Issue no: 924/67

MarketsAs of 24 Feb 2017

STOCKS Price w/w m/m BONDS Price w/w m/mBank of Georgia (BGEO LN) GBP 28.64 7,8% +2,3% GEOROG 04/21 105.50 (YTM 5.26%) 0,2%GHG (GHG LN) GBP 3.70 2,4% +8,0% GEORG 04/21 111.56 (YTM 3.82%) +0,1% +0,4%TBC Bank Group (TBCG LN) GBP 14.21 1,5% 5,3% GRAIL 07/22 110.50 (YTM 5.46%) +0,2% +1,0%

BGEOLN 07/23 101.94 (YTM 5.64%) +0,1% +0,1%COMMODITIES Price w/w m/mCrude Oil, Brent (US$/bbl) 55,99 +0,3% +1,0% CURRENCIES Price w/w m/mGold Spot (US$/OZ) 1 257,19 +1,8% +4,0% GEL / USD 2,5800 2,3% 4,1%

GEL / EUR 2,7253 2,6% 5,8%INDICES Price w/w m/m GEL / GBP 3,2156 1,8% 4,6%FTSE 100 7 243,70 0,8% +1,3% GEL / CHF 2,5612 2,8% 4,7%FTSE 250 18 588,64 0,6% +2,7% GEL / RUB 0,0443 2,2% 2,4%DAX 11 804,03 +0,4% +1,8% GEL / TRY 0,7152 1,7% +0,5%DOW JONES 20 821,76 +1,0% +4,6% GEL / AZN 1,4396 3,0% +1,1%NASDAQ 5 845,31 +0,1% +4,4% GEL / AMD 0,0053 1,9% 3,6%MSCI EM EE 147,88 1,4% 0,2% GEL / UAH 0,0958 1,9% 3,1%MSCI EM 943,52 +0,5% +3,8% EUR / USD 0,9468 +0,5% +1,6%SP 500 2 367,34 +0,7% +3,8% GBP / USD 0,8024 0,4% +0,5%MICEX 2 093,09 1,7% 3,7% CHF / USD 1,0075 +0,5% +0,6%MSCI FM 2 570,22 0,4% 0,5% RUB / USD 58,3991 +0,2% 1,5%GT Index (GEL) 1 133,22 3,8% 3,8% TRY / USD 3,6082 0,6% 4,6%GT Index (USD) 860,35 2,3% 0,6% AZN / USD 1,7938 +0,6% 5,2%

NEWS PAGE 3

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facebook.com/georgiatoday

• • FEB. 28 - MAR. 2, 2017 • PUBLISHED TWICE WEEKLY PRICE: GEL 2.50

In this week’s issue...

Continued on page 2

Prepared for Georgia Today Business by

PAGE 11

Making Kutaisi Great Again!

Russia to Cut Oil Supplies to Belarus

Ambassador of Kazakhstan to Georgia Speaks about Georgian-Kazakh Ties in Technical University Lecture

Parliament Adopts Majority’s Bill on Covert Investigation

McCarthy: I See a Hunger to Take Off in Georgia

Government to Invest GEL 4.5 mln in Check in Georgia Project

BY KATIE RUTH DAVIES

In an article written and investigated by Andy Jehring and GEORGIA TODAY's Tim Ogden, for The Sun, UK, it has been revealed that "nearly 100 British boxers may have faced

foreign fi ghters with dodgy paperwork". Matchroom Boxing says it “rings real alarm bells”.

"Pro fi ghters from ex-Soviet bloc coun-tries earn just £15 a fi ght at home — but can make up to £2,000 on the continent. Managers fudge paperwork to send boxers to Britain as punch bags, taking half the cash," The Sun told readers today.

The Sun: Foreign Boxers Fake Stats to Land Lucrative Fights with UK Champs, Georgian Insider Claims

FOCUS ON EUROPEAN SPIRIT

PAGE 3

According to PM Kvirikashvili, Georgian government fully understands theresponsibility that follows the implementation of visa-free travel to EU

GEORGIA TODAY FEBRUARY 28 - MARCH 2, 20172 NEWS

The source, who could not be named over safety fears, told The Sun: “It's a scandal. Top fi ghters in Georgia are fak-ing records to land fi ghts with European boxers.”

A Georgian boxer told The Sun that only three of their home fi ghts were real and they never had a medical check.

Questions have also been raised over fi ghters’ records from four other Euro-pean countries.

"Our source claims the Georgian made up bouts on website BoxRec.com to seal those fi ghts," The Sun claims. And "Fights against Dereck Chisora and Dillian Whyte

The Sun: Foreign Boxers Fake Stats to Land Lucrative Fights with UK Champs, Georgian Insider Claims

Continued from page 1 are among those alleged to have been hit by the scam."

The Sun spoke to BoxRec’s John Shep-pard, who said that they are now asking Georgia and others for video evidence of bouts.

"We only ask for videos if the commis-sion is on the Naughty List. Georgia is on the Very Naughty List,” Sheppard told The Sun.

To see the full article in The Sun, go to www.thesun.co.uk/sport/box-ing/2954457/foreign-boxers-fake-stats-to-land-lucrative-fi ghts-with-uk-champs-a-georgian-insider-claims/.

Read more from Tim Ogden in Friday's GEORGIA TODAY.

On February 22, the eighth Business Café took place at Holiday Inn Tbilisi. The get together was moder-ated by the businessman

and entrepreneur, Guga Tsanava. The topic of the meeting was “The Stanford Model of Management”.

Business Café is a project initiated by consulting company Insource. Through-out 2015 and 2016, the project was exclu-sively supported by PASHA Bank. PASHA Bank is a Baku-based fi nancial institution operating in Azerbaijan, Georgia and Turkey, providing corporate and invest-ment banking services to large and medium-sized enterprises.

Top managers of large enterprises regularly attend the Business Café meet-ings to network and exchange ideas on recent trends in various industries and the economy as a whole. Interesting discussion topics, the high caliber of speakers and an interactive event format all contribute to the rising popularity of the project. It is not unusual for the Busi-ness Cafe meeting to run well over the allotted time frame as participants tend to take a keen interest in the presenta-tions, followed by lively Q&A sessions. Beginning from the fi rst meeting of the year, two new sponsors will be support-ing the initiative - ACT and Orient Logic.

“We are glad to extend our partnership with Insource for the third year running,” said Anano Korkia, Head of PR and Mar-

Business Café Meeting #8

keting Department at PASHA Bank. “In 2017, PASHA Bank will remain the Gen-eral Sponsor of Business Café. We are most happy to welcome the new partners of the project and hope that our coop-eration will have a positive impact on further development and success of the Business Cafe. The year’s fi rst meeting was dynamic and informative; the posi-tive feedback we receive and the growing number of people wishing to attend the meetings clearly indicates that the project is truly successful and anticipated.”

