DEC. 31 2020 (The Bulletin) — Georgia’s economy shrunk by 7.7% in 2020 because of the impact of the coronavirus pandemic, Geostat said, more than the 4% that economists had predicted earlier in the year (Dec. 31). Economists have now said that they expect these worse-than-predicted results to be played out across the region
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— This story was first published in issue 467 of the Central Asia & South Caucasus Bulletin
— Copyright the Central Asia & South Caucasus Bulletin 2021
TBILISI/AUG.4 (The Bulletin) — Rustavi Azot, Georgia’s largest industrial enterprise, has
been named as the producer in 2013 of 2,750 tonnes of ammonium nitrate
that has now exploded in Beirut, killing 145 people and damaging large
parts of the city.
Its management, backed up by Georgian ministers, though said that
the chemicals had been safe when it was loaded on to The Rhosus, a cargo
ship, in its Black Sea port of Batumi and that the fault for the explosion
lies with the authorities in Beirut.
“Rustavi Azot is one of the country’s largest exporter companies
and produces up to 1% of the world’s total ammonium nitrate
consumption,” it said. “The company produces, stores and exports its
products having required licenses and permissions and in compliance with
all applicable national and international standards.”
The Soviet-era plant near Tbilisi employs 2,000 people and is the only
ammonium nitrate producer in the South Caucasus. Over the past half a
decade, the Georgian government has promoted Rustavi Azot and talked up
its exports and in 2016, the European Bank for Reconstruction and
Development led an international consortium of banks with a $155m
loan designed to help modernise the plant.
There had even been talk at the time of the EBRD taking a stake in
Rustavi Azot, although this does not appear to have materialised.
In its statement, Rustavi Azot was also careful to point out that new
management has been running the plant for the past three years and
shouldn’t be held responsible for previous deals.
But questions will still be asked as to how more than half the plant’s
annual production of ammonium nitrate in 2013 could be loaded onto
the Rhosus, which was sailing under the flag of landlocked Moldova and
was owned by Russian Igor Grechushkin.
Ammonium nitrate is mainly used as a fertiliser but can also be used to
produce cheap explosives and the Rhosus had been bound for an arms
factory in Mozambique when it was diverted to Beirut and its cargo impounded.
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— This story was first published in issue 456 of the Central Asia & South Caucasus Bulletin on Aug. 9 2020
JULY 31 (The Bulletin) — Georgia’s economy was 5.8% smaller by the end of June compared to the same period in 2019 because of the impact of the coronavirus pandemic, official data showed. This is in line with previous estimates for a coronavirus-linked recession. In the first six months of 2019, Georgia’s economy had grown by 4.9%.
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— This story was published in issue 455 of the Central Asia & South Caucasus Bulletin, on July 31 2020.
— Copyright the Central Asia & South Caucasus Bulletin 2020
JULY 30 (The Bulletin) — Georgia Capital, the London listed conglomerate which owns subsidiaries that produce beer, build hotels and run pharmacies, said that it had issued a so-called £250m green bond on the Irish Stock Exchange. CEO Irakli Gilauri said that the bond issue had been well-received by investors. They were issued with a 7.75% interest rate and a 5-year maturity.
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— This story was published in issue 455 of the Central Asia & South Caucasus Bulletin, on July 31 2020.
— Copyright the Central Asia & South Caucasus Bulletin 2020
TBILISI/JULY 29 (The Bulletin) — The Anaklia Development Consortium (ADC) and one of its key investors filed separate arbitration claims against the Georgia government for cancelling its deal to build the new Black Sea port.
ADC and Bob Meijer, the investor, said that they are claiming a combined $1b for lost earnings linked to the project.
The Georgian government tore up the contract with the ADC in January because it said that ADC had failed to secure sufficient financial backing to build the new port, supposed to become Georgia’s principal entry and exit for goods being transported to and from China and Europe.
