-formed that a recent EBRD report supported the Govern-ment on their non-interfer-ence policy so perhaps doing nothing at present is the best policy; time will tell.

Q. Cushman & Wake-fi eld | Veritas Brown has been successfully operat-ing in Kazakhstan since 2009. The country is also experiencing hard eco-

nomic times. What is the situation there at the mo-ment in terms of the real estate sector?

A. The economy in Kazakh-stan is intrinsically linked to both the Russian economy and oil prices; two factors that adversely affect current and future prospects in the country. Consequently, the real estate sector is also ex-periencing an adjustment ac-cordingly - for example, many occupiers are consolidating operations in the short to medium-term with a view to expanding in the medium to long-term.

Q. The Russian-Ukrai-nian crisis had a nega-tive impact throughout the whole region. Which countries remain the most promising?

A. The current downturn in the Russian economy has caused a ripple effect throughout the region. Those countries with the most posi-tive outlook are those that are insulated from the effects of both Russia and the drop in energy prices, or are suf-fi ciently diversifi ed through cooperation with a number of different international part-ners, such as China, India, the EU etc.

For Georgia, the best way to minimize external risks is through diversifi cation, by working with a variety of part-ners, who themselves are not intrinsically linked.

Q. Attracting FDI still remains a big challenge for Georgia. What are your expectations of whether we’ll see larger interest from foreign in-vestors in the country in 2015?

A. For the time being we do not expect to see increased FDI into Georgia due to re-gional instability issues. In-vestors have little, if any, risk appetite for the region but may look for trophy assets with good revenue streams.

Q. What are the main negative and positive steps that discourage and encourage the inter-est of foreign investors in Georgia?

A. Generally Georgia is a

good place to do business, highlighted by the country be-ing ranked 15th highest out of 189 economies in the World Bank’s “Ease of Doing Busi-ness” index; this position slipped from 8th last year.

However, the recent immi-gration debacle did not help. Investors coming to Georgia from the east need to have access to the country, and imposing unattainable visa requirements doesn’t help. Common sense needs to be applied and investors need access to the country.

Q. The construction of residential apartments was quite active during 2013-2014. Do you think that as the supply ex-ceeds demand we might face another wave of un-completed buildings?

A. There seems to be an un-fi nished residential develop-ment on every street corner, a legacy of the 2008 crises. Most are poorly located and constructed, and compet-ing with projects - such as Bank of Georgia M2, which in our view are excellent de-velopments - will be diffi cult. At present demand exceeds supply, so until this dynamic changes most new, well-locat-ed and constructed projects should yield returns.

Q. In Georgia there is no practice of insuring buildings under con-struction. What are the main reasons for it and do you recommend the implementation of this practice?

A. If is not a legal require-ment then developers are not obliged to insure buildings. The Government needs to address this issue which we believe should be a legal ob-ligation.

Hospitality and F&B Sectors to Boom on the Georgian Real Estate Market

STEVE BROWN, Managing Partner at Cushman & Wakefi eld | Veritas Brown


Development of the commercial real estate market in Georgia remains fi rmly focused on the tourism and hospitality sector. The expansion of international food and beverage

brands is still high on the agenda for 2015, which makes the hospitality and F&B sectors the most promising for investors. As for residential apartments - “demand exceeds supply,” said Steve Brown, Managing Partner at Cushman & Wakefi eld | Veritas Brown. So until this dynamic changes, Brown suggests that most new, well-located and constructed projects should yield returns.

“If mortgages become unaffordable the residential sector will become saturated with empty or half-fi nished buildings. Good quality offi ce space is in very short supply but this is due to low demand, and we think the hospitality and F&B sectors will continue to boom for the foreseeable future,” Steve Brown, Managing Partner at Cushman & Wakefi eld | Veritas Brown, told The FINANCIAL.

“Development of the commercial real estate market in Georgia remains fi rmly focused on the tourism and hospitality sector, which led to us expanding our provision of hospitality consultancy services through the recruitment of Tom Day as Regional Hospitality Director. Also, the expansion of international food and beverage brands is still high on the agenda for 2015 and there are a number of new and exciting retail developments planned in Batumi,” said Brown.

“We are helping Starbucks, through Alshaya, with their roll out in Kazakhstan, but we are making little progress convincing them to come to Georgia; this may change in the medium term. We believe many existing international brands are close to saturation point within the region and are seeking to consolidate rather than expand further,” he added.