Among the speakers and presented topics of the previous Business Café meetings were:

- Lado Gurgenidze, former Prime Min-ister of Georgia, an executive chairman of the supervisory board of Liberty Bank with the topic “Thoughts about manage-

ment and leadership”- Giorgi Kadagidze, former president

of National Bank of Georgia, with the topic “Innovation management”

- Alexander Jejelava, Minister of Edu-cation of Georgia - “Organizational corporate culture“

- David Gogichaishvili, general man-ager of Night Show Studio – “Manage-ment of human resources”

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

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

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

BY NINO GUGUNISHVILI

Georgian wine, Chateau Sva-nidze, won a Grand Prix, a Gold Medal and a PRO-DEXPO Star at the wine degustation competition

held during the International Exhibition for Food, Beverages, and Food Raw Mate-rial in Moscow, Russia.

Giorgi Svanidze with an award at Prodexpo

Georgian Wine Wins Grand Prix & Gold Medal at PRODEXPO, Russia

Chateau Svanidze wine won in a contest in which alcoholic beverage industry lead-ers from almost 100 countries participated.

“This victory is another step forward towards the popularization of Georgian wine and towards raising awareness,” said Giorgi Svanidze, the founder of the Chateau Svanidze Company.

Chateau Svanidze plans to introduce more brands to consumers in the near future, making them available on both local and export markets.

BY NINO GUGUNISHVILI

Saba publishing house, the Tbi-lisi Municipal Government, and the Presidential Fund are to launch electronic libraries in the streets, parks and gar-

dens around the area of Tbilisi. The new

Tbilisi to Have Free Electronic Street Libraries

project, City Library, is to make hundreds of e-books available for download. There will be over 300 electronic library stands throughout the city. Using the Saba Reader application, the Saba Publishing House collection will be available free of charge.

The City-Library project is expected to become a literary guide to the city, in an attempt to transform the city into an

open-air library. The electronic library planning has just

begun and will be fi nalized in April. Begin-ning with fi fty streets named after famous Georgian writers, electronic library stands will be created listing the author’s works with QR codes to download the works. The electronic library stands will also be installed in 12 parks around the city, and at every metro station.

GEORGIA TODAY FEBRUARY 28 - MARCH 2, 2017 3NEWS

BY THEA MORRISON

Offi cial Tbilisi confi rmed last week that a citizen of Georgia, Soso Osurauli, a former Georgian serviceman who left the Georgian Armed Forces in 2015 and was working in Congo on a private

contract, was captured on January 27 by rebels after two Congo Air Force helicopters were shot down.

Another Georgian was also with Osurauli during the incident. He was said to have been injured but, as Georgia’s Ministry of Foreign Affairs (MFA) reports, he is being treated in eastern Congo and is now safe.

“On February 22, the Georgian Embassy in Pre-toria was informed by the Congolese side that a Georgian citizen had been captured and another wounded by an opposition group after a helicopter was shot down. The wounded is being treated in Goma, eastern Congo and is now safe,” the MFA

Rebels in Congo Capture Former Georgian Serviceman

report claimed.The ministry says it is in permanent contact with

the Government of Congo to keep on top of the latest situation and to protect legal rights of the Georgian citizens there.

Beka Dvali, Georgian Ambassador to South Africa, confi rmed that Osurauli was captured by the March 23 Movement, a rebel group in the eastern part of the Democratic Republic of Congo. According to the Ambassador, the health of the Georgian soldier is not at risk.

“Dialogue is underway through all diplomatic channels to free the Georgian citizen… We should act carefully to get positive results,” he said.

Georgia’s National Security Council Secretary, Davit Rakviashvili, also commented on the issue. “The President’s Administration is doing its best to protect the rights of Georgian citizens,” he said.

Rustavi 2 reports that, according to the relatives of Osurauli, the rebels are demanding $1 million in exchange for his life. This information has yet to be offi cially confi rmed.

BY NINO GUGUNISHVILI

The Government of Georgia is to sup-port musical, sports and other activ-ities united under the Check in Geor-gia concept, it was announced at a conference in Rooms Hotel Tbilisi

last week.The meeting was attended by Ketevan Bochorish-

vili, Deputy Minister of Economy and Sustainable Development; Sergi Gvardjaladze, Head of the Junior Eurovision Song Contest in Georgia; and Dimitry Beridze, Black Sea Arena Director.

The Check in Georgia 2017 program is to bring together cultural and business activities with the aim of promoting the image of the country, with an overall budget of 4.5 million GEL, half of which will go to Georgian artists’ performances and the remain-der to be given to promoters to present projects with both Georgian and international performers.

“This will be a good example of public–private partnership, with fi nancial participation that will consequently raise effectiveness and motivate Georgian companies to get involved,” Bochorishvili said. “It will also help Georgia to establish itself as a place for numerous international events.”

That Georgia will this year be hosting the Junior Eurovision Song Contest is highlighted as being very important, and yet another possibility to introduce

Government to Invest GEL 4.5 mln in Check in Georgia Project

the country to a wider audience, since the contest will be broadcasted in almost 20 countries, reaching an anticipated 20 million viewers worldwide.

“Georgia is also to host a number of international sports events throughout the coming year,” said Akaki Lodia, Deputy Minister of Sports and Youth Affairs of Georgia. “These will include world and European championships and international tour-naments.”

“We have the relevant experience to host inter-national tournaments. In 2017, ten major sports events are planned in Georgia, to be attended by vistors from 70 countries. This will, of course, also benefi t our tourism sector,” Lodia added.

Promoters will be chosen through expressions of interests and will then be offered the chance to organize top cultural events at the Black Sea Arena through the months of June – September 2017. The applications will be assessed by a special commis-sion with qualifi ed specialists in the fi eld.

The invitations to express interest will be uploaded on the State Procurement Agency website with all requirements detailed.

“The project seeks to support Georgian promot-ers to get integrated into the international scene,” Beridze said.

The cultural events planned on the Black Sea coast in 2017 are expected to boost regional devel-opment and offer a chance for the local population to increase income. The 2017 calendar for Check in Georgia is expected to be announced shortly.

EU Commissioner: Georgians to Enjoy Visa-free Regime with EU from Late March

BY THEA MORRISON

European Union (EU) Commissioner for Migration and Home Affairs Dimitris Avramopoulos stated at the meeting with Georgian Prime Minister, Giorgi Kviri-kashvili on February 27, that citizens of

Georgia will be able to have the benefi t of short-term visa-free travel in Schengen member countries from late March.

The EU Commissioner reiterated that Georgia has made progress in all areas and the EU recog-nizes this.

The PM’s Press Offi ce reports that the offi cials discussed visa-liberalization issues, as well as plans to develop migration and security ties between the EU and Georgia.

