In achieving our strategic expansion initiatives with regard to geographical coverage, sectors, and products, we believe that it is essential to enhance our organizational capacity continuously. With this in mind, courtesy of the financial support of the European Bank for Reconstruction and Development (EBRD) and the Small Business Impact Fund (Italy, Japan, Luxembourg, Norway, Sweden, Switzerland, South Korea, TaiwanBusiness – EBRD Technical Cooperation Fund, and the USA) we are delighted to welcome to PMCG as a senior industry adviser, Mr. Thomas Wittig, Founder and CEO at WITTIGONIA.

PMC Research recently finished a diagnostic study of two clusters of two regions of Georgia - the processing and preservation of fruits and vegetables cluster in Guria, and the poultry cluster in Kvemo Kartli - in order to contribute to their development and promotion, which is beneficial for the private sector’s enhancement, as it can boost productivity and advance innovation.

Recently, we completed a project entitled Supporting an Inclusive Youth Policy by Establishing Sustainable Youth Platforms and Promoting Non-formal Education in Racha, in the course of which we established the Youth Assembly in the Racha-Lechkhumi and Kvemo Svaneti region of Georgia, which conducts various activities dedicated to providing youth with opportunities, experiences, and the necessary theoretical and practical skills and competencies to support their full and successful integration into society. Such efforts were designed to enable them to become involved in decision-making processes at the local level through civic engagement mechanisms.

Artificial intelligence (AI) is increasingly becoming a part of our everyday lives, offering tremendous benefits for societies in terms of public governance, business development, and healthcare. However, it also raises some important economic, legal, and ethical questions. Hence, while governments have to create an AI-friendly eco-system, attract AI investors, boost the development of AI technologies, increase the industrial application of AI and, therefore, enhance AI-generated economic and social welfare overall, they should also elaborate policy frameworks to balance AI-associated risks that might be related to personal data protection, targeting, algorithmic discrimination, cybersecurity, and/or AI liability.

The number of international travelers increased by 141.6% in April 2021 compared to the same period of 2020, and declined by 86.8% compared to the same period in 2019. Meanwhile, the number of international visitors increased by 140.4% (2021/2020) and declined by 85.0% (2021/2019), and the number of international tourists increased by 182.2% (2021/2020) and declined by 78.2% (2021/2019); Visitors from the United States and Israel stand out as high-spenders and long-stayers in Georgia, while visitors from Turkey, the Gulf States, Iran, and Armenia have been categorized as high-spenders but short-stayers. Visitors from Russia and Azerbaijan fall into the low-spend, short-stay category; Israel and the Gulf States accounted for the highest estimated revenue loss in 2020 due to the COVID-19, apart from immediate neighbors. Now, Israel and the United Arab Emirates have one of the highest percentage of vaccinated population, so visitors from the two countries could be worth targeting; For 2021, it is recommended to channel marketing campaigns toward high-spenders and short-stayers, along with high-spenders and long-stayers; Due to the abnormal impact of the pandemic on 2020 prices, we use 2019 as the comparison year for the Hotel Price Index for the rest of 2021.

In this bulletin, a snapshot of remittance inflows into Ukraine pre-COVID is discussed, followed by its developments in 2020. According to the World Bank, global remittances will decline by 14% by the end of 20212, compared to the pre-pandemic level of 2019; In 2020, remittance inflows into Ukraine declined just by 0.3%, compared to 2019; Remittance inflows in Ukraine have been growing at an annual average of 8.2% over the past decade; The contribution of remittances to GDP in Ukraine amounted to 7.7% in 2020; The top senders of remittances to Ukraine in 2020 were Poland (26%), the United States (10%), and the United Kingdom (9%). In 2016-2019, the top senders were Poland (30%), Russia (12%), and the United States (8%); Remittances from Russia declined the most in 2020 (-20%), compared to 2019, while the United Kingdom recorded the strongest growth (69%) over the same period.

