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CONTENTS
Forbes English #21 // June 2021
p. 50
2 | FORBES JUNE 2021
CONTENTS
LEADERBOARD
RATINGS
8 2020 Rating of Insurance
Companies
12 The World’s Top 50

Influencers Across Social
34 GEORGIAN
Media Platforms
BILLIONAIRES
16 The World’s Top Countries

for Military Spending 40 A billionaire
a day
THOUGHT LEADERS
46 How The Gates’ Split

20 Inflation Risk Could Stack Up
by Rainer Michael Preiss
Against The Biggest
Billionaire Divorces
22 All the Best, Mr. Hudak!
by Elene Kvanchilashvili
24 Georgia On the Road to

Green and Resilient Growth
by Sebastian Molineus
COVER STORY
26 “The First Startup Exit”

What Does it Mean for
Georgia?
by Colin Donohue 50 Hi-Tech Problem Solvers
by Elene Chomakhidze

A range of specific yet versatile products that can
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CONTENTS
CEO
p. 24
56 The Three Principles

MANAGEMENT
64 When the Market Leader is

Your Partner
72 Simon Sinek Tells You How

to Find the Treasure Hidden
in Your Company
by Sami Cohen
ECONOMICS
INTERVIEW
76 25 Years in the Legal

Business
80 How Do We Stabilize
Georgian Lari
by Beso Namchavadze
by Elene Chomakhidze
p. 56 82 US Inflation:
Set for Take-off?
by Laurence Ball, Gita Gopinath,
Daniel Leigh, Prachi Mishra, Antonio
Spilimbergo
86 Georgian Tax Residency

by Gela Barshovi
88 Bitcoin Electricity
Consumption
CONTENTS
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JUNE 2021 FORBES | 7

2020 Rating
of Insurance
Companies
BY SHOTA TKESHELASHVILI
D
espite the 2020 economic crisis, the Georgian insur- GEL 116.7 million in premiums. This represents an increase of GEL
ance market managed to grow. During the past year, 4.6 million compared to 2019. As of 31stDecember 2020, there
the eighteen insurance companies operating in Geor- were 93,000 insured vehicles in Georgia, meaning that only 6%
gia collected a total of GEL 667 million in premiums, of the total car fleet is insured. The average monthly insurance
representing a year-on-year increase of GEL 42.3 million, or 7%. premium is GEL 104 per vehicle. The third-largest segment is
The sector registered a net profit of GEL 47.6 million, representing property insurance, with companies collecting GEL 108 million
an increase of 89% compared to 2019. in premiums. The property insurance segment grew by GEL 19.8
In terms of individual segments, health insurance remains the million in 2020.
most lucrative area of the insurance sector. Health insurance com- In 2020, GPI Holding held the leading position among the eigh-
panies collected a total of GEL 267.6 million in premiums, exceed- teen insurance companies operating in Georgia with GEL 128.9
ing the 2019 figure by GEL 33.6 million. As of 31st December 2020, million in collected premiums. Second place was held by Aldagi
17% of the Georgian population (620,000 people) had private with GEL 106.9 million, and third place was held by TBC Insurance
health insurance. The average monthly health insurance premium with GEL 89.3 million in collected premiums. According to their
paid by consumers or their employers in 2020 was GEL 36. financial statements, half of the insurance companies registered
Car insurance is the second-largest segment, accounting for growth in 2020, while the other half registered losses.

Rankings of Insurance Companies Operating in Georgia
The rankings are composed based on premiums collected in 2019 and 2020.
128,900,000 GEL
GPI
106,900,000 GEL
106,900,000 GEL
Aldagi
99,500,000 GEL
98,300,000 GEL
TBC Insurance
81,300,000 GEL
71,700,000 GEL
Imedi L
84,200,000 GEL
59,600,000 GEL
Ardi
54,000,000 GEL
42,100,000 GEL
Unison
36,000,000 GEL
38,500,000 GEL
Irao
35,500,000 GEL
24,400,000 GEL
PSP Insurance
21,600,000 GEL
23,600,000 GEL
Euroins
16,200,000 GEL
17,000,000 GEL
Benefits
19,800,000 GEL
16,900,000 GEL
Alfa
21,200,000 GEL
11,600,000 GEL
Insurance Group
8,800,000 GEL
8,400,000 GEL
Prime
9,100,000 GEL
8,300,000 GEL
Cartu Insurance
10,700,000 GEL
7,700,000 GEL
Hualing Insurance
10,000,000 GEL
5,000,000 GEL
Tao
6,800,000 GEL
New Vision 4,000,000 GEL
2,700,000 GEL
Green Insurance
3,200,000 GEL
0 40,000,000 GEL 80,000,000 GEL 120,000,000 GEL
2020 2019

Ranking of Insurance Market Segments (2020)
Health Insurance 267,600,000 GEL

Car Insurance 116,700,000 GEL
Property Insurance 109,300,000 GEL
Life Insurance
50,400,000 GEL
Third-Party Car Insurance 38,700,000 GEL
Civil Responsibility Insurance 25,300,000 GEL
Accident Insurance 14,200,000 GEL
Liability Insurance 11,200,000 GEL
Insurance against Financial Losses 8,700,000 GEL
Other 25,000,000 GEL
0 60,000,000 GEL 1200,000,000 GEL 180,000,000 GEL 240,000,000 GEL
Health Insurance Market Distribution by Company
GPI 74,300,000 GEL

Irao 16,900,000 GEL
PSP Insurance 18,100,000 GEL
Ardi 39,100,000 GEL Imedi L 61,800,000 GEL
Car Insurance Market Distribution by Collected Premiums
TBC Insurance 27,300,000 GEL

Aldagi 23,300,000 GEL

Irao 6,400,000 GEL
Euroins 7,000,000 GEL

GPI 19,800,000 GEL

The World’s Top 50
Influencers Across
Social Media Platforms
I
n the modern digital world, social media reach is power. The peo-
ple with the most followers on Twitter, for example, have a massive
platform to spread their messages, while those with large, engaged
followings on Instagram are an advertiser’s dream sponsor partner.
Social media can also be an equalizer of power. It’s true that many
celebrities boast large followings across platforms, but social media
has also enabled previously unknown personalities to turn YouTube or
TikTok fame into veritable star power and influence.
Who has the biggest reach across the entire social media universe?
Instead of looking at who has the most followers on Instagram, Twitter,
or other networks, we ranked the most-followed personalities across all
major platforms combined.
BY OMRI WALLACH

Who Has the Most Overall
Followers on Social Media?
We parsed through hundreds of the most-followed accounts on multiple platforms to narrow down the top influencers across
social media as of April 2021.
Sources include trackers of the most followers on Twitter, Instagram, Facebook, YouTube, Twitch, and TikTok, verified directly on
site and with social media tracker Socialblade.
The results? A top 10 list of social media influencers consisting of athletes, musicians, politicians, and other personalities.
Rank Name Category Total Followers Biggest Platform
#1 Cristiano Ronaldo Sports 517M Instagram
#2 Justin Bieber Music 455M Instagram
#3 Ariana Grande Music 429M Instagram
#4 Selena Gomez Music 425M Instagram
#5 Taylor Swift Music 361M Instagram
#6 Dwayne Johnson Film & TV 342M Instagram
#7 Katy Perry Music 338M Instagram
#8 Kylie Jenner Other 333M Instagram
#9 Rihanna Music 332M Twitter
#10 Kim Kardashian Other 319M Instagram
Unsurprisingly, celebrities reign supreme on social media. As of April 2021, soccer superstar Cristiano Ronaldo was the most-
followed person on social media with more than 500 million total followers.
But there are other illuminating highlights, such as the global reach of music. With large and diverse fanbases, artists account for
half of the top 50 largest social media followings.
Also notable is the power of Instagram, which was the biggest platform for 67% of the top 50 social media influencers. This in-
cludes hard-to-categorize celebrities like the Kardashians and Jenners, which turned reality TV and social media fame into business
and media empires

The Most Followers on Twitter,
TikTok, and YouTube
However, it’s not only celebrities that dominate social media.
Personalities that started on one social media platform and developed massive followings include TikTok’s most-followed star
Charli D’Amelio and YouTubers Germán Garmendia, Felix “PewDiePie” Kjellberg, and Whindersson Nunes Batista.
Politicians were also prominent influencers. Former U.S. President Barack Obama has the most followers on Twitter, and India’s
Prime Minister Narendra Modi has more than 175 million followers across social media.
Former U.S. President Donald Trump would have also made the list with more than 140 million followers across social media
before being banned from multiple platforms on January 8, 2021.
A Generational Look at Social

Media Influence
While older generations have had to adapt to social media platforms, younger generations have grown up alongside them. As a
measure of cultural importance, this gives Gen X, Millennials, and Gen Z a rare leg-up on older generations.
Millennials, in particular, hold the lion’s share of spots in this top list:
Generation # of Influencers in Generation Top Influencer in Generation
Gen Z 4 Kylie Jenner
Millennial 33 Cristiano Ronaldo
Gen X 10 Dwayne (The Rock) Johnson
Baby Boomer 3 Ellen DeGeneres
The average age of the top 50 influencers was just over 37.
In our Generational Power Index (GPI), which measures the share of power generations hold in various categories, digital plat-
forms were a key area where Millennials derived their power and influence. Overall, Baby Boomers—and to a lesser extent, Gen X—
still run the show in most areas of society today.
Social Media Influence, Going Forward

As most fans and advertisers know, not all social media accounts and followings are homogenous.
Many influencers with relatively small followings have more consistent engagement, and are often able to demand high advertis-
ing fees as a result.
Conversely, most social media platforms are reckoning with a severe glut of fake accounts or bots that inflate follower counts,
impacting everything from celebrities and politicians to personalities and businesses.
Regardless, social media has become a mainstay platform (or soapbox) for today’s cultural influencers. Billions of people turn to
social media for news, engagement, recommendations, and entertainment, and new platforms are always on the rise.

The World’s
Top Countries
for Military
Spending
By practically any measure, the world today is more peace-
ful and less war-torn on a global scale, relative to the past.
For instance, declarations of war between nations and sol-
dier casualties have both dropped drastically since the 20th
century. Yet, military spending has not followed this trend.
BY ARAN ALI

The Top 10 Military Spenders
According to SIPRI, global military spend reached almost $2 trillion in 2020. The top 10 countries represent roughly 75% of this
figure, and have increased their spending by $51 billion since the year prior.
Here’s how the worlds top 10 military spenders compare to each other:
The U.S. isn’t labeled as a global superpower for nothing. The country is by far the largest military spender, and its $778 billion
budget trumps the remainder of the list’s collective $703.6 billion. On its own, the U.S. represents just under 40% of global military
spending.
This year, Saudi Arabia has lost out on a top five seat to the UK, after a 7.1% decline in spending compared to a 21.5% increase for
the UK.

Military Spend as a Percentage of GDP
Military expenditures as a percentage of GDP can be used to compare military spending relative to the size of a country’s
economy.
When looking at things this way, many of the top spenders above do not appear. This may be an indication of their economic
prowess or a demonstration that the money might be used for other vital areas such as education, healthcare, or infrastructure

It’s pretty rare for countries to reach double digits for military spending as a percentage of GDP. In this case, Oman is an outlier, as
the Middle Eastern country’s spending relative to GDP grew from 8.8% last year, to 11% in 2020.
Many of the countries with the highest military spending to GDP are located in the Middle East—a reflection of the escalating
conflicts that have persisted in the region for well over two decades.
It’s worth noting that some data for the Middle Eastern region are estimates, due to the aforementioned regional instability.
More Spending to Come?

Global military spending figures are at a 32-year high, despite the pandemic’s effect on shrinking economic output.
Although a major war hasn’t occurred in some time, it’s not to say the geopolitical mood hasn’t been tense.
The last 12 months or so have witnessed some nail-biting moments including: Border disputes between China and
India•Heightening tensions between China and Taiwan•Russia’s military presence in eastern Ukraine•The hacking of SolarWinds, a
Texas-based company, by Russia•The ongoing Yemen crisis•An Israel-Iran feud
Will 2021 extend the trend of peace, or will rising military spending mean even higher tensions?

THOUGHT LEADERS
RAINER MICHAEL PREISS - CURRENT EVENTS
INFLATION RISK
AS THE GLOBAL VACCINE ROLLOUT Rampant monetary easing by global central banks
continues and the post pandemic economic recovery to aid the global recovery from COVID-19 is spurring
gets closer, the global market narrative about rising economic activity while debasing fiat currencies. The
inflation and the risk of the U.S. economy overheat- rising prices of gold and bitcoin are visible indications
ing has become more mainstream. Bank of America of this, as investors seek to hedge their portfolios
recently created headlines with its warning about the against inflation.
risk of transitory hyperinflation. U.S. Treasury Secretary Janet Yellen indicated last
As stewards of capital and investment portfolios, week that if President Biden’s multi trillion-dollar
the most important question fund managers face to- spending plans are enacted by Congress, “it may be
day is whether the 40-year trend of disinflation ended that interest rates will have to rise” to prevent the U.S.
in 2021? economy from overheating.
In my view, the inflation trade, is arguably the big- It was the most overt acknowledgement to date by
gest decision you have to make with regards to your a government or Federal Reserve official that inflation-
portfolio for the next 10 to 20 years. ary pressures exacerbated by unprecedented federal
If you have got a 10-year to 20-year investment ho- stimulus spending and pent-up demand consumer
rizon now, the downside is that you do not adjust. Your spending might actually harm the American economy.
risk is that you do not adjust for inflation. Especially Madame Secretary Yellen offered further assuranc-
at a time when traditional fixed income is increasingly es that she is not worried about persistent inflation,
return free risk and crypto currencies like bitcoin are but she does think prices will rise in the short term as
making record highs. economic activity picks up.
Inflationary risk is generally defined as the risk The return of inflation now seems to have become
that inflation will undermine an investment’s returns consensus and could become one the main market
through a decline in fiat currency purchasing power. themes for 2021, coupled with a rebound in global
Bond payments are at most inflationary risk because commodities. Year-to-date, the best performing stock
their payouts are generally based on fixed interest markets in the world, like Mongolia and Kazakhstan,
rates, meaning an increase in inflation diminishes their are all commodity linked stock markets.
purchasing power. Rising inflation will lead to steeper yield curves
RAINER MICHAEL PREISS SERVES AS PORTFOLIO STRATEGIST AT GOLDEN EQUATOR WEALTH SINGAPORE.

initially, and eventually central bank According to Vladimir Potapov (CEO of it is important to note that U.S. and UK
policies such as yield curve controls and VTB Capital Investments, Russia’s largest investors are still by far the largest institu-
heavy debt monetization, in my view. wealth and investment manager and part tional investors in Russian equities.
This is likely to further drive investors of Russia’s second largest bank, VTB) Rus- As the world comes out of lockdown
into real assets, namely commodities and sian equites offer over 100% upside from and hopefully overcomes the pandemic,
GEM (global emerging markets), especially current levels over the next three years, investors might want to recall Austrian
global emerging market value stocks. plus he highlights investors get paid to economist Friedrich August von Hayek’s
Despite geopolitical risk, commodity-rich wait for the rerating with a 7% dividend famous statement: “it is not an exaggera-
emerging markets, like Russia and Ka- yield. tion to say history is largely a history of
SHUTTERSTOCK
zakhstan, are the best hedge against global While the media talks a lot about U.S. inflation, usually engineered by govern-
inflation rising. and increasingly EU sanctions on Russia, ments for the gain of governments.”

THOUGHT LEADERS
ELENE KVANCHILASHVILI - EDITOR’S NOTE
All the Best, Mr. Hudak!

GEORGIA’S PM HAS A SPECIAL ADVI- modern and greener. I believe that Georgia will thus come
SOR on attracting FDI. Vazil Hudak now has a direct link closer to Europe and this is the major aspiration of the
to Georgia, as the former EIB Vice-President was presented Georgian government too,” Vazil Hudak noted.
to wider society in a special briefing on May 7th, 2021. Actually this is not the first time that our readers heard
The decision came as a surprise since no one from the about Europe’s initiative to support a green economy and
Georgian government had even hinted before that appoint- SMEs. As just one example to focus on, which was a very
ing a foreign advisor on bringing in foreign investment was pointed suggestion from the IMF in an interview with
being discussed. Jihad Azour, the Director of the Middle East &Central Asia
Since the Prime Minister Irakli Gharibashvili sticks to Department at the International Monetary Fund in early
a policy of minimal communication with the media and April 2021. “We see potential for new partnerships.”Mr.
does so only through briefings without the possibility of Azour said, “Europe is investing in a strong recovery. That’s
asking questions, we still do not know whether there were expected to be green recovery. This offers neighboring
some other candidates discussed or Mr. Hudak was the only countries, like Georgia ,benefits.”
choice of the Prime Minister. ADB told me earlier last month that it had been working
Also, it is still hard to judge what is the exact job descrip- hard with commercial banks to ensure long-term cheaper
tion that comes with the new appointment – the only loans for SMEs to give them a chance of longer-term invest-
practical goal that has been identified at the first briefing is ment and growth.“Going forward we are also interested in
for Georgia to become part of the 50-billion-euro initiative developing opportunities for longer-term financing. Right
of Europe to support the SME sector globally. now, it is hard to get financing for any length of time, and
“It is aimed as an endeavor for greater resilience,” Vazil that makes it difficult to make longer term investments – the
Hudak, an EU envoy for SMEs explained at a briefing.“We types of investments that businesses need to grow, and to
have to operate together during a difficult period. It is true employ more and more people. Loans are extremely hard to
both for Europe and globally. It is of course due to COVID-19. get, and we think that it should be a priority of the financial
However, I believe that difficult times are opportunities as sector more broadly to help not only SMEs but also many
well. We have an opportunity now to grow and develop in other businesses as well,” the ADB resident representative to
many different directions, create better quality in various Georgia Shane Rosenthal said.
areas, attract support from the USA, EU and other countries. Earlier this year, in March, Mercedes Vera-Martin(former
We know how to recover the economy through investment, IMF Mission Head to Georgia)focused on SME importance
more economic development and advancement. I believe but in a totally different light, linking it directly to the need
that this is the future of Georgia as well as the EU.” for FDI as Georgia’s economy starts to gradually recover. In
As Vazil Hudak briefly explained this program has two my interview with the former IMF Mission Head, Mercedes
main aspects: digitalization and green or environmental Vera-Martin stressed that “special efforts” needed to be put
initiatives to address climate change. “These are the future in place to attract FDI to the country.
directions of Georgia as well – to become more digital, more Well, hiring aspecial advisor on attracting FDI seems to

be just that. required standards, then the country should in 2020, which is down by 52.9% compared
“You are in the location that can be very not have problems benefitting once again from to 2019. Current FDI inflow is the lowest since
attractive, between East and West – Georgia international programs. 2008/2009, which was the post-war period
being at the crossroads,” Mercedes Vera-Martin So what did Vazil Hudak underline as his in the country. Official data shows that FDI hit
explained in an exclusive interview.“The fact role during the briefing? “To help the govern- a 15-year low in 2020. According to Geostat,
that you have an FTA (Foreign Trade Agree- ment of Georgia to find ways to mobilize other the main reason for the decline in FDI was
ment) with China and with the EU can help resources. International support will bring the transfer of several enterprises under the
some companies find geographic advantages benefits to the government of Georgia.” This ownership of Georgian residents, it resulted in
by being located in Georgia. And for a country might not seem like a tough goal to achieve, FDI reduction by $340.5 million.
like Georgia, you don’t need to bring in very as the Prime Minister Irakli Gharibashvili also Both business associations and major pri-
large companies – I mean, those are welcome, noted in his address, counting on Mr. Hudak’s vate sector players supportthe Prime Minister’s
and they bring a lot of know-how – but you can advice to pull together PPP (Public-Private decision to bring an experienced voice to the
also bring in medium-sized enterprises.” Partnership) projects and investment in strate- international negotiations table. But strongly
Our loyal readers might also remember our gic sectors. With all major or minor HPPs (High maintain one emphasis – the Georgian govern-
big exclusive with Odile Renaud-Basso, EBRD’s Priority Projects) on hold, and with Anaklia’s ment should listen to its advisor.
President where she stressed that EBRD would case still in international arbitration, a fresh Meanwhile, half a year should be enough
stand with Georgia in its goals to focus on look at the country’s challenges might serve to notice any results of Vazil Hudak’s advice to
switching to a green economy and coming Georgia well. the Prime Minister. As one prominent Geor-
closer to implement the Association Agree- The Prime Minister’s open call that Georgia gian businessman – TemurTchkonia – told me
ment. “This will be very important,” Odile needs investment is a focus on FDI that many in a live TV-interview in ‘Analytics with Elene
Renaud-Basso told me in February. of us – in business or in business media – have Kvanchilashvili’ ,we will observe any changes
These examples make it clear that there long been waiting for. Coronavirus has served easily. “We have zero FDI today; when we have
seems to be a consensus among the inter- as a good catalyst to expose problems that more, this means we can measure Hudak’s
national community that Georgia needs have been piling up for more than a couple of advice”.
resources to support and develop the SME years now.
SHUTTERSTOCK
sector and green economy initiatives, and if According to preliminary data, the volume ALL THE BEST, MR. HUDAK!
the political situation in Georgia meets the of FDI in Georgia amounted to $616.9 million