The FINANCIAL

In January 2015, com-pared with December 2014, industrial pro-ducer prices fell by 0.9% in the euro area (EA19)

and by 1.2% in the EU282, according to estimates from Eurostat, the statistical offi ce of the European Union. In December 20143 prices de-creased by 1.0% in the euro area and by 1.1% in the EU28. In January 2015, compared with January 2014, industrial producer prices fell by 3.4% in the euro area and by 4.1% in the EU28.

The 0.9% decrease in indus-trial producer prices in total industry in the euro area in January 2015, compared with December 2014, is due to falls of 3.2% in the energy sector, of 0.5% for intermediate goods and of 0.2% for non- durable consumer goods, while prices rose by 0.2% for capital goods

and by 0.3% for durable con-sumer goods. Prices in total industry excluding energy de-creased by 0.2%.

In the EU28, the 1.2% de-crease is due to falls of 4.8% in the energy sector, of 0.4% for intermediate goods and of 0.2% for non-durable con-sumer goods, while prices rose by 0.2% for durable consumer goods and by 0.3% for capital goods. Prices in total industry excluding energy fell by 0.1%.

Industrial producer pric-es fell in nearly all Mem-ber States, with the largest decreases observed in the Netherlands (-3.6%), Lithu-ania (-3.1%), the United Kingdom (-2.9%) and Ireland (-2.6%). Industrial producer prices increased only in Lat-via (+0.4%), Luxembourg and Malta (both +0.1%), while they remained stable in Romania and Slovenia.The 3.4% decrease in indus-trial producer prices in total industry in the euro area in

January 2015, compared with January 2014, is due to falls of 10.2% in the energy sector, of 1.6% for intermediate goods and of 1.1% for non- durable consumer goods, while prices rose by 0.7% for capital goods and by 1.0% for durable con-sumer goods. Prices in total industry excluding energy fell by 0.7%.

In the EU28, the 4.1% de-crease is due to falls of 14.1% in the energy sector, of 1.4% for intermediate goods and of 1.3% for non-durable con-sumer goods, while prices rose by 0.7% for durable consumer goods and by 0.8% for capital goods. Prices in total industry excluding energy fell by 0.7%.

Industrial producer prices fell in all Member States, ex-cept in Luxembourg (+1.4%). The largest decreases were observed in the Netherlands (-10.9%), Lithuania (-10.6%), the United Kingdom (-9.5%), Belgium (-8.4%), Greece (-7.7%) and Denmark (-7.1%).

Industrial Producer Prices Down by 0.9% in Euro Area



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pollution. However, advances in the telecommunications and consumer sectors have had some positive offset-ting effects on their ranking.

Behind Singapore, the second highest-ranking city in Southeast Asia is Kuala Lumpur (84); other major cities here include Bangkok (117), Manila (136), and Jakarta (140). In South Asia, Colombo (132), ranks highest and is followed by emerging Indian cities Hyderabad (138) and Pune (145). Both cities rank higher for quality of living than the country’s more traditional busi-ness centres, Mumbai (152) and New Delhi (154). Considerable population increases in Mumbai and New Delhi in recent decades have increased ex-isting problems, including access to clean water, air pollution, and traffi c congestion.

In the Pacifi c, New Zealand and Australian cities are some of the highest-ranked cities globally, with Auckland in 3rd, Sydney in 10th, Wellington in 12th, and Melbourne in 16th.

MIDDLE EAST AND AFRICA

In 74th place, Dubai ranks high-est for quality of living across the Middle East and Africa region. It is followed by Abu Dhabi (77), also in the UAE, and Port Louis (82), Mau-ritius. In South Africa, Durban (85) is an emerging city and ranks higher than the country’s traditional busi-ness centres, Cape Town (91) and Johannesburg (94). Durban’s higher ranking is mainly due to its high-quality housing, plentiful recre-ational offerings and good consumer goods availability. However, the city’s crime problems keep it from reaching the top 50.

Ranking 230th, Baghdad is the lowest-ranking city in the region and on the overall list.

A quality-of-living allowance is typically location-related, while a mobility premium is usually inde-pendent of the host location. Some multinational companies combine these premiums, but the vast major-ity provides them separately.

