Tag Archives: Georgia

EU extends its mission in Georgia

DEC. 12 2016 (The Conway Bulletin) — The European Council extended by two years the length of its mission monitoring the boundaries separating Georgian forces and Russia-backed separatist forces in the Georgian break away regions of South Ossetia and Abkhazia. Officially called the European Union Monitoring Mission, it is now mandated to patrol between the two sides until the end of 2018. It was set up after a war in 2008 between Russia and Georgia. The monitoring mission costs the EU around 18m euro ($19m) per year.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Georgia to protect mortgage holders as lari tumbles

TBILISI, NOV. 29 2016 (The Conway Bulletin) — Georgia’s government said it would protect home-owners who took out mortgages in US dollars and also that it would ban online consumer lending, reforms aimed at shoring up confidence in the government and its economic policies after the lari dropped to all time lows.

PM Giorgi Margvelashvili made the announcements after fresh economic data showed a drop in exports and lower-than-expected remittance flows from Russia had pushed the lari down to 2.56 against the US dollar by close-Dec. 1. This is 20% lower than it was valued at in June.

“According to our plan, loans which had been disbursed to individuals before Jan. 1 2015, and supported by real estate, would be recalculated in lari at a rate which is lower than the current by 20 points,” media reported him as saying.

“For example, if the rate today is 2.5 lari per dollar, the credit will be calculated at a rate of 2.3 lari per dollar.”

And Mr Margvelashvili also said that the government would ban credit agencies which lend money via the internet and also look to increase excise duty on cigarettes.

The changes are among the most radical presented by a government in the South Caucasus/Central Asia region since an economic downturn linked to a collapse in oil prices and a recession in Russia. Earlier this year, Kazakhstan announced similar measures to protect mortgage holders who had borrowed in US dollars.

Following Mr Margvelashvili’s intervention, the Georgian Central Bank also called for calm. It said that the sudden fall in the value of the lari was a short term adjustment that would steady.

“We expect that devaluation will stop shortly,” it said in a statement. “We would recommend society and economic agents not to make harsh decisions, which will negatively affect themselves.”

The Central Bank blamed the drop on the strengthening US dollar, the weak rouble and poor Georgian economic data.

Georgia’s GDP grew in the 12- months to the end of October by 1.3%, less than half the rate for the same period in 2015. Remittances from Russia, so vital to the economy, have been low.

And people are worried. David, a Tbilisi resident in his late 20s, said that he had a mortgage for $15,000 which he had taken out when the lari was valued at 2.19 against the US dollar. He said that the fall in the value of the currency had meant it was now virtually unpayable.

“I got this credit for my home, so if the dollar continues to rise, I will have to sell my home and give the credit back,” he said. “I don’t know what else I can do.”

Tamta, a Tbilisi resident, was also worried. “I am trying not to think about this otherwise I’ll go crazy,” she said. “Thank God nobody in my family has a mortgage in dollars.”

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Stock market: Georgian lari and Azerbaijani manat

DEC. 2 2016 (The Conway Bulletin) — Currencies in the South Caucasus have declined sharply over the past few weeks after a slew of poor economic data and a strengthening US dollar.

The Georgian lari hit an all-time low on Tuesday, when it traded at 2.53/$1. A year ago it traded at 1.84/$1. In the past two months, it has fallen by 8%.

The government in Tbilisi said the slide was due to a negative trade balance and the strengthening US dollar. In what could have been a spiral effect, demand for US dollars within Georgia soared, as people feared a sharper depreciation of the national currency.

Macroeconomic statistics have shown that Georgia’s GDP growth has slowed in the past months, disappointing observers.

The Azerbaijani manat, the world’s worst-performing currency in 2015, has also depreciated against the US dollar, down 6.5% in the last 60 days. It traded at 1.73 on Thursday, down almost 40% compared to last year.

Azerbaijan’s banks also stopped selling US dollars due to shortages.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Economic growth halves in Georgia

NOV. 30 2016 (The Conway Bulletin) — Georgia’s year-on-year growth for the 12 months to the end of October more than halved to 1.3%, the Georgian statistics agency said. Georgia’s exports have fallen and its currency has weakened heavily in a regional economic downturn that has stunted growth and worried governments. For the 12 months to the end of October 2015, Georgia recorded GDP growth of 3%. Georgia, though, is faring better than its South Caucasus neighbours. Both Azerbaijan and Armenia’s economies have shrunk.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Working with Trump will be fine, says Georgian President

DEC. 1 2016 (The Conway Bulletin) — In an interview with Reuters, Georgian president Giorgi Margvelashvili said that he expected Georgia’s relations with the US under President-elect Donald Trump to be strong. In the wide-ranging interview Mr Margvelashvili said that he still expected to push for Georgian entry into NATO when Mr Trump becomes president in January. On the issue of visa liberalisation with the EU, Mr Margvelashvili said that he was disappointed more progress hadn’t been made but that once the current nationalistic mood in Europe had lifted the visa issue would be resolved.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Georgia sends wine to China