THOUGHT LEADERS
SEBASTIAN MOLINEUS - CURRENT EVENTS
GEORGIA ON THE ROAD TO

GREEN AND RESILIENT GROWTH
ONE THING HAS BEEN CLEAR TO ME survival and livelihood. Temperature increases and reduced
ever since I arrived in Georgia in the summer of 2019. It is a precipitation will negatively impact the agrarian, forest and
beautiful, breathtaking country and it is truly refreshing to water sectors.
see that so many Georgians care deeply about nature and Second, without action, climate change-driven impacts
the environment. could cost more than 6% of Georgia’s GDP. It is worth
Georgians are increasingly working to protect the local noting thatclimate change is not a rural versus urban issue
environment. In a survey by the Regional Environmental either. We can see that urban settlements, including Tbilisi,
Center for the Caucasus, almost all respondents indicated increasingly suffer from extreme weather events that result
that climate change is affecting Georgia, while in another in flooding, waterlogging, landslides, and damage to utility
survey by UNICEF, one third of Georgian youths reported infrastructure.
they engaged in volunteer work to protect the environment Third, if we look to Georgia’s west – the Black Sea
in various ways. coast – we see a lot ofimpact there too. According to a recent
This bodes well for Georgia’s aspiration for EU member- World Bank report, the cost of environmental degradation
ship. Becoming a member of the EU means “greening” in Georgia’s six coastal municipalities was estimated at 4-5%
Georgia’s growth and aligning with the European Green of coastal zone GDP in 2018, due to flooding, erosion, waste,
Deal, soon to be a defining feature of the EU’s approach to and damage to agricultural soils and forests.
development. Fourth, Georgia’s impressive progress in economic
So how can Georgia transition to greener and more growth is a shining example of what can be done with
climate resilient growth? In addition to changing attitudes smart policies, hard work, and international cooperation.
and personal choices, it is also about economics. The World Yet, this has come at some cost. Air pollution is a growing
Bank’s latest report Georgia: Towards Green and Resilient environmental challenge in Georgia, and the economic cost
Growth outlines some opportunities. of associated health impacts is estimated at more than $500
The report analyzes the cost of environmental degrada- million annually. Here, there is a clear opportunity to do bet-
tion and opportunities for enhancing natural capital in ter for our own health and that of our children.
the forest sector. It offers pathways to prioritize resource Fifth, when it comes to both air quality and economic
allocation for a greener economic recovery in the wake of development, forests are a key national treasure. Georgia
the COVID-19 pandemic, and sustainable growth for years has bolstered its forest sector regulatory framework through
to come. I would like to share six of our most important a comprehensive national system for sustainable forest
findings. management, and the adopted Forest Code provides the
First, we found that the effects of climate change in legal basis for improved management of this resource.
Georgia, like elsewhere, will disproportionately impact Finally, increasing the role of the private sector in em-
the poor—many of whom directly depend on land for their bracing green growth is an important goal in this context.
SEBASTIAN MOLINEUS IS THE WORLD BANK REGIONAL DIRECTOR FOR THE SOUTH CAUCASUS

Greening businesses opens doors to innova- digital development and promoting sustaina- proved management of ecosystems under the
tion and makes jobs safer, healthier, and more ble cities, cleaner transportation, and healthier “Emerald Network” – a network of protected
productive. It is also essential for Georgia’s buildings. areas with the objective of the long-term
regional integration under the EU-Georgia For instance, we examined energy efficien- protection of high conservation value species
Association Agreement. cy, underheating, and the associated economic and habitats.
The country’s relatively low per capita CO2 costs in public buildings, including schools. The continued implementation of the EU-
emissions are disproportionately high when The results of the study were quite grim, Georgia Association Agreement supports Geor-
compared against a unit of GDP. This indicates pointing to significant health and economic gia’s aim to apply EU standards, creating an
significant potential to make Georgia’s econo- impacts. The study also revealed that, in many ambitious agenda in the environmental field.
my and key growth sectors (such as tourism, rural schools, inefficient heating practices—the Looking to the future, there is an emerging
metaland mining) “greener”. A strong “green” use of stoves and firewood and poor insulation opportunity to further inform the govern-
business sector will also generate new export of buildings—cause significant indoor and ment of Georgia’s national development goals,
opportunities for innovative industries at the outdoor air pollution and underheating. including its green growth strategy, as well as
forefront of the country , including forestry. As part of our ongoing Inclusion, Innova- helping with the transition to a carbon neutral
Georgia’s national development strategy tion and Quality project, we are supporting the economy over the long term.
emphasizes the importance of sustainable construction of new schools and moderniza- The World Bank is establishing a Georgia
development. For example, the Ministry of tion of existing schools and integrated pre- Green Transition Platform, which will inform
Economy &Sustainable Development has schools so that they are healthy for children, Georgia’s NDC actions on decarbonization and
been undertaking vital work recently to teachers, and the environment, and are adaption to climate change, promote techno-
develop the country’s green growth strategy. resilient against any future climate-related logical innovation, and create opportunities for
Working out new regulations formanaging weather shocks. “green” jobs – all with an eye on fiscal prudence
lead pollution is also a commendable and The World Bank is also helping Georgia and cost efficiency.
much-needed measure in this respect. with adaptation to climate impacts in coastal I think it is fair to say that we are all waiting
In the context of these positive dynamics, areas and the water sector. We are also sup- for the excitement of growth, development,
the World Bank is ready to strengthen its col- porting the implementation of the EU4Envi- and opportunity to return as soon as we over-
laboration with Georgia’s policymakers and the ronment regional program of the European come these trying times. And when we do, let
private sector, as well as other development Commission to enhance delivery of ecosystem us work together to make sure that Georgia’s
partners for a green and resilient Georgia. services and livelihoods that depend on them. natural wealth is at the heart of its green
The World Bank has in fact been partnering Based on the national needs assessment, growth strategy.
SHUTTERSTOCK
with Georgia on the green growth agenda for program activities in Georgia will focus on the Let’s all strive for a Georgia that is open,
some time now, by harnessing the potential of sustainable use of forest resources and im- digital and green!

THOUGHT LEADERS
COLIN DONOHUE - CURRENT EVENTS
“THE FIRST STARTUP EXIT”

WHAT DOES IT MEAN FOR GEORGIA?
FEBRUARY 12TH, 2018 a small group of and journalists. The “Diaspora & Startups Dinner” also
Georgian startups traveled to Silicon Valley for a week of evolved, with great help of the Georgian embassy in the
networking events and the seeds were planted for Geor- US and the Georgian Association in the USA.
gia’s first international startup exit. This Spring PulsarAI This evolved into partnership with 110 chapter direc-
was acquired by US Company Spincar for an undisclosed tors for Startup Grind Europe-Asia connect, hosted by
price in the “tens of millions”. Georgia online involving 2000 people from 280 cities in
The group was a mix of Startup Grind organizers 60 countries. (startupgrind.ge)
(Giorgi Tukhasvhili and I), a few Georgian startups and
staff of GITA (Georgia’s Innovation & Technology Agency) THE RIGHT CONNECTIONS
which funded some startup travel. There were no corpo- Business relationships are personal relationships
rate sponsors and we organized it as volunteers to help and we believed that having founders and successful
build bridges for the startup ecosystem in Georgia. Georgian Diaspora together in an informal environment
The most important actions were not at the official would forge connections. We found this to be the case.
conference. My belief is that at conferences the real value As the Georgians from Silicon Valley gathered with
is in smaller, more focused “side events” where you help the delegation we all shared our vision for a prosperous
the right people connect. In this direction we rented an Georgia and dreamed what we could create together. One
Airbnb overlooking the Pacific Ocean and gathered a Georgian leader in the US was brought to tears with the
small “Diaspora Dinner” with successful Georgians in Sili- idea of carrying on the legacy of his late father, and eve-
con Valley meeting startups with the vision of fostering ryone gathered felt a special moment where something
mentorship and investment opportunities. new and important was starting.
At the conference we found a low-cost way for There were no “pitches” or “decks” or “investors” just
Georgia to be highly visible thanks to VRex Immersive people gathering together, learning about each other, and
which was a top finalist in the startup competition and sharing ideas.
earned a prime exhibit spot showing virtual reality tours This is where the seed was planted for PulsarAI as the
of Georgia!. Dachi Choladze and Zaal Gachechiladze met with George
We also hosted at the house a party for Startup Grind Arison and Zaza Pachulia who later became investors.
city directors from around the world. Georgian hospital- George would come to be the first investor in PulsarAI,
ity became legendary across Startup Grind and parties chair their board, mentor the young founders, share huge
were hosted in London as well as the US. “The Georgian amounts of data from his startup to train their artificial
Party” became a must-attend side-event and included as intelligence as well as introducing them to investors and
chapter directors from as many as 150 cities, some VCs customers and partners in the automotive space.
COLIN DONOHUE IS DIRECTOR OF STARTUP GRIND TBILISI AND STARTUP CONNECT. HE WORKS TO BUILD STARTUP COMPANIES AND ECOSYSTEMS IN GEORGIA AND BEYOND AND NOW SERVES AS FRACTIONAL CEO
COMMERCIALIZING TWO GLOBALLY-SIGNIFICANT GREEN TECHNOLOGIES.

Zaza Pachulia and Pulsar AI
founders at “Georgian House”
at Startup Grind Global 2018
While George was extremely busy he Sachs and Highland Capital. Our mutual data set, and relationships in the automotive
took time out to give the startups atten- friend Mark Mullen had recruited him to industry George had from Shift Pulsar was
tion. As Dachi shares George seemed very tear himself away from the office to come for able to get a “head-start” on the competition
distracted as Dachi talked to him, typing on dinner with Georgian founders though he and seize the niche of offering high-quality
his phone. Dachi was concerned he was not was ferociously busy growing the company automated tools for car shoppers.
listening and was very surprised. Soon after and laying foundation for a new $140 million The company that eventually acquired
George revealed that while they talked he round of debt & equity which he closed 6 pulsar, Spincar.com, is “global leader in
had already set up 3 appointments for the months later. Since then Shift.com has gone digital automotive merchandising software
talented tech founders and was opening the public on NASDAQ trading as SFT with a and data” and was eager after PulsarAI was
door to his networks! market cap of over $650M. only in the automotive market for less than
Dachi and Zaal followed-up quickly with 2 years to acquire them, saying “Pulsar’s
GEORGIA’S STARTUP STAR a meeting at Shift’s office and established a team of deep learning specialists, develop-
One of the most successful Georgian working relationship with George. Subse- ers, data scientists, linguists and operations
startup founders is George Arison, born Irakli quently George gave them some project ac- personnel have developed some of the most
Areshidze. He was born and grew up in tivities to demonstrate their capacity and the powerful conversational AI capabilities
Georgia but moved to the US as teenager for relationship evolved into active mentorship. available today”. In the acquisition Spincar
school. His resume includes work at Google, Pulsar had been an AI/ML development is making offers to all existing PulsarAI team
PHOTO: NIKOLOZ GOGOCHURI
founding the startup Taxi Magic, and work shop on the Georgian market and George members and seeks to expand the Georgian
with Boston Consulting Group. George was helped guide them into a more scalable team moving forward.
CEO of Shift which at the time had raised opportunity bringing conversational AI to Availability of qualified AI/Machine
$50 Million from investors like Goldman auto dealerships. Combining the experience, Learning workforce is likely a barrier to Pul-

FORBES
THOUGHT LEADERS COLIN DONOHUE // CURRENT EVENTS
sar’s growth and an issue Georgia needs to ture capital from VCs) and not trying to grab in seed investing. Very wealthy people
solve to capitalize on the opportunity arising all of the equity in good deals. They learned cannot afford the time to mess with enough
for Georgian companies. Competition for AI/ about the importance of having a portfolio companies to deploy meaningful capital and
ML talent is already a source of friction for of startup investments as the math does not smaller investors may not have enough to
Georgian companies. work if you only invest in one or two. They invest to make a well-constructed portfolio.
have warmed up to the idea of syndication This is why we are working with some
of investments so investors have smaller of our VC friends in Silicon Valley to build
A NEW DAY FOR GEORGIA? pieces of more companies, for better portfo- a modest venture capital fund focused on
While PulsarAI is making the news, there lio construction. And they have learned that seed investments in Georgia. Having a pro-
has been a steady development of things betting on a startup is not betting on the idea fessionalized fund with experts in VC allows
in Georgia. We have used the networks or projections but betting on the founders. for good portfolio construction and support
from Startup Grind and guests of Georgia’s Seed investing is mostly about having trust of startups as they grow in a way Georgian
Innovation & Technology Agency, bringing in founders and supporting them and allow- investors cannot provide.
VCs and other guests to see the sites and fall ing them to do their job. Many people are talk about doing ven-
in love with Georgia. For the Pulsar investment we invited ture funds without any experience in the
Georgia’s reputation in the startup the investors who had taken part in train- field, without deep connections in Silicon
world has become significant as it became ings and colleagues we knew and trusted. Valley with larger VC funds, customers and
one of the first regional Startup World Cup We wanted to involve people who would specialized talent startups need.
competitions, covering the Black Sea region, have expectations and founder-focused The secret is that the majority of funds
and hosted the largest Startup Grind online orientation. Georgian investors came in for a do not have returns better than the stock
event ever in December 2020 involving 60 low-6-figure-USD investment across several market. Investors in these low-performing
countries and 280 cities. investors, giving several people their first funds take additional risk without getting
Building on Georgia’s reputation for hos- startup experience. additional returns. In contrast, the top-tier
pitality we have developed networks with It was a good first experience for those funds are extremely high-performing. This
top-tier venture investors from Silicon Valley local investors, though it was not a realistic is where the money is made in VC and why
and many have “fallen in love with Georgia, one. Startup investment is a long-term com- you’ll never get into a Sequoia or A16Z fund
including Bill Reichert (Garage Ventures, mitment as the best companies will grow as they are always oversubscribed.
Pegasus Ventures), Marvin Liao (founder for a decade or more. Having a return in less High-performing VC funds make money
of 500 startups flagship accelerator in San than 2 years with multiple on your money is by attracting the most talented founders
Francisco and investor in 400+ companies), not typical. and providing alpha from supporting those
Sheel Mohnot (500 Fintech Fund, Better In building an angel/seed portfolio you founders. This support comes in the form
Tomorrow Fund), Zach Coelius (Coelius really want to put in a small part of your of introductions to potential follow-on inves-
Capital), Trae Stephens (Founders Fund) and investable money (maybe 2% or 5%) and tors, key customers, and talented specialists
more. The willingness of these investors to diversify across at least 10 companies if you in areas important to the founder, some-
participate in activities in Georgia gives the want the math to work right. Some angels times media, etc. While US startups often go
opportunity to more quickly develop early will just do a deal or two which is fine, but with a certain VC because of the doors they
stage investing based in a rational way, based most likely you’ll not get a return. Startups open its 100X more important for Georgian
on lessons learned and best practices from are a game of “outliers” so it’s really the top founders as most here do not already have
these professional VCs. 3% of investments that make returns for connections with VCs, corporations and
As national lead in Georgia for the EU- seed investors. If you put too much into too other key contacts.
funded Early Stage Investing Launchpad few companies your chances of hitting a 10X I look forward to seeing the Georgian
project a couple of years ago I had the oppor- or 50X return is very low. You can do it for startup and early-stage investing ecosystem
tunity to engage some more open-minded entertainment but angel investing without develop and hope that vehicles with the
investors in learning about seed investing proper portfolio construction is gambling. right networks and knowledge can be made
from some great European angels. These The odds are in your favor, but it’s still available to ambitious young founders so
investors have started to form a new culture, gambling. they can fuel their growth from Georgian
not trying to take 51% of a startup (thereby Not every investor has the time or funds not just US, Japanese, Israeli, Dutch
preventing them from being able to raise fu- interest to get to know the best practices and UK investors as is the case now.

IT’S ALL
IN THE DETAILS.
Pasta & Love, for a perfect shave.
eorgia
TEL: +995 32 225 0406
THE GREEN ENERGY LOBBYIST
Georgia consumes more energy than it produces. Last year, even as consumption decreased
due to the pandemic, the country had to import 160.07 million kWh of electricity. How can
Georgia enhance its energy independence? GNERC commissioner Maia Melikidze, who has
written several books on the subject of renewable energy, sees green energy as a solution. We
spoke to her about the existing challenges and government policy in this field.
Author: Tamta Jijavadze

Photo: Nika Paniashvili
Energy imports from Russia reached a four-year To what extent is solar energy currently being
high in 2020, accounting for 37% of total import- used in Georgia?
ed energy in the first 11 months of the year. Why We have a legal commitment to ensure that solar en-
was that the case? ergy accounts for approximately 2% of our total electric-
For a start, electricity consumption tends to grow ity generation. As of today, we have only reached the
over time due to infrastructural projects, such as the 0.2% mark, meaning that there are significant opportu-
construction of large apartment blocks. Infrastructure nities with regards to solar energy. The rise in electricity
is changing, technology is developing, and people’s prices in December 2020 encouraged the public and
demands for comfort are growing. For example, hotels businesses to start thinking about solar energy. Demand
and residential homes use air conditioning units during has grown significantly over the last six months.
summer, and heaters in winter. Electricity generation We are being approached by companies that in-
levels can therefore not keep up with growing consump- stall solar panels. They are interested to know how to
tion. Ultimately, this leads to an increase in electricity improve their business model to meet growing demand.
imported. We currently receive electricity from Azerbai- The opening of the energy market on 1stJuly 2021 will
jan, Russia and Turkey. The diversification component create more opportunities in this regard. Moreover,
is crucial when it comes to price. To this end, I think it banks have identified a niche and created a special
would be good to negotiate and cooperate with different product, issuing loans specifically for transforming solar
countries. For example, if Armenia had enough electric- power into electricity. Several businesses have already
ity, we would also talk to them before choosing the best applied for this product, and we are monitoring a growth
available offer. in demand in this field.
Does Russia offer Georgia competitive rates? What is the timeframe for reaching the 2% tar-
Azerbaijan offers us the best rates, but we also deal get?
with Russia for the simple reason that Azerbaijan may We were expecting to meet the target within five or
not have enough electricity to meet our demand. We six years, but last year’s rise in electricity prices speed-
also buy electricity from Turkey, although imports from ed up the process. We may now reach the target in two
this country do not cover a significant portion of our to three years – half the time we initially envisaged.
electricity consumption.
What happens when the 2% target has been
What steps are being taken to increase energy exceeded?
independence? We must then conduct research to establish whether
The first step is to achieve diversification, and the our electricity system can absorb more than 2%. If we
second is to integrate renewable energy into the grid. find that this is possible, then we will definitely raise
Energy efficiency is important. We know that hydroelec- the limit. However, we may also consider installing solar
tric power has been Georgia’s most successful model, batteries in the future.
which generates 80% of our electricity. There is also The use of the net metering system is becoming
thermal energy, but this requires natural gas, which increasingly popular. It allows excess electricity to be
we do not have. As you know, we import most of our stored with the distribution company and used later,
gas from abroad. Therefore, our thermal power stations in which case reverse metering is applied. If the use of
also rely on imports. Ideally, we should have additional solar energy was to grow significantly, and the electric-
sources of energy. Along with hydroelectric power, ity distribution network is reset, then installation of
we should also harness other forms of green energy, solar batteries may become part of the regulations. The
namely wind and solar power. batteries can store electricity generated during the day,
To reduce energy dependence, it is important to di- to be used by the consumer in the evening.
versify both the imported and locally generated energy. At this stage, our goal is to support those who are
However, in light of recent events, generating electricity ready to make our country attractive for investors with
locally has become highly challenging. regards to the use of solar panels and renewable en-
ages are currently being prepared,
and once these changes have been
enacted, it will be much easier for
investors to see the full picture and
confidently enter our market. There
are also investors who are waiting for
the Georgian energy market to open
on 1st July this year.
Investors routinely carry out vari-
ous research projects, and they know
very well about the growing demand
and growing imports in Georgia. They
also know that government policy is
focused on energy security, energy
independence and energy efficiency.
This means that local energy sources
must be advanced. Any smart busi-
nessperson or investor will realize
that this is a lucrative niche that they
can be a part ofby entering the mar-
ket and initiating local production.
Their product is guaranteed to sell
because electricity demand is sub-
stantial. We therefore expect them
to start expressing interest from the
second half of this year.
According to the energy policy docu-
ment of Georgia, the government and
other parties involved in the energy
sector must encourage generation of
clean energy and seek to transform
the country into a regional clean en-
ergy center. You have written several
books about renewable energy.
What kind of potential does Geor-