The offi cials held a joint press conference after the EU Transport, Telecommunications and Energy Council adopted a regulation on visa liberalization for Georgians travelling to the EU for a period of stay of 90 days in any 180-day period.

“This result proves that the EU has not reneged on its promise. Today, the European spirit is stronger in Georgia than anywhere else. The European ide-ology triumphs in Georgia more than ever. A uni-fi ed Europe with its common foreign, security and economic policies would be embraced by Georgia and its citizens. My fellow Georgians, I congratu-late you on this day! I also congratulate Europe because Georgia, as an integral part of European civilization, has drawn even closer today to its European family,” Kvirikashvili stated.

Kvirikashvili thanked Dimitris Avramopoulos for his contribution to the Georgia-EU visa liberaliza-tion process. He also thanked the EU member states and the European Parliament for their support.

“Visa-free access to the European Union will bring tangible, concrete benefi ts to the citizens of Georgia. Visa-free travel to the EU member states will promote closer tourism, educational, cultural, and business relations between our societies, also contributing to the introduction and advancement of European values and ideals in Georgia,” said Kvirikashvili, adding that the Georgian government fully understands the responsibility that follows the implementation of visa-free travel to EU.

The EU Commissioner also congratulated Geor-gians, adding the decision of the EU Council was another step towards the completion of the process.

“I am absolutely sure that Georgians will main-tain the conditions of the process, and will fulfi ll the relevant requirements… A fi nal decision has already been made and the time has come to cel-ebrate this step forward together,” Avramopoulos stated.

Moreover, Kvirikashvili and Avramopoulos had a walk along the recently renewed Aghmashenebeli Avenue, where they had a meeting with represent-atives of Georgian culture, education and science at a local café.

Avramopoulos said that he had personally been working to aid the process of helping Georgia achieve this important aim over the course of the last two years.

The European Parliament (EP) voted in favor of visa-free travel for Georgian citizens to the Schen-gen Area at the plenary session on February 2nd.

When the process is complete, biometric passport holders will be able to enter the Schengen area, which includes 22 EU member states (excluding Ireland, the United Kingdom, Croatia, Cyprus, Romania and Bulgaria) in addition to Iceland, Liechtenstein, Norway, and Switzerland for 90 days within any 180-day period for a holiday, business, or any other purpose, except work.

Georgian Prime Minister, Giorgi Kvirikashvili:Today the European spirit is stronger in Georgia than anywhere else. The European ideology triumphs in Georgia more than ever.

GEORGIA TODAY FEBRUARY 28 - MARCH 2, 20174

THE ISET ECONOMISTA BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS www.iset-pi.ge/blog

The ISET Policy Institute (ISET-PI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). Our blog carries economic analysis of current events and policies in Georgia and the South Caucasus region ranging from agriculture, to economicgrowth, energy, labor markets and the nexus of economics, culture and religion. Thought-provoking and fun to read, our blog posts are written by international faculty teaching at ISET and recent graduates representing the new generation of Georgian, Azerbaijani and Armenian economists.

BUSINESS

Kutaisi City. Source: wex.ge

BY IA KATSIA

Have you ever heard about a mysteri-ous law that predicts the size of a city? If you tell me the population of the largest city in a country, I can tell you the size of the second and

third largest cities. In 1949, George Zipf came up with the simple

theory called the rank-size rule, or “Zipf 's law.” Applied to the size of cities, this law says that the second city and following smaller cities should represent a proportion of the largest city. For example, if the largest city in a country is popu-lated with one million citizens, according to the law, the population of the second city would be one-half of the fi rst. The third would contain one-third and so on. Of course, this is not true for all countries. However, many nations, especially in the developed world, display this kind of pattern in terms of their cities populations (e.g. the USA).

Another famous concept, called “Primate City,” was developed even earlier, in 1939, by Mark Jef-ferson. The idea behind the concept is the follow-ing: Primate City is a main city, with a population at least three times larger than the second largest city (for numerous countries, the gap is much

Making Kutaisi Great Again!bigger), with many much smaller cities and towns in the country. A Primate City is not only large by population, but also represents economic dominance and is the cultural center of national identity. It creates most of the jobs, and the rest of the country depends on it for major economic, political, cultural, and transportation needs. It should be noted that the concept of Primate City is not directly related to a country’s development rate. For example, we could think of the United Kingdom with London (7 mln) as the Primate City and the second largest city as Birmingham, popu-lated by 1 mln people. However, many less devel-oped countries tend to follow a high degree of primacy, while most developed countries have a low degree of primacy. Two factors that affect high primacy include: having an underdeveloped economy, and/or an agriculturally dominant economy.

THE GEORGIAN CONTEXT The last concept describes the situation in Geor-gia, where the capital city of Tbilisi is populated by more than 1.1 mln people, followed by many much smaller cities like Kutaisi (147,000 people) and Batumi (154,600 people).

While having a Primate City in developed coun-tries does not create a signifi cant dilemma (such examples are rather rare), it could be a hindering

factor for the development of less developed countries like Georgia.

Why is having Tbilisi as Georgia’s Primate City a potential problem? The main negative effect is that it develops faster than other parts of the country, causing an unequal distribution of wealth, power and investments between regions, unequal distribution of education, unequal economic and resource development, and negative externalities, such as unsustainable urban growth, that affects environmental stability.

In 2006, the population of Kutaisi was 190 thou-sand people. It has now decreased by around 30% (Geostat 2016). The highest rates of migration are to Tbilisi or abroad. Possible reasons are related to the unequal distribution of education, which causes "brain drain" from smaller settlements to a Primate City, low employment opportunities, low level of attraction for businesses, and lower opportunities for individual progress.

If we look at incomes across regions, a large gap can be observed. According to Geostat, the aver-age monthly income per capita in Tbilisi is 60% higher than in the Imereti, Racha-Lechkhumi and Kvemo Svaneti regions. The average monthly remuneration of employed persons in Imereti is 604.6 GEL, whereas it is 1006.7 GEL in Tbilisi (a 67% difference).

Tbilisi serves as the political and fi nancial hub of the country. The previous government tried to decentralize political institutions by moving Georgian Parliament from Tbilisi to Kutaisi in 2012. The rationale behind this move was to bring economic development to the city, and the region with it. However, the move was not followed by large positive changes in the city as expected.

IS AN UPSURGE OF KUTAISI FINALLY HAPPENING?Recent trends suggest that the situation may be changing, and that Kutaisi is catching up with Tbilisi. The data from the ISET Khachapuri Index has already hinted at possible positive dynamics; in recent months, the khachapuri continues to be more expensive in Kutaisi than in other cities. One explanation of this could be demand. Accord-ing to the Georgian National Tourism Adminis-tration (GNTA), the number of tourists visiting the country went up by 19.8% in January 2017, compared to last year (January 2016). Also, the number of fl ights at Kutaisi International Airport increased by 121% in January 2017 y-o-y.

