Tag Archives: Georgia

Healthcare revolution in Georgia spurs private business boom

TBILISI, MAY 12 2017 (The Conway Bulletin) — While success and failure in Georgia’s acrimonious political arena are fragile, support for the Georgian Dream’s Universal Healthcare system has been consistently high.

Introduced in 2013, its advocates say that it has increased people’s access to healthcare and also given private companies such as Georgian Healthcare Group a huge boost.

In a survey by the International Republican Institute, 19% of respondents said that reforming the health service was the best thing that the government has done since winning power in 2012. The next most popular answer was achieving visa-free access to the EU, identified as important by 4% of respondents.

What the Georgian Dream government did was simple, said George Gotsadze, director of the Curatio International Foundation. He explained that it created a state- funded healthcare system that replaced an insurance-based system that only half the population had opted into.

“Prior to 2013, with public financing healthcare coverage was provided for 1.6m people out of 3.7m. The Universal Health Programme pretty much-expanded coverage to all the population of Georgia,” he said.

The government has also, effectively, cut out the middlemen insurers. It picks up the bills and pays the hospitals, run by private companies such as Georgian Healthcare Group, directly. In 2018, the Georgian government is expected to spend 3.1b lari on healthcare, up from 2.1b lari in 2015.

Most Georgians have seen a jump in the quality of their healthcare.

Teona, a Tbilisi resident gave birth to a premature child when she was six months pregnant. She said that she had incurred almost no expenses.

“My daughter was in an incubator for a long time. All I had to do was to bring diapers [nappies],” she said.

And this strategy has also spurred a major boom for business. Since 2013, Georgian Healthcare Group has expanded rapidly and now operates 35 hospitals. Spun off by Bank of Georgia, it listed on the London Stock Exchange in November 2015. Its shares have risen from 170p to 370p.

ENDS

(News report from Issue No. 328, published on May 12 2017)

Archpriest planned to kill Patriarch’s secretary, say Georgian officials

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APRIL 28 2017 (The Conway Bulletin) — Georgia’s Prosecutor’s Office said that they are going to charge Archpriest Giorgi Mamaladze with plotting to murder the secretary of Patriarch Ilia II, ending weeks of speculation that the head of the Georgian Orthodox Church had been the intended target. Archpriest Mamaladze was arrested in January carrying cyanide as he boarded a plane bound for Germany where Ilia II had been receiving hospital treatment. Prosecutors now believe that he had a vendetta against Patriarch Shorena Tetruashvili, Ilia II’s secretary.

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(News report from Issue No. 327, published on May 5 2017)

Georgia raises minimum capital requirements for banks

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TBILISI, MAY 5 2017 (The Conway Bulletin) — Georgia’s Central Bank will quadruple the minimum capital requirement that commercial banks have to hold to 50m lari ($20.5m), part of drive to reduce the number of small, weak banks in its financial system.

Acting on a recommendation from the IMF, the Georgian Central Bank said that commercial banks would need to hold capital of 30m lari by the end of the year, 40m lari by mid-2018 and 50m lari by the end of 2018. Currently the minimum capital requirement for a bank in Georgia is just $12.5m lari.

“It should be noted that in terms of minimum capital requirement Georgia has one of the lowest in the world, not in line with the financial sector’s development,” it said in a statement.

“The change was supported by the International Monetary Fund’s mission.”

Georgia and the rest of the Central Asia and South Caucasus region have been battling an economic downturn over the past three years that has eaten into the value of their currencies, undermined mortgage holders and companies holding large debt and bankrupted, or nearly bankrupted, a number of banks.

In Tajikistan only a government bail-out prevented a banking collapse; in Azerbaijan several small banks have been forced to close and the government has bought a majority stake in International Bank of Azerbaijan, the country’s biggest bank; in Kazakhstan the government has set up a bad loan fund for banks to dip into for support.

Georgia’s economy has survived the downturn in better shape than its neighbours – the lari proved more robust than the manat, which halved in value, but it still shook the banking sector. There are 17 banks operating in Georgia, the Central Bank said, roughly the same as 10 years ago. In 1995, there were 102 banks.

The two biggest, TBC and Bank of Georgia, are listed on the London Stock Exchange but many of the others are small, a legacy of the post- Soviet banking boom in the 1990s.

Last month the IMF approved a $285.3m loan on the understanding that Georgia would continue a series of economic reforms, including strengthening its banking sector.

