ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Jul
09

Great Expectations: Does the DCFTA Really Boost Georgia’s Economic and Export Potential?

On June 27, 2014, Georgia and the EU signed an Association Agreement (AA) and its integral part – the Deep and Comprehensive Free Trade Area (DCFTA). On July 1st, 2016, DCFTA fully entered into force. Until then, trade between Georgia and the EU was regulated by the Special Incentive Arrangement for Sustainable Development and Good Governance that contained a Generalized System of Preferences+ (GSP+) agreed to in 2005.  GSP+ covered 7,200 products for which the customs duty was reduced or eliminated when exporting to the EU market. It is w...
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Feb
20

Price and Prejudice on the Georgian Market for Cigarettes

Benjamin Franklin once said, “In this world, nothing can be said to be certain, except death and taxes.” Yet we have a tax that could prevent hundreds of millions of premature deaths. It is time to use it more effectively. -Prabhat Jha It is a truth universally acknowledged, that cigarettes are bad for human health. Yet, whenever the government tries to regulate consumption of cigarettes by increasing their price, it gets a very mixed reaction from the public. Some people (mostly non-smokers) welcome these policies, while others accuse the government of ...
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May
02

Will Georgia Be Able to Benefit from Bilateral Free Trade Agreements?

The Deep and Comprehensive Free Trade Agreement between Georgia and the EU, brought into effect in 2014, was hailed at the time by many as being of great importance to Georgian manufacturers and food/beverage producers. Yet, skeptics commented that 1) Georgia had already have more than 7000 articles duty-free and quota-free under the pre-existing GSP+ trade terms granted by the EU for many years, and 2) very few exporters had been able to take advantage of these concessions. Georgia’s wine and spirits exports are an excellent case in point. While constit...
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Oct
15

The New Silk Road Chain is Only as Strong as Its Weakest Link

Speaking at the opening of the Tbilisi Silk Road Forum, Georgia’s new Minister of Foreign Affairs Giorgi Kvirikashvili evoked electric circuitry as a metaphor to describe the future of rail and road connections between Europe and Asia. A graduate of the prestigious math and physics Komarov School, Kvirikashvili explained that a sequential circuit – a simple chain – crucially depends on each and every one of its links. A parallel circuit, on the other hand, allows to redirect electricity flows (or cargo and passengers) through alternative routes.  Th...
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Sep
07

Un-Muzzling the Persian Panther: Where Georgia Stands to Gain from an Iran without Sanctions

There is a distant rumble in the regional economy – one with a particularly Persian flair. Iranian commerce and exports are about to enter an unrestricted world market as part of the deal negotiated between Western partners and Iranian leadership over its nuclear enrichment program. If Iran can meet the terms of the agreement, sanctions on its exports and imports will be lifted within the next year. When such a large energy-producing economy goes from near autarky to free trade, this is bound to send ripples through the world economy. Georgia and the Sou...
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Apr
06

Georgian Tangerines

The Estonian-Georgian film, Tangerines, was nominated for the Academy Award for Best Foreign Language Film in 2014. While the film was shot in Guria, the story takes place in Georgia’s breakaway region of Abkhazia during the war in the early 1990s. In the film, two of the main characters are peasants from Estonia who are living and working in Abkhazia, one as a tangerine grower and the other as a manufacturer of wooden crates for transporting tangerines to markets (much like the one in the photo above). Unlike their families and neighbors, these two men ...
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