Tag Archives: Georgia

IMF enters Georgian banking row

JUNE 5 2015 (The Conway Bulletin) – The IMF jumped into an increasingly vicious row over supervisory oversight of commercial banks in Georgia by criticising the government’s plans to strip the Central Bank of the responsibility.

In a rare intervention into domestic politics, the IMF released a statement
which said it was worried about the implications that a change of supervisory powers would bring.

“The IMF is concerned that recent proposals to amend the central bank law would put NBG (National Bank of Georgia) independence at risk,” the statement said.

The government’s plan, which some suspect has been motivated by a desire to punish the Central Bank still headed by senior officials appointed by the previous administration of Mikheil Saakashvili, has been controversial from the start. A group of businesses warned that the policy change would not only pose a threat to the banking system, but also to the business and investment climate. This sentiment was supported by President Giorgi Margvelashvili, who said he would veto the bill if it was adopted by parliament.

The government has said that it wants to transfer responsibility for the oversight of commercial banks to an independent body to improve and strengthen this oversight. It has fallen out with Central Bank chief Giorgi Kadagidze over his handling of the economic storm which has battered the region.

IMF made its statement the day after former PM and Georgia’s most powerful man, Bidzina Ivanishvili, backed the proposed changes.

Mr Ivanishvili set up the governing Georgian Dream coalition and is considered the country’s chief power broker. He has clashed with both Mr Margvelashvili and Mr Kadagidze.

It its statement, the IMF also reiterated its public support for Mr Kadagidze, pitting itself firmly against Mr Ivanishvili and Mr Margvelashvili.

ENDS

(News report from Issue No. 235, published on June 11 2015)

Currency reserves fall in Georgia

JUNE 10 2015 (The Conway Bulletin) – Georgia’s foreign exchange reserves fell by $37.4m in May to $2.4b, the Central Bank said. Georgia has sold foreign currency reserves to prop up its lari currency.

ENDS

(News report from Issue No. 235, published on June 11 2015)

Majoritarians to stay in Georgian parliament

JUNE 8 2015 (The Conway Bulletin) – Georgia’s ruling Georgian Dream coalition said it won’t scrap the MPs elected via a first- past-the-post system for the 2016 parliamentary election. Last month the Constitutional Court said it backed reforming the voting system to make it fairer.

ENDS

(News report from Issue No. 235, published on June 11 2015)

FDI in Georgia halves in first 3 months of 2015

JUNE 9 2015 (The Conway Bulletin) – Foreign direct investment (FDI), so important to Georgia’s economy, halved in the first three months of this year compared to the last quarter of 2014, GeoStat, the Georgian statistics agency, said.

GeoStat measured total FDI in Georgia at $175m, down from $349m in Q4 2014. Georgia’s attractiveness as a foreign investment destination was rebounding after the global economic crisis of 2008/9 and a war against Russia in 2008, so the data will disappoint.

Apart from the second quarter of 2014, this was the weakest FDI data for Georgia since 2009. The biggest drop was in construction and manufacturing, reflecting the recession which has hit the region, triggered by a struggling Russian economy.

ENDS

(News report from Issue No. 235, published on June 11 2015)

Georgia’s President opposes new banking law

MAY 30 2015 (The Conway Bulletin) – Georgia’s President Giorgi Margvelashvili said that he opposed stripping the Central Bank of its supervisory duties over the country’s commercial banks. As reported in last week’s Bulletin, reformers suggested that these powers should be given to an independent body.

ENDS

(News report from Issue No. 234, published on June 4 2015)

Georgia-Russia flights rise

JUNE 2 2015 (The Conway Bulletin) – The number of people travelling by air directly between Tbilisi and Moscow has risen by 65%, Georgia’s government said. Georgia and Russia have only recently re-started direct flights between the countries. The data shows just how important an air-link is between the two capitals for trade and tourism.

ENDS

(News report from Issue No. 234, published on June 4 2015)

Georgia’s ministry building put on sale

MAY 29 2015 (The Conway Bulletin) – Georgia’s government has put a building in the centre of Tbilisi which houses the economy ministry up for sale, the first lot in a batch of state property earmarked for privatisation. Media reported that the government expected to sell the building as a potential hotel for $6m.

ENDS

(News report from Issue No. 234, published on June 4 2015)

Inflation rises in Georgia

JUNE 3 2015 (The Conway Bulletin) – Inflation in Georgia in May rose to 3.5% from 2.5% in April, the Georgian national statistics agency said. Economists have warned that the fall in the value of the lari would spur inflation.

ENDS

(News report from Issue No. 234, published on June 4 2015)

Turkey invests in Georgian hydropower

JUNE 3 2015 (The Conway Bulletin) – A Turkish infrastructure company has agreed to fund construction of a new hydro- power dam in Georgia, media reported.

The agreement boosts Georgia- Turkey relations and will also strengthen electricity generation in the country.

Anadolu Tasit Ticaret will spend $80m on building the 51-megawatt Khedula-3 hydro- power plant in the Svaneti region in the Caucasus mountains.

Georgia’s government is a major proponent of developing hydropower and energy minister Kakha Kaladze said that this new development was just part of an ongoing process to boost the sector.

“This is being done for our people and for our country. This is being done for Georgia to be an energy independent country, he said. But it’s not without its controversies.

Hydropower currently produces around 85% of Georgia’s power but with economic and industrial development demand rising, so is demand for power. The tension lies between those who want to develop hydropower, which often means smashing through pristine mountain valleys and destroying villages, and those who want to protect the environment.

The government is still to make a final decision about one of the most controversial hydro- power projects in Georgia, the proposed 200m high dam at Khudoni.

ENDS

(News report from Issue No. 234, published on June 4 2015)

Spanish company to lease Georgian Alphabet Tower for 1 lari

MAY 29 2015 (The Conway Bulletin) – An unnamed Spanish company is reportedly on the brink of signing a deal to lease the so-called Alphabet Tower in Batumi for 1 lari a year. That’s about 40 cents.

The Alphabet Tower, much like its neighbouring Batumi Tower which houses a ferris wheel halfway up one of its flanks, has become an item of ridicule since it was built in 2011.

It was one of former President Mikheil Saakashvili’s projects to beautify Batumi and yet it has been virtually abandoned since it was completed. And this is important. The current government, headed by the Georgian Dream coalition, despises Mr Saakashvili. It views his projects around Batumi with particular contempt and has already sold the Batumi Tower. Selling off these towers, it appears to think, is a way of pouring more scorn and ridicule on Mr Saakashvili.

Designed and built by a Spanish architect the Georgian alphabet twists and winds its way up the side of the Alpabet Tower. There are 33 letters in the modern Georgian alphabet, but only 31 on the tower. Two letters had been missed.

The tower has never been used the media reported that a lift running to the top floor was out of service. If the Spanish company did take the lease on the tower, and it reportedly wants to put a restaurant on the top floor, it would have to spend thousands of dollars repairing it.

ENDS

(News report from Issue No. 234, published on June 4 2015)