ISET

ISET Economist Blog

A blog about economics in the South Caucasus by ISET
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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Nov
05

Lock, Stock and Two Smoking Barrels

“All the evidence shows that God was actually quite a gambler, and the universe is a great casino, where dice are thrown, and roulette wheels spin on every occasion. Over a large number of bets, the odds even out and we can make predictions; that's why casino owners are so rich. But over a very small number of rolls of the dice, the uncertainty principle is very important” – Stephen Hawking. Casinos, totalizators, and other gambling institutions are very popular in Georgia. According to the study “Gambling in Georgia – Second Report,” conducted by Transp...
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Oct
31

To Cut or Not to Cut? Shifting Government Priorities and the Uncertain Future of Georgian Agricultural Cooperatives

“I cannot see any use [for the cooperative I have set up] if I cannot find anywhere [someone] willing to lend us money” Spanish Priest – 1908 (Cited in Garrido, S. 20071) THE GEORGIAN AGRICULTURAL SECTOR AND THE POTENTIAL ROLE OF AGRICULTURAL COOPERATIVES The Republic of Georgia was among the fastest Former Soviet Union countries to implement a large scale land reform and land redistribution plan, starting in 1992. Land redistribution resulted in the formation of hundreds of thousands of small family farms, replacing large-scale collectives and productio...
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Oct
29

Georgian Agriculture: Beacon or Red Lantern?

A question of causality: Does modernization of agriculture lead to economic growth or does growth induce a modernization of the agricultural sector? For many years, this question has been hotly debated among development economists. While those economists who believe in growth-led agriculture (GLA) were dominating until recently, now the proponents of agriculture-led growth (ALG) are afloat again. Which insights does this debate yield for Georgia? THE TRADITIONAL VIEW For a long time, the question seemed to be settled. If one asked a development economist...
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Oct
24

The Shortest Road to Strawberry Field Isn’t Always the Sweetest, or Quickest

Nino Kvirkvelia and her husband Irakli Todua are not exactly your typical Georgian smallholders. Both spouses are well-educated (both hold economics and business degrees from reputable Georgian institutions). More importantly in the context of Georgian agriculture, the couple owns 28(!) hectare of arable land in Georgia’s horticultural heaven, Samegrelo, best known for its hazelnuts. This is a fantastic amount considering that the average size of agricultural plots in Georgia is only slightly above 1ha. A natural born entrepreneur, Irakli was among the f...
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