ISET Economist Blog

A blog about economics in the South Caucasus.

Georgia’s New Gold Rush: Or the Economic Prospects of Export of Medical Marijuana

  This article continues the theme of ISET Economist blog “Decriminalize Marijuana?” written by my colleague Saba Devdariani in June 2015, where he described the philosophical aspects related to marijuana state regulations and medical consequences of its consumption. RECENT CHANGES IN LEGISLATION Three years after the blog was published, regulation of cannabis became the hottest topic of discussion in the social-political life of Georgia. On July 30th 2018, the Constitutional Court de jure legalized personal consumption of marijuana by declaring tha...
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Great Expectations: Does the DCFTA Really Boost Georgia’s Economic and Export Potential?

On June 27, 2014, Georgia and the EU signed an Association Agreement (AA) and its integral part – the Deep and Comprehensive Free Trade Area (DCFTA). On July 1st, 2016, DCFTA fully entered into force. Until then, trade between Georgia and the EU was regulated by the Special Incentive Arrangement for Sustainable Development and Good Governance that contained a Generalized System of Preferences+ (GSP+) agreed to in 2005.  GSP+ covered 7,200 products for which the customs duty was reduced or eliminated when exporting to the EU market. It is w...
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To Bee or not to Bee?

  The economic significance of bees extends far beyond honey production. As the National Resource Defense Council writes in 2011 (“Why We Need Bees: Nature’s Tiny Workers Put Food on Our Tables”), the value of the honey that bees produced in the US in that year amounted to 150 million dollars, while the value of the harvested crops that were pollinated by bees was 15 billion dollars, i.e., greater by a factor of 100! Having bees around is not primarily beneficial for the beekeepers, but even more for anyone else who grows crops, fruits, or vegetable...
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Georgian Tangerines

The Estonian-Georgian film, Tangerines, was nominated for the Academy Award for Best Foreign Language Film in 2014. While the film was shot in Guria, the story takes place in Georgia’s breakaway region of Abkhazia during the war in the early 1990s. In the film, two of the main characters are peasants from Estonia who are living and working in Abkhazia, one as a tangerine grower and the other as a manufacturer of wooden crates for transporting tangerines to markets (much like the one in the photo above). Unlike their families and neighbors, these two men ...
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Georgia’s Trade in 2014: Does Export Decline Suggest a Loss of Competitiveness?

According to the latest GEOSTAT figures, merchandize exports from Georgia decreased by 1.63% between 2013 and 2014. This is certainly not great news for the country, but does it imply that Georgian goods have become less competitive on the world market? Recent trade data suggest that this is not necessarily the case. The first thing to note is that much of the decline in exports is related to one particular activity – the re-exports of Georgian cars to Azerbaijan and Armenia. Beginning in 2009, this business has become a “cash cow”, capitalizin...
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Lari Winter Blues – Should We Worry?

In the past two weeks Georgians have been waking up with a sense of déjà vu. In a matter of days, the Georgian currency lost over 8% of its value against the US dollar, and reversed the course of appreciation against the euro. The lari winter blues are reminiscent of the last months of 2013, when, after a long period of stability, the lari lost about 5% of its value against the dollar in the course of ten weeks. The current episode of sudden depreciation sent ripples of worry through the Georgian society and prompted opposition parties to sharply critic...
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