Speaking with managers of companies operating in Georgia, one frequently hears complaints about a lack of certain specialists in the Georgian labor market. For instance, firms operating in the construction sector are often forced to hire foreign experts, as they do not find sufficiently qualified engineers and architects in Georgia. The shortage is particularly pressing in technical subjects and the sciences.

Last week, we argued that political decision-makers have a tendency to overregulate a society, as new laws, even useless or harmful ones, create the impression that politicians are addressing problems in society. Moreover, we outlined the theory of a military historian who claims that the Red Army was an “overregulated army”, explaining the disproportionate death toll of the Red Army in the Second World War.

The value of a currency, measured in terms of other currencies, has consequences for the real economy. A more expensive lari, for example, makes it more profitable to import goods into Georgia. The importer has to pay the foreign goods with foreign currency, and when the lari is more valuable, fewer lari is needed to pay for them.