"In a global environment, em-ployers have many choices as to where to deploy their mobile em-

ployees and set up new business”, Mercer commented. "A city’s qual-ity-of-living standards can be an important variable for employers to consider. Leaders in many cit-ies want to understand the specific factors that affect their residents’ quality of living and address those issues that lower their city’s overall quality-of-living ranking. Mercer advises municipalities through a holistic approach that addresses their goals of progressing towards excellence, and attracting multi-national companies and globally mobile talent by improving the el-ements that are measured in its Quality of Living survey"

Mercer evaluates local living conditions in more than 440 cities it surveys worldwide. Living con-ditions are analysed according to 39 factors, grouped in 10 catego-ries:

Political and social environment (political stability, crime, law en-forcement, etc.)

Economic environment (currency exchange regulations, banking ser-vices)

Socio-cultural environment (me-dia availability and censorship, limi-tations on personal freedom)

Medical and health considerations (medical supplies and services, in-fectious diseases, sewage, waste dis-posal, air pollution, etc)

Schools and education (standards and availability of international schools)

Public services and transportation (electricity, water, public transpor-tation, traffi c congestion, etc)

Recreation (restaurants, theatres, cinemas, sports and leisure, etc)

Consumer goods (availability of food/daily consumption items, cars, etc)

Housing (rental housing, house-hold appliances, furniture, mainte-nance services)

Natural environment (climate, re-cord of natural disasters)

See below detailed list.

2015 City Rankings

Rank City Country1 Vienna Austria2 Zurich Switzerland3 Auckland New Zealand4 Munich Germany5 Vancouver Canada6 Dusseldorf Germany7 Frankfurt Germany8 Geneva Switzerland

9 Copenhagen Denmark10 Sydney Australia11 Amsterdam Netherlands12 Wellington New Zealand13 Bern Switzerland14 Berlin Germany15 Toronto Canada16 Hamburg Germany16 Melbourne Australia16 Ottawa Canada19 Luxembourg Luxembourg19 Stockholm Sweden21 Stuttgart Germany22 Brussels Belgium22 Perth Australia24 Montreal Canada25 Nurnberg Germany26 Singapore Singapore27 Adelaide Australia27 Paris France27 San Francisco United States30 Canberra Australia31 Helsinki Finland31 Oslo Norway33 Calgary Canada34 Boston United States34 Dublin Ireland36 Honolulu United States37 Brisbane Australia38 Barcelona Spain39 Lyon France40 London United Kingdom41 Lisbon Portugal41 Milan Italy43 Chicago United States44 New York City United States44 Seattle United States44 Tokyo Japan47 Kobe Japan48 Los Angeles United States48 Yokohama Japan50 Washington United States51 Madrid Spain52 Birmingham United Kingdom52 Rome Italy54 Pittsburgh United States55 Glasgow United Kingdom55 Philadelphia United States57 Aberdeen United Kingdom58 Osaka Japan59 Leipzig Germany60 Minneapolis United States61 Nagoya Japan62 Dallas United States63 Belfast United Kingdom64 Houston United States65 Miami United States66 Atlanta United States67 St. Louis United States68 Prague Czech Republic69 Pointe-a-Pitre Guadeloupe70 Detroit United States70 Hong Kong Hong Kong72 San Juan Puerto Rico72 Seoul South Korea

74 Dubai United Arab Emirates

75 Budapest Hungary75 Ljubljana Slovenia

77 Abu Dhabi United Arab Emirates

78 Montevideo Uruguay79 Vilnius Lithuania79 Warsaw Poland81 Bratislava Slovakia82 Port Louis Mauritius83 Taipei Taiwan84 Kuala Lumpur Malaysia

85 Athens Greece85 Durban South Africa87 Limassol Cyprus88 Tallinn Estonia89 Riga Latvia90 Busan South Korea91 Buenos Aires Argentina91 Cape Town South Africa93 Santiago Chile94 Johannesburg South Africa95 Panama City Panama96 Victoria Seychelles97 Zagreb Croatia98 Cheonan South Korea99 Taichung Taiwan100 Wroclaw Poland101 Shanghai China

