ADVERTISEMENTGeorgia / P6ADVERTISEMENTSustainable forest management law planned,protected areas soon to expandGeorgia’s agricultural ecosystems and naturalgrasslands comprise “43 percent of the country’sterritory and are an integral part of the country’sbiodiversity” says Elguja Khokrishvili, Minister ofEnvironment and Natural Resources Protection, so ithas been Georgia’s priority to improve environmentalconservation through governmental process andlegislation. After the country’s independence in 1991,Georgia created the Ministry of Environment andNatural Resources Protection (MOENRP), mandatedwith the responsibility of restoring balance to theenvironment so devastated by Soviet policies that hadindustrialized agriculture, which, in turn, negativelyimpacted the nation’s agricultural ecosystems andnatural resources.Luckily, since the 2000s, Mr. Khokrishvili says,“some important initiatives have been implementedaiming to improve the conservation status of theagricultural biodiversity of Georgia.” The long list ofinitiatives includes the establishment of new agencies,advancing research projects and rehabilitating degradedagricultural lands. The Georgian governmentis clearly committed to investing in its environmentalfuture – in May 2014, it endorsed the MOENRP’s initiationof the process to revise the National BiodiversityStrategy and Action Plan 2014-2020, a comprehensivedocument that addresses broad environmental topicssuch as species/habitat conservation, agriculturalbiodiversity, public awareness and protected areas.Protected areas, including nature reserves, nationalparks, natural monuments, protected landscapes,world heritage and wetland sites, have become a majortenet of Georgia’s environmental policy. The Agency ofProtected Areas acts as the main authority responsiblefor the development and management of these areas.The “development of these protected areas [has beenone of] the priority directions of our Ministry for manyyears,” says Mr. Khokrishvili.“Today we have over 600,000 hectares (1.48 millionacres) of protected areas,” or 8.6 percent of the entirecountry, he adds, with the majority being nationalparks, including Borjomi-Kharagauli National Park,one of the largest of its kind in Europe. The number ofprotected areas, the minister says, is set to increase byover 300,000 hectares, which will raise the percentageof protected areas to 13.05 percent of total territory.“Now we are workingon a Sustainable ForestManagement Lawwhich will regulate ourforest management in asustainable way”Elguja Khokrishvili,Minister of the Environment andNatural Resources ProtectionENVIRONMENT Georgia’s Ministry of the Environment and Natural Resources Protectionis working toward restoring balance to Georgia’s natureCurrently, 8.6% of the entire country is protected, a figure which will soon rise to 13%On a higher level, as a result of the 2014 signingof the Association Agreement, the MOENRPis facing new challenges, one of the biggest beingharmonizing with and conforming to EU standardsand regulations. Developing, adapting and integratinglegislation along European lines (as well as achievingtheir implementation among the private sector) isimportant as the nation hopes for full E.U. membershipin the near future.Another complexity, the minister adds, is the necessityto take into account the impact of new environmentallaws, so they are adapting accordingly, “stepby step, because every new environmental standard orlaw not only creates additional cost, but also createsopportunities for business and for the private sector.”Another ongoing challenge is sustainable development,trying to find balance between economic growthand environmental protection, Mr. Khokrishvili says.Some 40 percent of the country is covered in forest,and the rural population’s reliance on forests as asource for heat production is unsustainable. Parliamentis considering a sustainable forest developmentstrategy – the National Forest Strategy – and “now weare working on a Sustainable Forest ManagementLaw, which will regulate our forest management in asustainable way,” Mr. Khokrishvili says.Despite the numerous challenges, the MOENRPhas promising projects in the pipeline and is makingoutstanding strides. For example, genetically modifiedorganisms were banned this year, and, currently,there are two pilot projects underway which focus onthe use of biomass as an alternative fuel source – anothermethod to reduce dependence on forests. Andyet another sign of encouragement, environmentaltourism is on the rise. There has been a nearly 25percent increase in visitors since 2013, largely due toGeorgia’s natural beauty and protected lands.Protected areas have “big potential,” Mr. Khokrishvilibelieves, and that potential is reflected in the attitudeof the