gia have in this field?
One ofthe UN’s sustainable devel-
ergy. Some investors have already identified opportuni- opment goals is to achieve extensive use of renewable
ties and have expressed their interest. energy by 2030. We already meet this requirement,
as hydroelectric power is a form of renewable energy.
You mentioned investment. Foreign direct invest- However, as a country we must realize that our neigh-
ment in the energy sector fell by 98% year-on- bors are considerablyricher in various resources, such as
year in 2020. Do we have a mechanism in place natural gas. Georgia has neither gas, nor nuclear power.
for stimulating investment in the sector? However, we have plenty of energy to harness from
The pandemic has affected investment in the energy water, sun and wind. In this regard, we are like a green
sector, but we are also currently going through a transi- flower within our environment.
tion period. More specifically, we are harmonizing our Our policies are important: if we bet everything on
legislation with that of the EU. Further legislative pack- energy efficiency and green energy development, we
are sure to become a hub and a place of interest for am a lecturer at two universities, and to my surprise,
our European partners. Some European countries have students are becoming less interested in banking and
already started implementing infrastructure projects business. I get the impression that these subjects have
with solar panel roofing, energy efficient construction been exhausted, and the youth now wish to learn more
materials and light-absorbing windows. I am sure that about renewable energy, its importance for small and
similar projects will soon happen in Georgia too. We are medium-sized businesses, or the potential impact of
gradually getting there. the energy exchange.There is now a new generation of
people willing to write dissertations on energy-related
Implementing these goals could be expensive… topics. As a representative of the energy sector, I am
That is true. We have to ask whether our country can incredibly happy to see this. I believe that in five or six
withstand such financial pressures. It is a challenge, but years, we will have a considerably more competent and
we undoubtedly have potential. We must figure out how stronger generation working in this field.
to achieve our goals while balancing the resources with
people’s financial means. You established a renewable energy research lab
at the Business and Technology University. Was
One of the missions of the Georgian National this also designed to spread knowledge about the
Energy and Water Supply Regulatory Commission energy sector?
is to facilitate net metering. What are the recent The lab was created to raise awareness among young
trends in this regard? What is being done to raise people. We offer them various training courses. I have
public awareness? also been invited as a guest speaker by other universi-
The net metering system currently has 294 sub- ties. Students are very proactive, which is great to see.
scribers, which includes residents of Tbilisi and other I get the impression that the younger generation wants
regions. We have taken certain measures, such as to learn more, ask questions, enter into discussions, and
increasing capacity from 100 kW to 500 kW. This was a so on. The lab is one of the spaces where we can raise
significant achievement for our network. We have also awareness among youngsters.
implemented the concept of a virtual consumer. It is
now possible to generate energy in Borjomi and transfer You are also heading a project that is designed to
it to Batumi, for example. The infrastructure is set up to encourage and support the appointment of wom-
facilitate generation of solar energy. en to leading positions in the energy sector. To
As for raising awareness, GNERC is working on estab- what extent are women represented in this sec-
lishing a learning center, where all the latest news will tor, and what is being done to encourage them?
be shared with interested parties. We also have a media There are very few women in the energy sector,
club that has been operating for several years. There is although the circumstances at GNERC are relatively bet-
a steadily growing number of people who wish to obtain ter. We have women working in leadership positions, but
information at this club, asking critical questions that elsewhere in the sector, they are few in number. Wom-
will be answered honestly by our staff. The issues raised en’s interest in the field of energy is growing, but more
at the club are also discussed by the Commission. The encouragement is needed. I personally feel that I have
media club has demonstrated that information about a responsibility to provide support. When I attended an
the energy sector is high in demand, which is great to Energy Regulators Regional Association conference in
see. 2017, I promised myself that I would become active in
this field. Three years later, I managed to become chair
Using renewable energy also requires appropriate of this organization. Today I head an association that
knowledge. To what extent have we accumulated represents 48 countries. It provides wide-ranging oppor-
such knowledge in Georgia? tunities for implementing various projects to strengthen
There is an older generation of professional electri- the energy sector as a whole, and the role of women in
cal engineers. Then there is a gap, and now we have the sector. Through this association, I am currently ini-
a new generation of people who are interested in this tiating a project that will encourage women to become
field. Young people have realized that energy is not proactive in the energy sector. I therefore hope that the
a purely technical field, as it was perceived before. I role of women in this field will improve in the future.
Georgian
RATING
Billionaires

At various times, the Forbeslist of global billionaires has
included four Georgians, two of whom have made this year’s
ranking. Mikheil Lomtadze is new on the list. However, Geor-
gians account only for $10 billion of the list members’ total
net worth of $13.1 trillion.
T
he Forbes list of billionairesnow includes two citizens of
Georgia. Mikheil Lomtadze is a new addition to the list of
the world’s wealthiest people. Through his business ac-
tivities with the Kazakh fintech firm KASPI, Mr. Lomtadze
amassed an estimated fortune of $3.8 billion.
Along with Mikheil Lomtadze, Georgia is represented on the bil-
lionaires list by former prime minister Bidzina Ivanishvili.
Until 2020, the billionaires list also included the Russian-based
businessman Alexander Japaridze, whose net worth was $1.2 bil-
lion. However, he is no longer listed as a billionaire, and is ranked
125th in the index of richest businesspeople in Russia with a net
worth of $950 million.
Businessman David Yakobashvili was on the list of global bil-
lionaires in 2014. At that time, Forbes estimated his fortune to
be worth $1.2 billion. According to Forbes Russia, he is currently
worth $700 million and is the 173rd richest businessperson in Rus-
sia.
The combined wealth of Georgians who made the Forbes list is
$10.25 billion.

Bidzina
Ivanishvili
Net worth: $4.8 billion
Position in the global index: 589
Age: 65
Source of wealth: Investments
Citizenship: Georgian
Place of residence: Tbilisi
Marital status: Married
Children: 4
რეიტინგი • ქართველი მილიარდერები
Georgia’s wealthiest man, Bidzina Ivanish-

vili, amassed his fortune in Russia during
the 1990s. He co-founded one of Russia’s
first commercial banks, RossiyskyKredit.
He was also involved in Russian real
estate, metallurgy and the pharmaceuti-
cal industry.
Mr. Ivanishvili managed his invest-
ments in the Russian Federation through
the Unicor fund. After announcing his
entry into Georgian politics, he gradu-
ally sold his Russian assets. Shares in his
metallurgical plants were purchased by
billionaires Alisher Usmanov and Vasily
Anisimov. In 2012, Mr. Ivanishvili also sold
his shares in RossiyskyKredit.
Bidzina Ivanishvili started his business
activities in Georgia in 1996 by found-
ing Cartu Bank. The Cartu Group and
the Cartu Charity Fund soon followed. In
late 2020, the charity fund acquired the
assets of the Tourism Development Fund,
which included the Paragraph Hotel in
Shekvetili and the Panorama project in
Wealth over the Years
central Tbilisi.
Bidzina Ivanishvili also owns the assets $6 მლრდ
of the Co-Investment Fund, which invests
$5 მლრდ
in manufacturing, agriculture, real estate,
and energy. $4 მლრდ
$3 მლრდ
$2 მლრდ
$6.4 bil
$5.3 bil
$5.2 bil
$5.2 bil
$4.8 bil
$4.5 bil
$4.6 bil
$4.9 bil
$4.8 bil
$4.8 bil
$1მლრდ
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Mikheil Lomtadze
Net worth: $3.8 billion • Position in the global index: 832
Age: 45 • Source of wealth: Fintech and investments • Citizenship: Georgian • Place of residence: Almaty
Marital status: Single • Education: Harvard MBA
Mikheil Lomtadze has been CEO of Kaspi Bank in Kazakhstan since 2007. Digital transformation has allowed Kaspi to become the
country’s largest fintech company. The company’s initial public offering on the London Stock Exchange in October 2020 ensured
that Mr. Lomtadze and the Chairman of the Board of Supervision at Kaspi, Vyacheslav Kim, made the Forbes list of billionaires.
Mikheil Lomtadze was born on 17th October 1975 in Batumi. He obtained his bachelor’s degree from the European School of Man-
agement in Tbilisi, before continuing his studies at Harvard Business School, graduating with an MBA degree in 2002.
Mr. Lomtadze started his business activities in Georgia, founding the auditing firm GCG Audit in 1995. The company became part
of the Ernst&Young Group several years later.
Since 2002, Mikheil Lomtadze has held the position of Investment Manager at the Baring Vostok Capital Partners investment
fund, becoming a partner in 2004. The investment fund later became one of the leading shareholders and investors in Kaspi Bank.
Mr. Lomtadze assumed the position of CEO of Kaspi Bank in 2007.

Alexander
Japaridze
Net worth: $950 million
Position in Forbes Russia index: 125
Age: 65
Source of wealth: Oil production and investments
Citizenship: Russian
Place of residence: Moscow
Education: Moscow Oil Institute
Children: 5
რეიტინგი • ქართველი მილიარდერები
According to Forbes Russia, businessman

Alexander Japaridze’s fortune is currently
worth $950 million. He was part of the
Forbes Billionaires List in 2012. At that time,
the international publication estimated hisnet
worthto be $1.2 billion.
Alexander Japaridze made his fortune in
the oil exploration and production sector.
He founded Petro Alliance in 1995, selling
the company several years later. In 2004, he
purchased a Lukoil subsidiary firm for $130
million and established the Eurasia Drill-
ing Company on its base. The organization
currently employs 18,000 people. It earnt$1.6
billion in revenues in 2019, $1.65 billion in
2018, and $2 billion in 2017.
In 2015, Schlumberger announced that
it was purchasing 50% of shares in Eurasia
Drilling Company. However, the deal col-
lapsed due to the deteriorating relationship
between Russia and the West.

$2.4 მლრდ
$2.2 მლრდ
$2.0 მლრდ
$1.8 მლრდ
$1.6 მლრდ
$1.4 მლრდ
$1.2 მლრდ
$1.0 მლრდ
$0.8 მლრდ
$0.6 მლრდ
$2.3 bil
$0.95 bil
$0.4 მლრდ
$2.1 bil
$1.8 bil
$2.1 bil
$1.5 bil
$1.2 bil
$1.3 bil
$1.6 bil
$1.2 bil
$1 bil
$0.2 მლრდ
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

David
Yakobashvili
Net worth: $700 million
Position in the Forbes Russia index: 173
Age: 64
Source of wealth: Investments
Citizenship: Russian
Education: Tbilisi Technical University (did not graduate)
Children: 1
Forbes Russia estimates businessman David

Yakobashvili to be worth $700 million. Ac-
cording to Forbes, his net worth reacheda
high of $1.2 billion in 2014. At that time, he
was on the list of global billionaires. He is
currently the 173rdrichest person in Russia.
David Yakobashvili is the co-founder of
Wimm-Bill-Dann Foods, one of Europe’s
largest manufacturers of dairy products and
fruit juices. The company was purchased
by PepsiCo in 2010, as a result of which, Mr.
Yakobashvili received $600 million for his
10.5% stake. Apart from the food industry,
he is also involved in the oil business. In 2011,
he founded Petrocas Energy, which owns
the entire networkof Gulf petrol stations and
an oil terminal. The Russian energy giant
Rosneft purchased a 49% stake in the group
in 2014.
In 2019, David Yakobashvili opened the
Sobranie museum in Moscow, which displays
classical art.
$1,200 მლნ
$1,100 მლნ
$1,000 მლნ
$900 მლნ
$800 მლნ
$700 მლნ
$600 მლნ
$500 მლნ
$400 მლნ
$1,200 mil
$300 მლნ
$950 mil
$950 mil
$950 mil
$900 mil
$900 mil
$900 mil
$800 mil
$750 mil
$750 mil
$700 mil
$200 მლნ
$100 მლნ
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

A B IL L ION A IR E
A D AY
THIS YEAR, FORBES
TRACKED DOWN A
RECORD 493 NEW
BILLIONAIRES—ROUGHLY
ONE EVERY 17 HOURS.
JUST OVER 40% HAIL
FROM CHINA; 20% FROM
THE U.S. PROMINENT
BILLIONAIRES • NEWCOMERS
ROUTES TO NEW
RICHES: IPOS, SPACS,
CRYPTOCURRENCIES
AND COVID-RELATED
HEALTH CARE.
IPOS
Matt Moulding
Since mid-March 2020, 1,489 IPOs $2.9 billion • E-commerce • U.K.
(including SPACs) raised $314 billion His e-commerce empire, The Hut Group, went
public in London in September. Two months later
globally. More than half went public in the he got a $1 billion share bonus that the board
had approved.
U.S., where they raised $277 billion. These
Tony Xu
10 billionaires land on the list as $2.8 billion • Food delivery service • U.S.
Xu is cofounder and CEO of food delivery
a result of such public offerings. company DoorDash, which listed on the NYSE in
December. It delivers meals
from 390,000 restaurants in the United States,
Canada and Australia.
Jared Isaacman
Pan Dong $2.3 billion • Payment processing • U.S.
$8.3 billion • Consumer goods • Canada Isaacman, 38, founded payment processing firm
The richest woman new to this year’s list, Shift4 Payments in his parents’ basement at age
she chairs laundry detergent maker Blue Moon 19 and took it public on the NYSE in June. He flies
Group Holdings, which listed in fighter jets for fun, including a Soviet-era MiG-29.
Hong Kong in December. Her husband,
Luo Qiuping, is the company’s CEO. Bang Shi-hyuk
$2.3 billion • Entertainment • South Korea
Vyacheslav Kim Founder of music label and agency Big Hit En-
$3.3 billion • Fintech • Kazakhstan tertainment, which represents the wildly popular
Mikhail Lomtadze K-pop band BTS, he took the company public on
$3.2 billion • Fintech • Georgia the Korea Exchange in October.
CEO Lomtadze and chairman Kim have steered
Kaspi—a payments, e-commerce and mobile- Gong Yingying
banking app used in Kazakhstan—from a small- $2.1 billion • Health IT • China
time retail bank to a London public listing. Half of She is CEO, chair and founder of health-care
Kazakhstan’s 18 million people use the service. analytics firm Yidu Tech, which listed its shares in
Hong Kong in January.
Pablo Legorreta
$2.9 billion • Investments • U.S. David Helgason
The former investment banker founded private $1 billion • Software • Iceland
equity firm Royalty Pharma in Helgason cofounded video-game software
1996 to buy future revenue streams of developer Unity Software in Denmark in 2004
pharmaceuticals. He took it public on and served as CEO until 2014; the company listed
the Nasdaq in June. on the NYSE in September.

WHITNEY
WOLFE
HERD
$1.3 billion • Dating app • U.S.
Wolfe Herd, 31, took her woman-centric dating app,
Bumble, public in February—becoming the world’s
youngest self-made female billionaire. The $582
million (revenue) company has 42 million customers
in 150 countries. She cofounded dating app Tinder in
2012. That relationship turned sour, and she settled
a sexual-harassment lawsuit with Tinder in 2014.
Andrey Andreev, the Russian founder of dating site
Badoo, offered Wolfe Herd a $10 million investment
and Badoo’s infrastructure, and the duo launched
Bumble in 2014. In late 2019, Andreev sold his
majority stake to investment firm Blackstone, four
months after a Forbes investigation revealed a toxic
work culture at its London offices. Badoo denied the
allegations.
JAMEL TOPPIN FOR FORBES

S PAC S
Special purpose acquisition companies,

or SPACs, have become all the rage.
More than 500 of these “blank-check”
companies have gone public in the U.S.
in the past year, nearly seven times the
number in the previous year. But only
a handful minted new billionaires.
Mat Ishbia
$9.7 billion • Mortgage lending • U.S.
Justin Ishbia
$3 billion • Mortgage lending • U.S.
The Ishbias’ father, Jeff, launched a mortgage
firm in 1986. Mat joined the mom-and-pop outfit
in 2003. He and his brother Justin, a private
equity investor, eventually bought most of their
dad’s stake in United Wholesale Mortgage. Now
the nation’s second-largest mortgage lender,
UWM merged with the Gores Holdings IV SPAC
in January; Mat is CEO and Justin is a board
AUS TIN
member.
Andrew Paradise
$2.3 billion • Mobile games • U.S.
RUSSELL
Skillz, the e-sports company Paradise
cofounded in 2012, provides a mobile
platform for developers to host daily
tournaments of games like solitaire and bingo. Its
$230 million in revenue comes
from its cut of users’ entry fees.
$2.4 billion • Sensors • U.S.
William Foley
Russell, 26, spent his teens $1.9 billion • Financial services • U.S.
doing research at the University The former insurance tycoon was quick to capi-
of California at Irvine’s talize on the SPAC boom, sponsoring
Beckman Laser Institute. The six blank-check companies to date. Two
have recently announced mergers—with cloud-
lanky 6-foot-4 entrepreneur based software provider Alight
dropped out of Stanford in Solutions and digital-payments platform Pay-
2012 to found laser lidar (an safe—in deals valued at just over
acronym for light, detection $7 billion and $9 billion, respectively.
and ranging) startup Luminar
Shalom Meckenzie
Technologies after getting $1.7 billion • Sports betting • Israel
a $100,000 fellowship from His gambling-technology provider, SBTech,
billionaire tech investor Peter merged with sports betting site DraftKings and
Thiel. Its sensors now help self- went public via a SPAC in April 2020. He serves
driving cars of customers such on the board and is one of DraftKings’ largest
as Volvo, Toyota and Intel’s shareholders, with a nearly 6% stake.
Mobileye see in 3D by bouncing Geeta Gupta-Fisker
laser beams off nearby objects $1.6 billion • Electric vehicles • U.K.
and vehicles’ surroundings. The Henrik Fisker
company listed on the Nasdaq $1.6 billion • Electric vehicles • U.S.
via a SPAC merger with Gores Famed car designer Henrik Fisker and his wife,
Metropoulos in December Geeta, who has a Ph.D. in biotech,
2020. Russell, who owns about took their eponymous EV maker public in
October; production of its first vehicle, a midsize
one-third of it, became the SUV, is planned to start in late 2022.
world’s youngest self-made
billionaire overnight. Trevor Milton
$1.4 billion • Electric vehicles • U.S.
His hydrogen-electric truck startup, Nikola, went
public via a SPAC in June 2020. He resigned as
chairman in September after
allegations by a short seller that he lied about
Nikola’s technology to investors,
spurring a review by the SEC.
MICHAEL PRINCE FOR FORBES
Chamath Palihapitiya
$1.2 billion • Facebook, venture capital • U.S.
After helping open the SPAC floodgates by tak-
ing Richard Branson’s space tourism company,
Virgin Galactic, public in 2019, SPAC sponsor and
venture capitalist Palihapitiya acquired two more
firms via SPACs in the past year: homebuying
marketplace Opendoor and insurance company
Clover Health.

CHINA
The world’s most populous nation boasts

a record 626 billionaires (excluding
Hong Kong and Macau); its red-hot stock
market helped mint 205 new ten-figure
fortunes, with half coming from manufactur-
ing or tech. All but two were self-made. Here
are 11 standouts.
Chen Zhiping
$15.9 billion • E-cigarettes
The founder of the world’s largest
manufacturer of vaping devices, Smoore Inter-
national, Chen took the firm public on the Hong
Kong Stock Exchange last July.
Li Hua
$7.1 billion • Financial services
K AT E
An early employee at Tencent, Li founded
Nasdaq-listed online brokerage Futu
Holdings in 2007. The Robinhood-style
fintech boasts nearly 12 million users.
Wang Junlin
$6.3 billion • Liquor
The turnaround artist revived two state-owned
companies before arriving at
WA N G
struggling liquor producer Sichuan
Langjiu in 2001. It now churns out more $5 billion • E-cigarettes
than 40,000 tons of alcohol a year.
One of the world’s youngest self-made female
Wang Ning billionaires, Wang, 39, is CEO of Chinese vaping
$6.3 billion • Toys company RLX Technology. The Columbia Business
In December, Wang took public his toymaker, School grad got the idea for the company in
Pop Mart, which is known for concealing the 2017, when she was trying to persuade her father
identity of its figurines in “blind boxes.”
to quit smoking. “I tried out all the [vaping]
Jian Jun products. Most of them were terrible,” she tells
$5.6 billion • Biomedical products Forbes. RLX posted $324 million in sales in the
Her Shenzhen-listed Imeik Technology first nine months of 2020 and listed on the New
Development makes medical cosmetic products York Stock Exchange in January. Wang has a
like skin fillers and facial implant threads, as well 20% stake. Shares fell 54% over three days in late
as face and neck masks.
March (after Forbes measured net worths for the
Cao Renxian Billionaires list) in response to Chinese authorities
$5.3 billion • Solar power publishing draft rules that would regulate
A university professor, Cao founded Sungrow e-cigarettes as tobacco products.
Power Supply in 1997. Its products, used in 150
countries, convert direct-current electricity from
solar panels into alternating current for the
power grid.
Steven Meng Yang

$4.2 billion • Electronics
A former Google engineer, he founded
popular Amazon seller Anker Innovations
Technology, known for its battery packs, phone
chargers and other electronic
accessories.
Liu Fangyi
$4.2 billion • Medical equipment
Stock of his Intco Medical Technology, which
makes disposable medical products like
masks and gloves, shot up 650% in the past
year amid the pandemic.
Li Xiang
$4 billion • Electric vehicles
The 39-year-old founded NYSE-listed
STEFEN CHOW FOR FORBES
online car dealer Autohome before creat-

ing electric vehicle startup Li Auto, which
debuted on the Nasdaq last July.
Jin Baofang
$3.9 billion • Solar panels
Jin is founder and chair of JA Solar, a Beijing-
based solar panel producer that boasts 33,000
clients in 135 countries and regions.

