ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Davit Keshelava has not set their biography yet
Jul
02

Will Georgia Ever Get to the World Cup?

“…….. Georgia clearly has potential. The country is small (5 million people), and horribly poor (even today, average income is below $4,000 per year). If Georgians could just become as rich as Croatia, they too could start beating England at Wembley.” – Simon Kuper and Stefan Szymanski, Soccernomics, (2006, p.287) “Football was born in England, grew to Brazil and died in Georgia” – a well-known joke about Georgian football. This summer, Russia is again at the epicenter of the world, but this time for hosting the 21st FIFA World Cup football tourna...
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Feb
05

The Tale of Two Cities: Are Almaty-Style “Bombilas” the Future of the Tbilisi Taxi Market?

  Recently, the administration of Tbilisi City Hall announced that the Tbilisi taxi market is going to be regulated. The process of switching to a regulatory frame will be gradual. At first, taxi drivers will be obliged to acquire taxi signs and permission from the appropriate authorities. This regulation is not expected to create significant pressure on taxi service providers. At the second stage, however, taxi drivers will be required to pass a technical inspection and satisfy minimal quality standards. The details of all the planned regulations r...
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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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Sep
25

Is ISET’s New BA Program Winning the Fight for Best Brains in Georgia?

  It is no secret that global competition for the best brains is as intense as ever. Having adequate human capital can put a country on a trajectory of perpetual growth, say economists. The ‘brain wars’ typically play out in the setting of national and multinational companies competing for talent, but some of the most intense fights happen between universities struggling to recruit and retain the best young minds on the planet. Even elite institutions such as Harvard, MIT, Stanford, Oxford and Cambridge are only as good as the quality of their last ...
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Jun
26

In debt and broke in Georgia

  An individual living in Kutaisi took a 1500 USD real estate secured loan from one of the microfinance institutions in 2011 and had to pay 75 USD interest rate for the following 6 months. The purpose of taking this loan was to finance treatment of her child. She was unable to cover monthly payments and prolonged the term to 10 month, but failed to cover this payments again and was fined several times. In the end, loan was restructured and monthly interest raised to 83 USD, while the amount of total loan nearly doubled to 2700 USD. As a result, she ...
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May
22

Free or Fearful? The Fear of Floating in the South Caucasus

In economics there is a long-standing debate on whether emerging markets should adopt a fixed exchange rate currency regime or leave their exchange rates up to markets to decide. Intuitively, exchange rate is just another price, similar to the price on a sack of potatoes, a liter of milk or a kilogram of honey. Except that exchange rate is the price of 1 unit of foreign currency (say, 1 US dollar) in terms of our domestic currency. Textbook economics would tell us that price flexibility is essential for markets to function well, to quickly clear up any s...
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