ISET

Unless its glorious past during the Soviet Union, the Georgian tea sector rebounded in the late 1990s and early 2000s, yet only partially as the economic and political stability of the post-independence period left a mark on the overall productivity of the sector.

Today, the sector could play a role in alleviating rural poverty in western Georgia by providing families with steady jobs and livelihoods if it will be revived. The Georgian government and donor communities aim to support this sector and the tea cooperative development is one of the ways chosen by them.

According to this study, the cooperatives could benefit the most if they focus on the high quality tea production (e.g., organic tea). Also, tea cooperatives (and their members) could benefit more if they invest in proper branding, marketing and promotion at the second level of cooperation.

Georgia’s Insolvency law of 2007 is primarily oriented towards a rapid liquidation of insolvent corporate entities and private entrepreneurs’ businesses with subsequent distribution of remaining assets amongst the creditors. The number of insolvency cases dealt with by the local courts of Tbilisi and Kutaisi is fairly limited most probably due to insufficient assets in the insolvent entities to cover the costs of the insolvency procedure. The law is relatively short and leaves relevant aspects of insolvency procedures either unclear or unregulated. Areas with significant shortcomings and deficiencies are e.g. regulations on avoidance of transactions concluded prior to insolvency, the monopolistic position of the National Enforcement Bureau as trustee, the Conciliation Council, the rehabilitation procedure, the role and function of Insolvency Office Holders, the ranking of claims in the distribution process etc.

Although the mining sector of Georgia only accounts for a small share of GDP, around one quarter of Georgia’s total exports are related to mining activities. Increased use of Georgia’s natural resources thus has the potential to benefit the economic development of the country as well as to contribute to public finances.

How can regulation be improved to strengthen the economic gains and public revenues from the mining sector? The current regulation creates unnecessary obstacles to investment in mining. These deter investors from increasing activities in Georgia, leading to less economic growth of Georgia in mining and related industries as well as smaller public revenues from a sector that generally is highly interesting from a perspective of creating tax and other public income.

Our Partners