Kutaisi International Airport has the cheapest fl ights in Georgia, and we see the corresponding increasing demand. Furthermore, the airport re-acquired a transportation hub function for Kutaisi, so it is very easy to visit Mestia, Tskaltubo and/or Georgia’s seaside from the airport.

Positive changes were also observed in real estate data. The number of ads (for fl ats, houses, and commercial property) in Kutaisi in the fi rst half of 2016 went up by 70% compared to the second half of 2015. Furthermore, the number of transac-tions (sold fl ats and houses) in 2016 increased by 13% y-o-y.

Recent business investments in Kutaisi also give some hope for possible positive changes. The opening of a Free Industrial Zone in Kutaisi has slowly started to attract businesses. A good exam-ple is the Hualing Group, which has invested $30 mln. At present, there are fi ve enterprises operat-ing in the Hualing FIZ: wood processing, furniture production, stone processing, metal construction, and mattress production. Another possible invest-ment ($12mln) is planned by investors from Dubai to start solar panel production in Kutaisi under the terms of the Free Industrial Zone.

According to recent information, international brands are interested in entering the Kutaisi mar-ket. A second McDonald’s branch will be opened in Kutaisi, followed by Dunkin Donuts and Wen-dy’s this year.

Moreover, Kutaisi may regain its function as an academic center, as Cartu Fund is planning to invest EUR 1 billion to build the Kutaisi Campus Univer-sity. The university, able to accommodate 60,000 students, will be equipped with modern infrastruc-ture, staffed by Georgian and foreign academic professionals, and will offer modern academic and research programs for Georgian and foreign stu-dents. This is a great opportunity for Kutaisi to become an educational hub in the region!

The development of Kutaisi as a center of West Georgia will relieve the current pressure on Tbi-lisi and also will create a strong regional center. It is very important to decentralize functions and powers, from Tbilisi to the regions, in order to follow a sustainable development path in the country. Hopefully, these developments will be followed by increased opportunities for employ-ment and industrial changes, so that fewer people migrate to the capital.

And yes! I am from Kutaisi and I want Kutaisi to be great again.

GEORGIA TODAY FEBRUARY 28 - MARCH 2, 2017 5BUSINESS

BY NINO GUGUNISHVILI

The Business and Technol-ogy University (BTU) last week presented its new creation: an artifi cial intel-ligence (AI) program for

organization management. The program, a total innovation for Georgia, is said to have no analogue anywhere else in the world.

“I’m very proud that the new product was made at BTU specifi cally,” says Micheil Batiashvili, the University Head.

The new invention is expected to revolutionize and ease the management process for organizations. A techno-logical assistance tool, it offers recom-mendations and can even participate in the decision-making process. The AI program delivers information on fi nan-cial operations, planned activities and existing problems to the management of organizations, offering suitable solu-

Artifi cial Intelligence Interface

BTU Georgia Presents Artifi cial Intelligence Program

tions. The program can be implemented on local and international markets and BTU is already using it.

“The work to create and launch the AI program took several months. It’s a tech-nichal assistant that will help company directors to manage and facilitate their working process,” Batiashvili added.

BY DIMITRI DOLABERIDZE

Russia plans to cut oil sup-plies to Belarus from 4.5 to 4 million tons in the fi rst quarter after the parties failed to fi nd a solution to

the gas dispute.The Ministry of Energy of Russia trans-

ferred the new delivery schedule to Belarus on December 28, 2016. The Bela-rusian side expressed its dissatisfaction to Deputy Prime Minister Arkady Dvork-ovich concerning this approach.

Russia to Cut Oil Supplies to Belarus

“If this level of supply is maintained, instead of the projected 18 million tons for the year, Belarus can only expect 16 million,” they said. The Ministry of Energy made no comment.

With the reduction of deliveries, Moscow wants to exert pressure on Minsk to make her repay the debt for gas at a rate of more than 400 million dollars.

Said debts have accumulated since January 2016, when Belarus demanded a reduction on raw material costs and unilaterally decided to pay less. Moscow linked the gas issue with the supply of oil, reducing it from the promised 5.3

million tons in the fi rst quarter to 3.5 million tons, and in October-December to 3 million.

It was assumed that by the end of 2016, the parties would reach an agreement- and they were close to a compromise. In this regard, the oil supply in the fi rst quarter should have been increased to 4.5 million tons. Moscow agreed to pro-vide a grant through the enrollment of customs duties for Russian oil to the budget of Belarus, which was, in turn, to repay the gas debt. However, Minsk asked for additional concessions, and as a result, the countries have not yet come to the expected agreement.

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Kabul Launches Survey Work on TAPI Gas Pipeline ProjectBY DIMITRI DOLABERIDZE

At the presidential palace in the Afghan capital, survey works were launched on construction of the Turk-menistan-Afghanistan-

Pakistan-India (TAPI) gas pipeline. This is to include a study of the route, and engineering and feasibility studies for a gas facility in Afghanistan.

The launch ceremony was attended by the President of Afghanistan, Moham-

mad Ashraf Ghani, the heads of minis-tries and departments of the participat-ing countries of the project, the consortium TAPI Pipeline Company Ltd

and the company ILF Beratende Inge-nieure GmbH.

Similar surveys are expected to begin on the territory of Pakistan in the near future.. A contract was signed between TAPI Pipeline Company Ltd and ILF Beratende Ingenieure GmbH on January 17, in Ashgabat, for provision of services for project management and technical supervision for the TAPI pipeline.

The contract provides for cooperation between the parties prior to the stage of making a fi nal investment decision on the TAPI project.

The construction of the Turkmen section

of the TAPI gas pipeline, to be some 214 km long, was begun in December 2015 and works are said to be running on schedule.

SC Turkmengaz, under TAPI Pipeline Company Ltd, is the primary fi nancier of the project, as well as manager. The consortium also includes Afghan Gas Corporation, Pakistani Inter State Gas Systems (Private) Ltd and India’s GAIL.

The total length of the pipeline will be 1814 kilometers, including 774 kilometers across the territory of Afghanistan and 826 kilometers to be laid in Pakistan until Fazilka village on the border with India. The gas pipeline will have an expected

annual capacity of 33 billion cubic meters of gas, starting at the close of 2019.

The Government of Turkmenistan has submitted a request for funding of $700 million from the ADB to be used to cover the cost of materials, works and services within the TAPI project.

The Turkmenistan–Afghanistan–Pakistan–India Pipeline (TAPI), also known as Trans-Afghan-istan Pipeline, is a natural gas pipeline being developed by the Asian Development Bank. The pipeline will transport Caspian Sea natural gas from Turkmenistan through Afghan-istan into Pakistan and then to India.

