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Coronavirus in Georgia, 11 – 17 May. Tourism industry revs engines, gov’t announces agricultural assistance plan



We’re not through this yet but we’re very close – that’s one of the messages health and government officials have been sending this past week (11-17 May).

Medical Director of Tbilisi Infectious Diseases Hospital Marina Ezugbaia said earlier in the week on May 11 that “We are at the peak of the period, if it continues like this, we can say that the situation has been overcome.”

She also noted that for more than one week the number of daily new cases had not exceeded single-digit numbers, though a spike of 20 cases on May 14 and another 18 on May 17 put an end to the streak.

Director of First University Clinic Levan Ratiani echoed similar sentiments, saying “The dynamics are declining…our clinic will soon be back to normal.”

While the virus remains a threat, several European countries seem to feel confident enough to being opening their land borders to neighboring countries, with Germany opening up to France, Austria, Switzerland and Luxembourg, while the rest of the continent will open up and restore free movement of people starting June 15.

Georgia, too, seems emboldened by the continued low rate of new case infections, with the average daily rate of infection at around 8.5 this past week, in comparison to the 6.5 of the week before.

Given the largely positive dynamics, the country is reopening at a pace significantly faster than what was previously envisioned, and now beauty salons and aesthetic medicine centers are due to reopen on 18 May, a week after most shops with their own entrances were allowed to resume operations.

Despite this, several restrictions remain in place. Gatherings of more than 10 people are forbidden, social distancing is to remain enforced and face masks are mandatory inside closed shops and other public spaces. Private transport is still limited to three people per vehicle, including the driver, and the curfew from 21:00 to 06:00 remains in effect.

Tourism
The country’s leadership wants to see international tourism back on its feet by July 1. To that end, Georgian National Tourism Administration Head Miriam Kvrivishvili said on May 16 that new regulations for the tourism industry would be made public later this week, after taking into account the input of hotels, tourist associations and other players.

One of the first countries with which Georgia will establish a corridor is Israel, PM Gakharia announced, noting that negotiations for similar agreements are already underway with Czechia, Poland, the Baltic states and the country’s neighbors.

The government is working on a plan to designate different parts of the country as safe zones for tourism, and where tourism facilities will have to adhere to particularly stringent hygiene requirements.

The aviation industry is revving its engines as wells, with Economy Minister Natia Turnava noting 20 airlines have already announced their readiness to resume flights to and from Georgia, including Ryanair and Wizzair, Turkish Airlines, El Al, Qatar Airways and others.

Meanwhile, how the country imagines the process of screening tourists and ensuring they are largely free of the infection is starting to take shape. Health Minister Ekaterine Tikaradze says that tourists entering Georgia will have to have present certified lab certificates from the last 72 hours which prove they are not infected with the coronavirus: “Thermo-screening by itself will not be enough, we know the situation is much more complicated. In some cases, tourists will be able to receive the testing service on the spot if they have not done so in their own country.”

Finance, business
The National Bank of Georgia issued a statement on May 11 announcing plans to increase GEL liquidity amongst banks in exchange for foreign currency resources. This, the NBG hopes, will increase lending flexibility and reduce the rates of GEL-denominated loans.

The EBRD released a new macroecnomic overview for Georgia and with it the most pessimistic forecast for the Georgian economy in 2020 yet, predicting a contraction of 5.5%. The IMF and NBG have both put forward a 4% estimate. With this indicator, Georgia may be the anti-leader in the region for economic loss in 2020, with economic downturn in Armenia reaching 3.5%, Azerbaijan – 3%, Russia and Ukraine – both 4.5%. The EBRD looks at 2021 more favorably, predicting 5.5% growth.

Remittances were down a full 42% in April 2020 to just 79 million USD, recently released GeoStat data show, with the decline being the sharpest from Russia (-62%), Italy (-28%), Greece (-38%), Israel (-48%) and the US (-34%). This is one of the few times, if not the first, in recent history that Russia has not been the number one supplier country of remittances to Georgia, with its $13.1 million taking second to the $13.3 million that came in from Italy. Remittances out of Georgia in April were down 47% to just 10 million USD.

Aid to agriculture
The Georgian government introduced a 300 million GEL assistance package on 12 May to help rural areas and farmers affected by the coronavirus crisis. Measures will include but are limited to:
- farmers will receive a one-time assistance package of 200 GEL / ha of land, up to 2,000 GEL.
- a subsidy program for the purchase of diesel fuel at one lari lower than market rate
- subsidies for the purchase of agricultural chemicals, agricultural goods and services
- co-financing for bank loans and insurance premiums
- irrigation debt of 2012-2019 to be written off, and irrigation taxes for 2020 to be canceled
- grants of up to 50% for the purchase of agricultural equipment

Medicine
Deputy Minister of Health Tamar Gabunia says the country will have access to Gilead’s Remdesivir, an experimental drug gaining traction as a possible treatment for patients with COVID-19 that may be capable of speeding up recovery time. The drug was initially developed to treat Hepatitis C, and later tested against Ebola, however was ineffective against these viral infections. Six clinics will have access to the drug, and it will be used for patients that have a severe form of the infection.

Element Construction has built a poultry farm

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Philip Morris Georgia has announced the launch of heated tobacco product - IQOS on Georgian market as of July 27, 2020. Find the press release here

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

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EY compensation and benefits survey

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Mobile market review by Grant Thornton

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Deloitte Legal, 17 June 2020

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

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EY Tax&Law Brief for March-April-May, 2020

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EY Law Updates on COVID-19, Seventh Edition

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EY Global Labor and Employment Law Multi-country guide

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TBC Quarterly Newsletter - Spring of 2020

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

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

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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

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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)

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

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

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

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