NOV. 28 2016 (The Conway Bulletin) — Georgian wine company Badagoni said it will sell 5m bottles of wine to China in a landmark agreement with the Asian country’s distributor Wenzhou Bydoway. The company did not specify the timeframe of the contract, but the volume agreed represents around 12% of Georgia’s annual wine exports, which have grown significantly in the past two years. The deal was made possible through a free trade agreement signed with China in September.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Georgia may sell 25% stake in energy company in IPO

TBILISI, NOV. 29 2016 (The Conway Bulletin) — The Georgian government is considering selling a 25% stake in Georgian Oil and Gas Corporation (GOGC) on the London Stock Exchange next year, a move that would give foreign investors another chance to buy into Georgia.

GOGC is Georgia’s state-owned energy company, administering its oil and gas contracts and also refurbishing and building power stations to generate electricity. Selling a 25% stake GOGC is likely to generate high levels of investor interest.

Georgia’s finance minister Dmitry Kumsishvili said: “The corporation’s 25% stake will be placed on one of the exchanges abroad, in London or Shanghai.”

Georgia’s BGEO Group, which controls Bank of Georgia, and its subsidiary Georgian Healthcare Group are already listed in London.

GOGC controls the North-South pipeline used by Russia to export gas to Armenia and is building the 450km-long East-West pipeline network, that will link its southern border with Azerbaijan to the Black Sea port of Poti. It also owns a 51% stake in the $230m Gardabani power plant, one of the biggest in Georgia, which was opened last year.

Azerbaijan’s state-owned energy company SOCAR, which supplies gas to Georgia, has also said that it is interested in buying a 25% stake in GOGC, according to the Trend news agency.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

BGEO results on Georgia increase

NOV. 21 2016 (The Conway Bulletin) — London-listed investment holding BGEO posted a 24% growth in revenues in Q3, compared to the same period last year. BGEO’s main assets are Bank of Georgia and Georgia Healthcare Group (GHG). GHG accounted for the group’s largest growth rate. In the first nine months of the year, GHG posted revenues for 290.4m lari ($116.6), up 64.8% from 2015.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Georgian Patriarch Ilia II: The tireless go-between

NOV. 25 2016 (The Conway Bulletin) — Patriarch Ilia II, head of Georgia’s Orthodox Church, has been in Moscow all week, officially to celebrate the 70th birthday of his Russian counterpart, Kirill.

This will, no doubt, form part of his trip, as will various lengthy, ornate and beautiful cathedral and church services. But another, important, side of the trip will be the semi-official diplomacy that he pursues.

This has been a vital channel for conversations between Russia and Georgia since strained relations broke down altogether in August 2008 and triggered a war that lasted for five days. It was on a trip to Moscow four months later that Patriarch Ilia started the ball rolling for the lengthy rapprochement that is continuing today.

And Patriarch Ilia’s natural ease with Russia and his Russophile outlook go back to his upbringing. He was born Irakli Ghudushauri-Shiolashvili to Georgian parents in the Russian town of Vladikavkaz in North Ossetia. He completed his theologian studies in Moscow before returning to Georgia and making his way up the ranks of the Georgian Orthodox Church.

Patriarch Ilia was promoted to Patriarch in 1977, reportedly against the wishes of the Communist party who suspected that he had nationalist tendencies, after the death of David V. It was during these last 12 years of Soviet rule that Patriarch Ilia really established himself in the eyes of his countryman as a true patriot. He built up the prestige and influence of the Georgian Orthodox Church and also, towards the end of the Soviet rule, supported independence marches.

Now aged 83, Patriarch Ilia is able to play the elder statesman of Georgian politics and society. Georgia’s politics is a fractious, personal affair but most Georgians regard Patriarch Ilia to stand head and shoulders above the rest. He has been dubbed the most trusted man in Georgia.

And he still weighs into conflicts, soothing rows and acting as a negotiator. During the final antagonistic days of Mikheil Saakshviliv’s presidency, Patriarch Ilia was called on more than one occasion to negotiate between the government and protesters.

A deeply conservative man, his anti-abortion, anti- gay rights views hold enormous sway over public opinion in Georgia. The new government has
already started to change the constitution to enshrine marriage as an act only between a man and a woman.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

S&P improves credit outlook for Georgian Co.

NOV. 21 2016 (The Conway Bulletin) — Ratings agency Standard & Poor’s improved the credit outlook for Georgian Oil and Gas Corporation from negative to stable, saying its performance had improved. Standard & Poor’s affirmed the company’s credit rating at B+/B and positively reviewed the financial health of the company, which is poised to decrease reliance on loans.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)