GEORGIA TODAY FEBRUARY 28 - MARCH 2, 20176

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BUSINESS

INTERVIEW BY MANUELA KOSCH

The Caucasus has many stun-ning mountains, most of which are only accessible if you have a high level of mountaineering and climb-

ing skills. Kazbegi is unique in that, with the proper training and guides, it can be climbed even by amateurs. The current shelter is situated at an altitude of 3700m- which inexperienced climbers would struggle to reach in a day. Further, there are sanitation and safety issues affecting the local environment. To help boost the potential of Mount Kazbegi, three Geor-gian entrepreneurs aim to build a new cabin- which will include a café, safety services, accommodation and equipment hire -on Mount Kazbegi.

Named Alticabin, it is expected to be ready to host its fi rst tourists in summer 2018. GEORGIA TODAY met David Chi-chinadze, one of the entrepreneurs, to talk about the project.

WHY DOES MOUNT KAZBEGI NEED ANOTHER CABIN?The existing cabin is situated above the Glacier at an altitude of 3700m- making it too high for many people to reach in one day. The existing facilities have a poor waste management system and a lack of safety support. The current envi-ronmental impact on the mountain is an increasing concern. With Alticabin, we intend to address these issues by provid-ing a well maintained, modern, environ-mentally friendly cabin with proper sanitary and waste management solu-tions, along with a clear strategy to develop sustainable mountain infrastruc-ture on Kazbegi such as hiking and mountain biking trails to reduce the human impact on the mountain even with the anticipated increase in visitors.

With Alticabin, we want to bring the enjoyment of mountaineering to a big-ger audience in a sustainable and envi-ronmentally friendly way by creating trails and infrastructure around the cabin, but keeping the human footprint there to a minimum.

New Mountain Cabin to Be Built on Mount Kazbegi

WHO CAME UP WITH THE IDEA?There are three of us in the team, each bringing skills and experience in vari-ous areas which are essential to the success of the project. Nika Alavidze, a long-time mountain biker and hiker, with many years’ experience in the fi nance industry, previously worked in the highest positions in the leading banks of Georgia. He is now involved in Private Investment Fund manage-ment and himself acts as an angel inves-tor. He's responsible for the fi nancial side of the project.

Mamuka Nikoladze, who originally set up the mountain rescue service in Geor-gia, is a prominent geologist, GIS spe-cialist and adviser to the emergency services and other government depart-ments within the tourism and protected areas fi elds.

As for me, I’ve been actively involved with the establishment of the Georgian mountain rescue services and have worked with the Swiss Development Agency for many years managing disas-ter risk reduction and several construc-tion projects in diffi cult-to-reach loca-tions, including high mountain regions of Georgia. I’ll be overseeing the con-struction of the project.

WHERE WILL THE CABIN BE BUILT?The cabin will be situated below the Gergeti Glacier, at 3000m- 800m above Sameba church, where most people will start their journey, and 700m below the Bethlemi cabin. It will be within the rec-ommended altitude increases for accli-matization for those wishing to head to the summit. It’s also ideally located for visitors to hike to see the Glacier or sim-ply to the cabin and back.

WHAT SERVICES WILL BE PROVIDED AND WHO IS YOUR MAIN TARGET GROUP?Along with a café/restaurant, there will be accommodation for up to 30 people, toilets, showers, washing facilities, a shop, rental equipment, mountain guides, and we will accommodate mountain rescue services. The main target group will be hikers, day trip-

pers visiting the glacier, mountain bik-ers, ski tourers in winter and, of course, climbers.

WILL THERE BE POWER AND WATER SUPPLY?Yes. We will have a fresh water supply along with solar power and a generator for emergencies.

WHO WILL OPERATE THE CABIN?We are currently looking for young, motivated locals experienced in all aspects of mountaineering to manage the cabin. They’ll be trained by us and our Swiss partners to offer the highest level of ser-vice and safety.

HOW ARE YOU FINANCING THIS PROJECT?The project is an impact investment opportunity which is being privately fi nanced to support mountain infrastruc-ture development, create trail infrastruc-ture, boost local employment and attract tourists into the area. Although private fi nances are available to fund our initia-tive, we remain open to attract like-minded investors and see their invest-ments channeled into our venture.

WHAT WILL CONSTRUCTION COST?The current estimation is $400,000.

WHAT IS THE LARGEST CHALLENGE IN BUILDING A CABIN IN THIS AREA?One of the main challenges is the cur-rent lack of access to the mountain, mak-ing it logistically very tough to transport

materials up there. That said, we are confi dent we can rise to the challenge, having already installed a much need bridge last summer over the river below the glacier, allowing people to cross safely.

THE PLACE IS INACCESSIBLE BY CAR. HOW WILL THE CONSTRUCTION MATERIALS BE TRANSPORTED?We have the use of a helicopter to lift heavy materials to the site, along with the use of pack horses for lighter materials.

HOW WILL THE CONSTRUCTION OF THE CABIN IMPACT THE SURROUNDING ECOSYSTEM?The aim is to have as little environmen-tal impact on the area as possible, which is why we’ll be using the helicopter and pack horses. Additionally, the site will quickly be restored to its natural state upon completion.

IS THE LOCATION SAFE FROM NATURAL HAZARDS?Yes. While selecting the site, we con-sulted avalanche specialists, disaster risk reduction specialists, geologists and fl ood zone specialists before fi nally deciding on the location to minimize the chance of risk from natural hazards.

IN AN EMERGENCY, THE CABIN CAN BE CONSIDERED QUITE ISOLATED. HOW WILL YOU ENSURE THAT THE BUILDERS, THEN LATER THE STAFF AND TOURISTS, WILL BE SAFE?We're planning to accommodate a moun-tain rescue unit within the cabin so that they will be closer to the area of poten-tial risk and therefore able to respond faster should the need arise. We will also have safety equipment on site and the staff will have medical emergency train-ing.Find out more on www.altitude.ge

GEORGIA TODAY FEBRUARY 28 - MARCH 2, 2017 7BUSINESS

Adjara Tourism Department at International Tourist Fair in Wroclaw

BY NINO GUGUNISHVILI

The tourism potential of the Adjara region was show-cased at the 9th Interna-tional Tourist Fair in Wro-claw, Poland, seeing visitors

express particular interest in the eco-tourism, culinary and skiing destinations in Adjara, Georgia.

The Adjara Tourism Department rep-resentatives who participated in the exhibition alongside the Georgian National Tourism Administration (GNTA) and various Georgian tourism agencies, met with advertising and tour-ist companies during the event to discuss

further opportunities for billateral coop-eration.

The Marshal of Silesian Voevodship visited the Georgian stand at the fair, together with Davit Gabaidze, the head of Adjara’s Supreme Council. The coun-cil delegation participated in the opening ceremony of the event and the press con-ference, where Gabaidze talked about the importance of regional collaboration and discussed the projects already completed.

