ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Mar
19

2018 – A Turning Point for the Georgian Electricity Market?

This year Georgia’s electricity market will have to go through some crucial reforms. The signing of the Association Agreement and Georgia’s accession to the energy community in October 2016 imposed some important obligations on the country to reform its energy markets. For the electricity market, 2018 will be a turning point. Among the key obligations the country committed to under the energy community accession protocol were the adoption of: (i) Directive 2009/72/EC, concerning common rules for the internal market in electricity and (ii) Regulation (EC)...
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Mar
12

Does Georgia Have One of the Largest Shadow Economies in the World?

In January 2018, an IMF Working Paper published new results on the shadow economy situation for 158 countries from 1991 to 2015. According to Medina and Schneider (2018), the shadow economy in Georgia during that period constituted, on average, 64.9% of GDP - the highest indicator in the world! In 2015 (the last year available), things were slightly better for Georgia, with the share of shadow economy standing at 53%. Still, our country was “outshone” only by Zimbabwe (67%) and Haiti (56%) in the world rankings. To add insult to injury, Georgia’s results...
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Mar
05

What Georgia Can Teach Sweden about Energy Efficiency

I believe we all are bound by the notion that technology is the thing. We might be convinced it’s a sign of progress. Those very clever engineers have finally saved humanity, not just by envisioning what will save the masses from wasting their minutes and seconds, but they also help to propel all sorts of time-saving devices. There are, of course, good reasons to argue for how important technological advances are. They can be used as a means of promoting youth employment, or to assist an individual suffering from mobility concerns with vacuum cleaning. O...
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Feb
26

Organic Is The New Black!

  Year by year, interest in the organic market is increasing all over the world. According to STATISTA, worldwide sales of organic food quintupled in the 21st century (18 billion USD in 2000, versus 90 billion USD in 2016), while, according to TechSci Research, the total worth of the market is projected to grow at a compound annual growth rate (CAGR) of 16.15% during the period 2017-2022. In fact, in some developed countries, the growth of supply of organic foods cannot keep up with the growth of demand (OCA, 2018), as the transition from conventio...
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Feb
19

Why Is Georgia Educating Future Unemployed?

  Sadly, today we are using budget funds to directly fund unemployment. We are financing professions that may not be required later. Giorgi Kvirikashvili, Prime Minister of Georgia As most other former socialist countries, Georgia enjoys a very high literacy level, as measured e.g. by the share of people completing secondary education. And yet, the single most problematic factor for doing business in Georgia, at least since 2013, is “inadequately educated workforce”. Not crime. Not corruption. Not access to finance. Not faulty infrastructure. Inade...
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Feb
12

“Just a Bit High”?

Interest in bank profitability is increasing every year. Google search data for Georgia shows that in 2017, there were 4,700 pieces (articles, blogs, comments and other documents) found for “Banks’ Profit” (ბანკების მოგება) while the same indicator in 2016 amounted to merely 2,990 pieces. In 2015, it was even smaller – 2,160 pieces. This growing interest has its own objective reason, which is simple:  In 2017, compared to the previous year, profits for commercial banks increased dramatically by 190 mln. GEL (if you like percentages, it is 28%), and ...
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