CRYPTO
Boom times (again) in cryptocurrency—

Bitcoin has skyrocketed 800% since the
middle of March 2020 and Ripple’s
XRP is up 200%—have landed these
nine fresh faces on the list.
Cameron Winklevoss
$3 billion • U.S.
Tyler Winklevoss
$3 billion • U.S.
The twin brothers own an estimated 70,000
Bitcoin, plus the crypto exchange Gemini, which
processes about $200 million a day
in trades. (See story, page 96.)
Michael Saylor
$2.3 billion • U.S.
The CEO of software firm MicroStrategy made,
and lost, a fortune during the first
dot-com bust. He debuts now after snapping up
Bitcoin ahead of the boom—for both himself and
his company—pushing its stock up.
Jed McCaleb
$2 billion • U.S.
He created Mt. Gox, the first major Bitcoin
exchange, before cofounding Ripple in 2012. He
soon left due to reported disagreements with
fellow founders but still holds an estimated 3.4
billion XRP, Ripple’s token.
Fred Ehrsam
The former Goldman Sachs trader owns 6%
of crypto exchange Coinbase, which he cofounded
in 2012 and which is poised to go public on the
Nasdaq; he remains a board member.
Barry Silbert
His Digital Currency Group, a conglomerate of
five blockchain-focused companies, includes
crypto asset manager Grayscale, which oversees
some $44 billion worth of Bitcoin, ether and
SAM BANKMAN-FRIED
other assets.
Tim Draper
The Silicon Valley VC bought $18.7 million worth
$8.7 billion • U.S. of Bitcoin confiscated by U.S. Marshals from the
shuttered Silk Road black market in 2014. They
An MIT grad and former Wall Street trader, Bankman-Fried, 29, is the founder and CEO of are now worth $1.5 billion.
quantitative crypto trading firm Alameda, which manages $32 billion in Bitcoin and other major
cryptocurrencies as well as their derivatives. He also founded Hong Kong–based crypto exchange Matthew Roszak
FTX, which achieved unicorn status in January 2020, less than a year after its May 2019 launch. The $1.5 billion • U.S.
exchange will soon replace American Airlines as the naming-rights sponsor of the home arena of the A longtime crypto evangelist, Roszak worked in
NBA’s Miami Heat. The vast majority of Bankman-Fried’s wealth is in FTX’s equity and FTT tokens, venture capital and as an entrepreneur before
the native cryptocurrency of FTX. In 2020, he gave $5 million to a pro-Biden super PAC, making him amassing a portfolio of Bitcoin, ether and other
one of the president’s biggest donors. cryptocurrencies starting in 2012.
VIRGILE SIMON BERTRAND FOR FORBES
Editor: Kerry A. Dolan Deputy Editors: Chase Peterson-Withorn, Jennifer Wang Country Editors: Graham Button, Grace Chung, Russell Flannery, Naazneen Karmali,
Nathan Vardi Wealth Team: Angel Au-Yeung, Kenrick Cai, Deniz Çam, Maggie Chen, David Dawkins, Anastassia Gliadkovskaya, John Hyatt, Max Jedeur-Palmgren,
Momina Khan, Sergei Klebnikov, Elaine Mao, Andrea Murphy, Krisztián Sándor, Ariel Shapiro, Giacomo Tognini, Hank Tucker, Lisette Voytko and reporters at Forbes-licensed editions in
Austria, the Czech Republic, Hungary, Kazakhstan, Mexico, Poland, Romania, Russia, Slovakia and Ukraine.
Reporters: Susan Adams, Dan Alexander, Anderson Antunes, Megha Bahree, Nina Bambysheva, Margherita Beale, Madeline Berg, Justin Birnbaum, Tim Boreham,
Igor Bosilkovski, Thomas Brewster, Nilgun Cavdar, Shu-Ching Jean Chen, Muhammad Cohen, Lachlan Colquhoun, Lauren Debter, Michael del Castillo, James Dunn,
Steven Ehrlich, Amy Feldman, Antoine Gara, Eliza Haverstock, Christopher Helman, Alvaro Hernandez Zorrilla, Jane Ho, Katie Jennings, Jeff Kauflin, Sean Kilachand,
Noah Kirsch, Alex Knapp, Alex Konrad, Nicole Lindsay, Katherine Love, Iain Martin, Anis Shakirah Mohd Muslimin, Suzy Nam, Lan Anh Nguyen, Alan Ohnsman, Robert Olsen, Phisanu
Phromchanya, Jonathan Ponciano, Anu Raghunathan, Natalie Robehmed, Leah Rosenbaum, Matt Schifrin, Lucinda Schmidt, Leonard Schoenberger, James Simms, Chloe Sorvino, Deborah
Steinborn, Jessica Tan, Michela Tindera, Ozer Turan, Elisa Valenta, Yue Wang, Jennifer Wells, Will Yakowicz, Itai Zehorai
Research: Sue Radlauer Photo Research: Merrilee Barton, Gail Toivanen Database: Dmitri Slavinsky
Acknowledgements: Special thanks to Sara B. Potter, FactSet Research Systems, Orbis by Bureau Van Dijk, PitchBook Data, Real Capital Analytics, Reonomy, S&P Capital IQ, VesselsValue
and the other experts who helped us with our reporting and valuations.

COVID-19
At least 40 new billionaires join the list

SERGIO
this year thanks to their involvement in
the global effort to fight the Covid-19
STEVANATO
pandemic. Some made their fortunes de-
$1.9 billion • Medical
veloping new vaccines and promis- packaging • Italy
ing antibody treatments, while oth- Covid-19 vaccines are
housed in tiny glass
ers sell much-needed
vials—many of them made
diagnostic tests and personal by the family-owned
Stevanato Group, where
protective equipment. Stevanato, 78, is the
chairman of the board
emeritus. Stevanato
Stéphane Bancel
$4.3 billion • Biotech • France Group is supplying
Shares of Moderna, where he has been vials for about 15% of
CEO since 2011 and whose Covid-19 vaccine was the Covid-19 vaccines
approved in the U.S. in December, rose 319% in tracked by the World
the past year. Health Organization.
Uğur Şahin That includes 100 million
$4 billion • Biotech • Germany vials shipped to a Gates
The Turkish-born physician cofounded Foundation–backed
BioNTech, which developed a Covid-19 group that’s helping
vaccine in partnership with Pfizer; his to scale 10 different
wife, Özlem Türeci, is chief medical officer. The vaccines, including
stock doubled since mid March 2020.
those from Moderna and
Yuan Liping AstraZeneca. Founded on
$3.6 billion • Pharmaceuticals • Canada the outskirts of Venice in
Yuan got a 24% stake in Chinese vaccine pro- 1949 by Sergio’s father,
ducer Shenzhen Kangtai Biological Giovanni, the Stevanato
Products after her divorce from the company’s
chairman (and fellow billionaire), Group started out making
Du Weimin, last year. glass bottles for wine
before pivoting to the
Hu Kun
$2.5 billion • Medical devices • China
pharmaceutical industry
in the 1960s. Sergio
Chairman of newly public Contec Medical Sys-
tems, which makes pulse oximeters and devices stepped down as CEO in
used to check lung conditions. 2010 but still owns a 68%
stake in the company; his
Noubar Afeyan
$1.9 billion • Biotech • U.S.
son Franco is executive
chairman.
The founder of life-sciences VC firm Flagship
Pioneering, through which he owns shares in a
dozen publicly traded biotech companies, is also
chairman of Moderna.
Carl Hansen
$1.8 billion • Biotech • Canada
Former college professor cofounded
AbCellera Biologics to identify antibody treat-
ments; it partnered with Eli Lilly, which led to an
FDA-authorized Covid-19 therapy.
Robert Langer
$1.6 billion • Biotech • U.S.
One of four new Moderna billionaires,
the MIT professor dubbed “the Edison
of Medicine” owns a 3% stake in the
company, which he helped start in 2010.
Arvind Lal
$1.5 billion • Laboratories • India
Shares of his listed diagnostics chain, Dr. Lal
PathLabs, soared 57% amid the pandemic
as it ramped up testing for Covid-19.
Prathap Reddy
$1.5 billion • Hospitals • India
A doctor, he runs publicly traded hospital chain
Apollo Hospitals Enterprise. Shares doubled in
the past year amid the hospitals’ focus on treat-
ing and diagnosing Covid-19.
STEVANATO GROUP
Jack Schuler
$1.1 billion • Diagnostics • U.S.
Former Abbott Labs president, now a biotech
investor, he owns 7% of diagnostics firm Quidel
Corp., which makes Covid-19 tests.

RATING
How The Gates’ Split

Could Stack Up
Against The Biggest
Billionaire Divorces
BY RACHEL SANDLER AND NOAH KIRSCH
B
ill and Melinda Gates, the influential billionaire couple a prenup, but that doesn’t mean they don’t have one, since they
in charge of the world’s largest private foundation, aren’t obligated to disclose everything on the filing.
are divorcing after 27 years of marriage, the pair said Complicating matters is the fact that Washington, where the
Monday in separate announcements on Twitter. Gates family resides, is a community property state. That means
In the divorce filing, the couple said their marriage is “irretriev- all assets acquired by either party during a marriage are con-
ably broken.” Bill and Melinda will remain co-chairs of The Bill sidered communal and typically split equally during divorce in
and Melinda Gates Foundation, and they will continue to work the absence of a prenup. Though in Washington, the parties can
together to shape the strategies of the foundation and set the agree to divide their assets in a way that is “just and equitable,”
organization’s direction, according to a spokesperson. which can result in settlements that aren’t necessarily 50/50, Janet
The shock announcement leaves several questions about the George, a divorce attorney at Washington-based law firm McKinley
Gates fortune unanswered. It’s unclear how the couple will divide Irvin, told Forbes. Take Jeff Bezos and his ex-wife MacKenzie; Jeff
their assets or whether they signed a prenup, but due to the sheer gave MacKenzie one quarter of his Amazon stake in their divorce
size of their fortune, the split will likely be one of the largest divorce settlement. If Bill and Melinda did decide to split the fortune
settlements in history. Bill Gates, who in 1975 cofounded Microsoft, equally, Melinda would be worth $65.25 billion, which would be
is worth $130.5 billion, making him the fourth richest person in the more than MacKenzie Scott, Amazon founder Jeff Bezos’s ex-wife,
world, according to Forbes. Gates first became the world’s richest who is worth $59.8 billion (Scott did donate nearly $6 billion of her
person—with a $12.9 billion fortune—in 1995, one year after he mar- fortune to charitable entities last year.).
ried Melinda. According to the divorce petition, Bill and Melinda are Forbes assembled a list of the largest billionaire disunions on
currently separated and signed a contract dictating how the couple record—at least where we could follow the money. In some cases,
will handle finances while living apart. They asked the court to like the split between Google’s Sergey Brin and Anne Wojcicki, we
divide their assets based on the terms of the separation contract, but don’t know the size of the settlement because divorce filings were
details of the contract weren’t disclosed. The filing does not mention sealed.

1. Jeff Bezos and
MacKenzie Scott
AT LEAST $35 BILLION
The couple met while both were working

at the hedge fund D.E. Shaw in New York.
After they moved to Seattle, MacKenzie
helped Jeff get Amazon off the ground. In
April 2019 they announced the terms of
their divorce: She received about 4% of
Amazon’s outstanding shares—worth over
$35 billion in 2019 when the settlement
was announced (and far more now, with
Amazon stock up nearly 75% since then).
Jeff held on to all of the rocket company
Blue Origin and the Washington Post.
Once the divorce was finalized, MacKen-
zie, who changed her last name to Scott
in 2020 and got remarried in March 2021,
became the world’s third-richest woman.
2. Bill and Sue Gross

$1.3 BILLION
The Grosses’ messy split minted a new

billionaire and dragged down another.
Sue filed for divorce in 2016 from her
husband, the founder of asset-manager
Pimco, and she walked away a year later
with a $1.3 billion fortune. That haul in-
cluded a $36 million Laguna Beach house
and “Le Repos,” a contested 1932 Picasso
painting that she later sold for $35 million.
While Bill tried to hang on to one of their
three pet cats, Sue eventually got custody
of all of them. Bill lost his spot on The
Forbes 400 in 2018 following 14 consecu-
tive years on the list. Both now run their
own charitable vehicles.

3. Steve and Elaine Wynn
$850 MILLION
The cofounders of the casino giant Wynn Resorts divorced (for

the second time) in 2010. That settlement dictated that Elaine,
a Wynn Resorts board member since 2002, receive 11 million
shares, then worth an estimated $795 million. Steve also sold
around $114 million in stock that year—some, if not all, went to
Elaine as part of the deal. She then sued Wynn Resorts in 2012
to sell part of her 9% stake and was kicked off the board three
years later amid an ugly proxy battle.
After Steve stepped down as CEO and chairman in February
2018 amid sexual harassment allegations that he has denied,
he sold all his shares. Elaine, now worth $2.3 billion, is Wynn
Resorts’ largest individual shareholder.
4. Harold Hamm and Sue Ann Arnall

$975 MILLION
After three years of bitter court proceedings, oil tycoon Harold in 2015
tried to finally end his 26-year marriage with Sue Ann (no prenup) by
writing her a check in the amount of $974,790,317.77 from his Morgan
Stanley account. She deposited it, but then changed her mind, decided
she wanted more and filed an appeal seeking a bigger share of the
then-$13.7 billion fortune tied to Hamm’s 75% ownership in publicly
traded Continental Resources. In April 2015 the Oklahoma Supreme
Court ended the saga, granting Harold’s motion to dismiss her appeal,
reasoning from precedent that Sue Ann had agreed to the settlement
by signing and depositing the check. Sue Ann subsequently funded a
political action committee that succeeded in its effort to unseat the
judge who presided over the divorce.
5. Roy E. and Patricia Disney

$600 MILLION
Roy and his wife filed for divorce in 2007 at the

ages of 77 and 72, respectively, after 52 years of
marriage. Roy, a nephew of Walt Disney, was worth
approximately $1.3 billion at the time. Previously a
Forbes 400 mainstay, he lost nearly half of his for-
tune in the split and was dropped from the list. In
2008, he married writer and producer Leslie De-
Meuse. He died a year later; Patricia died in 2012.
A family foundation with assets of $122 million
(as of 2018) bearing both of their names supports
environmental and economic causes.

TECHNOLOGY
PULSAR AI
Hi-Tech Problem Solvers
BY ELENE CHOMAKHIDZE
PHOTOS: KHATUNA KHUTSISHVILI
In May 2021, the global leader in digital automotive merchandising software and data – SpinCar –an-
nounced the acquisition of Pulsar AI, creator of the auto industry’s most advanced conversational
AI platform, and so Pulsar AI became part of an interesting puzzle on the global market. Through
this acquisition, Pulsar’s automated communication technology was integrated into the SpinCar
platform and Pulsar’s thirty employees became part of SpinCar’s expanded global Product, Op-
erations and R&D organization. Although behind this global success stands a great team; Dachi
Choladze, Zaal Gachechiladze and Sopo Chkoidze were the individuals who made the leap forward
in the Georgian tech industry five years ago and made everyone believe in the unbelievable.
What benefits did the deal with SpinCar bring to you in terms of Icon Tower in downtown Syracuse. It also has offices in New York City,
reputation and what are the financial implications of this deal? Toronto, and Manchester(England), and will take over Pulsar’s offices
Dachi: When we started the business, we bootstrapped our in San Francisco and Tbilisi, the capital of Georgia. As a result of the
company, and we provided our services directly to our customers in Pulsar acquisition, SpinCar will expand its offices in New York (NYC and
Georgia. Since then we have always aimed to expand our reach to the Syracuse), San Francisco, Tbilisi, Manchester and Toronto.
US market and, as a result of moving in that direction, we attracted $1.2 Zaal: We have united forces with SpinCar by joining this company,
million of investment from Silicon Valley venture capital funds and however, the product is still being developed by our team. We are try-
private investors to fund our product journey in the states; with this ing to promote synergy, which was the motivation behind the merger
amount we have been able to enter the US market and start selling our of these two companies from the very beginning. The multimedia
Conversational AI Solution there. The recent acquisition terms are con- content that SpinCar offers its clients has been integrated into our
fidential, so I am unable to disclose the exact value of the transaction at communication channels. These are two companies that did not merge
this point, although I can openly say that this transaction includes both simply because Pulsar generates revenue and that is the motivator, but
cash and SpinCar stock. Every shareholder (investors, option holders because we are each one part of a puzzle and we fit together seamlessly.
and advisors) who owns stock in Pulsar, be it an investor, an employee, This synergy offers a higher quality of service to clients and increases
or a founder, will receive both cash and share considerations from this the value of our service even more.
deal. Therefore, the merger of Pulsar AI with SpinCar means that as Dachi: We are continuing to develop this product and attract more
SpinCar grows, the value of every shareholder’s stock also grows –and customers to the US market, which in turn means we have a busy
as we continue to grow with enhanced motivation and resources, the schedule for the next 12-24 months. SpinCar is very strong in sales and
value of SpinCar naturally increases. We are confident that over the marketing and has an incredibly capable team – this allows us to make
next year and beyond, the valuation of SpinCar will grow exponentially. significant and more interesting changes in the automotive industry
with the products we create. All this gives us a high degree of motiva-
What has changed on a daily basis for Pulsar AI because of this tion. We believed years ago that we would make significant changes
deal? in the direction of artificial intelligence, and we managed to do it; this
Sopo: American Pulsar had no experience in selling products in gives us both adrenaline and inspiration.
the United States beforehand and did not sell automotive software in
Georgia. In 2019, We created a product that would attract US based car Perhaps there is no need to ask why you decided to focus on
dealerships to implement a Conversational AI tool that would engage America and more specifically on Silicon Valley. More to the
with their leads 24/7 and drive them to the store. It was a directly tar- point, when did you realize you were ready for America?
geted product that we aimed to sell on the US market. Employees who Zaal: When we knew that we were already firmly “holding” this
have been involved in these processes continue to work with the same technology in Georgia, it also coincided in part with the fact that we
know how, and in the same direction as they did before. One clear goal went to the United States and met George Arison, who then actively
is to scale our new customer on boarding process in a way to match the supported the company and helped the team identify a unique oppor-
demand that we now have through SpinCar’s more than 3,000 custom- tunity in the auto retailing space. He is one of the most successful entre-
ers. SpinCar has a strong background in creating a product that sells preneurs in the automotive industry in Silicon Valley with a billion-dol-
and markets itself as a global leader. This leading company provides lar startup that has just made an initial public offering and their shares
expert service in sales and marketing, and we, our end, develop and are being traded on the Nasdaq. It was with George that we learned
support the state-of-the art conversational AI platform. With the ac- about the problems in the auto industry. In general, the US is the land
quisition, SpinCar will have 120 employees, including 75 in its office in of opportunity. Especially Silicon Valley, which is actually the cradle for