By the end of the year, the Adjara Tour-ism department plans to participate in two more exhibitions in Poland, in Kato-wice and in Warsaw. Poland is regarded as one of the key tourism markets to explore for the Adjara region, and a spe-cial marketing campaign in that regard is to be launched from spring this year.

BY NINO GUGUNISHVILI

Ermukhamet Ertisybayev, Ambassador Extraordinary and Plenipotentiary of the Republic of Kazakhstan to Georgia, gave a lecture at the

Tbilisi Technical University on Friday to mark the launch of a special course on the history and culture of Kazakhstan.

While introducing the 'Third Mod-ernization of Kazakhstan - A bridge to the Future' program, announced in Jan-uary this year by Nurusltan Nazarbayev, President of Kazakhstan, to an audience of students and professors, the Ambas-sador highlighted the importance of the Georgian-Kazakh relations.

He gave a detailed overview of Kazakh-stan’s historical, socio-economic and political development and the future goals and prospects of the country, not-ing that Kazakhstan and Georgia will be marking the 25-year anniversary of the diplomatic relations in May 2017.

Among the many topics discussed dur-ing the lecture, the Ambassador men-tioned the importance of regaining ter-ritorial integrity and unity for Georgia.

While discussing the possibilities of economic growth and the process of economic reform implementation in Georgia, Ambassador Ertisybayev sug-gested that the potential visa-free regime

Ambassador of Kazakhstan to Georgia Speaks about Georgian-Kazakh Ties in Technical University Lecture

and improved diplomatic relations with Russia would be an important step for the country.

“Georgia is a very important strategic partner for Kazakhstan, the country through which we’ve been able to reach the Black Sea following the agreement signed between our two countries dur-ing the visit of our president, Nursultan Nazarbayev, to Georgia in 2005,” Ertis-ybayev said. “Georgia is the only coun-try in the world into the economy of which Kazakhstan has invested massively, with projects like the Batumi Sea Port, the Borjomi and Likani resort develop-ment, and other projects being realized with fi nancial investments from Kazakh-stan; all of it possible thanks to the tight trade and economic cooperation between the two countries.”

The Ambassador then went on to describe the huge International Expo planned for the summer of 2017 in Astana, which almost three million tourists are expected to attend.

“Our country is ambitious. We have the means to have the largest exhibition in history. A whole new city has been built for the Expo, with modern archi-tectural buildings, and Georgia is to have a large pavilion there. The theme- Energy of the Future -is very important for Geor-gia, in terms of new energies and hydro-technology,” the Ambassador said, add-ing that from June 2017 throughout the entire expo period, seven fl ights will be available to Almaty and four to Astana from Tbilisi. Everyone fl ying to Astana will be given free tickets to the expo.

The Ambassador then suggested launch-ing a joint initiative together with the Tbilisi Technical University, and attract-ing Georgian and Kazakh businessmen

to give the students who successfully pass their exams the chance to attend Expo 2017 for free. Enhancing coopera-tion between the Technical University and educational institutions of Kazakh-stan was also noted as a future step of mutual collaboration.

The second part of the lecture focused on the Third Modernization of Kazakhstan declared by President Nazarbaev in Janu-ary. The program focuses on creating a new model of economic growth to ensure the country’s global competitiveness. The modernization plan includes fi ve main priorities: acceleration of technological modernization of the country, improve-ment and expansion of the business envi-ronment and microeconomic stability, improving the quality of human capital, institutional change, security, and the fi ght against corruption. Increasing the power of parliament is a part of the constitutional reforms planned. The reforms aim to help Kazakhstan achieve the status of “most developed country” by 2050.

The meeting and lecture of the Ambas-sador of Kazakhsan was rounded up with a question and answer session, with top-ics ranging from the experience of the professional trade unions in Kazakhstan to the market economy.

“We deeply respect Georgia’s choice to be a member of European Union. But in order to be a real member of the EU and have the same rights as the other countries, in my personal opinion, it will take a whole historical era to modernize the country and make the necessary changes in mentality. Having a free trade zone with Europe for Georgia is an excel-lent chance and we are very happy with the fact that you’ll have a visa-free regime,” the Ambassador said.

GEORGIA TODAY FEBRUARY 28 - MARCH 2, 20178 BUSINESS

Investing in Georgia is becoming more and more attractive for foreigners. The stable political situation, sustainable and fast devel-oping economy, diverse nature and developing tourism are the key factors that infl uence them

to believe this an environment worth investing in.MAQRO Construction offers the best opportunity,

product and payment terms to make the multifunc-tional residential complex Green Diamond an ideal investment.

We spoke to MAQRO Construction’s Deputy Gen-eral Director, Oguz Kaan Karaer.

TELL US ABOUT MAQRO CONSTRUCTION’S LARGE SCALE INVESTMENT, THE RESIDENTIAL COMPLEX GREEN DIAMOND The new residential complex of MAQRO Construc-tion company, Green Diamond, launched on May 28, 2016 consists of three stages of construction, with the fi rst seeing 731 units ready to move into by May, 2018. 500 units have already been sold, but we still have over 200 units available.

In Green Diamond, there are four unit types: • 2 room apartment of an average 35 – 45 m2, with

a starting price of $ 30 000 • 3 room apartment with open kitchen – of an aver-

age 55 m2, starting at $ 45 000• 3 room apartment with close kitchen – of an

average 75 m2, starting at $ 60 000• 4 room apartment – 95 m2, with a starting price

of $ 80 000For payment in full, customers can enjoy a 15%

discount from the listed price.It sounds unbelievable that in just 55 sq.m you can

fi t a three-room apartment, in 35 sq.m you can get two rooms, but in Green Diamond it is possible thanks to the optimal planning- and this is one of the strongest sides of the project.

Customers have the chance to see the show rooms of all four apartments in the sales offi ce, simplifying the buying process and showing them exactly what they will get. For those customers wanting something bigger, Green Diamond is offering apartments on the top two fl oors of the buildings with up to 250 m2.

The unique residential complex is being built in an ecologically clean district of Tbilisi, near to the Olympic facilities. Next to Green Diamond will be the mega project Technological University, unique in Eastern Europe. The area of the residential com-plex is almost 70.000 m2 with more than 23.000 m2 of enclosed green territory- it is an ideal chance for residents to try a unique, brand-new and affordable life in Tbilisi. In the complex, you will fi nd 23 living blocks (9, 11, 21 fl oor buildings) and 1772 units. You will be able to satisfy all your needs, including with three swimming pools, four basketball areas, four outdoor fi tness areas, four children’s playgrounds, seven pergolas, indoor sport facilities, walking and running tracks, commercial areas, social terraces, a kindergarten and a school.

