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.

A dramatic y/y decline (44%) in Georgia’s 2015 exports to Armenia was the subject of a study by ISET-PI and the German Economic Team (GET). Our goal was to understand the extent to which this slump resulted from Armenia’s agreement to join the Eurasian Economic Union in 2014 (as part of this agreement, Armenia applied new trade barriers on imports from non-EEU countries in 2015).

An alternative explanation concerns the change in the terms of trade with Russia and Armenia. With the Russian ruble sharply depreciating in the course of 2015, Russian non-oil products became much more competitive in international markets, including Armenia.

The study overviews Georgia’s export structure and the key changes it undergone in 2014-15. The lion’s share of the decline in Georgian export to Armenia is found to be caused by a sharp contraction in car re-exports (-69% y/y). The paper goes on to analyze possible future changes in the trade regime between the two countries and their effect on Georgian exports.

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.

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