nation’s citizens: when citizens see thatthey are part of nature, and that tourists are interestedin the country’s biodiversity, “there is a change in thementality,” the minister has explained. They becomemore willing to take on responsibility for caring fortheir environment. “We can see these changes andthat’s interesting.”Georgian Railway makes tracksfor the new Silk RoadAs the shortest link between Europe and Asia, Georgia iscentral to the revival of the historic trade route“The railway has a longhistory in Georgia,” says theC.E.O. of Georgian Railway(GR), Mamuka Bakhtadze – ahistory filled with generationsof families involved with therailway since its founding in1865, a tradition that remainsvery strong. With its place in itsnation’s annals assured, GR isnow looking to make a lastingimprint on its future.Mr. Bakhtadze currentlyoversees the operations ofan organization that employsapproximately 13,000 people anda fully electrified railway lineserving Central Asia that spansover 900 miles. Although thecompany is state-owned, in 2012it became a joint-stock companymanaged on a growth and profitmakingbasis, with Mr. Bakhtadzesteering GR toward what he sayswill be a record-breaking year,with revenues of over GEL500m($274 million). GR’s internationalstatus is such that it has beenable to successfully issue bondson the London Stock Exchange,the latest being $500 millionEurobonds in 2012.The Georgian Railway’s mainrailway line is extensive, shippingcargo between the border ofAzerbaijan and the Black Sea;but, the C.E.O. notes, cargo canbe received from as far as China.Currently, revenue isgenerated by an equal splitof dry and liquid cargo, suchas oil, though dry cargo is onthe increase. “For the last 10years on average, our portshave increased their containershipments by around 20 percenton an annual basis,” says Mr.Bakhtadze. This year it is againanticipated to be around 20percent. This kind of consistentgrowth leads the C.E.O. tobelieve that there is a “brightfuture” for container shipmentsthrough the corridor, and in thenext 10 years, “this will be themain business” of GR.Georgia is the shortest linkbetween Europe and Asia, Mr.Bakhtadze emphasizes, andit’s a Silk Road route that GRwants to optimize. Historicallyspeaking, the Silk Road impliesa route that facilitates tradebetween Europe and Asia.Georgia, a country locatedbetween the Black and Caspianseas – the “shortest link” – nowplays a very important role in“If only theGeorgian Railwaydevelops itsinfrastructure, itwill not be enoughto make Georgia aregional hub. Weare coordinatingour projects withour partnersin the corridor,with countrieslike Azerbaijan,Kazakhstan andTurkmenistan”“The goal to getcontainers fromthe Black Sea tothe Caspian Sea inabout 60 hours isdoable and we aregoing to do it.It’s just the rightplace and the righttime to invest”Mamuka Bakhtadze,C.E.O. of GeorgianRailwaythe new Silk Road. And GeorgianRailways, as a transportationservice located between thetwo continents, has becomean integral part of Georgia’snational and economic growth.The development of thiscorridor into a strategic hubfor the region, Mr. Bakhtadzesays, depends on multiregion,multi-industry and governmentalcollaboration. “If only the GRdevelops its infrastructure, it willnot be enough to make Georgiaa regional hub,” he says. “Weare coordinating our projectswith our partners in the corridor,with countries like Azerbaijan,Kazakhstan and Turkmenistan.”He highlights Kazakhstan’sconstruction of a 1,000 kilometer(620 mile) rail line to PortAktau as one example. These“synchronized efforts” willultimately result in Georgiadeveloping into a dependableand necessary transportationhub in the region.The company has acomprehensive, multi-prongedstrategy to keep growing inlight of the demands of the newSilk Road. For one, it is buildinga new Baku-Tbilisi-Kars line, aroute that will ship to the borderof Turkey, slated for completion in2015, according to Mr. Bakhtadze.The goal is to get containers fromthe Black Sea to the Caspian Seain about 60 hours. “It’s doable andwe are going to do it,” he sayswith confidence.There is also the improvementof the existing line’s infrastructure,part of what the C.E.O. calls theModernization Project, whichincludes the construction of twonew tunnels between the eastand west of Georgia to increasecapacity and speed.The mountainous geographyof the country being a limitingfactor, the plan aims to tripleexisting capacity throughinfrastructural upgrades. Thisgoes hand in hand with currentcapacity building projectsfocused on acquiring the mostadvanced technology, such asnew engines to increase trainspeed, new wagons for improvingperformance and an upgradedsignalization system.Although GR is a regionalleader in investing in rollingstock, another aspect of itsstrategy is to expand the numberof container terminals in thecountry. In addition, with a 12percent increase in turnover,passenger/tourism businessis also a top priority (GR isnumber one in this categoryin all post-Soviet countries)and the company is workingwith various ministries toimprove coordination to makeservice more convenient andcomfortable for customers.“It’s just the right place andthe right time to invest,” Mr.Bakhtadze stresses. “Althoughwe are not a big country, witha big railway, we are actuallyserving a rather large populationand geography.”
