ISET

ISET Economist Blog

A blog about economics in the South Caucasus by ISET
Dec
25

Is Less, More? On “Usakhelauri” Wine

  This summer I bought a small piece of land (0.15ha) in the village of Okhureshi to grow a vineyard. About 700 “Usakhelauri” vine seedlings planted on that land in November this year will soon provide the most scarce and expensive grapes in Georgia. In just in a couple of years the vines will mature, and I will enjoy something as nice as the neighboring vineyard depicted in the photo. NO NAME… Usakhelauri is an ancient red-wine grape variety unique to Georgia. The grapes are cultivated in just a couple of villages in the Lechkhumi region (West Geor...
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Dec
23

Who Gets to Eat from the Growing Pie?

  2017 is shaping up as one of the best years in Georgia’s post-2008 crisis history. The economy is expected to expand by about 5%, beating early expectations and official forecasts by the likes of the IMF and the World Bank. Based on updated GeoStat figures for Q1 and Q2, ISET-PI’s annual growth forecast currently stands at 4.9%. Even that figure is likely to be revised upwards if Q3 growth turns out to be higher than suggested by GeoStat’s preliminary estimate of 4.4%. Georgia is not alone in experiencing a boom. In fact, it is rising with a tide ...
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Dec
11

Do You Have Questions About the Upcoming Pension Reform? Here Are Some Answers

Over the past months, we have been asked several times questions about the upcoming pension reform. Here are some answers. For whom is the contribution to the fund mandatory? Who can join/contribute to the fund? All those individuals who receive their salary net of taxes because their employer pays the income tax for them are automatically enrolled in the fund. Those who are 40 or more years of age will have – after 3 months in the fund – the possibility to opt out. However, this “window” to opt out will close after the 5th month in the fund. Those who a...
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Dec
09

Why Is Georgia Importing So Much Electricity?

In October 2017, Georgian power plants generated 828 mln. KWh of electricity, marginally up (+0.79%) compared to September. Following the traditional seasonal pattern, the share of electricity produced by renewable sources declined to 71% of total generation (87% in September), while thermal power generation’s share increased, accounting for 29% of total generation (compared to 13% in September). When we compare last October’s total generation with the total generation of October 2016, however, we observe an 8.7% decrease in total generation (in October ...
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Dec
04

Your Guest Is My Guest, or Why Tourism Is Not a Zero-Sum Game

The South Caucasus is divided by high mountain ranges, often impassable political borders, and ethnic conflict zones. In addition to three independent states, the region also includes three unrecognized territories. Nakhichevan is separated from Azerbaijan’s mainland by Armenia’s Syunik region. Armenia’s border with Turkey and Azerbaijan, on the other hand, is sealed for political reasons. Though trampled by politics, the economic arguments for greater regional integration in the South Caucasus are truly powerful. For one thing, thanks to its strategic l...
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Nov
27

Does Georgia Need Highly Educated Workers?

A pleasant surprise awaited me on my first day as a student of Tbilisi State University’s Business and Economics Faculty. Thanks to my performance on the national admission exam (ერთიანი ეროვნული გამოცდები), I was inducted into the so-called “Elite Group,” piloted by TSU in an effort to attract Georgia’s best and brightest. There were 50 of us in the group, mostly from working class families, and none felt like they belonged to any kind of “elite.” In the end, I really enjoyed my “elite” status. Not because I could assert dominance over “mere mortals,” b...
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