FORBES
TECHNOLOGY PULSAR AI
offered a solution to the problem. A similar product is

even not the right definition, as they offered SpinCar a
less functional virtual assistant when compared to us.
Dachi: When we did research regarding the
companies working on AI on the American market,
we noticed that there was a company called Conver-
sica, which claimed that it could solve the problem
of automatic answering software. However, this was
a bit far from the reality, because when they received
an email from a customer, Conversica returned a reply
to that email and then informed the dealership that
the customer was interested in the dealer’s product /
service. Pulsar’s conversational AI platform lever-
ages proprietary Machine Learning (ML) models and
Natural Language Processing (NLP) combined with
artificial intelligence technology to engage online
shoppers in personalized two-way conversations. The
company’s technology increases the efficiency and
effectiveness of dealership BDCs and internet sales
operations by delivering immediate, relevant, and
persistent follow-up to every online lead submission.
Pulsar’s automated communication capability can
respond to an unlimited number of shopper inquiries
via email or text.
What did you see as your competitive advantage
on the American market?
Sopo: For us, competitor analysis has become the
starting point of something new. We analyzed their
reports and articles about them, which gave us unique
insight into how a product can be put together that
will be sold easily. After this, we added features that we
consider to be our competitive advantage or made the
service more efficient, flexible and of a higher quality
over time.
Dachi: The presence of a competitor in the
Sopo Chkoidze
tech startups. The computer was created there, all the American market was the biggest contributing factor
technology-related innovations that changed the world for us. This helped us see what customers disliked
have come from Silicon Valley. Talent from all over the about the service SpinCar provided, and we corrected
world is concentrated there. That is why the money these errors. We analyzed that when a customer sends
that finances technology startups is concentrated there a question, he or she needs an answer in a timely man-
as well. Investors who are looking for talent and whose ner. The solution to this problem has become the main
main job is to identify people with potential. target for our team. We can see that these questions
revolve around mainly one issue. Our core task was
In the case of America, where did you see the need to find out what the main questions were and to work
for your product? on issuing timely and effective feedback on them.
Sopo: We encountered a slightly different situation Furthermore, the fact that the services and issues of
in the United States. We were the first in Georgia to start this company were already known to everyone in that
working on artificial intelligence and automated chat- market and the definition of the problem was already
bots, but there was already a company in the US that clear to everyone was also extremely helpful. When

we talked to dealers, they already had knowledge of
this problem. Having a competitor in the US market
has a beneficial side and can bring a real advantage.
The fundraising chronology is interesting, how

did you increase investor interest in Pulsar AI?
Dachi: When we first started fundraising, I discov-
ered that you do not go directly to investors and talk
about millions. You go to numerous investors and talk
about small amounts, $10,000, $20,000 or $30,000.
So, you raise that first crucial amount, which in turn
helps you find the next investment. Even in Georgia,
when you try to raise money, it is not necessary to ask
one investor for $50,000, but it is better to go to five
and talk about $10,000. I would recommend this to all
novice entrepreneurs. It is also extremely important
that if you want to start a business in the US, it is
necessary to be a part of American everyday life for
at least some time, communicate with people and
get advice from those who run into these problems
daily, and these are the problems that you potentially
want to work on. We raised some money in Silicon
Valley, returned to Georgia and attracted more invest-
ment from a few investors here, then went back to
the US and furthered our fundraising in the summer
of 2019, and after raising about a million dollars, we
invested in an application for a GITA grant, which
was 650,000GEL. It turned out that we had attracted
overall about $1.2 million by that time.
Sopo: We had a practice run with the Georgian
investors before going to the US. We were finalizing
the pitch deck and the talking points in parallel. Before
this deal there were a lot of exciting processes and
partnership agreements, on the basis of which we
would work –sometimes even directly in the CRMs
Zaal Gachechiladze
used by dealers. We went through the certification Devin Daly, SpinCar Co-Founder and CEO. Being an
process, which included a lot of administrative-finan- example in the field in which you work is probably a
cial issues to sort out, so that the team could get their great responsibility along with a joy. From the begin-
first client. The most important thing for our team was ning did you intend to start everything from scratch?
desire and motivation, and as a result, we got a proper Zaal: There is a book titled ‘Zero to One’, which is
system. an exceptionally good example for all entrepreneurs,
“Pulsar’s team of deep learning specialists, especially when it comes to tech startups. Although
developers, data scientists, linguists, and operations the niche you choose may be very narrow, it serves
personnel have developed some of the most powerful to solve a unique problem, which is an ideal spring-
conversational AI capabilities available today. We board for generating resources and capital, which
are thrilled to welcome them to the SpinCar family, then contributes to growth. After finding a niche, you
and we look forward to leveraging Pulsar’s expertise start solving the adjacent problems and this is also a
and technology innovations to deliver even greater precondition for growth. Our way was exactly that. We
business results for dealers of all sizes and types,” said decided to solve a problem that existed in the Geor-

FORBES
TECHNOLOGY PULSAR AI
reached this stage before. As part of my responsibility, I

would say that it is particularly important to share our
success story with people so that our story actually
helps them with their work and motivation. Inspira-
tion must be tangible. There are a lot of things in the
work of startups that look completely different from
the outside, and we want to help people look inside at
the work we do and see which path we took.
What do you mean by people looking inside at

the work you do?
Dachi: Everyone who hears our story will prob-
ably think that we came up with the idea, went to
the US, convinced investors of our idea, took money
from them, and came back to Georgia. In fact, this did
happen, but on the other hand, much more interest-
ing things were happening that could happen to any
entrepreneur. Thus, it was not just an idea. In the be-
ginning it was an idea to create technological solutions
that would make people’s lives easier, but then we as-
sembled a team in which we developed a style of work
founded on a love to innovate and unity amongst us
all. It is this fact that has given us the opportunity and
motivation to create bigger things.
When you started business in 2016, what was the

situation in the technology market? What indica-
tion did you have that your services and ideas
were needed by the market?
Zaal: When you are eager to do something, you
try to find a niche where you will not have competi-
tors – in order to grow fast, you cover this field, and as a
result, become the leader. You have a monopoly so to
speak, until others imitate and follow you. This is what
has happened in our case.
Dachi Choladze
gian language. It was a kind of a micro niche, because Dachi: Of course, it was risky, but risk is almost a
Georgia is a micro zone, the automated processing daily occurrence in entrepreneurship. You are trying to
of the Georgian language and the construction of so- do something for which there is no plan. Beyond the
called conversational AI (chatbots) around it is an even result that we achieved, there were many decisions
narrower niche. that did not work out and put the right decisions at
Dachi: If you are willing to enter the market, you risk. However, if that risk is justified, it will bring you to
have to do something that will help you with this and where we are now.
if you create something that is needed in the market,
then your place is guaranteed. As for being an example What do you think has changed with the appear-
to other entrepreneurs, first, it turns out that it is pos- ance of Pulsar in the startup ecosystem?
sible to create a successful startup in Georgia and get Zaal: From my point of view, we have changed the
to Silicon Valley with this startup, see success there, business culture in general in the country because,
attract funding and develop globally. Obviously, many unlike when you work and sell your time and in return
may have tried this, but the fact is that no one has only get paid, we tried to give extra motivation to

employees and make them a real part of the company. It is particularly thinking about TBC Bank. Even when it was too early to talk about
important to us that our team members have a sense of ownership at this project, we just had the idea, we already knew that TBC would
every stage and realize that this company belongs not just to the found- be the first to be offered this product. TBC, then and now, has made
ers. There are paths for this in the US and it is a common story there, quite obvious progress in the area of innovative technology compared
but it was not easy to implement this approach in Georgia, because to other companies locally. It was a very strategic step from our side.
there were no examples that would make this strategy more convinc- We were also incredibly lucky with the people we met at TBC Bank,
ing to the team. It was a bit difficult for us to generate motivation and we were able to work with them for some time. It was also both
otherwise because there are much bigger banks that pay a lot more for interesting and useful that after signing the contract with them, they
the talent we were interested in, but they in turn do a poor job because offered us the opportunity to work from their office, which allowed
although they bring in a lot of people and pay a lot, they don’t provide us to better follow their daily activities, thus making it easier for us to
enough to keep these people busy and accelerate their development. access their needs.
Do you think that being the first is the biggest competitive As you were at the forefront of the development of the techno-
advantage in your case? logical field in Georgia, tell us during this period, how the startup
Dachi: We offered a service to companies that no one else offered at ecosystem has changed in the country? What was the challenge
that time. When we chose the field of artificial intelligence exclusively, then, and what is it now?
this already gave us a niche. If someone needed a service related to Sopo: I would say that when we started the business in 2016, a
artificial intelligence, Pulsar was immediately on their mind. Probably startup ecosystem did not exist in the country at all. For example, we
still the biggest competitive advantage was that our first customer was did not have access to information about startups that might have been
TBC Bank, the money we received from this project was fully allocated operating in the country at that time. At this point, however, we have
towards expanding the team and we started to create services that did seen an increase in the number of entrepreneurs and startups. We have
not exist before in Georgia. This further solidified our advantage. heard a lot of great ideas and have become members of many com-
Sopo: I believe our advantage in the American market was more munities and a broader picture has emerged of what startups do and
visible in terms of price, product and its quality. We are a group of how they work. The culture of entrepreneurship has also become more
people that focus on creating valuable and high-quality products that interesting to the public.
drive change and innovation. We are a startup that has done a lot more Dachi: The existence of GITA created many opportunities for us,
work in the Georgian language than any other startup in the US that has and not only for us, in the sense that a community was created in
strived to create a natural language program. Having our technical and which knowledge was shared, people connected, got to know each
operations team based in Tbilisi (Georgia) helped us with maintain- other, and gathered more information. Additionally, a lot of activities
ing a low runway and cash burn compared to other startups based in and the constant process of something happening in this field, pushed
Silicon Valley. As for the product-based advantage, we are a group of many companies to grow and develop. A different culture has emerged
people that focus on creating valuable and high-quality products that in the startup ecosystem. There is already room for hi-tech startups,
drive change and innovation. We had three important advantages. The and GITA’s contribution to this is huge. We have participated in many
advantage in terms of price was that we worked from Tbilisi and were events with their support, including Startup Grind.
able to cut costs in many directions, for instance, in the case of rent. Zaal: From a legal point of view, the startup ecosystem has become
more sophisticated, and there are benefits around taxation when pro-
What was the starting point and where are you now? viding services abroad from Georgia. We have set an example for our-
Zaal: Dachi and I invested all our savings in the Georgian startup. selves that one can be successful in this field. This area has advanced
We sat and thought for a month, after this we made a prototype of the both in terms of initiatives and in terms of state emphasis.
first Georgian messenger chatbot, which we offered directly to TBC
Bank. It was a very well-calculated step on our part. Of course, there What plans does American Pulsar have in the short term?
was an element of luck, for example, Dachi met one of the representa- Sopo: Right now, it is too early to talk about long term plans, but
tives of TBC for a standard job interview, he listened carefully and in the short term we are currently focusing on ensuring that the two
finally said that he had actually come to them for a completely different teams merge as effectively as possible and bring more value together as
reason. After this we introduced the product to TBC’s management, one team.
and this is where our collaboration started. Dachi: We are focused on growing a more sophisticated product
Dachi: From my point of view, the experience with TBC Bank was and are fully committed to it. Entrepreneurship is what we relish, so it is
especially important. From the very first day when Zaal and I said our aspiration to find problems and solve them. We are problem solvers
let’s create this product and show it to someone, we were both only and no doubt we will continue in this way.

CEO
VEON GEORGIA
The Three
Principles
1.3 million customers and an increased market share de-
spite the pandemic – Veon Georgia is meeting fresh chal-
lenges and opportunities with new CEO Lasha Tabidze.
BY ELENE KVANCHILASHVILI
L
asha Tabidze, 38 years old, CEO of Veon Georgia. We are talking to each other through Zoom.
Nothing – not even face masks – reminds me of the realities of the pandemic as starkly as
having to record a cover interview using an online platform. I adjust to the situation, press
record, and the interview begins.
Lasha Tabidze has been employed by Veon Georgia for ten years. He has worked under four CEOs,
studied every detail about the multinational firm, and acquired practical skills that allowed him to rise
to the position of CEO.
In Lasha Tabidze’s opinion, the main personal challenge for him during his time at the company was
to showcase his skills not just at the local level, but also more broadly within the group. “This requires
a completely different set of skills,” he states, quickly adding that according to his philosophy, there are
always two sides to the coin – wherever there is a challenge, there is also an opportunity.
This approach has served him well. He is now in charge of a company that is part of the VEON group,
a global provider of connectivity and digital services.
Headquartered in Amsterdam, VEON serves 212 million customers in nine different countries,
including Georgia. The company is listed on the NASDAQ and Euronext stock exchanges.
By February 2021, VEON Georgia managed to increase its market share in spite of the pandemic.
Lasha Tabidze is not frightened of the pandemic. He has experience in crisis management, albeit
in a different company and a different sector. Throughout the interview, I get the impression that for
him abstract experience does not exist. He collects knowledge and skills before implementing them in
practice.
“I am very happy with how far I have come and where I am today. I accomplished all of this through
my own and my team’s hard work. I would like to believe that my success is down to my capabilities,
rather than luck,” says Lasha Tabidze.
It is clear that he relies on his strategic vision rather than luck. According to him, it does not matter
what he is working on – whether he is selling alcohol products, insurance, advertising or SIM cards, he
always adheres to the three principles of management: first, to have a vision and know in which direc-
tion you want to take the company; second, to know who your customers are and what you can do for
them; and third, to work with the right people who can help achieve the first two components.
FORBES
CEO VEON GEORGIA
2014. This was a significant experience for us. My

Lasha Tabidze – CEO of Veon Georgia
assessment of our internal success depends on the
Lasha Tabidze was appointed CEO of Veon Georgia on 15th- satisfaction of our team and our employees, as well
March 2021. Prior to that, he held the position of a Chief Opera- as the diversity of the workplace experience of our
tions Officer in the company between 2018 and 2021. He started team members – for example, how many educa-
at Veon Georgia as a Chief Commercial Officer. Overall, he has tional programmes they are involved in, how many
spent ten years working in the telecommunications sector. rotations they undergo, and so on. There are no bad
Lasha Tabidze has many years of experience as an executive teams. There are teams that develop, and those that
in the field of business management. In 2011, before moving don’t.
to the position of Commercial Director at VEON Georgia, he
worked in companies such as JSC Sarajishvili (as Commercial
Does this depend on the manager?
Director) and Vellagio Ltd. (Director for Business Development).
Yes, it does. I believe it is a sign of weakness for
Lasha Tabidze studied economics at the Ruprecht-Karls
a manager to start changing his/her team instead of
University of Heidelberg in Germany and international business
devoting all the energy and resources towards the
at Tbilisi State University. He is fluent in Georgian, English, Ger-
man, and Russian. development of team members and giving them the
freedom to grow. In the 21st century, nobody can
claim to fully know a profession anymore. Every-
thing changes dynamically. It is, therefore, impor-
tant to always be informed and ready to develop.
Let us talk about these three components of Otherwise, you will quickly lose your competitive
your philosophy in greater detail, and start edge.
with vision – how will you make your mark, and
how will you measure your success as company What is the other side of the coin?
CEO? The other side of the coin is the outside – the
Most importantly, I will always remember what I company’s external development. For example,
said earlier about the two sides of the coin. My team when I first arrived at the company in 2015, we had
will have a lot of freedom to develop themselves. no internet technology beyond 2G. We immediately
This will happen not only through teamwork, coach- devised a strategy to switch to 4G. We were the first
ing and collaboration, but also with the help of all company in Georgia to purchase the appropriate
the numerous resources that are at the company’s license and bring in this technology.
disposal – educational projects, funded courses,
licenses, and training. All of this comes with the What was your role in all of this?
freedom that we have spent years building, and is My responsibility was to ensure that our business
working right now. caught up with this innovation. You need to bear in
mind that our group was investing tens of millions
In spite of the pandemic? into the development of this network at a time when
2020 was a good test for us. We had long been there were very few 4G mobile phones in the coun-
advocating things such as having the freedom to try. However, we devised a four-year strategy and
work from anywhere you want and having a flexible managed to fully recover our investment in 2018.
schedule if you can get the work done. Last year By that time, 4G users were already outnumbering
proved that we had been employing the right ap- users of other technologies.
proach for a long time. It has given us a great advan-
tage, which will only become stronger in the future. What do you mean by that?
Strategy is particularly important. The reality
Are you talking about Agile? We are coming is that our company was already aboard the digital
across this term quite a lot nowadays. train in 2018, long before the pandemic. In our case,
We implemented Agile at our company in digital development is more than just words. We

created our first application in 2016. We started firms and platforms and tell them: “consumers in
focusing on e-commerce even though at the time our country require a specific product or service, so
there were only a couple of dozen consumers on let us talk about the ways to meet their needs and
this market. Today, there are half a million people deliver what they are asking for.” When you choose
actively using our app alone. such a strategy, CSR activities become more con-
sistent. Throughout the year, we offered students
How do you measure the success of the com- free or discounted internet access. The interests of
pany? Is this also part of the vision? our customers and our own interests are closely
I tend to divide the success of the company into intertwined – without each other, they practically do
two parts. First, there are the financial and commer- not exist.
cial figures that allow the company to continue to
invest and grow. The second component is customer To summarize the vision component – as the
satisfaction and welfare. I use these two indicators new CEO, what kind of company are you prom-
to measure not only my personal success, but also ising to build for your customers?
that of my team and the whole company. This company will be an ecosystem and a hub
that will fully utilize its substantial experience, its
How does your vision translate into specific professional staff, and the wealth of its resources
products? to try to create comfort for its customers, bring
We focus on implementing innovations. We economic prosperity to Georgia and develop our
have a chatbot, an application, a website, and digital business in a way that highlights the role of this
terminals at our stores. We are an innovative com- company and our country across the whole group.
pany, as we have shown over the last few years. We
introduced the concept of service rates in this coun- On your list of universal managerial principles,
try. We even digitalized our physical channels with the vision is followed by the customer. Who are
self-service terminals. Here you can see our vision VEON Georgia’s customers?
– we serve 1.3 million customers, which is a great In the 21st century, the customer is part of any
responsibility. However, with responsibility comes business. Based on the old marketing approach, a
the motivation to offer people what they need. company had to guess in advance what customers
might want, and then try to attract their attention
How do you know what people’s needs are? through advertising. Successful companies then
We know our customers very well. We carefully started to listen to customers. We were among the
observe and listen to them. Take one of our latest businesses to do so.
products for example – as you know, there were no
licensed music apps in Georgia. You either had to How does this approach differ from the other
illegally download your music or use a lot of data to approaches that you listed?
stream it. After studying this market and listening to If listening to customers and considering their
our customers, we offered a special app. Indeed, not interests becomes a priority for the company, then
only do we ask our customers for feedback regarding profit margins move into the background. The
our existing products, but we also always try to find starting point is to gain and maintain customer
out what they need and what they would like to see loyalty. Then the vision changes, retaining custom-
in the future. Based on this feedback, we recently ers and ensuring their satisfaction becomes the
launched the globally popular app that is available main priority. When customers are satisfied, they
to Beeline customers as part of the 3 GB package. acquire new services, because they already trust
Consumers are incredibly happy. the brand. In the long run, this represents a consid-
In another example that comes to my mind, erably more stable income than using the approach
we identified a significant need for e-learning last where more short-term profit can be achieved by
year. Our company can directly contact big global raising prices.

FORBES
CEO VEON GEORGIA
Do the customers themselves change?

Customers have become more demanding.
They are part of the business not only by constant-
ly talking to us, but also by determining the future
course of the company. In which direction should
the company be moving tomorrow? Customers
can answer that question. This is an especially
important issue.
Does the competition change? I am asking
because I have recently conducted numerous busi-
ness interviews such as this one, and it has become
apparent to me that there is a growing focus on the
customer. For example, if banks were broadly in
competition with the financial sector in the past,
they are now competing with the whole retail
sector. How does the expansion of competitive
boundaries affect your business?
If you think back to the time when the internet
brought the whole world together, we are now
observing a similar process. The era of ecosystems
is coming. Consumers no longer need to open
hundreds of applications or websites and register
themselves on every one of them. They dictate the
whole ecosystem, telling us what they need to use,
and what for. Moreover, they need to get it easily
and quickly. What you mentioned earlier about
various industries moving into different business
sectors stems from customers. In the past, custom-
ers only required a call service, so that is what we
provided. Now the reality is different, customers
demand that companies are there for them any-
time, anywhere, providing them with the services
they need at that moment.
Does this increased competition present a

challenge or an opportunity for you?
If we continue to listen to our customers and
successfully predict how we can make things even
more comfortable for them – save them time, cre-
ate more synergy between companies and allow
customers to complete all processes in a few steps
– it will be a very good result. That is the reality
today. Companies are uniting within ecosystems,
exchanging information, and ultimately delivering
a better product to the customer. This process is
irreversible, and I believe it should not encounter
any resistance.