ADVERTISEMENTGeorgia / P7ADVERTISEMENTGeorgia is currently the chair country of the World Wine Trade GroupThe government is keen to reunite the small parcels of land from the Soviet era to streamline plotsInvestment sought to modernize agricultureAGRICULTURE The agriculture industry in Georgia currently employs over 50 percent of the population, and following its recentestablishment as a Deep and Comprehensive Free Trade Area, it is now in the midst of a grand transformationOver the last two years 750 million Georgianlari, or GEL, ($413 million) have been investedin the sector and Georgian Minister of AgricultureOtar Danelia has high hopes and a detailed gameplan for addressing the challenges that lie ahead.Twenty-five years ago, the Georgian agriculturalsector was very different than it is today. Collectivefarms were in place and while Georgia was managingto supply many U.S.S.R. countries with agriculturalproducts, following the collapse of the Soviet Union,the land was divided into many small parcels whichinhibited efficient production. Reuniting that landinto bigger, more streamlined plots and drasticallyimproving irrigation are among the many objectivesthat the Georgian government is committedto accomplishing.“We are cofinancing,” explains Mr. Danelia, inregards to the government’s support for the agriculturalsector. “We already have 89 cofinancedbusinesses that we are supporting in different fields:as far back as the 11 thcentury, Georgia had awine academy. Oenologywas already an establisheddomain of higher education,as important as philosophy,medicine and mathematics.The royal court even hada “Minister of Wine,” andby the 19 th century, beforeEurope had gotten aroundto acknowledging winemakingas a form of highereducation, Georgia alreadyhad a special committeeregulating the wine industryand vineyards.Today, that committee iscalled the National WineAgency. Operating underthe Ministry of Agriculture,the Agency is chaired byLevan Davitashvili and isresponsible for quality controland certifications, as well asdomestic and internationalmarketing for Georgian wines.Comprised of a team of 60employees who supervisevineyards, inspect wineries,manage promotionalactivities and oversee theadditional rotating staff ofblind tasters who help controlfor quality and conformity,the agency is connected tothe Georgian Wine ProducersUnion and its activities arecofinanced by the state andthe private sector.According to Mr.Davitashvili, the certificationprocess for wines exportedfrom Georgia is very strict, asthe country is trying very hardto establish a solid reputationfor its wines abroad. Over thepast five years, exports haveincreased by an average of20 percent, and by the endof 2014, 60 million bottlesvalued at around $200 millionwill have been exported. Atthe same time, the agency isalso diversifying its offeringsby promoting the export ofthis could be wine-making, storage facilities, coldstoragefacilities, farms, poultry, in any direction.”The key is to keep expanding and eventually becomea competitive exporter.As an impetus to boost exports, Georgia hassigned a free trade agreement with Europe, whichpresents a potential market of nearly 900 millionconsumers. Over 200 civil servants have been deployedall over the country to help educate and trainfarmers in the labeling process and certificationprocedures required to prepare for export. Thereare no fewer than 425 new directives that need tobe complied with before exports can be approved,but they are being tackled in conjunction with theMinistry of Economy, and progress has alreadybeen made.Georgian businesses are already sending samplesof their products to Europe for quality assessmentand to ensure that they meet with the E.U.standards for export. Honey, for instance, wasA glass raised high to a growingwine industryA strong tradition of wine making and clever marketinghave made Georgia’s wine exports soar“We have around30% growthevery year in theChinese market.The product isdifferent from anyother product orany other way ofproducing wine”Levan Davitashvili,Chairman of the NationalWine Agencywine brandy, a grape-originspirit, as well as what is nowcommonly known as ‘orangewine’; a type of white