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(News report from Issue No. 327, published on May 5 2017)

Economic growth picks up in Georgia

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APRIL 28 2017 (The Conway Bulletin) — Year-on-year economic growth in Georgia accelerated to 5% in the first quarter of 2017 because of an increase in exports and remittances, the statistics service said. The rise beats the Georgian government’s expectations of a 4% rise for the whole of 2017.

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(News report from Issue No. 327, published on May 5 2017)

Georgia’s Central Bank raises rates

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MAY 2 2017 (The Conway Bulletin) — Georgia’s Central Bank raised interest rates to 7% from 6.75%, its highest rate since June 2016, because of supply-side price pressure. One of the Central Bank’s key remits is to keep inflation at 4% and it said that one- off price rises, such as an increase in excise duties, were pushing up prices. It also said, though, that it didn’t expect any more interest rate rises this year. Annualised inflation in March was 5.4%.

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(News report from Issue No. 327, published on May 5 2017)

Azerbaijan-Georgia gas corridor to complete on time

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MAY 1 2017 (The Conway Bulletin) — In an interview with Reuters, BP’s Georgia country manager, Chris Schlueter said that the middle section of the $40b Southern Gas Corridor would be completed on time in 2018. This is important because it indicates that the entire pipeline system, running from Azerbaijan’s Caspian Sea coast across Georgia and Turkey into the Balkans and across the Aegean Sea to Italy may be operational by 2020 as promised. The Southern Gas Corridor is supposed to reduce Europe’s reliance on gas supplies from Russia and also boost Azerbaijan’s economy.

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(News report from Issue No. 327, published on May 5 2017)

Georgian committee approves constitutional changes

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APRIL 23 2017 (The Conway Bulletin) — A committee, dominated by the ruling Georgian Dream coalition, convened to study ideas for a new constitution in Georgia voted overwhelmingly in favour of proposals to strip the presidency of power. Opponents of the proposed new constitution, lead by President Girorgi Margvelashvili have accused the Georgian Dream government coalition of trying to undermine its rivals by tinkering with the constitution and pushing the country towards a one-party rule. The Georgian Dream has a large enough majority in parliament to push through any constitutional changes. A date for a vote in parliament on the proposed changes has not yet been set.

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(News report from Issue No. 326, published on April 28 2017)

Georgia PM visits Tehran

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APRIL 22/23 2017 (The Conway Bulletin) — Georgian PM Giorgi Kvirikashvili travelled to Tehran to meet with Iranian president Hassan Rouhani, underlining increasingly close Georgia-Iran ties. In a series of tweets after the meeting, Mr Kvirikashvili said that he had discussed developing trade and transport ties with Mr Hassan. His visit comes 10 days after Iranian foreign minister Mohammad Zarif visited Georgia as part of a Central Asia/South Caucasus tour.

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(News report from Issue No. 326, published on April 28 2017)

Georgia considers VAT cut for domestic flights

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APRIL 26 2017 (The Conway Bulletin) — Georgia’s government said that it was considering scrapping VAT on aviation fuel for planes flying domestic routes. While flights to and from international airports have boomed the domestic sector is considered underdeveloped. Scrapping VAT was one of a series of proposals under consideration to change tax mechanisms in Georgia. Other incentives being considered including giving help to small power stations.

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(News report from Issue No. 326, published on April 28 2017)

Georgia says Russia is still its biggest threat

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TBILISI, APRIL 25 2017 (The Conway Bulletin) — In its latest national defence review, undertaken every four or five years, Georgia said that its biggest threat was still Russia despite a marked improvement in relations between the two neighbours since 2012.

Quoting from the Georgian language document, the civil.ge news website said that a build up of Russian forces in the Caucasus and the Black Sea region was a threat.

“The main factor for planning national defence and security still remains the threat from the Russian Federation,” the civil.ge website reported. The review has not yet been published in English.

Relations between Georgia and Russia have improved since the Georgian Dream came to power in 2012 and former president Mikheil Saakashvili fled into exile.

The report, which sets the tone and agenda for the Georgian military up to 2020, said that Russian aggression and its lack of respect for international law posed a serious threat to Georgia. In particular, the report’s authors said the build up of Russian military in the region “will weaken the West’s access to the Caucasus region, and, accordingly, decrease its capability to balance Russia.”

Russia has increased its military cooperation with the rebel Georgian states of Abkhazia and South Ossetia since a war with Georgia in 2008. This has included holding military exercises in South Ossetia deploying thousands of soldiers.

Since annexing Crimea in 2014, Russia has also strengthened its presence in the Black Sea.

Part of Georgia’s defence plan is to join NATO and in the Defence Review it said that it would continue to support NATO, EU and UN operations.

ENDS

(News report from Issue No. 326, published on April 28 2017)