ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Jun
10

Could the Government Act as Coordinator?

In Avchala, in the middle of nowhere, you might be surprised to find the busy “Craftsmen’s City” or “Khelosnebis Kalaki” as it is called in Georgian. It is built on a 4-ha plot where there used to be a large carpet manufacturing plant in Soviet times, which vanished with the Soviet Union and turned into a concrete carcass surrounded by a swamp. Luckily, ten years ago, a man called Irakli bought this territory with the intention of renting it out1 — though it was not an easy task! At a minimum, Irakli had to provide basic conditions for people to mov...
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Guest — Matt
I enjoyed reading this piece: the narrative was compelling, the idea explained well and it was short enough to enjoy. Creating clu... Read More
Friday, 12 June 2020 8:08 AM
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Jun
14

The Dire State of Business Support Organizations in Georgia

In technological terms, there has never been a better time to be a small or medium size business owner: people can always get ahold of you and you can work wherever you need to. Creating an additional source of income catches people’s interests all over the world; as an additional motivation, we often hear about the launch of yet another program directly helping these businesses, thus making it easier to become a start-upper. And here, the rhetorical question: “why not?!” pops into some people’s minds. Starting a small or medium size enterprise (SME) ser...
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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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Nov
19

Solving Insolvency

It is that time of year again when our world starts revolving around the World Bank’s Doing Business publication. It is a time when we once more have the chance to brag about how easy it is to start a business in Georgia, about how small the tax burden on businesses is, and about how good we are at enforcing contracts. However, we are unlikely to draw attention to our rank in the Resolving Insolvency indicator, which places us in a bracket alongside countries not necessarily known for their pristine business-enabling environment. Fortunately for Georgia,...
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Apr
17

How Businessmen Grow Wings

  Everybody knows Bakar and Tengo (BATE Generals), two businessmen from a very popular Georgian TV series, 'My wife's best friends' ('ჩემი ცოლის დაქალები'), who became incredibly rich from a start-up with a seemingly 'nonsense' idea to export the 'tails' of khinkali (traditional Georgian dumplings) to Bulgaria. Later on, BATE Generals created a special office for ideas, where their relatives and unemployed friends of their friends were solicited to generate promising business ideas. BATE Generals is paying a fixed amount to the idea generator and a ...
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Eric Livny
Thanks for an interesting analysis, Olga! I have a little bit of an angel investor experience in Georgian agriculture, so fully ap... Read More
Thursday, 20 April 2017 6:06 AM
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Feb
06

Failure is Always an Option! Or is it?

“The type of failure we’re talking about is like how frogs lay 20,000 eggs so a few wind up as adults sitting on a lily pad sucking down mosquito dinners” is how the author of the recent Newsweek article describes the rate of failure it takes to breed a handful of unicorns-tech startups valued at more than $1 billion. Failure has increasingly become a chapter in success stories; stories which inspire a new generation of entrepreneurs to try, fail, try again, and succeed. Economics, as we have come to know it, is about efficient allocation of resources. R...
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