winethat is fermented with itsseeds and skin, and ends upbeing a very deep shade ofamber.While 50 to 60 percent ofGeorgian wines go to Russia;Ukraine, Poland and the Balticcountries are the next topexport destinations, followedby China, to which Georgiarecently exported 1 millionbottles. “We have around 30percent growth every year inthe Chinese market,” saysMr. Davitashvili, pointing outthat no other Central andEast European wine-makingcountries have had the samesuccess in the Chinesemarket.Georgian wines stand outfor their unique fermentationprocess, which happens inlarge earthenware jars knownas Kvevris. The skins andseeds are left to maceratefor six months in theseunderground jars, creatingan extra-long fermentationprocess that generates moreantioxidants than the averagewine, meaning that fewersulfites need to be added.“The product is differentfrom any other product orany other way of producingwine,” says Mr. Davitashvili,but ultimately, what both heand the National Wine Agencyhope resonates most withconsumers is that winemakingis embedded in theGeorgian culture. “In 8,000years, in this territory winemakingnever stopped. Evenwhen we had hard times,Georgians always fermentedwine. This is part of our life.”“Today is a different reality;it’s a market economy and thegovernment cannot get involvedin the private sector, in thebanking sector, and so on”Otar Danelia,Minister of Agricultureamong the first products to be sent for analysis,given that Georgia is already known for the qualityof this product. Plans to build labs for the analysisof soil inspection are also in the works, so that inthe future products can be tested domestically.While the Georgian government has set asidemoney to vitalize the agricultural sector, the countryis also receiving huge support from the E.U.,U.S.A.I.D. and the U.S.D.A., and possible supporton the irrigation front from the World Bank. Privateinvestors from Europe, Japan and China havealso begun to inquire about making investments inGeorgia, and Mr. Danelia makes it very clear that thecountry is still eager to continue entertaining offers.“We need investments. We support the investments.It really motivates others,” he says, explainingthat the country is putting particular emphasison food safety and argues that the country’s smallerscale of arable land – as opposed to that of its muchlarger neighbors, like Turkey – lends itself nicely todeveloping a niche in organic production.In order to promote the agricultural sector andencourage rural Georgian inhabitants to remainin rural areas, the government is also focused ondeveloping the country’s infrastructure to includeeducational facilities, hospitals, roads, electricityand gas in its more remote regions. Because notall 50 percent of the population currently involvedwith agriculture will continue to be involved with thesector in the future, there are also plans to developthe factory sector, including storage areas, as wellas food and beverage production facilities.One beverage that Georgia seems predisposedto successfully produce is wine. With over 8,000years of history, Georgian wine – the majority of itwhite – is a source of national pride. Georgia is thechair country of the World Wine Trade Group and isproactively promoting the quality of its grapes, whichrecently brought in an unprecedentedly fruitful harvestthat amounted to over GEL170 million ($93.5million). Following a government trip to Bordeaux,Georgia will also have a corner detailing its oenologicalhistory in the Wine Civilization Museum thatis being constructed there. While Georgia is mainlyexporting wine to Russia, there has been interestfrom China, and local vintners are working to ensurethat Georgian wines may one day be able to competein Europe as well.With respect to all of the plans being made to mobilizethe agricultural sector in Georgia, Mr. Daneliais careful to make it clear that while the governmentis facilitating and subsidizing as needed, it is criticalfor Georgia and its potential trade partners tounderstand that the rules to the industry are beingcompletely rewritten.“It is like moving from post-Soviet standardsinto European standards,” he explains. “Today isa different reality; it’s a market economy and thegovernment cannot get involved in the private sector,in the banking sector, and so on.”Well aware of the many challenges that lie ahead,he is nonetheless optimistic. By 2020, he expectsthat the number of tourists visiting Georgia will havetripled, that the majority of farmers will work underbetter conditions, and that imports will have beensubstituted by local production, with enough leftover to create a serious change in export figures aswell. “Of course it will not be easy but it’s possibleand it’s achievable,” he says.
Change language