Journal number 1 ∘ Teimuraz Beridze ∘ Nino Paresashvili ∘
The Conference – “Challenges of Globalization in Economics and Business"

More recently the Faculty of Economics and Business, Ivane Javakhishvili Tbilisi State University conducted the International Scienfic Conference – “Globalization: Challenges in Economics and Business.”

There was quite a wide circle of issues discussed: ranging from theoretical aspects of globalization to the risks associated with it. The circle of the conference participants was quite impressive - Germany, Poland, Russia, the Baltic States, Romania, Ukraine, Georgia. The term “globalization” is relatively new in scientific literature, however, as a phenomenon, it existed almost all over the period of the XX century. Globalization is characterized by a range of spectra (layers) - Globalization in politics, economy, social sphere and the other, but, globalization in economy and education (development of foreign trade among countries, creation of the World Trade Organization, introduction of new technologies, transition of education to universal standards) has fundamentally changed the face of the world and its dynamics.

The globalization phenomenon has supporters and opponents: proponents believe that this process is objective and inevitable, because nothing can resist the technical progress and economic development, and criƟtis believe that as a result of globalization rich countries become richer, and for developing countries, poverty remains as a acute problem. The question is: Where is the solution? As always, the truth is in the middle (aurea mediocritas - the golden mean) - The governments of the countries with economies in transition should pursue such policies (economic), which will allow the country (population) to find its place in the rich mosaic of the world economy. 

The International Scientific Conference was attended by up to 130 Georgian and foreign scientists- economists, including representatives of various countries and universities (Germany, Czech Republic, Poland, Latvia, Russia, Ukraine, Romania and other countries). 7 sections worked at the conference:

Section I - Theoretical Economics, Macroeconomics, Econometrics;

Section II - Microeconomics, Regional Economy;

Section III - Economic and Social Statitics;

Section IV - International Economics, Economic History, Economic Policy;

Section V - International Business, Management, Markting, Economic Informatics;

Section VI - Finance, Banking, Accounting and Auditing;

Section VII - Tourism and non-production sphere.

The conference participants presented the results of scientific research; there was also an intensive exchange of views and experiences of scientists.

The plenary session was opened by the Dean of the Faculty of Business and Economics, Professor Teimuraz Beridze, who noted that “Georgia with its economic potential, territory is a small country, so the policy should be carried out in such a way that will allow Georgia to find its own place in the global economic scales, which is not so simple.”

Welcome speeches were made by the Mayor of Tbilisi, Professor David Narmania, Academicians Vladimir Papava and Avtandil Silagadze and others.

At the conference plenary session Academician Vladimir Papava presented an interesting report: “Precondition of retro-economics – necro-economic globalization,” where the professor acquainted listeners with the new vision about necro-economics. The plenary session was addressed by: the Vice-President of the International Academy of Business and Economics (IABE), Professor Marius Gavriletea (theme: “Aviation Risks and Terrorism”), Elguja Mekvabishvili, Professor of TSU (theme: “Economic content of modernized authoritarianism: Georgia’s experience”), Igor Arefiev, Professor of the Naval Academy of Poland (theme: ”Predictions and Assessment Methods of Transport Enterprises’ Financial Stability in the Conditions of Risks”), Nugzar Todua, Professor of TSU (theme: The Influence of Globalization on the Security of Georgia’s Consumer Market”) and Matthias Vogt, Professor of Zittau-Görlitz University of Applied Sciences (theme: When Did Globalization Begin?”).

The speakers discussed the current economic issues, global economic challenges, including the economic role of Georgia in the world, the main trends of economic development. The conference included virtually all the issues which are important for the economy in the last period.

After the plenary session, conference participants continued their work in sections, where they presented interesting papers.