102 Bandar Seri Begawan Brunei

103 Johor Bahru Malaysia104 Muscat Oman105 Tel Aviv Israel106 San Jose Costa Rica107 Brasilia Brazil108 Doha Qatar109 Monterrey Mexico110 Bucharest Romania111 Noumea New Caledonia112 Nassau Bahamas113 Tunis Tunisia114 Asuncion Paraguay115 Sofi a Bulgaria116 Rabat Morocco117 Bangkok Thailand118 Beijing China119 Rio de Janeiro Brazil120 Sao Paulo Brazil121 Guangzhou China122 Amman Jordan122 Istanbul Turkey124 Lima Peru125 Kuwait City Kuwait126 Mexico City Mexico127 Manaus Brazil128 Casablanca Morocco129 Quito Ecuador130 Manama Bahrain131 Bogota Colombia132 Colombo Sri Lanka133 Chengdu China133 Windhoek Namibia

135 Santo Domingo Dominican Republic

136 Manila Philippines137 Nanjing China138 Hyderabad India139 Shenzhen China140 Jakarta Indonesia141 Belgrade Serbia142 Xi’an China142 Chongqing China144 Gaborone Botswana145 Pune India146 Bangalore India

147 Port of Spain Trinidad and Tobago

147 Qingdao China149 Lusaka Zambia150 Guatemala City Guatemala151 Chennai India152 Mumbai India

153 Ho Chi Minh City Vietnam

154 Hanoi Vietnam154 New Delhi India156 Kingston Jamaica156 La Paz Bolivia156 Shenyang China

159 Skopje Macedonia160 Kolkata India

161 Sarajevo Bosnia-Herzegovina

162 Dakar Senegal163 Riyadh Saudi Arabia164 Libreville Gabon165 Accra Ghana166 Jeddah Saudi Arabia167 Moscow Russia168 Jilin China169 Kampala Uganda170 Cairo Egypt171 Vientiane Laos172 San Salvador El Salvador173 Managua Nicaragua174 Saint Petersburg Russia175 Almaty Kazakhstan176 Kiev Ukraine177 Blantyre Malawi178 Maputo Mozambique179 Caracas Venezuela180 Tirana Albania181 Beirut Lebanon182 Cotonou Benin183 Yerevan Armenia184 Banjul Gambia184 Tegucigalpa Honduras186 Nairobi Kenya187 Algiers Algeria188 Djibouti Djibouti189 Kigali Rwanda189 Minsk Belarus191 Islamabad Pakistan192 Yaounde Cameroon193 Havana Cuba194 Tbilisi Georgia195 Phnom Penh Cambodia196 Douala Cameroon197 Baku Azerbaijan198 Dar es Salaam Tanzania199 Lahore Pakistan200 Luanda Angola201 Yangon Myanmar202 Karachi Pakistan203 Tehran Iran204 Lome Togo205 Addis Ababa Ethiopia206 Harare Zimbabwe206 Tashkent Uzbekistan208 Bishkek Kyrgyzstan209 Abidjan Côte d’Ivoire210 Ashkhabad Turkmenistan211 Dhaka Bangladesh211 Lagos Nigeria213 Abuja Nigeria214 Dushanbe Tajikistan215 Ouagadougou Burkina Faso216 Tripoli Libya217 Antananarivo Madagascar217 Niamey Niger219 Bamako Mali220 Damascus Syria221 Nouakchott Mauritania222 Conakry Guinea

223 KinshasaCongo, Democratic Republic of

224 Brazzaville Congo, Republic of

225 Sana’a Yemen226 N’Djamena Chad227 Khartoum Sudan228 Port au Prince Haiti

229 Bangui Central African Republic

230 Baghdad Iraq

Continued from p. 16

Baku, Tbilisi, Yerevan at the Bottom of Quality of Living Rankings

In January 2015 com-n January 2015 com-pared with December pared with December 2014, the seasonally ad-2014, the seasonally ad-justed volume of retail justed volume of retail trade1 rose by 1.1% in trade1 rose by 1.1% in

the euro area (EA19) and by the euro area (EA19) and by 0.8% in the EU28, according 0.8% in the EU28, according to estimates from Eurostat, to estimates from Eurostat, the statistical offi ce of the Eu-the statistical offi ce of the Eu-ropean Union. In December3 ropean Union. In December3 retail trade rose by 0.4% in retail trade rose by 0.4% in both zones.both zones.

In January 2015 compared In January 2015 compared with January 20144 the retail with January 20144 the retail sales index increased by 3.7% sales index increased by 3.7% in the euro area and by 4.0% in the euro area and by 4.0% in the EU28.in the EU28.