As Green Budapest is the fi rst residential complex, it became the visit card of MAQRO Construction’s quality. Green Budapest is currently handing over units, so people can be assured of the high quality, as in Green Diamond the construction and renova-tion materials will be exactly the same as in Green Budapest. Those interested can visit the informative and interactive sales offi ce to see the units and con-struction materials for themselves.

Creating a proper product, optimal planning, affordable prices and fl exible payment conditions have lead to the success of Green Diamond. People are grabbing this opportunity very actively and this makes us happy, too.

YOU SAY THIS IS THE BEST REAL ESTATE OPPORTUNITY FOR FOREIGN INVESTORS IN GEORGIA. TELL US MOREGreen Diamond is becoming very popular among foreigners wanting to own an apartment in an eco-logically clean district of Tbilisi, and I’m proud to say that among the future residents of Green Diamond

Build Yourself a Bright Future – Invest in Green Diamond

are not only locals, but residents from several coun-tries, including UAE, Qatar, Kuwait, Turkey, Iran, and Russia. Foreigners can take advantage of applying for residency after investing $35,000 in Georgia, so Green Diamond is an opportunity not to be missed!

HOW PROFITABLE IS IT TO INVEST IN GREEN DIAMOND?Investing in Green Diamond is very profi table for buyers. First of all, the unit planning and concept of the complex are very attractive, with a starting price of $800 per sq. meter. If the buyer pays in full, that price is just $700. In May 2018, when the construc-tion of the fi rst stage is fi nished, the customer can get approximately 50% profi t within just two years. I think you agree that this is a very high indicator.

A second example: A three-room $50,000 apartment in Green Diamond residential complex can easily be rented out for $500 a month. That means that the owner can recover the amount paid in just eight years with an early 13% return. In the real estate business, these rates are really high compared to other coun-tries, where the yearly return is around just 5-6%.

MAQRO GROUP IS ONE OF THE LARGEST INVESTORS IN GEORGIA. WHY HAS GEORGIA BECOME AN ATTRACTIVE INVESTMENT DESTINATION FOR THE COMPANY?Since 2013, the Company has been bringing together a variety of projects, including residential complexes with unique concepts, Green Diamond and Green Budapest, the international 4-star Hotel Mercure Tbilisi Old Town, Hotel Ibis Styles (to open in March), Furniture Factory Glorya, Furniture store chain Bel-lissa and restaurant Dinehall, unique for its culinary creations and boasting a marvelous interior.

As, in Georgia, there is a healthy and stable invest-ment environment, we recognized the need for quality construction on the Georgian market. There-fore, we decided to share our own experience and to this day make huge and valuable investments. The residential complexes Green Diamond and Green Budapest are the largest-scale investments of international holding MAQRO Construction. Green Budapest, based on preliminary information published by the National Statistics Offi ce of Geor-gia (NSOG), belongs to the ten largest investments of 2015 according to the amount of direct foreign investments made to the country, including Hotel Mercure Tbilisi Old Town. The key to our success at MAQRO Construction has been a responsive approach to business and quality control, and the management team’s ability to recognize changes in the marketplace and adapt to them. MAQRO Con-struction continues to invest in the Georgian market and has ambitious plans for the future.

WHAT IS THE KEY TO THE SUCCESS OF MAQRO’S PROJECTS?Flexible and unprecedented payment conditions are one of the main reasons for selling apartments so well in Green Diamond. MAQRO Construction gives an opportunity for customers to use monthly payment and helps them to simplify the purchasing process.

General payment terms are extremely tailored to customers: 10% - fi rst payment, and 30% of the total amount is distributed over 30 months, so it means that customers are paying only 1% monthly. When the construction is completed (May, 2018), custom-ers need only pay delivery payment- 60%.

The initial price for the fully renovated units with kitchen furniture, built-in appliances and bath head-set is from $30,000. The clients can pay 3,000 USD for the fi rst payment and $300 per month thereafter.

WHAT ARE MAQRO CONSTRUCTION’S FUTURE PLANS?In March, hotel Ibis Styles will be opened and soon we will launch the second stage of Green Diamond and use all the opportunities to develop other future projects.

GEORGIA TODAY FEBRUARY 28 - MARCH 2, 2017 9BUSINESS

BY THEA MORRISON

Georgian parliament on Friday adopted a Bill on Convert Investigation pro-posed by the ruling Georgian Dream (GD) party.

In the legislative body with 150 law-makers, where GD has 115 MPs, 89 voted in favor and 20 were against.

The legislative package provides for the creation of a legal entity of public law (LEPL) the Operative-Technical Agency of Georgia, which will be respon-sible for covert surveillance. The Agency will be under the supervision of the State Security Service (SSS), however, the agency will be accountable to the Prime Minister and will submit a generalized report of its activities annually to the PM.

The responsibilities of the Agency will include: hidden surveillance of phone communication; retrieving information from computer systems; control of post offi ce transfers; secret audio and video surveillance; and photographic surveillance.

The initiative of the new bill on covert investiga-tive actions was raised after the Constitutional Court of Georgia ruled on April 14, 2016, that the existing model of surveillance, with the Interior Ministry and Personal Data Protection Inspector as key players, needed to be changed.

The Court stated that the legislation allowing the police to have direct, unrestricted access to telecom operators’ networks to monitor communications was unconstitutional and set March 31, 2017 as the deadline for implementing the court’s decision and replacing the existing surveillance regulations with new ones.

Now, according to the bill, access to surveillance will be in the hands of the new LEPL under the SSS, the Personal Data Protection Inspector, and the Judge of the Supreme Court.

The non-governmental organizations (NGOs), Pub-lic Defender Ucha Nanuashviili, and the opposition parties criticized the bill, demanding the creation of an independent agency, not under the SSS and hav-ing no professional interest in surveillance.

Opposition party United National Movement (UNM) says the bill does not answer the verdict of the Constitutional Court, which said that the “creation, possession, and administration of tech-nical means of obtaining personal information in

Parliament Adopts Majority’s Bill on Covert Investigation

real time and having direct access to personal information using this means, by an agency that has investigative functions or is professionally interested in familiarizing itself with this informa-tion, creates an excessive threat of unsubstantiated interference with personal lives.”

“The commission, led by the SSS head, will choose three candidates for the post of Agency head,” said UNM member Akaki Minashvili. “After this, the candidates will be presented to the PM who will chose one. This means that the Agency is not inde-pendent. It is under the direct infl uence of the SSS.”

Members of the Parliamentary minority, Move-ment for Freedom - European Georgia, walked out of the plenary session in protest during the discus-sions. The party believes the new law will "rudely interfere with people’s personal lives”.

“We do not want to participate in this farce and so we are leaving the session,” Otar Kakhidze from European Georgia stated.