Section I

Theoretical Economics, Macroeconomics, Econometrics

Section Chair: Professor Elguja Mekvabishvili

In the first section the papers were presented from theoretical economics, microeconomics and econometrics. Academician V. Papava’s report was devoted to the extremely interesting and new problem of economic theory – the role of retro-economics in the globalization of necro-economics. The speaker gave a reasoned explanation of what is the reason for using mostly outdated technologies mainly in many poor countries economies, which is why all these countries have retro-economy. The zombification process of economy impedes its technological modernization and the state’s role is extremely important in overcoming technological backwardness. Professor Yuri Ananiashvili discussed the LKS model of macroeconomic equilibrium based on Laffer-Keynesian synthesis, in which the joint demand and supply functions include the price level and the average tax rate explanatory variables. This approach within one general model allows the calculti on of two particular LKSP and LKST versions. The presenter described the features of both models and showed that in the condiƟ ons of Laffer-Keynesian synthesis there is some correlation between the price level and the tax level.

Elguja Mekvabishvili in his report analyzed the realized and ongoing modernization stages and forms in the world. Special attention was paid to the models of economic modernization, political component of economic modernization, in particular, the phenomenon of authoritarian modernism. In Georgia, on the basis of the analyses of nine-year experience of the government of “Rose Revolution” there was made a conclusion that it was the Georgian version of authoritarian modernism (model). It was shown the contradictory nature of the latter, objective and subjective reasons for its failure.

Professor George Bedianashvili spoke about culture in the context of globalization, as the country’s socio-economic development and business factor. The main attention was devoted to the system-conceptual model of culture. Using Hofstede’s quantitative characteristics of culture, he showed the ratio of theses indicators for Georgia with the analogous indicators of different countries. The speaker formulated the transformation directions of Georgia’s cultural values in the long run.

Professor Revaz Gvelesiani’s report was devoted to the important theoretical and methodological problem – the formation of specifi c framework conditions of economic order which was discussed in terms of the formation of macro-economic conditions of investment - (tax and spending policies, tariff agreement, fixation of salaries and salary structures by partners, monetary policy, interest rates and so on).

Professor T. Verulava considered human health as an important factor for economic growth; he stressed the successes achieved in the last 25 years in Georgia’s health care system and also discussed about some of the problems. The speaker considered it expedient to support the development of the primary system, to follow the recommendaƟ on of the World Health Organization in reference to the state health care costs.

Doctor Marina Tabatadze’s report was devoted to the issues of state political strategy in the conditions of economic instability. She considered the state’s economic functions in the period of unstable development, government strategies of crisis prevention, economic mechanisms for functioning of the state management system, the role of society in the process of development and its transformation in the conditions of economic liberalization. Dzotsenidze, Doctor of Economics, talked about the role of public goods in the collective decision-making process and about various aspects of the state’s economic policy in regard to public goods. Nino Zurashvili, doctoral student of TSU, made presentaƟ on about the analysis of real estate in Tbilisi.

The foreign guest, Professor Lev Jakobson in his report touched on the assessment of experts’ role in the Russian Federation in establishing economic policy. The speaker stressed that the technocratic approach to the problem prevails currently, which in his opinion, is inconsistent and irrational decision-making risk. The foreign pati cipant of the conference - Professor Natalia Makasheva discussed the problem existing on the boundaries of philosophical, theoretical economics and economic history – famous Russian economist’s, Tugan-Baranovsky’s efforts to combine the rational vision and Kantian imperative, through which it sought to create ethical grounds of political economy.