FORBES
CEO VEON GEORGIA
Does regulation constitute resistance? to go through 6-7 steps to buy a product or service
On the one hand, regulation is necessary to online. Today the number of steps is being revised,
prevent monopolies on the market. However, there and I believe we are getting closer to the moment
is another way of looking at things: our 1.3 million when one or two steps will be enough. This will only
customers can currently transfer small amounts of increase customer satisfaction.
money to each other, top up their balance, purchase
products for each other, and now also send music You mentioned a key word – security, which
as a gift. Everything is coming together. That is why is closely related to simplicity and customer
I believe that the era of ecosystems is ahead of us, satisfaction. How has this market evolved in
and the process cannot be stopped. If this is done the ten years that you have been observing it
correctly, in compliance with ethical business norms directly?
and by ensuring that customer data is protected, This market has become incredibly dynamic over
while at the same time creating new wealth for the last five years. When I joined the telecom sector
customers, then this can only be viewed positively. ten years ago, it was entirely dependent on technology.
These dynamics will become increasingly visible Today, service is as important as technology. Soon we
and tangible. Around four years ago, we needed will also be dealing with the challenge of electronic

SIM cards. This means that physical cards will no
longer be needed, and it is still unclear where this will
take us in terms of development. What we can say for
sure is that with technology and service, the next step
will be self-service. This is a relatively new concept
If listening to customers and
that we have been developing for several years. Self- considering their interests
service must be simple enough for consumers to no
longer need physical service points such as call centers
becomes a priority for the company,
or shops. Naturally, all of this will not completely
disappear, as all businesses are currently using a
then profit margins move into the
hybrid development model –neither the online, nor background. The starting point is to
the physical components are good enough on their
own, and this is unlikely to change any time soon. gain and maintain customer loyalty.
As for the Georgian market, the telecom sector has
been developing in a very dynamic and competitive investment is allocated to security and monitor-
environment. Significant mergers have taken place in ing, and we only entrust the personal data of our
recent years – first, involving MagtiCom and Caucasus customers to ultramodern systems.
Online, and then by Silknet purchasing Geocell. All of People used to say that cash is king. Today, it is
this has changed the situation on the market. the content that is most important. If you have good
content and can deliver it to customers when they
We have naturally arrived to the third and final need it, then you have a great opportunity to ensure
component of your universal principles of both customer satisfaction and the company’s prof-
management – the team. Would it be fair to say itability, which helps its subsequent development.
that your team is one of the reasons why your
company has managed to retain its position on In summary, what is your main message to your
the market despite the big rearrangements? customers?
The Veon Georgia team is exceptionally innova- First, keep safe, maintain hygiene, get vaccinated
tive. These are the kind of people I work with. From if you can, and show that you are acting responsibly
the very beginning, we decided to be an innovative towards yourself and others.
company, and to constantly introduce and imple- Second, we have created maximum comfort for
ment new things that may not become popular here you to adapt to the new reality. What I mean is that
until three to four years down the line – things that we promise you the smooth operation of all online
may initially have been developed only on western services. We will also continue our development
markets. Whenever we introduce tariffs, packages, or more intensively than ever. Our priority is to ensure
new services – be it music or other streaming – we are that you feel comfortable and safe.
developing mobile services. Those are our dynamics. Most importantly, we care about you. We un-
Years ago, when we said we would measure derstand you, and will do everything to ensure that
customer satisfaction, people were surprised. They services are fast and accessible.
asked us what exactly we were measuring. However,
this method ultimately helps us achieve our most Finally, what does the future hold?
valuable goal – to do business ethically. Before we More digitalization is a certainty. The faster we
process any information or introduce any novelties, adjust ourselves to this trend, the more we develop
we ask our customers if they want this to happen. our digital skills, and the more we adapt ourselves
Thankfully, our country has advanced data protec- to the online space, the more time we will have left
tion, as demonstrated by the presence of the Office to pursue other things. Most importantly, we will be
of the Data Protection Inspector. As for our team and better prepared for new and greater challenges that
our company, it is in our DNA – a large part of our are sure to come.

MANAGEMENT
GIORGI TKHELIDZE
When the
Market Leader
is Your Partner
When business clients face a challenge, they can
rely on TBC and Giorgi Tkhelidze for support.
BY ELENE KVANCHILASHVILI

FORBES
MANAGEMENT GIORGI TKHELIDZE
O
nce the pandemic is over, our main surprise to those who regularly follow the reports
leadership test will come in the form published by TBC Bank and the forecasts of various
of feedback from our clients, and financial organizations. Based on these forecasts,
whether or not they will say that we the 2021 economic recovery figures may seem
were and always will be their main supporters,” large against the background of last year’s record
Deputy CEO of TBC Giorgi Tkhelidze says with a lows. In reality, it will take the economy at least
smile. After a long time, we finally manage to meet until the end of 2022 to reach pre-pandemic levels.
face-to-face again at the TBC office on Marjanish- Even from the figures posted by TBC we can
vili Street. clearly see, on the one hand, the bank’s resilience
I can only tell by his eyes that he is smiling, as in the current difficult environment, and on the
we both wear face masks. It is a seemingly organic other hand, the way in which the development
moment against the background of this interview of systemically important banks and economic
and the message sent out by Georgia’s leading recovery are interconnected. In the fourth quarter
bank: uncertainty remains, but we have considera- of 2020, TBC posted figures of GEL 14 billion in net
bly more experience and more ways of eliminating loans, GEL 22 billion in assets, and GEL 123 million
it now than last summer, when the bank’s manage- in end-of-year net profit. “The growth was not as
ment was discussing the pandemic and the ways of substantial as in 2018 and 2019, but we still issued
adapting to it with Forbes. GEL 2.2 billion to corporate businesses alone,” Mr.
We have other priorities today. We need to ensure Tkhelidze notes. TBC remains the market leader in
that TBC manages to retain stability in the relation- terms of growth.
ship with its partners and chooses the right leader- Even during the crisis, businesses were issued
ship style. We now know that the pandemic is more with funds, including new money for the imple-
unruly and long-lasting than we initially thought. mentation of both ongoing and new projects. The
At the time of writing this cover story, devalua- Deputy CEO of TBC sees the cooperation between
tion of the national currency continues at a record the banking system, the National Bank of Georgia,
pace.Last year, the current account deficit of Geor- and the Georgian government as key to maintain-
gia doubled and reached 12% of GDP, the economy ing these dynamics. “We listened to each other
shrunk by 6.2%, more than 100,000 people found and conceived a joint action plan. This partnership
themselves below the poverty line, and more continues to the present day.”
than 75,000 citizens lost their jobs. Without going According to international credit rating agen-
deeper into negative statistics, we can see that cies, the Georgian banking system is functioning
the health crisis is closely being followed by an well even during the pandemic – most recently, at
economic crisis. the end of March, the international credit rating
For Georgia’s small open economy, the agency Fitch revised the outlook of TBC and two
aforementioned figures are truly alarming. In the other Georgian commercial banks from ‘negative’ to
context of banks representing the main source of ‘stable.’ At the same time, the rating agency affirmed
funding in Georgia, and TBC being a systemically TBC’s long-term Issuer Default Rating (IDR) at ‘BB-’.
important bank, there are two important questions According to the statement published by Fitch, “the
that we need to put to Giorgi Tkhelidze. revision of the outlook to ‘stable’ reflects reduced
First, when can we expect the economy to pressure on the bank’s credit profile from the
recover? The Deputy CEO of TBC believes that “in pandemic and contraction of the Georgian economy.
this regard, we have not yet felt the full effects of Fitch expects the bank’s pre-impairment profits
the pandemic. The reality is that last year’s expec- to be sufficient to absorb additional credit losses
tations about slowing the pandemic and achieving from the pandemic without jeopardizing the bank’s
tourism recovery have been delayed. Therefore, it financial profile. TBC entered the crisis with healthy
will also take the economy longer to recover.” capital cushions and sound performance metrics.”
Giorgi Tkhelidze’s response does not come as a As we can see, the main risks are related to eco-

nomic growth as well as the ability of companies loyal guests to see that ongoing projects were not
and people to service their debt. being suspended. “‘Lopota does not stop’ is an
The second question is what is the role of excellent slogan that could be used in the future,”
Georgia’s leading commercial bank in this process? Giorgi Tkhelidze recalls. As a result, Lopota will
Giorgi Tkheladze divides his response into three be able to greet its guests with renovated tennis
parts. courts, a new restaurant and 51 additional hotel
“One of the main roles of the bank is to provide rooms this year. “It is better to show more belief in
support with regards to financial liabilities. We have these situations, take risks and prove real partner-
agreed to restructure debt on several occasions,” ship in difficult times,” Mr. Tkhelidze states.
states the Deputy CEO, who is responsible for the Lopota is only one of numerous examples. The
corporate segment. Looking at this particular seg- list of businesses that were started or expanded in
ment, we can see that the bank’s pandemic-related 2020 with TBC’s support include two Nova mega-
concessions for its corporate clients affected loans centers in Tbilisi and Batumi, where TBC contribut-
worth GEL 2.1 billion (37% of the total portfolio) and ed GEL 1.5 million, and two new Bomondi hospitals
252 borrowers (34% of all debtors). in Poti and Kobuleti. TBC also contributed GEL 10
“When the pandemic is over, decision making million to Georgian Textile – a sportswear enter-
and long-term planning will become much easier, prise in Rustavi that exports its products abroad.
but right now we must think about the ways to With TBC’s help, companies were able to manufac-
operate in the current reality – how to work with ture products such as face masks during the crisis
“We listened to each other and conceived a joint action

plan. This partnership continues to the present day.”
our colleagues remotely, how to supply remote – Medifari and New Technology Impex obtained
services to our clients if they face difficulties, how funding for this purpose during the pandemic. This
to ensure that businesses can adapt to the current list is far from complete.
reality, continue to operate and retain their staff,” TBC is also working closely with the gov-
Mr. Tkheladze explains. ernment. It sponsored the 112thsession of the
When it comes to the subject at hand, TBC has Executive Council of the UN World Tourism
an interesting approach and philosophy. According Organisation. As the leading financier of tourism
to Giorgi Tkhelidze, it is important not to spend in Georgia, the bank decided to provide funding at
too much time thinking about when the pandemic needs-oriented and flexible terms for this sector,
will be over, and instead think more about the which was hit particularly hard by the pandemic,
ways to adapt to the current situation and continue to ensure that when activity in the sector finally
operating. This means that for TBC, it is important restarts, its players are ready and able to operate
to support businesses both in good times, when without hindrance. All forecasts confirm that Geor-
they generate profits, and in challenging times, gia’s economic recovery depends primarily on the
when they most need help. TBC is therefore willing fortunes of the tourism sector. TBC has provided a
to take more risks and then work with businesses total of GEL 130 million in funding for the hospital-
on risk management, rather than take the easy ity industry.
route of refusal. Thus, supporting businesses in difficult times
A good example is Lopota. “Goga Maisuradze is not only an emotional matter for TBC, but also a
explained to us that it would be important for his pragmatic business decision made by the market

FORBES
leader. “30% is emotion, and 70% is business deci- with situational analysis, as approximately 90%
sion. If you do not take appropriate risks and then of businesses are TBC clients. The company has
work with businesses to exit the crisis, it means that collected countless data on sales, turnover and
you are actually deepening that crisis. The welfare dynamics in individual sectors and the economy as
of businesses and banks is interconnected, espe- a whole. This information is collectively analyzed
cially in the medium-term. If you do not help busi- in TBC’s weekly public reports. “If we detect
nesses overcome challenges, then the crisis could recovery dynamics or signs of life in a project, then
also engulf the bank,” Giorgi Tkhelidze explains. we continue supporting it, as well as funding new
The National Bank of Georgia, in their role as projects,” Giorgi Tkhelidze explains.
regulator, ensures that systemically important TBC has also implemented the practice of hold-
banks do not take excessive risks. This forms the ing regular webinars about COVID-19 and the mac-
second part of Mr. Tkhelidze’s response to my roeconomic outlook. According to Giorgi Tkhelidze,
question. while the situation can change from one webinar to
The Deputy CEO of TBC views the bank regula- another (at times quite radically), the question/an-
tion policy positively, effectively admitting that swer format creates a more complete picture, reduc-
NBG’s conservative approach towards market regu- ing uncertainty and making the prospect of adapting
lation before the pandemic, for which it was often to the pandemic appear more realistic.
criticized, has a positive effect during the crisis TBC also understands that the pandemic is
with regards to bank capitalization and liquidity. a global threat.The bank ensures that its best
“NBG will probably feel proud of itself for a long practices and examples arefar more diverse than
time,” Giorgi Tkhelidze remarks, and I can once just those on the local market. Sharing them during
again detect a smile behind his face mask as he the pandemic can be priceless. For that reason,
recalls how thoroughly the National Bank and TBC the bank even invited international management
discussed the responsibilities of large borrowers: consultants for a three-hour session with Tegeta.
“Corporate loans are the least problematic, as we “They wanted to conduct a detailed analysis to
pursued adequate lending policies. We had capital find out what the best global practices were, what
buffers to establish additional reserves for insuring kind of mistakes are made and by whom, and how
crisis-related risks.” According to Mr. Tkheladze, to correctly plan and re-adjust the business model
the financial system of Georgia is still capable of to ensure that businesses can adapt to the existing
overcoming minor shocks, although uncertainty situation. They gathered plenty of good ideas,” Mr.
remains a major challenge. Tkhelidze says about Tegeta. The same was the
This is the third and final part of Giorgi Tkhe- case with the hotel business.
ladze’s response. In his view, an important part of Hospitality and entertainment are the worst-
the role and responsibilities of TBC as a leading affected sectors today – the hotel and restaurant
company is providing its partners with profession- sector shrank by almost 40% in 2020, while the
al advice and sectoral or macroeconomic analysis arts, entertainment and leisure sector shrank by
in times of uncertainty: “We regularly talk to our 19%. “From what we can see, only a small part of
clients, and these talks can be difficult and intense. the sector is able to function. During the summer,
Difficult situations often require correct but pain- this segment will be able to service the interest on
ful decisions, but we remain realistic. Apart from their debtat best. As for the rest, we are just waiting
providing financial services, we also act as advis- for a more active period to get them on their feet,”
ers and experts. Our analytical and consistently Giorgi Tkhelidze tells me.
updated reports allow us to do that. Together with Real estate and related sectors have been able
our partners, we create realistic expectations based to better adjust to the pandemic – partly due to the
on joint discussions that lead to correct decisions.” state subsidy program, partly due to infrastructure
Such is Mr. Tkhelidze’s firm position. projects, and partly through their own efforts. This
Being the market leader clearly helps TBC sector shrank by 5%. “If the situation becomes

FORBES
more stable, this sector will be able to continue Tkhelidze states.

functioning,” says Mr. Tkhiladze. Thirdly, the digitalization process will continue.
Luckily, there are also sectors that have been “We are actively working with NBG to enable
relatively unaffected by the crisis or were only af- digital signatures. This will save a lot of paper and
fected for a short period of time. Examples include time for customers and banks alike – time that can
trade, supermarkets, pharmacies, and wine export. be used for other beneficial endeavors,” says Giorgi
Using TBC’s own clients as an example, Giorgi Tkhelidze.
Tkheladze boldly predicts that business will Fourthly, the culture of online meetings will
emerge stronger from the pandemic. Notably, he become more prevalent. “In early 2020, nobody
includes TBC Bank in this prediction. Analysis of at TBC could imagine holding even a five-person
several clear trends gives him cause for optimism. meeting online,” Mr. Tkhelidze recalls. “You had to
First, the pandemic will provide additional beat the traffic to get from Ateni Street to Mar-
impetus for companies to either diversify their janishvili Street, or vice versa. This culture has
products or achieve more cost-effectiveness in significantly increased efficiency. Many meetings
supplying these products. Giorgi Tkhelidze cites now take place remotely, and that will still be the
delivery service as a specific example. “Delivery case when this pandemic is over.”
services completely transformed everything. This concerns not only internal meetings, but
This concerns not only food, but also many other also business meetings – even the most conserva-
products and services. As a result, companies with tive Georgian businessmen are now ready to solve
“It is better to show more belief in these situations, take

risks and prove real partnership in difficult times.”
good reputation and brand recognition no longer at leastsome of their issues online. The picture
need to pay high prices in city centers. They can is not so one-sided when working from home.
easily rent a space further away for a tenth of the According to a recent survey, 74% of TBC employ-
price, set up a kitchen and start delivering,” Giorgi ees view remote work positively, as it has raised
Tkhelidze explains. “There are several such com- their quality of life and happiness. However, when
panies on the market already, while several others work-related activities have to be conducted in the
have turned this approach into their development same space where children are being raised, and
strategy. Most of these businesses have managed when it becomes harder for colleagues to commu-
to retain a large section of their staff thanks to nicate and exchange advice, online work becomes
delivery services.” more time and energy consuming. “We are grate-
Secondly, there is growing demand for data ful, and at the same time, we are thinking about
analytics, which encourages companies to be more how to resolve this issue moving forward,” says
transparent. Giorgi Tkhelidze also provides specific Giorgi Tkhelidze. At this point, TBC provides all its
examples for this: “For instance, supermarkets and employees who wish to work remotely with that
hotels are actively exchanging data. We now pro- opportunity. According to the current statistics,
duce such data and supply them to a growing num- approximately 20-25% of staff choose to work from
ber of companies. Demand is growing, which is the office.
good. The next stage will be for companies to start The final observation is that the pandemic seems
producing and analyzing this data themselves, to have erased borders by strengthening online chan-
and we will gladly help them in this process,” Mr. nels. TBC Bank knows this better than others. Giorgi

Tkhelidze recalls an interesting story: “The husband there must be an option to place savings not only
of one of our team members was assigned to a diplo- in bank accounts, but also in other sources – espe-
matic mission in South Korea. She had to follow her cially since the interest rates on foreign currency
family and could no longer remain at TBC. We were deposits in the Georgian banking system are show-
in the process of saying goodbye when we raised the ing a declining trend at a time when76% of total de-
opportunity of working part-time. Our employee posits of natural persons (GEL 18.7 billion) and 45%
agreed, but things worked out so well that by the end of total deposits of legal persons (GEL 16.9 billion)
of December we concluded that she was working are placed on foreign currency accounts. Secondly,
full time, only remotely. Many clients do not realize loan liabilities increase during a crisis, as either
that this person is providing them with service from profitability decreases, or the volume increases
abroad unless she tells them.” Hearing this story due to devaluation, or both. Thus, the parameters
from Giorgi Tkhelidze has a special ring to it. Several ofmany companies will no longer be able to meet
years ago, when he was offered a high position at the additional borrowing requirements, and access
TBC, he had to choose between staying at Barclay’s to alternative sources of funding will be needed
in London or moving back home. If it was not for more than ever. “A partnership between NBG and
his desire to return home, he might have taken a the financial sector already exists in this regard,
different decision. Today, the choices are different. It which is reflected in the additional benefits of an
is no longer necessary to be in Georgia to work here, alternative source of funding for companies with
if you can successfully work remotely. At least, that is a high credit rating, resulting in a more active debt
the approach adopted by TBC. It will allow the bank capital market. This must be supplemented with
to significantly increase its efficiency and access to state resources,” states Giorgi Tkhelidze, highlight-
professionals. ing pension savings in this context. However, this
One of the lessons learned by Giorgi Tkhelidze is a different issue for a different article.
personally, and one he was willing to share with As for the short and medium-term, Mr.
Forbes Georgia, is that while fighting the effects of Tkhelidze believes that only a speedy vaccination
the pandemic, when the bank managed to retain process can be a turning point. “If the third wave
its staff despite revenue losses, when it had to fo- affects a large number of people and restrictions
cus on continuing to provide non-stop services to have to be reintroduced, we will be unable to re-
its clients, and when it devised plans for working ceive tourists,” Giorgi Tkhelidze states, adding that
online, it was running increased risk of paying less it is important for as many people as possible to be
attention to what was happening inside the team vaccinated, at least in the industries that cannot
that enabled all of this – how the TBC employees function without people’s physical involvement.
were coping with the stress of having to adapt to The Deputy CEO of TBC firmly believes that
the changing environment and practices. “In recent the crisis will be followed by significant growth, as
months, we actively began to ensure that resources artificially restrained sectors will ultimately grow
can be added wherever they are needed, and that faster than under normal circumstances. “It is im-
we constantly express our gratitude to let every- portant to position Georgia as an attractive proposi-
one know that results are achieved by the whole tion for investors,” says Giorgi Tkhelidze, who
TBC team, rather than the management alone.” represents the bank that has for years prioritizedG-
Looking ahead to the future, what should eorgia’s position on the London Stock Exchange.
be done in 2021 and beyond to ensure that the I believe that we have managed to convey one
economy starts to recover, and businesses start example of what leadership can look like, including
to function fully? The Deputy CEO of TBC has a during the post-pandemic period. The next step
detailed response to this as well. will be to measure the verdict of the business sec-
Giorgi Tkhelidze believes that the time is right tor – will it say that TBC was its main supporter in
for real development of the capital market. Accord- difficult times?
ing to him, this is important in two respects – first, We will be waiting to find out!

