ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Oct
12

To Subsidize or Not to Subsidize Georgia’s Wine Sector?

“Rtveli 2020” – a traditional vintage and rural harvest holiday in Georgia accompanied by feasts, musical events and other celebrations started on August 26. This year, the Government of Georgia (GoG) is subsidizing the grape harvest to support growers in selling their products. 0.3 GEL of the total 0.8 GEL per kg of Rkatsiteli or Kakhuri Mtsvane is subsidized. In the case of extreme necessity, the GoG will be involved in the purchase of grapes as well. Supporting the wine sector is part of the anti-crisis plan to handle the economic challenges caused by...
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Jun
30

Mortgage Subsidy – Encouraging Borrowing in the Midst of a Crisis

On 28 May, Georgia announced its fourth anti-crisis plan, in which the government will subsidize 4 per cent of the interest rate of mortgage loans for five years. The subsidy will be issued for loans not exceeding 200,000 GEL and will only apply to those taking mortgages for the purchase of residential apartments that are newly built or under construction, from 1 June 2020 to 1 January 2021. The state will also ensure the completion of ongoing construction. Moreover, the state will issue loan guarantees on mortgages to the amount of 20 per cent of their ...
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Jun
24

How Can You Be Sure? On the Agricultural Insurance in Georgia

  BACKGROUND Agricultural production is associated with a variety of risks, including market, institutional, and production risks. An important production factor in agriculture is the weather. Its uncontrollable nature makes weather risk the prevailing risk to agricultural production. Farmers have various informal and formal means of transferring and mitigating these risks. Informal means include savings, diversification, off-farm activities, etc. The most common formal means of risk mitigation is insurance. Insurance is a contract that transfers th...
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Apr
26

Granted Survival!

Various business support programs have been implemented in many countries across the world. Grants, interest-rate subsidies, and equity participation are among some of the most adopted tools for promoting firms’ performances (Dupont and Martin, 2006). Such assistance programs also have their own objectives. For example, low-interest rate loans and cash transfers to new and small firms are designed to overcome the financial constraints many firms face (Hubbard, 1998). Moreover, these programs may aim to help firms adopt new technologies (Bronzini and Pise...
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May
07

Georgia’s Economy Grows, Agriculture Shrinks: What Should We Do?

Since 2012, when the political party Georgian Dream took leadership of the country’s governance, economic [real] growth reached its highest rate in 2017 (5.0%). The drivers of this growth were construction (11.2%), hotels and restaurants (11.2%) and the financial sector (9.2%). However, a few sectors of the economy declined in 2017, and one was agriculture (-2.7%). Experts on this sector agree that 2017 was a “bad year” for Georgia’s agriculture. Winter lasted longer and spring frost damaged fruit plantations. This was followed by some periods of drought...
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