Section II

Microeconomics, Regional Economy

Section Chair: Professor Eter Kharaishvili

The section included 10 presentations and 13 speakers. The reports referred to several topical issues: 1.Ccompetitiveness and competition, the role of clusters in the increase of competitiveness; 2. Economic and financial challenges of the development of agribusiness in the conditions of globalization; 3. Globalization and regional economic problems. Participants of the section were mainly from the Faculty of Economics and Business, TSU, professors from the Departments of Microeconomics, Marketing, Management, Economic Policy, Finances and Banking; there were also invited guests from the Aviation Institute of Georgia. The articles presented at the session involved quite diverse issues and problems. The section was represented by the following reports: Intellectual property in Georgia (Damenia N.), Social Entrepreneurship in Georgia: Problems and Prospects (Erkomaishvili G., Paresashvili N.), Family Farm’s Contemporary Practice in the EU countries and Its implications for Georgia (Natsvlishvili I.), The Current State of Agro-Food Market in the World and in Georgia (Okruashvili N., Seturi M.), Clusters Role and Importance in the Increase of Company’s Competitiveness (Samchkuashvili N.), Concessions in the Transport Sector (Sukhitashvili I., Imedashvili G.), The Main Trends in Agribusiness Operation and the Financial System in Georgia (Lutidze T.), The Potential of Farming Scales Growth in Georgia (Chavleishvili M.), Stimulation Programs for the Export of the Georgia Agriculture Products and their Effectiveness (Kharaishvili E., Saghareishvili N.).

At present, the great importance is attached to the provision of population with adequate quantity and quality of agricultural products. In the conditions of globalization the changes taking place in the world’s agricultural market have direct reflection on individual countries, including Georgia’s local market situation  has direct consequences for the world agricultural market changes.

Globalization is the most important feature, which is directly linked to the planet’s survival imperative – the necessity for provision of people with food. The researchers assessed a variety of problems in this regard. Special attention was paid to the role of international trade in developing countries. In this respect, the two alternative strategies were discussed: 1. Stimulation of exports; 2. Import replacement.

They also evaluated the replacement policy of agricultural products import with the increase of local production and made conclusions about the formation of positive trade balance on the basis of the increase of local production and stimulation of export. Based on local as well as foreign countries experience there were presented interesting visions about optimal scales of farming and advantages of small and large-sized farming. Scientists shifted their focused to the cluster strategy with respect to the regional development and assessed it as a necessary methodological tool in the regional development planning process.

The analysis of the existing situation of social entrepreneurship in Georgia and factors hindering its development represented the novelty. There was proposed the idea about the creation of social agricultural cooperative. In the conditions of globalization it became clearly necessary for state objects commercialization to attract investments. For solving the noted problem, in many cases, governments used the concession agreement instead of privatization. The speakers presented the noted topical issue in the example of transport facilities, evaluated the positive and negative sides of the concession in detail.

On the basis of the reports the section formulated two types of recommendations: 1. For governmental bodies and 2. For private sector.

In general, the conference, especially the sections of “Microeconomics, Regional Economy" worked fruitfully. In addition to the urgent problems which researchers shared with each other and offered recommendations for their solution, there were interesting meetings with foreign scholars. In particular:  the meeting with the professors from Brno University, the Czech Republic: Iveta Simerova (Deputy Dean in International Relations), Aliona Kosmanova (Deputy Dean in Scientific Field) and Petr Nemecek; this meeting was held at the Department of Microeconomics. During the business meetings with them both sides noted that it was necessary to find ways for cooperation with universities of Brno and European countries in scientific programs as well as in expansion of students exchange programs with the goal of improving teaching quality.

Secrion III

Economic and Social Statistics

Section Chair: Professor Simon Gelashvili

11 papers were submitted to the section; out of them 7 speakers made their presentations. These are: Globalization from the Statistical Point of View (Mindorashvili M.); The Main Directions for the Perfection of the Criminal Statistics Methodology in Georgia (Abesadze N., Mchedlishvili L.); Japan’s Contributions to the Global Environment Statistics (Gelashvili S.); The Russian Market Prospects and Trends for Georgia after the embargo (Marshava K., Dzebisauri L.); Pre-school Education – the Zero Level of the International Standard Classification of Education (Charekishvili L.); Social Media – A Reliable Indicator of Predicotin? (Gigineishvili N.); Information Sources of Migration and Migration Indicators (Kinkladze R., Kurashvili G.).