MANAGEMENT
SAMI COHEN - CURRENT EVENTS
SIMON SINEK TELLS YOU HOW TO FIND

THE TREASURE HIDDEN IN YOUR COMPANY
In a chapter entitled ‘Trusting Teams’ in his latest book The Infinite Game,Simon Sinek writes the
story of Shell URSA team and how Claire Nuer, co-author of LEO Methodology with Sami Cohen
trained them to achieve tremendous results while feeling safe in one of the riskiest jobs in the world.
GIORGI IS THE CEO OF A SUCCESS- gagement. How can he expect employees to be engaged
FUL COMPANY. He takes a lot of courses and when they are in a culture of fear? Fear of making a
keeps himself up to date with management trends. mistake, of not knowing, of admitting failure, of asking
He is convinced that his workforce is the basis for for help, of losing to the competition, and so on.
the company’s success, but he was not aware before He had no clue before reading Simon Sinek’s book
reading Simon Sinek’s latest book – The Infinite Game how to train his managers to find hidden treasure.
– that he possessed hidden treasure. Simon Sinek explains that by using Leo Methodology
Can an unmotivated employee perform at his or her over a one-year program,the forty people compos-
best? Of course not. When he read Gallup’s employee ing the URSA team– Shell’s largest oil rig in the world
engagement survey, he was shocked. He would never valuedat$5.5 Billion – learnt to trust one another and
have guessed that 70% of his employees did not like become a trusting team.
their job and some 20% were actively disengaged. This Giorgi loved a specific paragraph that describes the
means that they were working against the company; culture of a trusting team:
they had no problem speaking badly about their boss When we work on a Trusting Team, we feel safe
or about the company itself. to express vulnerability. We feel safe to raise our
Giorgi always knew that employee engagement hands and admit we made a mistake, be honest about
could be a gold mine, but he never guessed how big shortfalls in performance, take responsibility for our
that mine might be. It is huge! He thought that if it was behavior and ask for help. Asking for help is an exam-
addressed effectively, the company could gain a lot. ple of an act that reveals vulnerability. However, when
Giorgi was conscious that most employees put on a Trusting Team, we do so with the confidence that
their interests before the interest of their team. He was our boss or our colleagues will be there to support us.
conscious that his managers were in competition with “Trust is the stacking and layering of small moments
one another to get his praise. He liked that they had a and reciprocal vulnerability over time,” says Brené
certain level of fear, it gave him leverage on them. He Brown, research professor at the University of Houston
never thought that this level of fear would cascade on in her book Dare to Lead. “Trust and vulnerability
the levels below creating a distrusting culture. grow together, and to betray one is to destroy both.”
You can understand Giorgi’s surprise and joy after he This paragraph highlighted the culture of a trusting
read The Infinite Game. He realized that what he thought team. The question for Giorgi was to decide which kind
was effective had a boomerang effect on employee en- of management style he wanted? Did he want his man-

agers to be genius leaders with hundreds of emulation and doing tasks together over He was so delighted that he even
helpers behind them thereby increasing the competition among each other and being thought about letting go of the superhero
gap between management and the rest of separated by silos? What if people woke image he had of himself. Now that Giorgi
the organization, or to develop what Simon up in the morning knowing they belong to had made the decision to create a trusting
Sinek calls a ‘Trusting Team’? something bigger that they had created to- team culture, he had three options:
The answer was not obvious to him. gether. What if they feel emotionally safe 1 - Continue as is. After all, results
Giorgi had been successful with things as to be vulnerable and grow? What if they were satisfactory and the board was happy.
they were– why rock the boat? How does feel inspired, fulfilled and appreciated? But will this create a trusting team culture?
one create these trusting teams that Simon Giorgi was surprised to perceive the 2 - Ask HR to organize or intensify
Sinek is talking about? Giorgi also realized difference between succeeding by having training with different companies, hoping
that he will probably look less indispen- a competitive culture as he had always one of them will yield a trusting team
sable if his teams are more independent, pursued and succeeding by having people effect.
motivated and responsible. Would he lose more engaged. He also realized that he 3 - Or explore the possibility of us-
the image of the charismatic leader? He never took the latter goal seriously. When ing the methodology that helped Shell’s
didn’t like this last thought. he imagined that it would be him inspiring URSA team become a ‘Trusting Team’ and
But he started thinking more deeply: cultural change that would make more achieve tremendous results, while feeling
How would it be if my team leaders employees go to work feeling trusted and fulfilled and appreciated at work.
SHUTTERSTOCK
were engaged in creating a culture of valued then come home feeling fulfilled, Giorgi felt good about his thinking
trust and support. What if they choose he felt really inspired. process and made his decision.

INTERVIEW
ZVIAD KORDZADZE
25 Years in the
Legal Business
In the 1990s, few people in Georgia
viewed the legal profession as a busi-
ness. Founded in 1995, the Kordzadze
Law Office offered its clients innovative
services and a progressive approach
that may have seemed outrageous at the
time but ensured that the company’s list
of loyal clients now includes dozens of
successful companies, while local and
international index firms routinely list
the law office and its founders as a top-
category representative of the legal pro-
fession. We spoke to Zviad Kordzadze
– a lawyer with bold ideas, hundreds of
cases won and interesting views that
extend beyond the field of law.
BY ELENE CHOMAKHIDZE

FORBES
INTERVIEW ZVIAD KORDZADZE
Aside from any widely accessible standard and operated by Mkhedrioni men like a customs
information, who is Zviad Kordzadze? How did checkpoint. Then we had to deal with burst tires in
you establish yourself as a successful lawyer, and Mtskheta, before finally reaching Tbilisi and starting to
what helped you achieve such impressive results? sell our product. We were left with very little money.
People who started their business in the 1990s, when Afterwards we conducted similar activities on several
business image and reputation were not viewed as a occasions. What I am trying to say is that even before
key advantage, learned a lot through trial and error. We becoming a lawyer, I was always looking for ways to
helped establish the sectors in which we were operating. make money. I therefore approached the legal profes-
It was my generation that shaped the legal business sion as a business from the very beginning. We only
as we know it today. This may sound strange to some had the Bar Association in Georgia at the time. They
people now, but we started out at a time when there asked me to pay $500 for membership. Instead, I de-
were no meeting spaces or anything else. For example, cided to start my own business – not as a private lawyer,
when I first saw an electronic weather board at a petrol but as a law office, together with my partners Gocha
station in Tbilisi, that is when I started to hope that we Svanadze and Irakli Okruashvili. We were the first law
would become part of the modern world. To give you an firm in Georgia to be paid for our services by the hour.
idea about the environment in which I started practicing People even joked that Kordzadze had an hourglass on
law, we composed our first business documents and his table, making money each time he flipped it over.
regulations with the help of the Norton programme, We introduced monthly fees, as well as the concept of a
which was little more than a typewriter with a blue family lawyer. All of this meant that we were conduct-
screen. If we wanted to send a message, we had to wait ing business. We were doing so in an organized manner
two minutes for the computer to establish a connection and by observing all formalities, signing agreements,
with the web, and a similar amount of time to send the and paying taxes.
document. Georgia did not even have mobile phones
at that time. My first piece of business equipment was a What motivated you as a lawyer to remain in this
pager that was given to me by a client who wanted me business?
to contact him in case of a problem. All of this may seem I can tell you exactly what motivated me. As part
funny right now, but that is what we had to deal with. of the joint program carried out by the Embassy of the
United States in Georgia and USAID, I travelled to the US
We are no longer surprised to see every new idea in 1996. I was working for the Young Lawyers’ Associa-
or undertaking being viewed from a commercial tion back then, and I was one of several representatives
perspective, but that was not the case when you of successful NGOs who were chosen to travel and meet
started your firm. When did you start viewing their American counterparts. We held meetings in sev-
the legal profession as a business, rather than eral states, the final stop being New York. This was when
just a job? I fell into a state of amazement from which I still have
Before practicing law, I had some experience in the not recovered. Just imagine – you live in Tbilisi without
field of small business. Nothing substantial, but still… electricity, natural gas, or hot water, and suddenly you
When my parents were unable to continue supporting find yourself in New York City. I lived two streets down
me financially, I had to do something. My friends and from Broadway and got a sore neck as I looked up at the
I decided to transport unlicensed Coca-Cola from the skyscrapers for four days in a row. I barely slept. Other
Kutaisi lemonade factory to Tbilisi and sell it to local cities impressed me too, but New York left a particular
shops. This was happening during the Mkhedrioni era, impression. It was also the first time I found myself
and it was an extremely bold move by us. We loaded inside the office of a proper legal firm – on the 47th floor,
two small vehicles with bottles and set off for the with numerous desks, and lots of light. This experience
capital. We were stopped by armed men on several changed my life. I saw that there are successful countries
occasions. They drank some of our Coke, kept some and cities where people can live in good conditions by
more for themselves, and let us proceed. We took a taking advantage of the opportunities that they have. I
detour around the Rikoti tunnel, which was controlled asked myself: even if we cannot live likein the US, can

we not at least try to live better than we do now? Then and I decide whether or not to take up a case. I do not
came the 1997 judicial reforms, and I found myself at the deal with small cases, and I do not simply do what I am
center of legislative changes in the country. told. I need to be in my comfort zone. I like ideas and
opportunities. People who work with me note that they
How profitable is the legal profession as a busi- have the freedom to try new things. I believe that people
ness? are most productive when they are free. In our profes-
It can be quite lucrative, but only if you have the sion, the conveyor belt approach is unproductive. This is
right approach. You must be fully focused on clients’ not manufacturing.
interests and achieving results for them. This business
allows you to have a good life. It requires a lot of hard Law is an extremely competitive industry. If you
work, but it pays off. You must bear in mind that these do not stand out, you will quickly get crowded
results cannot be achieved in one or two years. The out. It takes a lot of effort and resources to stand
younger generation often seeks to achieve everything out. What makes you different?
quickly. However, the ones who persevere and show I read lectures on the topic that you are now asking
patience will reap the rewards. In their case, annual me about. We are talking about the skills of a lawyer.
revenue will exceed tens of thousands of GEL. This What makes this business different is that we do not
will allow them to have a beautiful house and a nice usually advertise our services on television or billboards.
car, provide their children with a good education, help Some people may do it to raise their profile, but I doubt
other people, and so on. it attracts more clients. I give my students a remarkably
simple example for illustration purposes. You see many
Do you see yourself as a self-made businessman? billboard adverts for dental clinics on the streets. How-
I would say that the businessman Zviad Kordzadze ever, when you have a toothache, you call your friends
is my own product. My parents were teachers during the or family and ask them to recommend a good dentist,
Soviet era. They had to wait twenty-three years for a flat rather than go out looking for one on the streets. The
and twenty-one years for a telephone. When they finally image of a doctor and a lawyer depends entirely on the
got both, I was happy about it, but they were not. Still, quality of their work. It is the only factor that guarantees
they gave me an education and funded the first three them a place on the market. Such is the specific nature of
years of university for me. I also received a monthly the legal profession – the content is more important than
scholarship of 40 rubles, which encouraged me to a the form. The only way to survive and develop in this
certain extent. When I had to decide whether to stay in competitive environment is to be a professional, adhere
Tbilisi after graduating or return to Kutaisi, I realized that to ethical norms, and do your job well.For me, the fact
if I stayed here, I would be unable to depend on anyone that a company like Coca-Cola Bottlers Georgia has been
else, and would have to look after myself. I decided to a loyal client of mine for twenty-three years during my
stay. Generally, when people from the provincesmove twenty-five-year career, is what defines my competitive-
to the capital, they have to work harder than usualto ness and appeal. There are also other companies that
establish themselves and achieve success. Crudely have been my clients for two decades. Why is that the
speaking, they have to fight for their place. During this case? We are not talking about love or marriage here.
time, they develop skills that are important in a competi- These are mutually beneficial business relationships.
tive environment. I am not saying that I work day and
night. In fact, I believe that if someone still works around Who is behind the national and international suc-
the clock at a certain age, it means that they have a cess of the Kordzadze Law Office?
problem with time management. If I set myself a goal Initially, the Kordzadze Law Office was just me. I then
that I believe in, I will not rest until I reach it. However, if decided to move into the background and highlight the
I do not believe in a goal or idea, then I will not waste my role of my staff by sending them to do TV interviews,
time on it. One of the reasons behind my success is that increasing their involvement, and so on. This was a cal-
I love what I do. Furthermore, I have never worked for culated move to ensure that the Kordzadze Law Office,
anyone else. I determine my own rhythm and workload, rather than Zviad Kordzadze himself, becomes a brand.

FORBES
INTERVIEW ZVIAD KORDZADZE
This approach has paid off, as our partner lawyers have winemaking, which means that this is more than
their own loyal clients and are being contacted directly just a hobby for you. How long have you been
by them, ensuring that the law firm can act more inde- involved in viticulture, and what are your plans in
pendently. I was CEO of the Georgian Industrial Group this field?
(GIG) for several years, meaning that the office received I have been interested in winemaking for almost
less attention and involvement from me during this fifteen years. I certainly did not spare any resources to
period. I even stopped attending court cases for a while. get to the point where I am today – offering custom-
I had to choose between continuing to work for GIG and ers a distinguished, high-quality product. I am at the
returning to the law office. Having gone back, it took me stage where the branding and external packaging for
two to three years to bring the firmback to a certain level my wine is finished, and it is ready to be sold. Barbales
as a brand. That is no longer the case today. Marani has its own website and delivery service, which
is an essential part of commerce during the pandemic.
Numerous local and international law firms have The winery itself is located on Gorgasali Street, inside a
moved into the Georgian market in recent years. 19th century cellar. The grand opening was delayed due
What competitive advantages does the Kordzadze to the pandemic, but it will definitely happen in the
Law Office have over them? spring. This will not be an ordinary winery, but a center
Our main competitive advantage is that we have for tourism offering customers somewhat different and
never focused on one specific field of law. Our objective interesting services. As for the wine, there will be more
since the day we founded the firm was to provide each than ten different varieties on offer. Additionally, we
client with comprehensive legal services regardless will be selling our unique line of fruity alcoholic drinks,
of whether they were looking for a criminal, civil, starting with the raspberry-flavored beverage that is
administrative, corporate or tax lawyer. This always ready to be launched. I believe that consumers will like
gives us the edge over our competitors, which becomes it. We will also have something interesting and exclu-
apparent in times of crisis. For example, when the fall sive for the Georgian market. Barbales Marani will be
in foreign investment affected law firms that worked selling Rose Miraval – the renowned brand produced by
in this specific field, we were able to balance the deficit Brad Pitt and Angelina Jolie’s winery. Football fans and
through other areas of law. others will be able to try the wine from Andres Iniesta’s
vineyard. Naturally, we do not intend to stop there. We
As in other industries, success in law is measured have more interesting ideas and plans. Negotiations
by specific achievements. What are the achieve- about exporting our products are ongoing.
ments that Zviad Kordzadze and the Kordzadze
Law Office can boast after twenty-five years in the Zviad Kordzadze Publishing, Barbales Marani,
sector? academic activities at the Georgian-American Uni-
In our case, success can be measured not only by versity and Tbilisi State University – are you sure
customer satisfaction, but also the annual indexes you are not turning away from the field of law?
published by influential local and international compa- Abandoning law is something I cannot do. If I invest
nies. For example, the survey conducted by Chambers twenty-five years of my life in those other activities,
& Partners is based on objective methodology that then I might start thinking about changing profession.
excludes any form of bias. In-depth market research I would describe my recent undertakings, including
is used to identify the best law firms and individual publishing and winemaking, as diversification of my
lawyers. My law office and I occupy leading positions in activities. These were my hobbies that turned into
these rankings on a regular basis. The company has also something more as I accumulated a certain degree of
held the Golden Brand status of the best law firm of the experience. They required the same attitude from me
year for several years in a row. that I showed towards law. Whatever I do, I must en-
sure that it is done thoroughly and to a high standard. I
Let us talk about Barbales Marani. I read in an hope I will be as successful in publishing and winemak-
interview that you have invested GEL 100,000 in ing as I was with my law office.

ECONOMICS
BESO NAMCHAVADZE
How do We Stabilize
Georgian Lari
IN 2020, GEORGIA’S CAPITAL OUT- Furthermore, the Georgian economy shrank by 6.2%,
FLOW exceeded inflow by $2 billion. The negative thereby reducing demand for the lari.
balance (current account deficit) increased by $1 billion year- The local currency would have depreciated even further,
on-year. That is the main reason for the recent devaluation had the government not taken on an additional $1.8 billion
of the local currency. in foreign debt. These funds were mainly transferred to the
Traditionally, Georgia loses the most amount of dollars foreign currency reserves of the National Bank of Georgia
through foreign trade in goods. Until 2020, the country was (NBG), which proceeded to sell $873 million on the local
able to significantly offsetthese losses with trade in services. currency market in 2020, and $243 million between Janu-
For example, the negative balance of foreign trade in goods ary and April 2021. In just over one year since the start of
in 2019 was $3.7 billion, while the positive balance of trade the pandemic, NBG has sold a total of $1.1 billion, thereby
in services was $2.2 billion, meaning that the total negative slowing the depreciation of the lari.
trade balance was reduced to $1.5 billion. Changes in the currency exchange rate, foreign trade and
In 2020, the negative foreign trade balance was $3.1 other foreign economic relations constitute a joint dynamic
billion, which is $585 million less than the 2019 figure. The process. If it were not for the depreciation of the lari against
fall in imports ($1.2 billion) exceeded the fall in exports ($615 the dollar, Georgia’s external balance (current account
million), resulting in an improved balance. However, the deficit) would have been even more negative.
balance of foreign trade in services worsened by $2 billion, The pandemic reduced the demand for the dollar in
meaning that the overall balance of foreign trade in goods Georgia, as economic activity and internal demand de-
and services worsened by $1.5 billion compared to 2019. creased. Low internal demand reduces imports and outflow
The worsening of the foreign balance of trade in services of foreign currency. Had it not been for the increase in the
was caused by the suspension of tourism due to Coronavi- budget deficit and the launching of new social and subsidy
rus. The amount spent by visitors to Georgia decreased from programs by the government, internal demand would have
$3.3 billion in 2019 to $542 million in 2020, representing a fallen even further. The increase in expenditure was partly
$2.7 billion fall in revenues. The amount of money spent by justified, as it served to support citizens who lost their
Georgians abroad also decreased by $477 million, meaning jobs because of the pandemic. On the other hand, higher
that Georgia lost a total of $2.3 billion from the suspension expenditure means higher government debt and more
of tourism in 2020. negative pressure on the local currency.
Along with tourism, foreign currency inflows were sig- The initial expectations in 2020 were that the country
nificantly affected by a decrease in foreign direct investment would overcome the pandemic in a few months, and it
and foreign portfolio investment by $1.3 billion in total. would just be a minor problem by 2021. Now these expecta-

tions have been delayed to2022 due to the mains high, economic activity remains stable, not increase and the lari does not depreciate
collapse of the vaccination process in Georgia. and the economy grows (unless new strict much further, the government must avoid
Until the spread of the virus is minimized, the economic restrictions are imposed to control imposing further strict economic restrictions
country’s main source of income – tourism – the spread of the virus). under any circumstances, even if the spread of
will be unable to recover. Georgia will also be The best way to overcome this dilemma is the virus escalates. Furthermore, the budget
unable to obtain the same amount of foreign for members of the public to get vaccinated as deficit must at the very least not increase. The
funding as in 2020, as its debt-to-GDP ratio has quickly as possible and fully comply with all government ought to abandon the subsidy
already reached 65%. The prolonged crisis and preventative measures. There are no effective programs that artificially increase demand
the decrease in foreign aid means that it is no solutions in the economic policy scenarios un- in certain sectors, damage strict monetary
longer practical for NBG to conduct currency less we become used to the waves of the virus policies, and ultimately result in depreciation
intervention to the same extent as last year. and rely on developing herd immunity. The of the lari and higher inflation. The economy
The lari will rebound if the figures regis- latter is as unlikely as the prospect of much should be stimulated by lowering interest
tered by the tourism sector are even half as of the population getting vaccinated in a few rates, rather than through subsidy programs.
good as they were in 2019. We have no other months, maintaining social distancing, and We are insured against the prospect of strict
major sources of foreign currency. However, as avoiding crowded spaces. economic restrictions given the fact that the
we are feeling the effects of the third wave of Only external factors can help Georgia Georgian government will be unable to take
the pandemic, we may find that 2021 will be mitigate the economic dilemma. The exchange on additional debt. Borrowing more money
even worse for tourism than 2020. rate of the lari is intricately linked to the ex- would be a dangerous move and a big mistake.
The third wave of the virus will leave Geor- change rate of the currencies in the countries Economic restrictions result in reduced budget
gia facing a painful dilemma: 1. Significantly that are our trading partners (particularly our revenues, higher expenses, and ultimately, in
increase refinance rates (the interest on loans), neighbors). Despite our domestic affairs, the an increased budget deficit and state debt.
leading to NBG reducing demand, selling the currencies of our trading partners may appreci- To summarize, the lari can be strengthened
dollar, strengthening the lari and stabilizing ate. Under equal circumstances, this would by quick vaccination and opening the country
the prices, albeit at the cost of slower economic also lead to the appreciation of the lari. to tourists. Any other alternatives come with a
growth (possibly even a recession) in 2021; To ensure that the ongoing processes do heavy price that will impact the population as
or 2. The lari depreciates further, inflation re- not get out of hand, inflation and state debt do severely as the currency devaluation did.