Vice Speaker of Parliament and Georgian Dream party member Tamar Chugoshvili fi nds the new draft "balanced”, while majority member Giorgi Volsky says the implementation of the version offered by the NGOs and the opposition requires more budgetary funds than the bill prepared by the ruling party.

“Financially and technically, this Agency will be independent and a special confi dence group will be able to monitor its work,” Volsky stated.

Parliamentary discussions over the proposed changes will continue. This week, amendments to the bill will be discussed during the third reading and after this the bill will be sent to the president for signature.

If President Giorgi Margvelashvili vetoes the bill, the majority will need votes of at least 76 MPs to override the veto.

The majority last overrode a presidential veto on the Bill of Judicial Reform on February 8.

On Tuesday, February 28, at Hotel Radisson Blu Iveria, Tbilisi, the Min-istry of Environment and Natural Resources Protection of Georgia, with assistance from the United

Nations Development Program (UNDP) and Global Environment Facility (GEF), hosted a discussion about sustainable urban transport.

The event opened a series of national discussions

National Discussion about Sustainable Urban Transport

that mean to lead Georgia to developing a national concept of sustainable urban transport, including for the fi rst national strategy and policy framework.

The discussion brought together Gigla Agulash-vili, Minister of Environment and Natural Resources Protection of Georgia; Niels Scott, Head of UNDP in Georgia; and representatives of the Georgian government, Parliament, and local governance and international organizations.

GEORGIA TODAY FEBRUARY 28 - MARCH 2, 2017 11

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INTERVIEW BY NINO GUGUNISHVILI

Andrew McCarthy, an Academic Direc-tor at the IE School of Human Science and Technology in Madrid, a man regarded as a guru of innovation, with numerous start-ups to his name and

who has been brought in to consult such corpora-tions as BBVA, Google Spain, Adidas, MTV Pro-ductions, Paramount, and BP, held a lecture in Marriott Tbilisi Hotel this Saturday.

GEORGIA TODAY met with Professor McCarthy after the lecture to speak about his views on fi nan-cial innovations and how they will shape our future.

WHAT DO YOU THINK THE ROLE OF BANKS AS FINANCIAL INSTITUTIONS WILL BE WITH TECHNOLOGIES CHANGING SO FAST? The question of how the fi nancial institutions, or fi nance service organizations, operate is really changing with the rise of internet, and of artifi cial intelligence and connectivity. There are going to be different models of how we interact with objects, and with objects as services. iTunes and the App store are perfect examples of this- micro transac-tions: all I need to pay for an App is my fi ngerprint. It doesn’t feel like a monetary transaction, but it is. So, the producers are going to be investing much more in that. Again, with the rise of automated currency, if we’re better able to automate the entire process coming out of a manufacturer, what do we need a fi nance company for? Or, if we look at it from the perspective of the fi nance company, what value can we offer? Where do we deliver value and how can we then partner with a manufacturer, for example? They will have to rely a lot more on collaborative partnerships and alliances.

WILL IT BE CHALLENGING

FOR THEM TO DO SO? I think it’ll be increadibly challenging. I think they’re going to have to change the way they think about their own experience and institutional knowledge, maybe what they are good at in this example is large movements of fi nancial resources and so perhaps they could partner with manufacturers in micro transactions as a way to provide a service managing or traffi cking fl ow. It’s going to require lots of refl ec-tion, a lot of sort of self-inquisition.

WHY DO YOU THINK ADVANCED FINANCIAL TECHNOLOGIES ARE BENEFICIAL TO CUSTOMERS AND WHAT FUTURE TENDENCIES CAN YOU HIGHLIGHT? Well, we’re still trying to understand it and how our behaviour can be affected by it; to realize how it can help us do a job, or satisfy a need or require-ment.

IS IT SAFE? Let me answer that question from a different angle. There’s an organization called Code For America, it’s quite old now and the way it operates is as an agile, nimble programming team. It’s very respon-sive, experimental, very informative, and it works very fast. They are also very tight with govern-ment, and are well-connected. What they’re doing is acting as a third party to provide solutions for people: they’ve launched and run programs for food assistance for example, helping people to stay out of the justice system for small things, like not paying a fi ne, etc… and they can operate like a modern development crew because they are not government but they provide services for the government. Some of the fundamental regulations and laws that govern how digital is done in American government were written quite some time ago. It could not pre-dict any of the way we operate now and yet it has some very smart laws, some of them even good for

McCarthy: I See a Hunger to Take Off in Georgia

personal safety now. Yet they inhibit the kind of responsive, proactive, people-centered innovation that is posible and necessary. The question of safety should always be a paramount question.

ALTHOUGH INNOVATIVE SERVICES ARE WIDELY USED IN GEORGIA, IT IS OFTEN A CHALLENGE FOR THE ELDER GENERATION TO WORK WITH THEMThat’s not their fault, that’s the failure of the peo-ple working in that sphere, and again, it comes back to design. When we talk about design that is focused on people, be it consumer or customer, there’s a great phrase in civil architecture and design that “it should be 99 percent invisible”- it should just work. And if the older generation is tensing up, that’s because it’s not working. We may need a dif-ferent solution; we may need multiple solutions, because if we’re trying to change culture, we can’t have just one brute force attempt, because the way we people interact, the way we group ourselves or segregate ourselves, is far more complex.

WHERE DO YOU THINK GEORGIA STANDS IN TERMS OF INNOVATIONS? My brief impression is incredibly hopeful. I’ve been really impressed [during my visit], particularly with the attitude to innovation. I went to TBC Bank and met with people there who were engaged and very interested.

I also spoke to clients of Bank of Georgia and found them equally switched on. I get the impres-sion that this is the challenge that people are living in, engaged in. You have to believe that you can make change, that you can respond to a challenge in a postive way, that you can deliver some value to someone’s life. Of course like Spain, Georgia has economic problems, movement is diffi cult, regula-tions are diffi cult, we’re dealing with the historic

baggage of organizational structures, etc… but what I see is a hunger to take off.

WHAT DIFFICULTIES DO YOU FORESEE FOR IMPLEMENTING CHANGES?I would say stay in power and endorse, because these are marathons, not sprints. We have to address the small things fi rst and build up from there.

WHAT DOES CREATIVITY MEAN TO YOU PERSONALLY AND CAN IT BE TAUGHT? No, in a lot of ways it can’t…. I’m teaching the unteachable. I don’t know if it can be taught but I know it can be learned. Learning is a personal jour-ney, a personal transformation; a sort of realization process. I’m really fascinated with neuroscience and this is the golden age of investigation into the brain and how lots of things happen- many white papers published are on the process of thought, ideas and creativity. Creativity is thinking some-thing that you haven’t thought before. Because I’m engaged in education and facilitating practices and activities, I can say for sure that the process of creativity isn’t fi nished until you have something out and you’ve shared it.