The presentations made at the section aroused a great interest of the conference attendees because each of them included both theoretical and applied innovations. Particularly interest was aroused by the following reports: “Globalization from the Statistical Point of View,” which emphasized the positive aspects of globalization and at the same time the hidden risks, particularly in economy. Because of this, official statistics is forced to revise the existing systems of national accounts, data collection and compilation for measuring domestic economy. Also interesting was the report “Japan’s Contribution to the Global Statistical Environment,” in which there was presented the role of the Statistical Institute for Asia and the Pacific - the United Nations only international institution established in Japan, in qualification elevation of statisticians in different countries. The noted institute makes a great contribution to the development of the theory and practice of statistics worldwide.

The report: “Social Media – A Reliable Indicator of Prediction?” aroused a broad discussion. The speaker stressed the importance of digital media in the modern process of globalization, which has become one of the leaders in the industry. An interesting example was given of the activity of political parties in the virtual space. Also there was an interesting and broad discussion about the report: “The Main Directions for the Perfection of the Criminal Statistics Methodology in Georgia.” It discussed the indicators system of the statistics of criminal cases according to the first instance courts and the issues of the perfection of legal statistics considering the recommendaƟ on of The European Commission for the Efficiency of Justice (CEPEJ).

On the basis of the reports presented at the section there were made theoretical-methodological and specific practical recommendations, which were submtt ed to the Organizing Committee.

Section IV

International Economics, Economic History, Economic Policy

Section Chair: Academician Avtandil Silagadze

The international scienfitic conference, which was conducted on the initiative of the Faculty of Economics and Business was well organized. The conference was focused on the most relevant problem – strengthening of economic researches in the light of globalization. Interesting research results were presented at the conference by Georgian and foreign scientists, and promising young researchers.

Preliminary publication of reports made the conference more attractive. Section IV included the following reports of the scholars and economists: “Social and Economic Aspects of the Georgia-EU Relations (N. Akhvlediani); Liberalization and Integration of Georgia’s Foreign Economic Activities As the Key to the Country’s Economic Development” (Kh. Berishvili); “Euro-Atlantic Values” (Sh. Veshapidze, M. Darbaidze, T. Beridze); “Free Industrial Zones in Georgia and International Experience” (G. Menapire); “The Impact of FDI on Economic Growth (Case of Georgia)” (D. Sikharulidze); “Historical Aspects of European Integration” (R. Putkaradze); “The Analysis of Georgia’s Foreign Economic Activities in 2015: Opportunities and Challenges” (G. Gaganidze), “The Problem of Georgia’s Export Competitiveness in the Conditions of Globalization” (L. Korganashvili); “Transnational Corporations and Technologies International Transfer” (Sh. Shaburishvili); “Global Competition and Successful Strategy” (E. Julakidze) and others.

According to the views expressed in the reports: in globalized economy, the priority should be given to the liberal approaches, in some cases, it is necessary to use a protection policy; European integration is a priority for Georgia; studies of the Euro-Atlantic values should be deepened; The government needs to encourage the production of export products, as well as the attraction of foreign investment. To this end, to our country it will be useful to put “free economic zones” into operation swiftly; complete analysis of Georgia’s foreign economic activities is always valuable, and so forth.

The process of plenary and sectional works showed the Conference productivity. Interesting recommendations were formulated in summarizing the results; specifically, the Georgian government should develop a concrete plan of measures (by years) stating the date and level when Georgia’s indicators of economic development approximate to the “average European economic integration indicators,” which provides the country’s membership in the European Union.

