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ISET Economist Blog

A blog about economics in the South Caucasus by ISET
Nov
26

Professionals for Georgian Agriculture

  Recently, the ISET Economist Blog wrote about the cooperative “Shamatia.” Their strawberry seedlings started to fade soon after planting. The cooperative consulted with different experts in the country to find the reason, and the solution for the problem, without success. Only after sending sample seedlings abroad was the cause of the problem revealed. In the meantime, however, the cooperative experienced losses of 15,000 GEL. Such cases are not rare in Georgian agriculture. Recent value chain studies conducted by the ISET Policy Institute indica...
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Nov
21

Structural Transformation in Georgia – In the Right Direction at a Turtle’s Pace

  Structural transformation of the economy is one of the most important determinants of economic development. Almost invariably, nations that have managed to pull themselves out of poverty were able to diversify their economies away from low productivity sectors. In advanced countries, productivity differences between sectors are generally small, and growth mostly happens because of productivity improvements within sectors. Developing countries, on the other hand, are characterized by large productivity gaps between the sectors of their economies. ...
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Nov
19

Net Metering in Georgia. Getting Ready for the Next Energy Revolution

"We have this handy fusion reactor called the SUN. You don't have to do anything, it just works, shows up every day, produces ridiculous amounts of power." Elon Musk Introduction of Tesla Energy A few weeks ago Elon Musk (CEO of SpaceX and Tesla Motors and Chairman of SolarCity, among others) presented two new products: solar roof tiles produced by SolarCity, and Tesla’s Powerwall 2, designed to work together to revolutionize the concept of solar PV systems. Energy sector professionals, environmentalists, and renewable energy enthusiasts around the world...
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Nov
14

Georgian Haves and Have-Nots. Who’s to Blame and What to Do?

Just like the World Bank’s Doing Business, Transparency International’s Corruption Perceptions Index and many other international rankings, the European Bank for Reconstruction and Development’s (EBRD) Transition Reports have typically carried a very positive message for Georgia, Eastern Europe’s poster child of transition since the Rose Revolution of 2003. This year’s Transition Report, launched last week in Tbilisi by Alexander Plekhanov, EBRD’s Deputy Director of Research, is somewhat exceptional in this regard. Subtitled “Equal opportunities in an un...
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Nov
12

Thinking Forward through the Past

Under the Soviet system, farmers worked under strong central control; everyone knew what to do. Important economic decisions were not left to the market, or decided by self-interested individuals. Instead, the government, which owned or controlled much of the economy’s resources, decided what, when and how to produce. Along with providing necessary inputs, the state ensured that farmers had access to markets for their goods. After the collapse of the Soviet Union, state-provided coordination was abolished. The newly shaped market system brought a lot of ...
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Nov
07

“Friendship Bridge” – For or Against Gravitation?

The official visit of the Armenian President last week was concluded by a splashy announcement that the building of the “Friendship Bridge,” a new infrastructure project approved by the Georgian and Armenian Governments in late 2014, will start construction in 2017, and will be completed in under two years. The Georgian Prime Minister and the Armenian President have reportedly discussed a range of other opportunities to deepen economic and trade relationship between the two countries and support business community engagement in this process. This excitem...
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