Tag Archives: Georgia

Business comment: BREXIT, Oil & Crisis

JUNE 24 2016 (The Conway Bulletin) – As the results of the referendum on Britain’s EU membership came in early on Friday, the decision to leave the EU has shaken the global market.

The Leave vote has hit the London stock market, where most of the companies focusing on Central Asia and the South Caucasus are listed. Economists now expect more volatility in the short term for the London Stock Exchange.

The so-called Brexit also negatively affected oil prices, sending both Brent and WTI down by 6% in just a few hours. Analysts have said that the period of uncertainty regarding oil prices will now last longer.

Currency markets were also hit, as the British pound lost value against the US dollar, effectively strengthening the greenback.

This had an immediate domino effect on currencies across Central Asia and the South Caucasus, where local currencies weakened against the US dollar.

The increasing uncertainty and volatility is now poised to harm, at least in the short term, local markets in the region, prompting elites in from Tbilisi to Astana to brace for more tough times. It will also hit global markets in general, forcing investors to flee to safety and this means missing out Central Asia and the South Caucasus.

Now both the Fed in the US and the Bank of England will have to revise their economic policies and this is likely to insulate further their economies and pull investment back from Emerging Markets.

In these uncertain times, countries in Central Asia and the South Caucasus cannot but hope that Western investors will go against the tide and continue investing in the region.

ENDS

(News report from Issue No. 286, published on June 24 2016)

Georgia’s GDP rises

JUNE 20 2016 (The Conway Bulletin) – Georgia’s GDP grew by 2.6% in Q1 2016, driven by an increase in mining and construction activity, the Georgian Statistics Committee, Geostat, said. Large infrastructure projects have boosted Georgia’s GDP growth, which is still below the government’s expectation of full-year growth of 3%.

ENDS

(News report from Issue No. 286, published on June 24 2016)

EBRD issues lari bond in Georgia

JUNE 17 2016 (The Conway Bulletin) – The EBRD said it issued a 107m lari ($50.2m) bond in Georgia, the second lari-denominated public bond issued by the bank. The five-year bond has an initial yield of 6.45% and will be listed on the Georgian Stock Exchange. The EBRD launched its first domestic bond in Georgia in March 2014. The value of the original two-year bond was 50m lari (around $30m at the time).

ENDS

(News report from Issue No. 286, published on June 24 2016)

Gazprom agrees Georgia deal

JUNE 17 2016 (The Conway Bulletin) – Russia’s state-owned energy company Gazprom said it agreed a gas supply deal with a private Georgian distributor, Gasko+, stirring criticism in Georgia’s Parliament. Under the deal, agreed on the sidelines of the St Petersburg International Economic Forum, Gazprom will sell 100m cubic metres/year to Gasko+. Georgian MPs have said that the deal risks circumventing the current intergovernmental agreement that allows Georgia to import 10% of the gas Russia sends to Armenia through its territory.

ENDS

(News report from Issue No. 286, published on June 24 2016)

BGEO buys major Georgian utilities company

TBILISI, JUNE 23 2016 (The Conway Bulletin) — BGEO, a London-listed holding company that owns Bank of Georgia, said it bought the 75% stake it didn’t already own in Georgian Global Utilities which controls some of the country’s biggest utility companies.

Offshore-registered Georgian Global Utilities (GGU), owns water and wastewater service providers in Tbilisi, Rustavi and Mtskheta and three hydropower generation facilities with a total capacity of 143MW. The purchase gives BGEO control over water and wastewater services for a third of the population.

In 2014, BGEO bought a 25% stake in GGU for $26.25m. It delayed buying another stake in GGU because of the uncertain position of the Georgian currency, the lari.

Now, with the new management brought in after the 2014 deal, BGEO said that GGU had improved its position and the lari currency had stabilised after losing 25% of its value.

“The combination of GGU’s strong performance during 2015 and the prospect of significant further improvement over the medium term led the BGEO board of directors to make the decision to step up the Group’s investment in GGU,” BGEO said in a statement.

ENDS

(News report from Issue No. 286, published on June 24 2016)

Irakli Gilauri, brother of former PM Nika Gilauri, is BGEO’s CEO.

Georgia MPs allow PM to stand in parliamentary vote

TBILISI, JUNE 22 2016 (The Conway Bulletin) — Georgian MPs voted to modify the election code to allow the PM to run for parliamentary elections without having to resign, a major blow to the opposition’s calls for separation of powers.