Section V

International Business, Management, Marketing, Economic Informatics

Section Chair: Professor Nugzar Todua

The section included 22 presentations: The Essence of the Project of Economic Production (Lean production) and Its Impact on the Increase of Company Competitiveness (Dudauri T.); National Identity and Country’s Branding in the Global System (Tandilashvili A.); The Main Aspects of the Formation of Legal Environment at the Georgian Food Market (Todua N., Mgebrishvili B., Urotadze E.); Virtual/Cryptographic Currency Bitcoin and Prospects for Its Introduction in Georgia (Kalandadze L.); Anti-crisis PR (Kobalava M.); Importance of Emotional Intelligence in the Achievement of Success (Maisuradze T.); The System of State Support in Small and Medium-sized Businesses (Maisuradze R.,); Optimization and Perfection of Information Streams in Organization in the Case of the “Georgian State Electric System” (Machitidze M., Davitaia Sh.); Stimulation of Constructive Behavior in Conflict Situations (Nikvashvili M.); The Effects of Foreign Direct Investment in the Economy of the Host Country (the Case of Construction Business in the Autonomous Republic of Ajara) (Zhorzholiani T.); The Global Tendency of Business Virtualization and Related Organizational Problems (Ramishvili B.); Multi -Vector – The Catalyst of Georgia’s Economic Growth (Samadashvili U.); Increase of Effectiveness of Customs Through the Automated System of Risk Management (Seturidze R.); The Essence of Virtualization Technology, Features and Prospects of Use in Georgia (Sichinava D., Gognadze T.); Natural Resources – A Contributing Factor in the Formation of Business Technological Environment (Kadagishvili L); Management Quality and Its Impact on the Public Sector (Keshelashvili G.); Strategy for Georgia’s Innovative Development (Kutateladze R., Kutateladze K.); Culture as a “Perception of Knowledge” and Its Impact on International Business (Shengelia T.); From Self-management Theory To Practice: The Principles of Career Planning and Creation (Shikhashvili G.); Social and Ethical Aspects of Marketing (conceptual overview) (Jashi Ch., Jangulashvili T.); Master Students Self-management Peculiarities in Georgia (Kharadze N., Gulua E.); Importance of the Development of Emotional Intelligence in Business (Kharkheli M., Morchiladze G.).

The works discuss the factors influencing the development of business in Georgia in the conditionsti of globalization; analyze those major trends that are characteristic of Georgian companies involved in the process of internaonalization. Based on the generalization of the key findings given in the works it can be formulated the following important conclusions: There are shown opportunities for of the concept of economic producƟ on and undue cost-cuƫ ng in the Georgian companies which ensure global competitiveness. Special arrention is paid to the formation of the country’s image in the global environment, characteristics of the influence of positive image on identification features and competitive advantages.

In the context of association with the EU the most important factor is considered the introduction of European standards in the sphere of food market regulation. Therefore, the food business is described in relation to the process of legal acts creation and activation. From this point of view, the emphasis is shifted to the issues of labeling and consumers’ provision with information. Noteworthy is the fact, that Bitcoin-technologies in Georgia are at an early stage of development. However, the trend of globalization and Internet-sales are expected to bring Bitcoin’s rapid spread in Georgia. Accordingly, the use of a Bitcoin business will become increasingly significant.

There are presented the management mechanisms for the formulation of anti- crisis strategy, as well as the main criteria that determine the quality of employees’ work, team spirit, flexibility and other qualities with which their employment for the organization will be fruitful. There is assessed the current state of small and medium entrepreneurship as well as the international experience in support of small and medium business and programs and projects implemented in Georgia. There is formulated the communication role in the development of organization, communication flows and proposed the necessary technology for their optimization.

In the context of virtualization there is discussed the role of human factor in organizations. Special emphasis is shifted to those important directions of practical self-management such as the issues of career planning and creation. The prerequisite for business development in a country is foreign direct investment infl ows. With this in mind, there is discussed the impact of foreign direct investment on Georgia’s economic growth and the problems relating to foreign direct investment inflow.

There is grounded the objecve necessity for acceleration of economic growth in order to emerge from poor conditions existing in the Georgian economy. The main direction of Georgia’s economic development is considered an effective implementation of the commitments within the agreement with the European Union and activities at the diversifi ed international market.

