Ge­or­gians know how to do busi­ness amid war in Ukraine

Kyiv Post - - Business - BY I LYA TIMTCHENKO [email protected] Kyiv Post staff writer Ilya Timtchenko can be reached at [email protected] com.

While Ukraine is fac­ing a busi­ness down­turn with many of its eco­nomic part­ners, Ge­or­gia is show­ing re­siliency to Ukraine’s eco­nomic flu.

Ukrainian-Ge­or­gian re­la­tions:

Trade turnover: $686 mil­lion (2014). Ex­ports from Ge­or­gia to Ukraine: spir­its, wine, min­eral wa­ter, fer­rous met­als, train lo­co­mo­tives. Ex­ports from Ukraine to Ge­or­gia: agri­cul­tural prod­ucts, cig­a­rettes, metal and steel­work. Ge­or­gian in­vest­ment in Ukraine: $17.2 mil­lion (cu­mu­la­tive as of Oc­to­ber 2014).

Ge­or­gia at a glance

To­tal area: 69,700 square kilo­me­ters. Pop­u­la­tion: 4.5 mil­lion (2014). Gov­ern­ment type: Repub­lic Head of state: Pres­i­dent Giorgi Margve­lashvili. GDP, PPP: $32.1 bil­lion (2013). GDP per capita, PPP: $7,176 (2013) Main ex­ports: scrap metal, wine, fruit.

Busi­ness be­tween Ge­or­gia and Ukraine re­mains hope­ful, says Alexander Kip­i­ani, the se­nior coun­selor at the Em­bassy of Ge­or­gia to Ukraine. De­spite Ukraine’s bad eco­nomic sit­u­a­tion, bi­lat­eral trade is “still quite a good num­ber,” says Kip­i­ani.

Ukraine’s trade turnover with Ge­or­gia in 2014 was $686 mil­lion, down 13 per­cent from 2013.

Teliani Val­ley

Shota Kho­belia, the 38-year-old CEO of Teliani Val­ley, says that his wine busi­ness is do­ing OK, although last year was not as good as 2013.

In 2013, the com­pany sold 1.25 mil­lion bot­tles in Ukraine for about $7 mil­lion, or 20 per­cent of to­tal sales. Ukraine ranks af­ter Poland and Ge­or­gia, re­spec­tively, among the 25 coun­tries which Teliani Val­ley ex­ports to.

The wine com­pany en­tered the Ukrainian mar­ket in 2008. It has three of­fices around Ukraine, with 100 em­ploy­ees al­to­gether.

Rus­sia’s war against Ge­or­gia in 2008 en­abled the com­pany to be more re­silient. “We know how to man­age busi­ness in cri­sis sit­u­a­tions,” says Kho­belia.

CAP School

Kha­tia Dekanoidze, for­mer min­is­ter of ed­u­ca­tion and science of Ge­or­gia and the for­mer head of the Ge­or­gian po­lice academy, is ea­ger to be in Ukraine. Dekanoidze just launched the CAP School in mid-De­cem­ber. The school’s aim is to cre­ate lead­ers for a demo­cratic and lib­eral fu­ture for Ukraine.

CAP has 45 stu­dents and ex­pects to grow.

The school’s lec­tur­ers in­clude for­mer Ge­or­gian min­is­ters, the ex-deputy for­eign af­fairs min­is­ter Sergi Ka­panadze.

CAP stu­dents are of var­i­ous ca­reer back­grounds, but all want to par­tic­i­pate in the devel­op­ment of Ukraine, says Dekanoidze. Sev­eral of CAP’s stu­dents are al­ready work­ing with var­i­ous re­form groups in Ukraine’s gov­ern­ment.

“Ev­ery­thing we Ge­or­gians are do­ing in Ukraine is re­ally af­fect­ing Ge­or­gia too,” he says.

Ge­or­gia’s de­pen­dence on Ukraine can be no­ticed in the heavy trade im­bal­ance. Ukraine’s $603 mil­lion in ex­ports are four times more than its im­ports from Ge­or­gia. Ukraine’s main ex­ports to Ge­or­gia are tobacco and agri­cul­tural prod­ucts such as meat, oils and juice, while it im­ports wine, min­eral wa­ter, fer­rous met­als and train lo­co­mo­tives.

But Ge­or­gia’s worth for Ukraine is not only mea­sured in trade num­bers. Ge­or­gia is a role model for Ukraine in its free mar­ket and law en­force­ment re­forms. It gained eighth place in the Do­ing Busi­ness rank­ing in 2014.

Dekanoidze ad­vises Ukraine to learn from other coun­tries be­sides Ge­or­gia. “The role mod­els are free economies with no mo­nop­o­lized struc­tures, with lib­er­a­tion of tax­a­tion etc.”

Ukraine’s in­vest­ments in Ge­or­gia are tiny. Out of the $1.27 bil­lion in­vest­ment inflow to Ge­or­gia in 2014, Ukraine had only tens of mil­lions.

But th­ese ties are grow­ing. The num­ber of Ukraini­ans vis­it­ing Ge­or­gia is steadily in­creask­ing -- from 76,000 in 2012, to 126,000 in 2013 and 143,000 in 2014.

“We hope that our eco­nomic re­la­tions will go up,” says coun­selor Kip­i­ani. “Th­ese re­la­tions are pos­i­tive, pro­gress­ing and de­vel­op­ing.”

CAP School stu­dents are con­vers­ing dur­ing the school’s open­ing cer­e­mony on Feb. 6. (Cour­tesy by CAP School)

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