ISET

ISET Economist Blog

A blog about economics in the South Caucasus.

Nino Mosiashvili – is a graduate of ISET. She is currently working for ISET Policy Institute. She’s responsible for Macro Review. She is also frequent contributor to ISET Economist Blog.

Apr
24

Let Tourists Arrive and Georgia Thrive!

After the collapse of the Soviet Union it was believed that tourism might become one of Georgia’s “locomotive” sectors. While the Shevardnadze government failed to develop this potential, after the Rose Revolution, tourism became a top priority. Each year since 2005, the direct effect of tourism (i.e. the money spent by tourists) alone has contributed 6-7% of Georgia’s total GDP. Georgia is a net exporter of services, and tourism accounts for about 60% of these service exports. This is important income for the country, helping to finance the country’s la...
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Feb
27

Making Sense of FDI Dynamics

Foreign direct investment (FDI) is critical to every developing county, and Georgia is no exception in this regard. Georgia wants to grow out of poverty and catch up with the economically more developed regions of the world – for this to happen, foreign resources are needed, in particular if the domestic savings rate is as low as in Georgia. Yet FDI is not only about the capital which is made available to the economy but also, and even more importantly, about trust foreigners have into the Georgian economy. It is one thing to make cheerful statements abo...
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Dec
12

Traffic Traumas

Recently, one of the authors of this article was crossing a street with a crowd of people at green pedestrian light close to Marjanishvili metro station, when a Mercedes was accelerating and heading towards the people, ignoring the red light, making the crowd splash in all directions. A police car was standing nearby, doing nothing. Walking and driving in Tbilisi is usually dangerous and stressful. When walking around, pedestrians must continuously monitor the cars in their vicinity, even when walking on the sidewalks. The task of avoiding to be hit by c...
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Dec
08

Lari Winter Blues – Should We Worry?

In the past two weeks Georgians have been waking up with a sense of déjà vu. In a matter of days, the Georgian currency lost over 8% of its value against the US dollar, and reversed the course of appreciation against the euro. The lari winter blues are reminiscent of the last months of 2013, when, after a long period of stability, the lari lost about 5% of its value against the dollar in the course of ten weeks. The current episode of sudden depreciation sent ripples of worry through the Georgian society and prompted opposition parties to sharply critic...
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Oct
07

The Economic Potential of Georgian Wine

Winemaking is one of the oldest Georgian traditions that have survived to this day. Archaeologists have proved that the history of Georgian wine production reaches back into the past at least 8000 years. Arguably, this makes Georgia the earliest place on earth where wine was produced. And the tradition is alive – today there are not just big wine firms, but it is common among ordinary Georgians to grow grapes and produce their own, home-made wine. The great history of Georgian winemaking has been acknowledged internationally. Since July 2012, G...
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Sep
16

Who Defends the Workman’s Interests?

Assume you want to buy tomatoes at a vegetable market in Tbilisi. At a booth, you see beautiful tomatoes of flawless quality, red, fleshy, and shiny. Right next to them are offered semi-rotten tomatoes with corky blotches, but to your surprise, both kinds of tomatoes are tagged with the very same price. “Something wrong with this seller”, you may think and buy the shiny tomatoes. When we speak about market failure in economics, we usually mean that the economy is in a situation in which we can make everybody better off without making anybody worse. A sta...
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