ADC, though, said that the contract was ripped up for political reasons. One of the main backers of the ADC project was, Mamuka Khazaradze, the founder of TBC Bank. TBC Bank is one of Georgia’s biggest high street banks and is listed on the London Stock Exchange but last year Mr Khazaradze was arrested for corruption, allegations he has said are politically motivated.
ADC said that this row between Mr Khazaradze and the Georgian government tarnished the project.
“The Government deliberately acted to ensure that ADC could not succeed with project development. In this instance the Government abused its power because the ruling party and its leader decided the project’s success was contrary to their own political and economic interests,” ADC said in a statement.
The statement also said that the ADC was bringing its action through the International Court of Arbitration of the International Chamber of Commerce (ICC) in Paris and that Mr Meijer was pursuing his claim through the International Centre for Settlement of Investment Disputes (ICSID) in Washington.
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— This story was published in issue 455 of the Central Asia & South Caucasus Bulletin, on July 31 2020.
— Copyright the Central Asia & South Caucasus Bulletin 2020
JULY 24 (The Bulletin) — Georgia’s TBC Bank launched its digital subsidiary bank in Uzbekistan. TBC, which is listed on the London Stock Exchange, has branded the bank as the first fully online bank in Uzbekistan. It has followed Kazakhstan’s Halyk Bank in setting up a subsidiary in Uzbekistan but while Halyk Bank has said it is targeting lending out to businesses, TBC has said that it is targeting ordinary people.
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— This story was published in issue 455 of the Central Asia & South Caucasus Bulletin, on July 31 2020.
— Copyright the Central Asia & South Caucasus Bulletin 2020
JULY 22 (The Bulletin) — The China-led Asian Infrastructure Investment Bank (AIIB) approved a 50m loan to Georgia to help it buy more PPE clothing to fight the coronavirus pandemic. Reuters reported that the loan was jointly financed by the World Bank and is the second AIIB loan to Georgia after a $100m loan was provided in May. Critics of the AIIB have said that China uses it to spread its influence.
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— This story was published in issue 455 of the Central Asia & South Caucasus Bulletin, on July 31 2020.
— Copyright the Central Asia & South Caucasus Bulletin 2020
JUNE 23 (The Bulletin) — The US warship USS Porter docked in the Georgian Black Sea port of Batumi, part of a regular series of visits by the US Navy. Georgia aspires to join the NATO military alliance and, to the irritation of Russia, regularly hosts NATO militaries for joint exercises.
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— This story was first published in issue 451 of the Central Asia & South Caucasus Bulletin, published on June 23 2020
— Copyright the Central Asia & South Caucasus Bulletin 2020
JUNE 23 (The Bulletin) — The EBRD gave an unsecured loan of $100m to Georgia’s TBC Bank to help it lend out cash to small and medium-sized businesses fighting off the impact of the coronavirus. The EBRD has been a core supporter of SMEs in Georgia throughout the lockdown. Georgia has been praised for stamping out the virus but its economy is set to shrink by 5% this year.
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— This story was first published in issue 451 of the Central Asia & South Caucasus Bulletin, published on June 23 2020
— Copyright the Central Asia & South Caucasus Bulletin 2020
JUNE 23 (The Bulletin) — Georgian stocks fell across the board after more economic predictions said that the downturn triggered by the coronavirus is going to be deeper and more severe than first thought.
All other stocks moved up, with metal stocks tracking an increase in commodity prices and the Centerra Gold stock being given a boost by news unrelated to its Kumtor gold mine in east Kyrgyzstan.
Equity news is generally quiet at this time of year ahead of the Q2 earnings season which kicks off next month. Analysts have said that they are looking for strong results from the region’s metals miners. Metals prices have remained buoyant throughout the coronavirus economic recession. Oil has also recovered and is now at more than $42/barrel. It had been at less than $30/barrel.
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— This story was first published in issue 451 of the Central Asia & South Caucasus Bulletin on June 23 2020
— Copyright the Central Asia & South Caucasus Bulletin 2020