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ISET Economist Blog

A blog about economics in the South Caucasus.
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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Nov
27

Does Georgia Need Highly Educated Workers?

A pleasant surprise awaited me on my first day as a student of Tbilisi State University’s Business and Economics Faculty. Thanks to my performance on the national admission exam (ერთიანი ეროვნული გამოცდები), I was inducted into the so-called “Elite Group,” piloted by TSU in an effort to attract Georgia’s best and brightest. There were 50 of us in the group, mostly from working class families, and none felt like they belonged to any kind of “elite.” In the end, I really enjoyed my “elite” status. Not because I could assert dominance over “mere mortals,” b...
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Nov
20

Asian Invasion: Stink Bug in Georgia

Nikoloz M., 65, from the Imeretian village of Jikhaishi, invested around 15,000 GEL into his 8.5 ha hazelnut orchard in 2012, hoping that one day his initiative would turn into a profitable business. Nikoloz was on his way to success up until this year, before the stink bug, or Asian pharosana, as Georgians call it, appeared in his orchard. While Nikoloz expected to harvest 800 kg – 1000 kg of hazelnuts per ha, the stink bug infestation reduced his harvest by 30-35%, resulting in a loss of more than 1,000 GEL per ha. For a rural household with average an...
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Nov
06

The Long, Hot Summer: Why We Witnessed a Spike in Forest Fires, and What Can Be Done About It – Part II (man-made fires)

Forest fires pose a threat to human life and property. As we discussed in a previous article, most countries throughout the world, Georgia included, suffered from an unusually high number of forest fires during the summer of 2017. In Georgia, this topic was the subject of a spirited public debate about whether these fires were wild or man-made. In our previous article we discussed how natural causes generate wild forest fires. We mentioned that climate change can play a major role in the occurrence of forest fires, because drier conditions and longer hot...
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Oct
30

Georgia’s Democracy: the Puzzle of a Red Country Turning Blue

On October 21, 2017, Georgia’s entire political map was painted in different shades of blue – the color of the ruling Georgian Dream (GD) party. GD won in all but one race in the country’s municipal elections – achieving solid majorities in all sakrebulo (city councils) and placing party-backed candidates as mayors in all cities and self-governing communities. Such results are quite unusual, and nearly impossible to achieve nowadays in the politically polarized atmosphere of Western Europe, UK or the U.S. Do they suggest that GD has been except...
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Oct
23

Telavi, the Capital of Georgian Beer Drinking?

Telavi, the former capital of the Kingdom of Kakheti, is a beautiful town with spectacular views of the Alazani Valley and Caucasian mountains. In the 18th century, King Erekle II reigned from Telavi. The palace can still be seen, and the statue of King Erekle stands proudly in the middle of the city's town square. More importantly for the city dwellers, Telavi is the capital of Georgia’s traditional winemaking.  This month, however, the capital of Georgia’s winemaking has for a couple of days become the capital of Georgian beer drinking, in the bes...
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