The 1.1% increase in the The 1.1% increase in the volume of retail trade in the volume of retail trade in the euro area in January 2015, euro area in January 2015, compared with December compared with December 2014, is due to rises of 3.2% 2014, is due to rises of 3.2% for automotive fuel, of 1.2% for automotive fuel, of 1.2% for the non-food sector and of for the non-food sector and of 1.0% for “Food, drinks and to-1.0% for “Food, drinks and to-bacco”. In the EU28, the 0.8% bacco”. In the EU28, the 0.8% increase in retail trade is due increase in retail trade is due to rises of 2.9% for automo-to rises of 2.9% for automo-tive fuel, of 0.8% for the non-tive fuel, of 0.8% for the non-food sector and of 0.6% for food sector and of 0.6% for “Food, drinks and tobacco”.“Food, drinks and tobacco”.

Among Member States for Among Member States for which data are available, the which data are available, the

highest increases in total re-highest increases in total re-tail trade were registered in tail trade were registered in Portugal (+6.8%), Poland Portugal (+6.8%), Poland (+3.1%), Germany (+2.9%) (+3.1%), Germany (+2.9%) and Slovenia (+2.4%), while and Slovenia (+2.4%), while decreases were observed in decreases were observed in the United Kingdom (-0.9%), the United Kingdom (-0.9%), Lithuania (-0.5%), Bulgaria Lithuania (-0.5%), Bulgaria and Ireland (both -0.1%).and Ireland (both -0.1%).

The 3.7% increase in the The 3.7% increase in the volume of retail trade in the volume of retail trade in the euro area in January 2015, euro area in January 2015, compared with January 2014, compared with January 2014, is due to rises of 6.1% for au-is due to rises of 6.1% for au-tomotive fuel, of 5.0% for the tomotive fuel, of 5.0% for the non-food sector and of 2.2% non-food sector and of 2.2% for “Food, drinks and tobac-for “Food, drinks and tobac-co”. In the EU28, the 4.0% in-co”. In the EU28, the 4.0% in-crease in retail trade is due to crease in retail trade is due to rises of 5.6% for automotive rises of 5.6% for automotive fuel, of 5.4% for the non-food fuel, of 5.4% for the non-food sector and of 2.4% for “Food, sector and of 2.4% for “Food, drinks and tobacco”.drinks and tobacco”.

Among Member States for Among Member States for which data are available, the which data are available, the highest increases in total re-highest increases in total re-tail trade were observed in tail trade were observed in Luxembourg (+10.7%), Hun-Luxembourg (+10.7%), Hun-gary (+8.2%), Poland (+7.5%) gary (+8.2%), Poland (+7.5%) and Romania (+7.3%), while and Romania (+7.3%), while the only decreases were ob-the only decreases were ob-served in Finland (-1.2%) and served in Finland (-1.2%) and Belgium (-0.3%).Belgium (-0.3%).

Volume of Retail Volume of Retail Trade Up by 1.1% Trade Up by 1.1% In Euro AreaIn Euro Area

The FINANCIAL

Opportunities for career progres-sion tops the list of most attractive employer traits.

49% of female millennials starting their careers believe they can reach the very top levels with their current em-ployer.

86% of female millennials in a relationship are part of a dual-career couple, while 66% earn the same as or more than their partner or spouse.

But almost half say employ-ers are too male biased when it comes to internal promo-tions

And 71% feel that opportu-nities are not equal for all.

To mark International Women’s Day (IWD) on Sun-day 8th March 2015, PwC sur-veyed 8,756 female millenni-als (women born between 1980-1995) from 75 countries to fi nd out how they feel about the world of work and their career.

The report eveals that the female millennial is much more likely to believe she can reach the very top levels with her current employer, par-ticularly those starting their careers (49%).

The female millennial ranks opportunities for career progression as the most at-tractive employer trait (53%); making her more career confi -dent and ambitious than pre-vious generations.

Female millennials in Bra-zil (76%), India (76%) and Portugal (68%) are the most confi dent, while their peers in Japan (11%), Kazakhstan (18%) and Germany (19%) are the least confi dent.

Of the female millenni-als who are in a relationship, 86% are part of a dual career couple, with 42% earning equal salaries to their part-ner or spouse. And almost a quarter (24%) are the primary earner in their relationship.

