ISET

On November 8, ISET was visited by Mr. Juha Kahkonen, Deputy Director of the Middle East and Central Asia Department of the IMF, who gave a presentation on the fact that global trade tensions and slowing growth amongst key trading partners are affecting the Caucasus and Central Asia (CCA) region. However, Mr Kakhonen explained that despite a decline in export growth, a looser fiscal stance and rising retail credit is expected to maintain a broadly stable growth for the region in 2019–20

The IMF’s CCA Deputy Director then examined the issues in-depth and stated that in order to foster higher and more inclusive growth and raise living standards, CCA policymakers should strengthen competitiveness, leverage comparative advantages, and foster diverse sources of growth to reap the gains from trade and integration into global value chains. In addition, revitalizing FDI by easing restrictions and promoting macroeconomic stability while deepening domestic financial markets can provide more stable sources of funding, mitigating the risk of volatile portfolio flows. These portfolio flows to the region’s economies are nearly twice as sensitive to global market sentiment compared to other emerging economies, exposing the region to abrupt shifts.

On October 25th, ISET was visited by Dr. Robert A. Lawson of the Fraser Institute. In a highly entertaining and often humorous lecture, Dr. Lawson discussed a wide variety of topics, including the notion of economic freedom, research into economic liberty, as well as Georgian reforms since 2004 and recommendations for future development.

One of the most important aspects of Dr. Lawson’s presentation was the fact that Georgia, as a small country, is highly dependent on international trade for future growth. This is in contrast to the United States: as Dr. Lawson explained in a hypothetical scenario, if the US was to hypothetically abruptly cease all trade with other countries, it would still retain something of an economy, albeit one far reduced in size. This is simply due to the fact that the US has such a large population; small countries such as Georgia, meanwhile, would collapse without foreign trade partners. With this in mind, Dr. Lawson then discussed Georgia’s case specifically and attributed the country’s economic success over the last two decades to successfully deepening ties with other countries.

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