ECONOMICS
LAURENCE BALL, GITA GOPINATH,

DANIEL LEIGH, PRACHI MISHRA,
ANTONIO SPILIMBERGO
US Inflation:
Set for Take-off?
How high is the ongoing US fiscal expansion likely to push inflation? This
column presents new evidence that underlying (weighted median) CPI
inflation has so far steadily declined since the start of the COVID-19 crisis,
broadly as predicted by its historical Phillips curve relation. If the ongoing
fiscal expansion reduces unemployment to 1.5-3.5%, as some predict,
underlying inflation could rise to about 2.5-3% by 2023. If the fiscal expansion
is temporary and monetary policy remains clearly communicated and
decisive, there is little risk of a 1960s-type inflationary spiral.
HOW HIGH MIGHT INFLATION rise in the US in might rise depending on how low unemployment falls with the
the coming years? Blanchard (2021) and Summers (2021) caution government spending expansion.
that the recent $1.9 trillion American Rescue Plan Act (ARPA),
together with the fiscal expansion passed in 2020, may push US INFLATION: PUZZLE DURING
unemployment low enough to cause overheating and surging in- THE COVID-19 CRISIS?
flation. Others, such as Gopinath (2021), see a persistent surge in To understand recent inflation behaviour, we separate it into
price pressures as unlikely, and Powell (2021) argues that the rise two components: (1) underlying inflation that reflects macroeco-
in inflation will be “neither particularly large nor persistent”. nomic conditions (the Phillips curve); and (2) a transitory compo-
The purpose of this column is two-fold. First, to re-assess nent arising from changes in relative prices due to microeconomic
how strongly US inflation responds to the unemployment rate, factors. We measure underlying inflation using weighted median
including since the start of the COVID-19 crisis, with a focus on CPI inflation data from the Federal Reserve Bank of Cleveland,
underlying (core) inflation. Second, to predict how high inflation which indicate the price change at the 50th percentile (in terms

Figure 1. US inflation fell in 2020 as unemployment rose
Note: Quarterly data. Long-term forecast = SPF 10-year-ahead forecast. Natural rate from CBO.
of consumption basket weights) of the tions. During the 2017-19 expansion, it was long-term forecasted level than could have
distribution of price changes in a given on average below the long-term expected been expected given the rise in unemploy-
month. This approach filters out extreme level for CPI inflation based on the Survey ment. However, the labour market was
price movements from various components of Professional Forecasters (SPF). During very unusual in 2020, with a large share
such as, for example, the record 84% fall the COVID-19 crisis, it fluctuated widely of job losers on temporary layoff due to
in cell phone service prices in March 2017 from -1.1% in 2020Q2 – the largest fall in lockdown measures, and, with prospects
(annualised) which prompted commentary the series’ history – with record drops in of regaining employment, having arguably
by then Fed Chair Yellen.1 airline fares, lodging, apparel, and motor little effect on wage bargaining and price
Underlying (median CPI) inflation vehicle insurance prices, to a rise of 3.9% dynamics. When we exclude job losers
has moved closely with macroeconomic in 2020Q3, when several of these one-off on temporary layoffs from the unemploy-
conditions in recent years (Figure 1). Dur- price drops rebounded, providing a noisy ment rate (right panel), the puzzle fades
ing 2017-19 when unemployment declined signal of underlying inflation. The CPI and inflation is broadly in line with its pre-
well below Congressional Budget Office excluding food and energy will probably pandemic Phillips curve relation.
(CBO) estimates of its natural rate, median rise sharply in 2021Q2 on a year-over-year Our Phillips curve estimates based on
CPI inflation rose above 2.5% (quarter- basis, but this will reflect base effects from quarterly data for 1985-2019 imply that a
over-quarter). In 2020, when unemploy- the record 2020Q2 drop rather than a rise 1 percentage point fall in the unemploy-
ment sharply increased, median CPI in underlying inflation. ment rate should raise median CPI infla-
inflation steadily declined, reaching a low We examine if, during the COVID-19 cri- tion by 0.24 percentage points (the 95%
of 1.6% in 2021Q1. sis, median CPI inflation has moved in line confidence interval is 0.17–0.31 percentage
By contrast, an often-used simpler with its pre-pandemic relation with unem- points). We find little evidence of non-lin-
measure of core inflation based on the CPI ployment – the Phillips curve – and at first earity with inflation rising faster at lower
excluding food and energy prices has not there is a puzzle. As Figure 2 (left panel) rates of unemployment so far, despite the
reliably reflected macroeconomic condi- illustrates, inflation was higher above its sample including times of low unemploy-

FORBES
ECONOMICS INFLATION
Figure 2. US inflation: No puzzle in COVID-19 crisisrose
Note: Inflation gap = inflation – long-term SPF forecast. Unemployment gap = unemployment – CBO natural rate, 4-quarter average.
ment.2 Our Phillips curve slope estimate of conditions that prevailed after the has averaged below median PCE inflation
is similar to that of Blanchard et al. (2015) global financial crisis – although such by about 0.5 percentage points reflect-
(about 0.2) and of Hazell and others (2020) large multipliers might not apply now ing disinflationary relative price changes,
(0.25 for median CPI inflation). with the rapid recovery. A substantial fall could, if these persist, be in the 1.8–2.3%
in unemployment could also occur with range. Such outcomes would be broadly
HOW HIGH MIGHT smaller multipliers but with additional consistent with the Fed’s average inflation
INFLATION RISE? fiscal stimulus beyond the ARPA. In this targeting strategy with inflation modestly
Based on our Phillips curve estimates, case, our estimates imply that median CPI overshooting its long-term level following
we investigate how high inflation might inflation would rise to 2.9% by 2023. To in- a number of years of undershooting it.
rise under two unemployment scenarios. vestigate this scenario further, we consider
First, we consider the April 2021 IMF a steeper Phillips curve slope – the upper UPSIDE RISKS
World Economic Outlook baseline, which bound of our aforementioned confidence Inflation could rise higher than we
reflects the IMF staff’s assessment of the band, a slope of 0.31. In this case, median envisage if expectations de-anchor and
ARPA and earlier fiscal packages, with the CPI inflation reaches 3.1%. rise with actual inflation, resulting in a
unemployment rate falling to 3.6% by 2023, Overall, our estimates imply median self-fulfilling inflationary spiral. How
about 0.8pp below the CBO natural rate CPI inflation rising to about 2.5–3.0% by likely is such a scenario – which has not
(Figure 3). Based on our estimated Phillips 2023. PCE inflation, on which the Federal materialised for several decades – to occur
curve, median CPI inflation would then rise Reserve focuses, and which has aver- with the temporary pandemic relief pack-
to 2.4% (quarter-over-quarter) by 2023. aged about 0.2 percentage points below age currently being implemented?
Second, we consider Blanchard’s (2021) CPI inflation over the past decade due to Blanchard (2021) concurs that current
scenario where the unemployment rate methodological differences, would reach Phillips curve estimates do not yield
falls to 1.5%, reflecting larger assumed 2.3–2.8% on a median basis. Inflation of predictions of high inflation but em-
fiscal multipliers calibrated on the basis the PCE excluding food and energy, which phasises that the aforementioned sharp

Figure 3. US inflation could rise to 2.5% or more by 2023
Note: WEO = IMF World Economic Outlook. ARPA = American Rescue Plan Act. PC = Phillips curve.
fall in unemployment could de-anchor risks. Inflation has undershot its long-term rent temporary government spending for
expectations and steepen the Phillips expected level for much of the past decade pandemic relief causes an inflationary
curve, resulting in a self-perpetuating rise – sometimes by more than the inflation spiral. We expect instead a rise in inflation
in inflation and costly policy trade-offs. overshoot we now predict – with little that is modest and temporary. We have
He cites the example of the 1960s, when evidence of de-anchoring. Also, the struc- focused in this column on the impact of
unemployment persisted below its natural ture of the economy is now more open to the ARPA. The recently unveiled American
rate and inflation rose from below 2% in foreign competition and labour markets Jobs Plan proposal, still under discussion,
1961 to nearly 6% by 1969. are more flexible, which would further would further reduce unemployment,
At the same time, the rise in govern- dampen price pressures. but the spending is likely to be spread
ment spending in the 1960s was not, as Finally, a period of low unemployment over a longer period, be partially offset
Gagnon (2021) underscores, a one-time could have positive supply-side effects, by tax measures, and raise potential
relief bill along the lines of ARPA but further mitigating inflationary pressure output through increased infrastructure
rather reflected longer-term commitments and reducing scarring from the COVID-19 investment. These factors could limit
to finance the Vietnam War and Great crisis. Positive supply-side effects could overheating concerns. Nonetheless, as the
Society programmes. A more appropri- arise, as Ball (2015), Blanchard (2018), plan is being firmed up it is important to
ate reference for today is the temporary Powell (2018) and Yellen (2016) discuss, keep in mind the lessons from the past.
government spending and inflation during as more (discouraged) workers re-enter More persistent and unfunded long-term
the Korean War in the early 1950s. the labour force and efficiency-enhancing commitments with limited supply-side
Moreover, the Fed’s communication job switches increase as labour markets benefits could pose greater inflationary
and policy framework are now more cred- tighten, enhancing human capital through risks. Should such upside risks to inflation
ible and consistent with explicit policy on-the-job training, and prompting invest- arise, they would complicate the exit from
goals than they were in the 1960s and ment as well as research and development. the Fed’s very accommodative monetary
1970s, which further limits de-anchoring Overall, we see little risk that the cur- policy stance.

ECONOMICS
GELA BARSHOVI
“HIGH NET WORTH INDIVIDUALS”

ARE ENTITLED TO OBTAIN A
GEORGIAN TAX RESIDENCY
CERTIFICATE WITHOUT SPENDING
183 DAYS IN THE COUNTRY
INTRODUCTION ELIGIBILITY REQUIREMENTS TO

If you aspire to become a tax resident without hav- QUALIFY FOR HNWI STATUS
ing to spend six months in a country, Georgia may be High Net Worth Individuals: Natural Persons
one of the best options available to you. who either own assets worth more than 3,000,000
In general, Georgia applies a 183-day threshold for Georgian lari (GEL) (approximately$910,000), or
determining an individual’s tax residency. Specifically, have received more than 200,000 GEL (approxi-
a natural person should spend at least 183 days in mately$60,000) annual income in each of the last
twelve consecutive months in the country to become a three calendar years from the year of the application
tax resident for a specific fiscal year in Georgia. (e.g.,2018, 2019, and 2020 – if the application is made
Apart from the general clause, another, more spe- for the fiscal year 2021).
cific rule of tax residency is in the Georgian tax code, Please note: Sometimes tax authorities require an
the so-called ‘High Net Worth Individual’ (HNWI) tax asset valuation report from a licensed expert showing
residency rule, according to which, a natural person the market value of the assets. The valuation report
qualified under HNWI can become a Georgian tax may be required for fixed assets and other tangible
resident without spending even a single day in the properties while for some other types of assets no such
country. proof is needed (e.g.,an official signed bank statement
GELA BARSHOVI IS AN INTERNATIONAL AND GEORGIAN TAX ADVISER AND A MANAGING PARTNER OF THE TBILISI-BASED ACCOUNTING/CONSULTING FIRM TPSOLUTION. REGARDING BUSINESS INCORPORATION, TAX
CONSULTATION, AND/OR ACCOUNTING SERVICES, YOU CAN REACH OUT TO HIM DIRECTLY AT [email protected].

might suffice as proof of funds). TO BE A GEORGIAN TAX shares and residential apartments).
To apply for a tax residency certificate, RESIDENT? • Georgia does not tax individuals’
besides meeting the criteria of ‘High Net Before applying for a HNWI tax residen- profit generated from selling cryptocur-
Worth Individuals’(as described above), a cy certificate, you should make sure that: rency;
person should either hold a residence per- • Georgia is a suitable place for you to • For some category of business activi-
mit or citizenship in Georgia (a residence be a tax resident, and ties, an individual can obtain the status of
permit and working permit is different to • Any income declared in Georgia a “small business” and pay as little as 1%
a tax residency certificate),or demonstrate (taxed or exempted) will not be taxed in personal income tax in Georgia;
that he/she received at least 25,000 GEL other jurisdictions. • Georgia is not an offshore zone, it is a
(approximately$7,500) from a Georgian Here are several reasons why Georgia cooperative country and has quite a rich
source in the calendar year when the ap- is an attractive place to become a tax tax treaty network (56 as of today, and the
plication was submitted. resident: 57th with Hong Kong will be in force soon);
More precisely, a person applying for • Georgia does not tax individuals on • Relatively low prices and the pos-
a tax residency certificate in Georgia as foreign-sourced income. sibility of profitable investment in, for
a ‘High Net Worth Individual’ needs to You must bear in mind that “foreign- example, the real estate sector;
satisfy the following criteria: sourced income” is not all income that • If you decide to incorporate a compa-
1. Demonstrate ownership of assets is transferred to Georgia from abroad. ny in Georgia, you will have an obligation
with a value of at least 3,000,000 GEL OR Regarding services, the term “foreign- to pay corporate income tax only when
demonstrate receipt of at least 200,000 sourced” is somewhat misleading. In you distribute dividends to shareholders.
GELof annual income in each of the last reality, a service provided by a Georgian For more details about Georgian tax
three years AND hold a residence permit resident to a foreigner (in other words, residency, please read my previousForbe-
(or citizenship) in Georgia. when a service fee is paid from abroad to sarticle.
Or Georgia) is mostly considered as Georgian-
2. Demonstrate ownership of assets sourced income. CONCLUSION
with a value of at least 3,000,000 GELOR Fortunately, this definition does not Georgian tax law allows one to become
receipt of at least 200,000 GEL of annual apply to all categories of income. For a tax resident without spending much or
income in each of the last three years AND instance, any passive income (e.g., interest, any time in the country. This exceptional
demonstrate receipt of at least 25,000 GEL dividends, capital gains, and pensions) of rule is applicable for ‘High Net Worth
from Georgian sources in the calendar year Georgian residents from abroad is mostly Individuals’, the term is defined in detail
when the HNWI tax residency application considered as “foreign-sourced income” above. The rule might be highly benefi-
is submitted. and exempt from personal income tax in cial for HNWIs traveling, not wanting to
Please note: Georgia. stay in one country long and at the same
If you prefer to obtain a residence per- I say mostly, as there are details to be time looking for a low tax jurisdiction to
mit instead of demonstrating the receipt considered and things that need to be become a tax resident in.
of 25,000GEL of income, you should visit analyzed on an individual basis to make This law is especially beneficial to
Georgia and go through all the required sure that your passive income received individuals receiving passive income from
procedures. There are several ways to from abroad definitely qualifies under the a foreign source, as this is usually exempt
obtain a residence permit, which are not tax exemption. from personal income tax in Georgia, as
mentioned in this article. • Georgia provides tax exemption for well as to individuals who receive service
The 25,000GEL of income should be capital gains if an individual had owner- fees that qualify under “small business”
received from a Georgian source (foreign- ship ofthe asset for more than two years status and have a1% personal income tax
sourced income will not count). Article before selling it; rate. Lastly, before analyzing Georgia’s
#104 of Georgia’s tax code determines the (For certain types of assets, an addition- tax system and applying for a HNWI tax
categories of income considered as being al precondition for exemption is that the residency certificate, make sure that any
from a Georgian source. asset was not used in economic activities income (taxable or exempt) declared in
in the last two years before selling it. This Georgia is not subject to be taxed simulta-
WHY IS IT BENEFICIAL additional precondition does not apply to neously in another jurisdiction.

BITCOIN, ALONG WITH OTHER CRYPTOCURRENCIES, has been criticized for price volatility, high and variable transaction costs, poor
security and use in illegal transactions. It has also been lambasted for the amount of electricity it devours through mining, a term that refers to
the process whereby new Bitcoins are added to the cryptocurrency ecosystem.
Mining involves the calculation of complex mathematical equations and it is extremely energy intensive, requiring powerful and expen-
sive computer equipment. Data from the University of Cambridge’s Bitcoin Electricity Consumption Index shows that the Bitcoin network
now consumes a whopping 142.59 terawatt-hours (TWh) of electricity each year, a figure that is higher than many countries.
Putting the figure into perspective, it could power all of the kettles used to boil water in the United Kingdom and the European Union for
32 years and 4.5 years, respectively. It also represents 0.57% of global electricity production and accounts for 0.65% of global electricity con-
sumption. In fact, if Bitcoin was a country, it would be the 27th largest consumer of electricity on the planet in May 2021. Its annual electricity
consumption is higher than Norway’s 124 TWh and more than twice the level of Bangladesh’s 70 TWh.
It is also substantially higher than the amount of electricity used by some of the world’s largest technology companies. According to a
further comparison carried out by Visual Capitalist, Google’s annual electricity consumption amounts to 12 TWh while Facebook’s totals five
TWh. Bitcoin still uses less energy than the world’s data centers, however, with their yearly electricity consumption totaling 205 TWh.

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Beard care products containing exclusive ingredients

Three-step procedure: preparation, shaving, moisturizing

PRE-SHAVE AND SOOTHING AFTER SHAVE AND

6 Shrosha Str., Office 1, 0179, Tbilisi, Georgia

12 The World’s Top 50

16 The World’s Top Countries

46 How The Gates’ Split

24 Georgia On the Road to

26 “The First Startup Exit”

4 | FORBES JUNE 2021

6 Shrosha Str., Office 1, 0179, Tbilisi, Georgia

56 The Three Principles

64 When the Market Leader is

72 Simon Sinek Tells You How

76 25 Years in the Legal

86 Georgian Tax Residency

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JUNE 2021 FORBES | 7

8 | FORBES JUNE 2021

New Vision 4,000,000 GEL

0 40,000,000 GEL 80,000,000 GEL 120,000,000 GEL

10 | FORBES JUNE 2021

Health Insurance 267,600,000 GEL

Civil Responsibility Insurance 25,300,000 GEL

Accident Insurance 14,200,000 GEL

Liability Insurance 11,200,000 GEL

Insurance against Financial Losses 8,700,000 GEL

Other 25,000,000 GEL

0 60,000,000 GEL 1200,000,000 GEL 180,000,000 GEL 240,000,000 GEL

Health Insurance Market Distribution by Company

GPI 74,300,000 GEL

Irao 16,900,000 GEL

PSP Insurance 18,100,000 GEL

Ardi 39,100,000 GEL Imedi L 61,800,000 GEL

Car Insurance Market Distribution by Collected Premiums

TBC Insurance 27,300,000 GEL

Aldagi 23,300,000 GEL

Euroins 7,000,000 GEL

JUNE 2021 FORBES | 11

12 | FORBES JUNE 2021

Rank Name Category Total Followers Biggest Platform

#1 Cristiano Ronaldo Sports 517M Instagram

#2 Justin Bieber Music 455M Instagram

#3 Ariana Grande Music 429M Instagram

#4 Selena Gomez Music 425M Instagram

#5 Taylor Swift Music 361M Instagram

#6 Dwayne Johnson Film & TV 342M Instagram

#7 Katy Perry Music 338M Instagram

#8 Kylie Jenner Other 333M Instagram

#9 Rihanna Music 332M Twitter

#10 Kim Kardashian Other 319M Instagram

14 | FORBES JUNE 2021

A Generational Look at Social

Generation # of Influencers in Generation Top Influencer in Generation

Gen Z 4 Kylie Jenner

Millennial 33 Cristiano Ronaldo

Gen X 10 Dwayne (The Rock) Johnson

Baby Boomer 3 Ellen DeGeneres

Social Media Influence, Going Forward