In March 2014, Heifer Georgia launched its “Comprehensive study on the Georgian sheep value chain” project. Heifer Project International, the umbrella organization of Heifer Georgia, intends to support the development of the Georgian sheep sector for the next decade, starting with sheep wool processing.
The purpose of this event was to have a discussion about the potential of the tourism sector to improve well-being and reduce poverty in rural areas of Georgia, as well to discuss the contribution the development of large hotels in peripheral touristic destinations can make to inclusive growth in local communities. The follow up activity of this dialogue was an excursion to the Kazbegi Municipality on July 19.
In Georgia, employment is often found not through prevailing in fair, orderly selection processes, but through personal connections. This is a well-known fact almost nobody denies. It is evident in almost every Georgian firm and institution. In a hospital, you encounter a “nurse” not capable of the most basic medical accomplishments, in one of Tbilisi’s universities you meet a “cleaning woman” who is mentally ill, known for scaring everybody through aggressive and inappropriate behavior, and in the railway station, you buy a ticket from a clerk who knows nothing about regulations, timetables, and trains.
Before answering this question, let us define what economists usually mean by” informal employment”. There is some confusion with this term, and sometimes it is improperly used as a synonym for tax evasion or illegality. ILO defines informal employment as: employment “consisting of units engaged in the production of goods or services with the primary objective of generating employment and incomes to the persons concerned.
In the first part of this article, I described some of the adverse incentives resulting from a social welfare system. Then I argued that according to Simon Kuznets' famous paradigm, increasing inequality is hardly evitable when a country enters a growth trajectory (as Georgia did in 2003), and I reasoned that it is at least an ambivalent (not to say questionable) policy for Georgia, at its current state of development, to fight inequality by social welfare measures. In this vein, the article seemed to advocate that Georgia might better follow the “Asian” approach of “develop first, redistribute later”.