On the basis of the analysis and generalization of existing theoretical approaches about the impact of cultural relations on international business there is given a reasoned argument for the necessity of transition from the static measurement of culture to the dynamic construction - “perception of knowledge” reflecting the reality. There are formulated the virtualization aspects of software and hardware components of the information systems, their main advantages and disadvantages, there is justified the prospects of the implementation of virtualization in the sphere of Georgia’s education. There is shown the role of the automated system of risks management in the perfecƟ on of customs management system. Various meetings held between Georgia and the EU member states will help to improve the sharing of experience of foreign countries, which will guarantee the customs management efficiency.

There are analyzed the issues of the system for public sector reformation and effective public management. There is studied the role of Georgia’s natural resources in the formation of business technological environment. There is given a conceptual overview of the issues about the social marketing, corporate social marketing and corporate social responsibility and the importance of their practical implementation. There are established the basic trends and problematic issues which exist with regard to the use of budget. There are studied the main challenges and formulated recommendations in order to get a full-bodied work force for the country. It is also shown the importance of the development of emotional intelligence as managers, as well as their subordinate staff . Practical implementation of the findings and recommendations will help to increase the competitiveness of local firms and their active involvement in the process of internationalization, which will ensure the success of Georgian business.

Section VI

Finances, Banking, Accounting and Auditing

Section Chair: Associate Professor Mikheil Chikviladze

The section included 25 presentations. Twenty presenters (among them 4 professors, 14 associate professors, 2 doctoral students) participated in the section work (reports, discussions).

Regarding the topics presented at the section it should be noted that broad and interesting discussions were held in between reports. In working of the section it became clear that this conference is not only of theoretical nature, but also has considered the ways of solving many pressing practical problems in our country and relevant ministries and agencies should react to them in a timely manner; specifically, Professor Akaki Gabelaia, Doctor of Physical and Mathematical Sciences, presented a very important study at the section. The study refers to the forecasting problem of Georgia’s consolidated budget revenue. He carried out the analysis of the dynamics of the own revenue of Georgia’s consolidated budget for 2002-2015 years; there are obtained respective base models and through these models there are found the forecast estimation of the main indicators for 2016- 2018 years. Based on the study there is assessed the impact of the introduction of the so-called Estonian model on the noted indicators.

There are made forecast evaluations of the incomes to be received from the consolidated budget’s total (own) revenue and the profi tax;  The Department of Accounting and Auditing, Faculty of Economics and Business, TSU, actively participated in the section work. The attention was paid to the solution of painful issues (in the presented theme “new model of revenue recognition - the price form 15-proceeds contracts”); namely, Associate Professor Nadezhda Kvatashidze and the senior lecturer of the same department Zeinab Gogrichiani in their report stressed the issue of “the price from 15 proceeds contract,” which was jointly developed by the International Financial Reporting Council and the US Financial Accounting Standards Board.

The standard will come into force from 2017 and will replace the International Accounting Standards (IAS). The new standard will replace many of the methods and timing of the recognition of many spheres’ revenues, particularly in the construction, telecommunications (mobile networks, cable) licensing (media sector, science, franchising), a lot of property, software and so forth.

They expressed concern that the standards and the tax code are not in compliance with each other and the main part of entrepreneurs has a complete misunderstanding, since, to date there is not a clear and legal vision of how to direct a report. The section considered that it was expedient to promptly notify the Ministry of Finance about the immediate solution of this problem in order to make an appropriate decision on preventing this misunderstanding, no later than 2017.

Associate Professor Murad Narsia’s report – "Auditing, New Challenges in the Field of Public Procurements” aroused a very broad discussion at the section. As the speaker noted, the law adopted by the Georgian government in 2012 on “Accounting and Audit of Financial Statement,” has led businessmen and auditors to a dead end with respect to accounting.

