JUNE 27 2017 (The Bulletin) — Armenia will complete electricity transmissions lines to Iran and Georgia by the end of 2019, media reported quoting the deputy minister of energy, Hayk Harutyunyan. This is important because one of Armenia’s key export potentials is electricity. It operates the only nuclear power station in the region and has export capacity.
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(News report from Issue No. 335, published on July 3 2017)
JUNE 27 2017 (The Bulletin) — The ruling Georgian Dream’s decision to postpone introducing proportional representation in elections until 2024, pushed back from 2020, is a damaging precedent for the country’s democracy, 32 civil society organisations wrote in an open letter. The groups that have signed the letter include the influential Young Lawyers Association and Transparency International. The Georgian Dream signalled last week that it was going to brush aside pressure and not immediately ditch the majoritarian system during constitutional changes.
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(News report from Issue No. 335, published on July 3 2017)
JUNE 22 2017 (The Bulletin) — Highlighting Georgia’s improving economy, Dubai-based retail company Majid Al Futtim signed a deal with Wissol Group to launch another Carrefour store in Georgia at a new shopping centre outside Batumi. Majid Al Futtim currently runs two Carrefour hyper- markets in Georgia and six super- markets. By comparison, this year Majid Al Futtim said that it was closing its only Carrefour store in Kazakhstan because the economy and market were too small. It had been only been open for 15 months.
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(News report from Issue No. 334, published on June 26 2017)
TBILISI, JUNE 21 2017 (The Bulletin) — Adding to the debate around Georgia’s constitutional reforms, the Venice Commission, which acts as the Council of Europe’s constitution watchdog, described proposed changes as another step positive step towards a parliamentary democracy.
The proposed constitutional changes are controversial because they strip the president of power and hand it to parliament. Parliament is dominated by the Georgian Dream coalition, increasingly opposed to President Giorgi Margvelashvili who was elected under the Georgian Dream ticket but has rowed with his former colleagues.
The Venice Commission’s opinion should dampen an issue which has become increasingly acrimonious.
The constitutional changes also shift the voting system to proportional representation and away from the proportional/majoritarian system considered opaque, another move the Venice Commission praised.
It did say, though, that maintaining a 5% threshold for entering parliament and allowing political blocs to contest elections were detrimental to Georgian democracy.
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(News report from Issue No. 334, published on June 26 2017)
JUNE 24 2017 (The Bulletin) — The charismatic and well-known Georgian TV news reader Zaal Udumashvili said that he was going to run in an election to be the mayor of Tbilisi for the United National Movement party. Mr Udumashvili’s announcement will give the beleaguered party of former Georgian President Mikheil Saakashvili a boost. He had worked for Rustavi-2, a TV station that is the subject for a battle for control between its current UNM support- ing owners and a businessman with links to the ruling Georgian Dream coalition.
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(News report from Issue No. 334, published on June 26 2017)
JUNE 19 2017 (The Bulletin) — It was a poor week for stocks in companies linked to Central Asia and the South Caucasus. All stocks were either stagnant or fell, with the notably exception of Georgia Healthcare, which is perhaps the standout performer of the year.
By the end of the week, Georgia Healthcare stock had risen by 12% to 394.5p, smashing past its previous all-time high of 373p hit in February.
As for the fallers, the heaviest tumbles were taken by KAZ Minerals and Centerra Gold. KAZ Minerals, the Kazakhstan focused copper producer, fell 11.4% to 471.5p. This, although it looks bad, was merely a correction to return to trading at a level it has been anchored around for the past month.
Centerra Gold’s shares are volatile. The Canada-based miner whose main asset is the Kumtor gold mine in eastern Kyrgyzstan is locked in a near permanent dogfight with the Kyrgyz government for control of its asset. This week, though, traders said that short-selling had knocked the value of its shares. It finished the week at C$6.72, a fall of over 8%, and its lowest level since the start of March.
Other notably fallers include Nostrum Oil & Gas, which lost around 4.7% of its stock price, more than the fall in oil, and TBC Bank, a Georgian bank, which also shed around 5% of its value, possibly because inflation data remained stubbornly high.
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(News report from Issue No. 333, published on June 19 2017)
JUNE 14 2017 (The Bulletin) — Georgia’s Central Bank said that it was keeping its key interest rate at 7% because of stubbornly high inflation. It said that inflation in May was 6.6%, above its 4% annual target, although it also said that it expected the rate of price rises to drop in the second half of the year. Higher taxes and increased prices for imported goods have pushed up prices in Georgia this year. Georgia had slashed rates last year to 6.5% from 8% but started to raise it again in January.
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(News report from Issue No. 333, published on June 19 2017)
JUNE 11 2017 (The Bulletin) — Georgian prosecutors said that they had launched an investigation into police conduct over the arrest of the Birja Mafia rappers, 28-year-old Mikheil Mgaloblishvili and 21-year- old Giorgi Keburia, who accused security forces of planting drugs on them. The Birja Mafia are popular in Georgia and the arrest of Mr Mgaloblishvili and Mr Keburia sparked demonstrations in Tbilisi and Batumi. They said that the police wanted revenge for a song that they released earlier this year that mocked them.
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(News report from Issue No. 333, published on June 19 2017)
JUNE 12 2017 (The Bulletin) — A second Georgian infantry unit of 100 men is set to join NATO’s Response Force, the Western military alliance’s primary early response mechanism, media reported. Georgia’s is eager to join NATO and has had an infantry unit on NATO’s Response Force since 2015.
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(News report from Issue No. 333, published on June 19 2017)
TBILISI, JUNE 14 2017 (The Bulletin) — Georgia’s parliament started processing a law that will forbid foreigners from owning farmland, despite warnings from experts that the ban will stunt the growth of the agriculture sector.
The Georgian Dream government dominates parliament and has said that it is bringing in the law because of the pressure on farmland, although opponents have said that its main aim is to roll back another key policy of former president Mikheil Saakashvili.
Levan Davitashvili, the minister of agriculture, said that under the new legislation foreigners would only be allowed to own land if they inherited it, if they married into it or if they already had a permanent residence or an investment permit.
“Land is a particularly limited resource and, with the population growth, land resources are becoming more significant and valuable,” media quoted him as saying. “It is crucial that agricultural land has to be for Georgian citizens and they have to have the property rights.”
When he was in power between 2003 and 2013, Mr Saakahvili had courted Afrikaans to move to Georgia from South Africa, promising them access to good farmland. He followed this up with campaigns to persuade Indian farmers to also move to Georgia too. Essentially he wanted the expertise and investment potential the foreign farmers would bring.
But alongside the expertise, the farmers from South Africa and India generated resentment and frustration from locals, something that the Georgian Dream picked up on and campaigned to change.
After winning a majority of MPs in Parliament in 2012, the Georgian Dream brought in a moratorium to suspend the sale of farmland to foreigners. This moratorium was declared unconstitutional in Dec. 2014 and revoked.
Earlier this month, with the Georgian Dream now dominating Parliament, constitutional amendments were passed banning land sales to foreigners. The new law being discussed, though, will come into play before constitutional amendments.
Phatima Mamardashvili, head of the Agricultural Policy Research Centre, said the ban was negative.
“Our agriculture is so unproductive. We should welcome any investment,” she told The Bulletin. “Foreign investor bring knowledge, capital, new technology. These new limitations are negative. foreign investment flow will be reduced. Georgia will be a less attractive market.”
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(News report from Issue No. 333, published on June 19 2017)