When it comes to diver-sity, 86% of female millenni-als seek out employers with a strong record on diversity,

equality and inclusion – and while they say employers talk about diversity, 71% do not feel opportunities are really equal for all.

What’s more, 43% of fe-male millennials believe em-ployers are too male biased when it comes to promoting employees from within – up 14% since 2011.

Millennial women in Spain (60%), France (58%) and Ire-land (56%) view employers in their country as the most male biased, versus Malay-sia (16%) and the Philippines (11%) where female millenni-als are more optimistic.

As the experience of a 34-year-old millennial wom-an with 12 years’ work expe-rience will be very different to that of a 22-year-old mil-lennial woman just starting out in her career, the report looks at the insights and de-sires of the female millennial by career stage: career start-ers (female millennials with 0–3 years’ work experience), career developers (4–8 years’ work experience) and career

establishers (9 or more years’ work experience).

The millennial generation can be expected to drive un-precedented shifts in organ-isational culture, with sig-nifi cant demand for work life balance and fl exibility from 97% of female and 97% of male millennials.

The female millennial ex-pects real time, high quality, future-focused feedback and despite being extremely tech-savvy, prefers critical feed-back discussions to take place face-to-face.

Female demand for in-ternational experience has never been higher with 71% of female millennials wanting to work outside their home country during their career. Despite this, only 20% of cur-rent international assignees are female.

Female millennials are least likely to want to work in the Financial Services, De-fence and Oil & Gas sectors, solely because of their image and reputation.

Female millennials are the most confi dent and ambitious of any female generation



Women Earned on Average 16% Less Than Men in 2013 in the EU2 OUT OF 3 MANAGERS ARE MEN, 2 OUT OF 3 CLERICAL WORKERS ARE WOMEN

The FINANCIAL

In 2013, the gender pay gap stood at 16.4% in the European Union (EU), ranging from less than 5% in Slovenia to

more than 20% in Estonia, Austria, the Czech Republic and Germany. The gender pay gap represents the differ-ence between average gross hourly earnings of male paid employees and of female paid employees as a percentage of average gross hourly earnings of male paid employees.

Differences between fe-males and males in the labour market2 do not only concern wage discrepancies but also and along with it, the type of

occupations3 held. Though representing 46% of em-ployed persons, women were under-represented amongst managers, with only a third being female in 2013 in the EU. On the contrary, women were over-represented among clerical support workers as well as among service and sales workers, accounting for around two-thirds of em-ployed persons in these occu-pations.

The gap between men and women in the labour market was also signifi cant as regards the type of em-ployment held. In 2013, 1 employed woman out of 3 (31.8%) worked part-time, compared with fewer than 1 man out of 10 (8.1%).

LOWEST GENDER PAY GAP IN SLOVENIA, LARGEST IN ESTONIA

In 2013 in the EU Member

States, the gender pay gap was less than 10% in Slo-venia (3.2%), Malta (5.1%), Poland (6.4%), Italy (7.3%), Croatia (7.4%), Luxembourg (8.6%), Romania (9.1%) and Belgium (9.8%). At the op-posite end of the scale, the gender pay gap was over 20% in Estonia (29.9%), Austria (23.0%), the Czech Republic (22.1%) and Ger-many (21.6%).

Compared with 2008, the gender pay gap has dropped in 2013 in a majority of EU Member States. The most noticeable decreases be-tween 2008 and 2013 were recorded in Lithuania (from 21.6% in 2008 to 13.3% in 2013, or -8.3 percentage points), Poland (-5.0 pp), the Czech Republic and Mal-ta (both -4.1 pp) and Cyprus (-3.7 pp). In contrast, the gender pay gap has risen be-tween 2008 and 2013 in nine Member States, with the most significant increases being observed in Portugal (from 9.2% in 2008 to 13.0% in 2013, or + 3.8 percent-age points), Spain (+3.2 pp), Latvia (+2.6 pp), Italy (+2.4 pp) and Estonia (+2.3 pp). At EU level, the gender pay gap has decreased slightly, from 17.3% in 2008 to 16.4% in 2013.

PART-TIME EMPLOYMENT TENDS TO BOOST FEMALE EMPLOYMENT RATE

Among Member States in 2013, the largest disparities in employment rate between men and women were re-corded in Malta (79.4% for men and 49.8% for women, or a difference of 29.6 per-centage points), Italy (19.9 pp) and Greece (19.4 pp), and the smallest in Lithuania (2.6 pp), Finland (2.8 pp), Latvia (4.2 pp) and Sweden (5.0 pp).