Therefore, the section concluded that the accounting, reporting audit oversight authority, which was created by the noted law, along with the State Procurement Agency, professional organizations, should take appropriate and decisive measures with the goal that the state procurement organizations as well as auditors will not allow breaches and violation because of imperfect legislative acts. The relevant normative act requires immediate improvement.

Doctoral student of the Department of Banking, the Faculty of Economics and Business, TSU, Levan Kalandadze in his report: “Virtual Cryptographic Currency Bitcoin and Prospects for Its Introduction in Georgia” presented interesting recommendation and suggestions. The appearance of Cryptographic currency Bitcoin and the growth of its popularization set the central banks new objectives. At the section the noted issue became the subject to wide discussion. At the section a great attention was paid to the report on the topic – “The Study of Competition in the Banking Sector Through the Indirect Method,” presented by Lasha Beridze, Doctoral student of Shota Rustaveli Batumi State University. The calculations of the shares of the largest commercial banks and scientific conclusions have occupied a significant part in this report. The noted study is so important that it will be of great help to the “Bank Republic,” “TBC Bank,” “Bank of Georgia,” Liberty Bank and other banks’ respective services to solve specific problems.

Section VII

Tourism and Non-Production Sphere

Section Chair: Professor Joseph Khelashvili

The section included 22 reports presented by the Georgian, German, Polish and Lithuanian scientists. Of the presentations special attention was paid to the report on the topic: The Added Value of Exports in Central and Eastern European countries,” presented by the Polish scientist Ambroziak Lukasz. In the conditions of globalization, the geography of international division expands rapidly. As a result, the number of those products and services grows, which are produced in a number of involved countries. Moreover, the same country may take part at the various stages of the process. In such circumstances, it becomes difficult to determine the export’s valueadded sources through traditional statistical methods in the countries participating in the production. The author made the adaptation of the “consumption-production” model to the noted process in order to determine the value-added exports.

The method has been tested on the example of Eastern and Central European region. The study found that as a result of the noted region’s integration into the European economy in the of 1995-2011 years, the member country’s export revenues increased significantly and this increase was mainly due to the increase in value-added products and services that were imported in the region from other countries. Georgia, which is on its way to European integration, the study of the noted issue is undoubtedly important. It is particularly important with respect to the tourism industry where the share of this fi eld in the country’s total exports exceeds of 36%.

Besides, there is not determined the role of foreign companies products and services in the export of tourist services. As the development of tourism is recognized as the country’s economic policy priorities, the importance of the noted issue will increase in the future. Nana Katsitadze’s (Associated Professor of the Faculty of Economics and Business) report on the “Prospects for the MICE Tourism Development in Georgia” is also noteworthy. This type of tourism, which includes trips to the business and cultural events with the aim of attending and participating in them, represents a priority for the development of this sector in the face of globalization, and especially considering the processes of Georgia’s integration into Europe. The author noted the expected results of the MICE tourism development in Georgia: Intensifi cation of trade and economic relations, distribution of education and professional development, development of high level infrastructure for tourism, balancing of the seasonality problems in the tourism industry, the revenue growth and the sustainable development of tourism, which at the current stage is being introduced as the international standard all over the world.

The information collected and analyzed by the author convincingly proves the necessity of development of this industry and creating the preconditions for further research, which can be described as one of the most urgent and important directions for scientific study of the country.

In the work of the tourism section it should also be noted the report Revaz Getsadze, doctoral student of the faculty of Economics and Busines, on the topic of the country’s so called sovereign ratings. The growth of tourism industry is essentially related to foreign investment, and the investment cost - to the country’s sovereign rating. The speaker considered the world’s three leading rating companies methods: (Standard & Poor’s, Fitch Ratings and Moody’s), with regard to the 10 countries (Austria, Belgium, Finland, France, Greece, Ireland, Italy, the Netherlands, Portugal and Spain), as well as the ratings variability in crisis and post-crisis periods. As a result of the conducted research, the author expressed his opinion on the genesis of ratings changes and the major factors. Concerning the further growth plans of tourism industry, the study of these aspects with respect to hotel investment is of particular importance.

