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Coronavirus in Georgia – 20-26 April newsletter, updates



The infection curve was flattened further this week in Georgia, with the rate of infection significantly down from the spike of the week from 13-19 April, when average daily infections came out to 19.5. This week average daily cases came down to just 13, a figure seen earlier in the outbreak of the disease in the country.

Despite the good news, Deputy Head of the National Center for Disease Control Paata Imnadze warned that the country should not think about returning to the usual way of life for at least one year, and that even afterwards, “we will have to get used to the fact that there will be individual cases of COVID-19, maybe dozens. However, this should not give rise to concerns that we will have repeat of the problem [as has been seen] in European countries.”

Director of the NCDC Amiran Gamkrelidze said this is no time to relax ‘even for a minute’, and that the first weeks of May will likely see an uptick in the number of cases, noting that the time period spanning between the 6th and 8th week of community transmission has been the most critical abroad. Georgia is only now moving into its 6th week after the first recorded cases of community transmission on March 22.

Meanwhile, the state of emergency has been extended until May 22.

Anti crisis plan

The Georgian government unveiled a 3.5 billion GEL anti-crisis economic recovery plan on April 24, which provides financial support for households and businesses, and details how the economy will be gradually reopened over the next three months if the country manages to keep the infection rate low.

For information on how exactly the plan will help the unemployed, socially vulnerable individuals, agriculture and the private sector, AmCham Georgia has put together an in-depth description of the plan, which you can find here.

Various categories of businesses will be allowed to reopen starting this Monday, April 27, including e-commerce, delivery services and taxis.

Open air markets will also be allowed to begin functioning. The roads will once again be opened to private vehicles as well, and two days will be given – April 27, 28 – to allow people to return to their city of registration if they have ended up outside their home district due to the entry and exit ban that went into force at noon on April 17.

In intervals of two weeks following April 27, more and more businesses will be allowed to open over the course of an additional five stages (three months).

Stage two: construction, car wash and auto services, computer repair, recreational zones

Stage three: retail and wholesale stores except malls, manufacturing and publishing enterprises

Stage four: shopping malls, open-air restaurants, all types of financial services, beauty salones, aesthetic medicine centers

Stage five: Closed markets, all restaurants and cafes

Stage six: All sports, entertainment, education, recreation facilities, non-profit activities

Health, regulations, testing

Several villages were put on lockdown this past week. Gvankiti in Terjola municipality (Imereti) was put on lockdown on April 23 after an outbreak of more than 10 cases in the area. Khatisopeli, Vanati and Mushevani in Bolnisi municipality (Kakheti) followed on April 25 for the same reason. Bolnisi municipality now has a little less than one-fifth of the country’s infections.

Violations of the state of emergency regime and curfew hours are noticeably down, with police recording between 85-114 violations per day since April 20, whereas upwards of 150-200 violations and higher had previously been the norm.

Georgia’s testing capacity remains limited but sufficient. Minister of Health Ekaterine Tikaradze says the country currently has 10,000 PCR tests, and that these stocks will reach 100,000 by the beginning of May. Meanwhile, she says, the country has around 5,000 rapid tests available.

Deputy Head of the National Center for Disease Control Paata Imnadze said that as the limitations are gradually lifted, the risk of infection will go up, and that widespread testing will be one of the country’s best defenses against a large-scale outbreak. However, he said there ‘should be no illusions that even half the country will be tested.’

“I want you to know that even in countries where so-called ‘aggressive testing’ is carried out – Germany, South Korea, Singapore – only 8-10% of the population was tested”, Imnadze noted.

Cutting through the noise of alleged treatments circulating the web, First University Clinic Levan Ratiani called on residents to refrain from using immunostimulants and to say no to alcohol. He also advised against self-administered preventative ‘treatments’ of Vitamin C.

Economy

GeoStat has released import-export data for the first quarter of 2020, with foreign trade turnover down 2.7% in comparison to the previous year at $2.8 billion, and with a trade deficit of $1.21 billion.

Imports were down in Q1 2020 only slightly at 1.4% to $1.99 billion.

Exports have been hit harder, with total exports sustaining the bulk of the blow, and sinking 9.4% to $778 billion, while domestic exports were down just 5.9%.

Only copper ores and concentrates (+17%) and the re-export of cars (+26%) reported growth in comparison to the previous year. Georgia’s remaining top exports suffered moderate downturns. Ferroalloy exports were down 39%, as were wines (-9.6%), fertilizers (-14%), mineral and freshwaters (-11.3%), alcohol (-9.2%) and medicines (-76.8%). The head of Georgia’s Export Development Association Anna Kvaratskhelia predicts the second quarter will be significantly worse.

