ISET

ISET Economist Blog

A blog about economics in the South Caucasus.

Michael Fuenfzig has not set their biography yet

Apr
14

Fine and Punishment

Imagine arriving at a provincial airport in an unnamed Central Asian country. You leave the terminal and go straight to row of waiting taxis. In your Lonely Planet you read that you should pay about $10 for what is a short taxi ride to the city center. You ask the first taxi driver and are quoted a fantasy price of $50. You try to bargain, to no avail. You go to the next taxi, and once again you are quoted $50. You finally go to the third taxi, and lo and behold, it’s the same price, $50. And you don’t even try to bargain anymore… Now, imagine this to pl...
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Nov
16

A New Competition Policy for Georgia

In recent weeks there has been a lot of talk about alleged monopolies and cartels in Georgia, and Georgia’s future competition policy. With few exceptions this debate has been pathetic. The debate has been dominated by politicians or businesses with a vested interest in the outcome. Even worse the framework of the debate is often provided by self-proclaimed experts with no actual expertise. According to the debate monopolies and cartels are pervasive in Georgia. Seemingly almost every sector of the Georgian economy is not competitive, either because firm...
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Oct
24

Georgia: The Hub Issue

The new issue of Investor.GE is out, this time focusing on Georgia as the hub for the South Caucasus and Central Asia. This quote from the lead article caught my attention: I am amazed at how many requests I am getting from major multinationals from all industry sectors to speak with them about doing business in Georgia. I am also increasingly seeing multinational companies who are already in the region, looking to change their business model to move many of their activities through Georgia," he said, noting that so far most interest comes fro...
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Oct
18

Political Instability in Fragile Democracies

Free Policy Briefs has an insightful post on political instability in Kyrgyzstan. The literature, typically using panel data covering many countries, shows that higher government turnover rates reduces growth significantly in both economic and statistical terms, even for established democracies. Looking at government turnover in more polarized societies and unconstitutional change in power (revolutions and coups), the effect is estimated to be even larger. Is this relevant for Georgia? Only the future will show.
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Oct
05

Competition in the Georgian Retail Gasoline Market

No, nothing about the election here. Instead something about the Georgian retail gasoline market, which according to some is not so competitive. Case in point is this article on an opposition (soon government) leaning news outlet that alleges price fixing in the Georgian retail gasoline market. The article is based on a recent study by Transparency Georgia. A study with some interesting data, but apparently it was all too much for a clueless (or partisan) journalist. But let’s discuss the study itself. Transparency Georgia finds that: The reta...
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Sep
29

Aviation and Agriculture

  The YFN Georgia blog offers an interesting angle to the opening of the new Kutaisi airport: A major hindrance to the development of high-value horticulture exports from western Georgia is the limited availabity of air freight capacity from Batumi Airport. Most flights from Batumi are oriented towards Ukraine; only one service to the Persian Gulf is available, to Kuwait City. Hopefully Kutaisi will offer airfreight routes to Dubai and Qatar, which will provide new markets for high value cut flowers, citrus and fresh herbs. Check out the othe...
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