It should be noted that those Member States with the high-est female employment rates are generally also those with a high share of employed wom-en working part-time in 2013. Sweden, Germany, Denmark, the Netherlands and Austria have all a female employment rate above 70% and a share of part-time employment among

females well over 30%. The noticeable exceptions are Finland and Estonia, which combine a high female em-ployment rate and a low share of part-time employment for women.

It is worth mentioning that one of the key objectives of the Europe 2020 strategy6 is to increase employment in the EU. The target to be reached by 2020 is an employment rate of 75% among those aged 20 to 64.

At EU level, the female em-ployment rate stood at 62.6% in 2013 and almost a third (31.8%) of them were working part-time, while for men, the em-ployment rate was 74.2% but less than 10% of them (8.1%) were in part-time employment.

LESS THAN 20% OF MANAGERS ARE WOMEN IN LUXEMBOURG AND CYPRUS

At EU level, a third (33%)

of managers was female in 2013. Conversely, women ac-counted in 2013 for around two- thirds of all clerical sup-port workers (67%) and of all services and sales workers (64%).

In 2013 across the EU Member States, women were particularly under-represented among manag-ers in Luxembourg (while accounting for 44% of em-ployed persons, 16% of man-agers are women), Cyprus (48% vs. 19%), the Neth-erlands (47% vs. 25%) and Croatia (46% vs. 25%). In contrast, the share of female managers was more repre-sentative of the proportion of women in total employ-ment in Hungary (the share of women was 46% among employed persons and 41% among managers), Latvia (51% and 44%) and Poland (45% and 38%).

In every Member State, women were over-repre-sented among clerical sup-port workers in 2013, with Ireland (while accounting for 46% of employed per-sons, 80% of clerical work-ers are women) and the Czech Republic (43% vs. 79%) having the highest proportions of women in these occupations.



Advertiser: The FINANCIAL. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com



BUSINESSTRAVELCOMHOTEL AND AIRTICKET BOOKING: 2 999 662 | SKY.GE

For advertising please contact:

577 741 700

marketing@fi nchannel.com

DISCOVERY

40, Chavchavadze Ave. Tel: 229 42 30

24/24

Red Café - Bistro & Cafe

# 71 Vazha-phavela Ave.Tel: 2201 211

[email protected]

VERA STEAKHOUSE

37, Kostava Str.Tel: 298 37 67

TSISKVILI

Beliashvili Str. Tel: 253 07 97

PREGO84, Barnovi Str.Tel: 225 22 58

15, Erekle II.Tel: 293 14 11

25, Tarkhnishvili Str.Tel: 225 25 16

2, MarjaniSvili Str. Tel: 2 999 723

41, Gamsakhurdia Str.Tel: 237 96 88

SIANG-GAN

Prospero’s Books34, Rustaveli Ave. Tel: (+995 32) 2923 592

ENGLISH TEE HOUSE

5, Marjanishvili Str. Tel: 294 16 20

32, Paliashvili Str.Tel: 222 11 09

Belle Ville

French - European bar-restaurant Pleasant and cozy atmosphere High quality service, live music every day

26, l.Kiacheli Str. Tel: 293 65 53

Entree

13 Taktakishvili Str.20 Rustaveli Ave.19 Petriashvili Str.

7 Pekini Str.78 Chavchavadze Ave.

(Bagebi)86 Aghmashenebeli ave.

Tel.: 599 21 53 83

LITERATURULI CAFÉ

22, Abashidze Str.Tel: 222 02 76

4, Besiki Str.

Tel: 2 519 966

Book Corner

13b, Tarkhnishvili Str.Tel: 223 24 30

[email protected]

www.facebook.com/RespublikaEspressoBar

16, Marjanishvili Str.Tel: 555 003151

Espresso Bar “RESPUBLIKA”

Addr: 3 Vekua Street.(Trade Center GTC)

Tel.: 2 93 61 38

CAFE CINEMA

diningdining| places we strongly reccommend to visit |

4, Vashlovani Str.Tel: 298 90 86

PICASSO

Literary cafe “MONSIEUR JORDAN”V. Gorgasali st.,17Tel.: 275-02-07



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Documents

Construction Business 2015