The bill, which included other technicalities, such as free airtime for parties, was approved with a 79-1 majority.

The defenders of the bill said that it is constitutionally illogical to be left without a government during an election campaign, or to have to form an interim government, if the PM was forced to resign to run for MP.

“To have to form a new government, which could change completely within two months, just before a parliamentary election is not appropriate for the stability of a con- constitutional system,” Vakhtang Khmaladze, MP for the Georgian Dream, said as he presented the bill.

Georgia’s President Giorgi Margvelashvili will have to sign the bill before it enters into force.

The Georgian Dream coalition, although showing cracks as the election campaign builds up, voted en masse to back the proposal, which will allow PM Giorgi Kvirikashvili to run for MP without having to resign.

On Oct. 8, Georgia will vote to elect a new Parliament. The opposing factions are already gearing up to what analysts have said will be a heated political campaign, fought between two deeply opposed sides.

ENDS

(News report from Issue No. 286, published on June 24 2016)

Foreign trade rises in Georgia

JUNE 13 2016 (The Conway Bulletin) – Foreign trade turnover grew by 3% in Georgia in Jan.-May 2016 compared to the same period last year, the Statistics Committee said. Importantly, however, the gap between imports and exports grew by 15%, worsening the country’s trade balance. The value of imports increased by 8% to $3.3b. The value of exports decreased 12%, to $780m.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Georgian anti-LGBT activists want referendum on blocking gay marriages

TBILISI, JUNE 12 2016 (The Conway Bulletin) — Georgia’s Central Election Committee (CEC) gave preliminary approval for a referendum on enshrining the sanctity of marriage between a man and a woman in the Georgian Constitution, setting up a potentially acrimonious clash between liberals and conservatives.

If activists manage to collect the 200,000 signatures needed to trigger a referendum it is likely that the vote would be held on the same day as a parliamentary election — Oct. 8.

It’ll be closely watched by the European Union. Georgia wants to join the European Union and has been lobbying for visa-free access but, among other issues, Brussels has said that Georgia’s attitude towards gay rights undermines its application.

Georgia’s society is broadly conservative and against gay rights, although it does have a vocal LGBT community. In 2013, a crowd attacked a gay rights march in Tbilisi injuring several people. A Georgian Orthodox priest was photographed wielding a stool as a weapon.

The proposed referendum was put forward by several MPs, including Sandro Bregadze, who had been a deputy minister within the Georgian Dream coalition and is known for his staunchly homophobic comments.

He told a press conference after the CEC approval that the referendum question he wants to put forward is: “Do you agree or not the definition of marriage is a union between a man and a woman for the purpose of starting a family?”

Lika Jalagania, lawyer at Human Rights Education and Monitoring Center, later told The Conway Bulletin that there was a strong chance that the group lobbying for the referendum would be able to collect the 200,000 signatures.

“I really think that they will reach this number, bearing in mind the current homophobic attitudes of Georgian society”, she said.

On June 13, outside the US embassy in Tbilisi a group of gay rights campaigners were holding a vigil in support of the victims of a homophobic attack on a nightclub in Orlando two days earlier. At least 49 people died in the attack, one of the worst mass shootings in the US.

A 57-year-old activist who declined to be named said that mainstream Georgians’ attitude towards the LGBT community would not change.

“The Church rules our country and that is not good for us,” she said.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Railway construction delayed, says Azerbaijan Railways chief

JUNE 13 2016 (The Conway Bulletin) – Azerbaijan Railways chief Javid Gurbanov said that the construction of the Baku-Tbilisi-Kars railway connection has been delayed by adverse weather conditions, but is on track to be completed by the end of the year. Georgia has already completed the section that will cross its territory. The Turkish government also confirmed that it plans to complete its section by the end of 2016. The original timeline of the project, started in 2007,scheduled its completion for 2010.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Remittances drop in Georgia

JUNE 15 2016 (The Conway Bulletin) – Georgia’s Central Bank said remittances from abroad fell by 5% in May to $92.9m, compared to May 2015, a sign that the regional economic malaise is still biting economies in the South Caucasus and Central Asia. Money transfers from Russia represented one-third of all remittances last month. Remittance flows to Georgia have also been badly hit by Greece’s economic problems. Greece, also a predominately Orthodox country, had been the second highest originator of remittances to Georgia.

ENDS

(News report from Issue No. 285, published on June 17 2016)