PMC Research has launched a new periodic publication entitled Sector Snapshots. Each issue focuses on a specific sector of the Georgian economy, observing developments with respect to key indicators of the given sector as a whole, the sector’s dynamics, its role in the overall economy, and, finally, financial indicators of companies within that sector.   The publication will produce valuable insights for businesses engaged in the covered sectors, as it lays out the trajectory of development for each sector and its possible financial bottlenecks, thereby contributing to more informed and efficient decision-making.  In the first issue of our new publication, we focus on Georgia’s microfinance sector.  In 2017-2019 new regulations on microfinance institutions (MFIs) entered into force, which significantly altered the landscape of the industry; Between Q1 2017 and Q4 2020, the number of MFIs and employees in the sector fell, with the former dropping to 40 and the latter to 4145 by Q4 2020 (52% and 16% decrease, respectively) In Q4 2020, MFIs in Georgia held 1.48 bln GEL of assets and 0.98 bln GEL of liabilities. In this period, the consolidated assets and liabilities of MFIs increased, compared to Q4 2019 with a growth of 7% and 9%, respectively. Compared to Q1 of 2017, figures increased by 6% and decreased by 1%, respectively; In 2020, gross income (revenue) of MFIs decreased, compared to 2019, and dropped by 10% to 332.6 mln GEL, while net income increased to 44.8 mln GEL. Moreover, the net income margin increased by 14 percentage points and reached 14%; By the end of 2020, portfolio of loans issued by MFIs amounted to 1.18 bln GEL, while number of loans in portfolio amounted to 0.66 mln loans, which represented 8% increase and 16% decrease, respectively, compared to the figures by the end of 2018.

The number of international travelers declined by 75.3% in March compared to the same period of 2020, and by 90.7% compared to the same period in 2019. Meanwhile, the number of international visitors fell by 73.4% (2021/2020) and by 89.0% (2021/2019), and the number of international tourists fell by 64.4% (2021/2020) and by 84.4% (2021/2019); Saudi Arabia, the United States, Qatar, United Arab Emirates (UAE), and the United Kingdom rank as the top five countries of origin when it comes to highest average expenditure per visit; Turkey, Saudi Arabia, Qatar, UAE, and Armenia rank as the top five countries of origin when it comes to average expenditure per day; Targeting visitors from Turkey, via both air and land routes, could be an effective marketing strategy, at least in the short term; Due to the abnormal impact of the pandemic on 2020 prices, we use 2019 as the comparison year for the Hotel Price Index for the rest of 2021.

In Georgia, the average cost of a room in a 3-star hotel was 124 GEL per night in March 2021, while the average cost of a room in a 4-star hotel in Georgia was 219 GEL per night and the average cost of a room in a guesthouse was 80 GEL per night. The average cost of a room in a 5-star hotel in Georgia in March 2021 was 332 GEL per night. In Guria, the average price was 587 GEL, followed by Tbilisi - 436 GEL, Adjara - 295 GEL and Kakheti – 293 GEL.

PMC Research conducted a diagnostic study of fruit and vegetable processing cluster and hazelnut processing in Guria region of Georgia, and developed a cluster map, and elaborated short-term objectives as well as a long-term vision for the development of this cluster.  The study is part of the “EU Innovative Action for Private Sector Competitiveness in Georgia (EU IPSC)” program, which is a joint initiative of the European Union and the following four UN agencies: the United Nations Development Programme (UNDP); the Food and Agriculture Organization (FAO); the United Nations Industrial Development Organization (UNIDO); and the International Organization for Migration (IOM). 

PMC Research conducted a poultry cluster diagnostic study in Kvemo Kartli region of Georgia, and developed a cluster map, and elaborated short-term objectives as well as a long-term vision for the development of this cluster.  The study is part of the “EU Innovative Action for Private Sector Competitiveness in Georgia (EU IPSC)” program, which is a joint initiative of the European Union and the following four UN agencies: the United Nations Development Programme (UNDP); the Food and Agriculture Organization (FAO); the United Nations Industrial Development Organization (UNIDO); and the International Organization for Migration (IOM). 

PMC Research described both the history and the current reality for the marine fishing cluster in Samegrelo-Zemo Svaneti region of Georgia, analyzed business operations within it, developed a cluster map, and elaborated short-term objectives as well as a long-term vision for the development of this cluster.  The study is part of the “EU Innovative Action for Private Sector Competitiveness in Georgia (EU IPSC)” program, which is a joint initiative of the European Union and the following four UN agencies: the United Nations Development Programme (UNDP); the Food and Agriculture Organization (FAO); the United Nations Industrial Development Organization (UNIDO); and the International Organization for Migration (IOM). 

PMC Research described both the history and the current reality for the hazelnut processing cluster in Samegrelo-Zemo Svaneti region of Georgia, analyzed business operations within it, developed a cluster map, and elaborated short-term objectives as well as a long-term vision for the development of this cluster.  The study is part of the “EU Innovative Action for Private Sector Competitiveness in Georgia (EU IPSC)” program, which is a joint initiative of the European Union and the following four UN agencies: the United Nations Development Programme (UNDP); the Food and Agriculture Organization (FAO); the United Nations Industrial Development Organization (UNIDO); and the International Organization for Migration (IOM).