However, in March alone the balance of trade improved by 30 million USD (about 7%), with exports down 22%, but imports, the volume of which is must larger, down 11%.

Meanwhile, 15 commercial banks operating in Georgia reported losses of 747 million GEL in Q1 2020, which is 1.5% of total assets owned by these banks. However, the loss was mainly caused by the creation of reserves due to the negative expectations stemming from the pandemic and an attempt to bolster resiliency against the crisis. In recent years, the Georgian banking sector has reported annual average profits of around 900 million GEL [$285 mln].

The government has announced a wheat import subsidy program – a maximum of $40 per tonne of wheat – as a result of which a bag of flour will go for a maximum of 51 GEL. Some local producers say that this will allow producers not to increase the price of bread. Wheat has grown by between 25-30 USD per tonne of wheat in recent weeks, reaching 240-245 dollars.

National Bank of Georgia President Koba Gvenetadze announced the bank would be providing $200 million in GEL liquidity to microfinance institutions in the country.

Remittances to Georgia sank 9% in March. The country received 28% less in transfers from Russia than in did in 2019. Georgia is the 24th most remittance-dependent country in the world in terms of remittances to GDP, with 11.6% of the country’s income provided by transfers from abroad.

The Labor Inspection Department of the Ministry of Health reports it will have carried out monitoring of operations practices for 450 businesses by the end of this week, including online shopping facilities.

Galt and Taggart is upbeat about 2021, and forecasts 5% economic growth for Georgia next year – considerably more optimistic than the IMF’s 3% forecast.

Worth the read:

What is selling most on Amazon, thanks to COVID (Maximum Venture)

Georgia: the social impact of COVID-19 – case for a universal support scheme? (from ISET Policy Institute)

Aggressive testing – a potential game changer in the struggle against coronavirus (Huffington Post)

BGI Law Brief, (General Regulatory Update) - May 2020

(posted on May-21-2020)

Grant Thornton Tax and Legal Alert - Overview of changes in Georgian legislation, April 2020, in Georgian and English

(posted on May-18-2020)

In what circumstances will criminal law liability be imposed for violating the rules of the state of emergency? by Business Legal Bureau (BLB) in Georgian and English

(posted on May-18-2020)

Deloitte Academy training- Business Evaluation/ Covid 19 impact on companies' international operations.

(posted on May-8-2020)

EY Law Updates on Covid-19

(posted on May-7-2020)

Grant Thornton: Legal Response to Covid-19 Challenges

(posted on May-1-2020)

Could the President of Georgia establish the criminal law liability for violation of Emergency regime? by BLB Partner Ms. Maya Mtsariashvili

(posted on Apr-29-2020)

Deloitte: COVID-19 Anti-crisis Economic Plan Introduced by the Government of Georgia (in Georgian and English)

(posted on Apr-27-2020)

KPMG: Tax adjustments and challenges caused by the spread of New Coronavirus (COVID-19) (in Georgian)

(posted on Apr-25-2020)

BLB Newsletter, April 13, 2020 (in Georgian and English)

(posted on Apr-15-2020)

Dentons launches 2020 edition of its 'Investing in renewable energy projects in Europe' guide

(posted on Apr-7-2020)

Nexia TA release on Government decree about restrictions against Covid 19 - see document and annex (in Georgian)

(posted on Apr-6-2020)

SavvY has launched a platform for supporting companies through Covid 19 crisis - supportbusiness.ge

(posted on Apr-3-2020)

BGI Law Brief, (General Regulatory Update) - March 2020

(posted on Mar-31-2020)

BGI Law Brief, (Georgia Responds to Covid-19 Pandemic) - March 2020

(posted on Mar-31-2020)

Deloitte Legal, Mar-10

(posted on Mar-10-2020)

Special offer for AmCham members from Dinehall

(posted on Mar-05-2020)

The Biltmore Hotel: proposal for Women’s Day Sunday Brunch

(posted on Mar-05-2020)

Dentons' Tbilisi office contributes to 9th annual Tbilisi VIS Pre-Moot

(posted on Feb-26-2020)

New menu in Tiffany Bar and Terrace Restaurants

(posted on Feb-25-2020)

Deloitte Legal, Feb-10

(posted on Feb-25-2020)

Dentons' Tbilisi office contributes to the Energy Investment Risk Assessment (EIRA) 2019

(posted on Feb-24-2020)

IRC Academy is more than pleased to invite you to attend the Sales & Marketing - Business Model Canvas course. (March 10-11-12)

(posted on Feb-24-2020)

AE Solar: the biggest PV modules manufacturing facility in Europe

(posted on Feb-14-2020)

BGI Law Brief, February 2020

(posted on Feb-11-2020)

Deliberate market focus drives solid growth for Grant Thornton

(posted on Jan-21-2020)