The section included other interesting and important topics that are related to the improvement of the regulation of tourism, the country’s urban and rural regions comprehensive development according to the Latvian model and other issues.

In discussions with foreign guests Professor Joseph Khelashvili reviewed the issue of seƫting up a real estate investment trust, underlined the specifi cs of the noted trust and importance of its development in Georgia. In regard to the specification it was said, that this trust is intended for mobilization of small savings existing in the country in the large-scale investment projects of real estate. In Georgia, where more than 95% of the bank deposits are less than 5000 Lari, each of such savings can not be used as a resource for investment. In addition, mobilization of these deposits in the Foundation of tens of millions Lari will enable them to become co-investor of real estate and likely to get more benefits from these funds than taking them from passive deposits. It was noted, that a high likelihood of geƫting benefits is conditioned by the relatively high liquidity of real estate and obligation of the noted status trusts to distribute 90% of profits in the form of dividends. Objects for investment may be hotels, hospitals, warehouses, large shopping centers, residential and office buildings. Moreover, such trusts in the UK should have at least three real estates and the value of each of them should not exceed 40% of the value of the total package. This approach reduces the risk of investments through their diversifi cation.

Three additional circumstances were stressed in respect to the credibility of geƫting revenues. First, stable functioning of the hotel facilities will be contributed by the boom in the tourism industry in Georgia, with particular attention paid from the government too. Second, considering the broad involvement of people in such funds, employers of office buildings could become state institutions, which will guarantee a stable income. Finally, according to the practice in Western countries, the noted trusts incomes are exempt from profit tax. This increases the amount of the dividends, which is the subject to taxation.

The discussed trust revenues are distributed among multiple shareholders of the foundation. Such distribution is contributed by the practice accorded in Western countries, where the public trust fund prohibits the possession of controlling package by any one entity (shareholder). It was noted the US example, where one shareholder’s maximum quota is 15%. Thus, the introduction of the trust will help the country to overcome the acute problem – population’s middle-income class expansion.

The guests noted that these trusts are only now beginning to be introduced in central and eastern European countries and Georgia may become a model country in this respect. It was also noted that at the initial stage it may be formed a limited liability company and then it can develop into a joint stock company. It was also said that it was needed to initiate the relevant legislation for such trust.

The participants of the discussions unanimously agreed that the study of these issues and recommendations for the Parliament and the government ought to be carried out at the Faculty of Economics and Business. In evidence of this it was said, that the Faculty contains economics, business and tourism areas, has adequate staff resources in this direction has academic and practical work experience. It meant the articles and monographs published on the noted subject in 2015-2016, the Faculty professors working practical experience in finance, banking, statistics and investment funds, including the Minister of Finance, Privatization Minister, Chairman of the Department of Statistics and the Partnership Fund Executive Director positions.

At the summarizing meeting, which was held at the end of the sessions, all the chairs of the secƟ ons highly evaluated the work of the international conference. Each of them expressed the gratitude towards the leadership of Ivane Javakhishvili Tbilisi State University’s, Faculty, administration and the organizing committee for conducting the well-planned and organized conference. It was also noted that conduction of such representative forums is of the very great importance to the university, as the main core of economists gathers in the university space, therefore, the university must be the main center for the improvement of the country’s current economic situation and for formulating the issues about modern concepts of development. Co-participation of foreign colleagues in the discussion of a number of scientific and educational issues increased the importance of the conference. The Faculty authorities arranged their meetings with various professors of the faculty, where they outlined the joint future events.

On the inititive of the faculty administration and the leadership of the organizing committee of the international conference – “Challenges of Globalization in Economics and Business” there was planned to formulate and publish the main tendencies identified at the conference, problematic issues and recommendations.

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