MAY 14 2015 (The Conway Bulletin) – Outside the financial sector, SOCAR, Azerbaijan’s state energy company, is the largest company in Georgia, media reported quoting research from Ilia University in Tbilisi. SOCAR Petroleum Georgia is a SOCAR subsidiary. Its main business in Georgia is a network of petrol stations.
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(News report from Issue No. 232, published on May 20 2015)
MAY 20 2015 (The Conway Bulletin) – London-listed Bank of Georgia reported Q1 profit up 16% because revenue from its banking and healthcare units offset weaker contributions from insurance and real estate sectors. The results are much needed positive news after a bleak economic Q1 dominated by the falling value of the lari currency.
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(News report from Issue No. 232, published on May 20 2015)
MAY 19 2015 (The Conway Bulletin) – In an interview with the AP news agency, Georgian president Giorgi Margvelashvili said Russia would use its military to grab more territory in the former Soviet Union. Georgia has been warning about excessive Russian aggression since the two neighbours fought a brief war in 2008.
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(News report from Issue No. 232, published on May 20 2015)
MAY 14 2015 (The Conway Bulletin) – At its two-day annual general meeting in Tbilisi this year, the European Bank for Reconstruction and Development downgraded the host nation’s economic growth rate from 4.2% to 2.3% in 2015.
The EBRD’s latest report predicted overall stagnation in 2015 across all its 35 countries in the former Soviet Union and the Middle East. This is mainly due to a drop in oil prices and pressure on currencies generated by a strong US dollar.
Specifically, the EBRD said it had downgraded Georgia’s economic growth prospects because of the stronger than expected impact of the regional financial crisis centred on Russia. This expressed itself in lower remittances from abroad and a heavy drop in the value of national currencies.
Money transfers from abroad in April were down 25% on 2014 and the Georgian lari has also lost 34% of its value against the US dollar since November 2014.
These dreary economy forecasts pile extra pressure on the Georgian Dream coalition government although EBRD president Suma Chakrabarti did have some more comforting words for his hosts.
He said that Georgia was still performing better than average and has the strong potential for economic growth in the future.
“I don’t think it will be too long before Georgia will be able to take advantage of its productive potential going forward and the economic fundamentals here are sound,” he said.
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(News report from Issue No. 232, published on May 20 2015)
MAY 20 2015 (The Conway Bulletin) – The IMF and the European Bank for Reconstruction and Development (EBRD) both delivered withering assessments of the economies of Central Asia and the South Caucasus, piling pressure on governments across the region.
Not since the global financial crisis of 2008 and 2009 has the region been under such economic strain, the IMF said in its assessment.
“Exchange rate developments, such as the appreciation of the US dollar and the depreciation of the rouble, are compounding the problem,” media quoted Juha Kähkönen, deputy director of the IMF’s Middle East and Central Asia Department, as saying at the presentation of the report in Kazakhstan on May 19.
The region’s average growth rate this year, the IMF said, would slow to 3.3% from 5.3% in 2014.
A collapse in the price of oil and the value of the rouble have knocked economies in Central Asia and the South Caucasus. Currencies have nosedived, losing around a third of their values in only a few months, governments have scrambled to cut budgets and companies have laid off hundreds of workers.
All the data, in short, paints a turbulent portrait of the last few months and an equally troublesome outlook for the next couple of years.
Mr Kähkönen’s statement came only a few days after the EBRD had issued a similar warning at its AGM in Tbilisi. It drew attention to the sharp fall in remittances to the region from Russia and the impact this would have.
“As the Russian economy has declined, remittances from Russia to Central Asia and to eastern Europe and the Caucasus have been declining at an alarming rate,” the bank said in a statement.
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(News report from Issue No. 232, published on May 20 2015)
MAY 17 2015 (The Conway Bulletin) – Georgia has toned down its hopes of a deal to scrap visas for its citizens travelling to Europe, the FT reported quoting Georgian officials ahead of an EU summit meeting in Riga. Georgia has been pushing to speed up integration with Europe.
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(News report from Issue No. 232, published on May 20 2015)
MAY 17 2015 (The Conway Bulletin) – Under the slogan “Summer in Georgia”, the Georgian tourism board has started a $3.5m advertising campaign to attract more tourists from across the former Soviet Union, media reported.
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(News report from Issue No. 232, published on May 20 2015)
MAY 8 2015 (The Conway Bulletin) – As expected, parliament approved a law that will extend the time that citizens of most Western countries can stay in Georgia without a visa to 360 days from 90 days. Visa-free regulations were tightened in the summer.
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(News report from Issue No. 231, published on May 13 2015)
MAY 13 2015 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD) holds its 24th annual meeting and business forum in Tbilisi May 14-15, placing Georgia firmly at the centre of the region’s attention.
Georgia is the first country in the Caucasus to host the annual EBRD meeting. Uzbekistan hosted the event in 2003. The Bank is a major player in Georgia, and has invested a total of $3b over the last 22 years.
This meeting is strategically important for Georgia to demonstrate its economic development, especially now, when the country is mired in a currency crisis. The lari has lost around 32% of its value since November.
Deputy minister of finance Davit Lezhava said the meeting was a perfect opportunity to spread information about Georgia to the outside world.
“I hope that the meeting will result in more investment, greater integration with the democratic world and in more political support,” Mr Lezhava told the Bulletin.
Over $7.2m was spent in preparing the EBRD annual meeting by the private sponsors and the government, media reported.
Mr Lezhava said that he didn’t know how much came from the state’s budget.
“But whatever the governmentcontribution was, it is not a waste of money because we will have great benefits from this event,” he said.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 231, published on May 13 2015)
MAY 13 2015 (The Conway Bulletin) – Georgia’s government easily survived a no-confidence vote in parliament triggered by the resignation of a minister earlier this month, meaning that PM Irakli Garbashvili remains in power.
Mr Garbashvili, part of the Georgian Dream coalition that turfed out former president Mikheil Saakashvili’s party from power, appointed four new ministers, including Tina Khidasheli as the country’s first female defence minister.
Importantly, even though Mr Garbashvili’s government won the no-confidence vote 87-38, it would still have damaged the government’s credibility.
The Georgian Dream has been beset by bickering and in- fighting and its popularity has plummeted as a regional economic recession batters Georgia. Its currency has slid 32% against the dollar.
Alongside Ms Khidasheli, Mr Garbashvili appointed Gigla Agulashvili as environment minister, Nodar Javakhishvili as infrastructure minister and Tariel Khechikashvili as minister for sport.
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(News report from Issue No. 231, published on May 13 2015)