ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Oct
07

The Two Faces of Foreign Direct Investment

Recently, the Georgian media abounded with alarming reports about a slowdown of foreign direct investments (FDI) in Georgia. Indeed, economic figures seem to support the view that there may be a turn in the FDI activity. The graph shows FDI in the first two quarters of each year from 2005 to 2013. There is obviously a huge volatility in the investment activity throughout those years, reflecting economic and political events like the war and the financial crisis in 2008. Yet since 2009, FDI activity was following a slow but steady upward trend. This trend...
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Guest — RT
1. That's an interesting chart, though it may be more interesting to look at these flows in % of GDP (corresponding two quarters).... Read More
Monday, 07 October 2013 5:05 PM
Guest — Eric Livny
Quote from The Telegraph: "Steel-making giant Arcelor Mittal has suffered an extraordinary attack from a French government ministe... Read More
Monday, 07 October 2013 8:08 PM
Guest — Y
FDI can be a powerful instrument in the government's industrial policy toolkit. The idea is to 'direct' FDI in way that facilitate... Read More
Tuesday, 08 October 2013 10:10 AM
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Sep
13

Moratorium on Foreign Ownership of Agricultural Land. Xenophobia, Myopia or what?

On June 28, the Georgian Parliament passed a bill imposing a moratorium on land acquisition by foreigners and foreign-owned legal entities till the end of 2014. The bill effectively reversed an earlier policy that welcomed foreigners to settle and invest in Georgia’s agricultural sector, a policy culminating in the seemingly outlandish program seeking to bring to Georgia – and offer fast-track naturalization to – dozens of expert farmers from South Africa. Rattled by this policy reversal, groups representing the expat business community in Georgia are tr...
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Guest — Hans Gutbrod
thanks, Eric, for this thoughtful piece. I agree, there does need to be a strategy, not just buying time. One aspect that would be... Read More
Friday, 13 September 2013 10:10 AM
Guest — MM
Great article, although it would be interesting to read about the benefits of the moratorium.
Friday, 13 September 2013 11:11 AM
Guest — Simon Appleby
The implications are the moratorium are profound. It throws the rural financial sector into disarray as most banks and microfinanc... Read More
Friday, 13 September 2013 2:02 PM
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Jul
01

Georgia's National Competitiveness

In the globalized world of today, increasing national competitiveness has become an important policy target for any country. While engaging in mutually beneficial trade, technological and cultural exchanges, countries find themselves in a race for scarce mobile resources such as financial capital and talent. Winning in this race are those locations that offer the best conditions for economic activity – skilled and disciplined labor force, high quality services and urban amenities, transparent and efficient public administration, etc. These locations – no...
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Guest — llabadze
It seems Georgia is going forward in terms of "the much-coveted role of a regional hub". Just today (Sep 20, 2013) the Austrian tr... Read More
Saturday, 21 September 2013 10:10 AM
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Jun
28

Georgian Banking Sector Development: Is There Room for Growth?

The Georgian economy faces many challenges, not least of which are access to finance and the extremely high cost of financing private enterprises. With the cost of borrowing (real interest rate) reaching 17.3% on average in April 2013, businesses find it very difficult to function, let alone invest in innovative technologies, long-term growth and development. These challenges can be directly traced to issues raised in one of the ISET Economist blogs: the Georgian financial industry is still very far from being a well-developed, efficiently functioning sy...
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Guest — YB
Dear Sir, thank you very much for your comments and your question. You are right in pointing out that the kind of businesses that... Read More
Sunday, 30 June 2013 2:02 AM
Guest — jaswinder singh mavi
dear friend, I am not a big economist.I know one basic thing that to Bank we go for keeping our money safe and to borrow money if... Read More
Friday, 28 June 2013 5:05 PM
Guest — jaswinder singh mavi
dear friend, I am not a big economist.I know one basic thing that to Bank we go for keeping our money safe and to borrow money if... Read More
Friday, 28 June 2013 5:05 PM
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Jun
21

Regional Disparities in Georgia

Regional development policy, defined as aid and assistance given to economically less developed regions, is an issue for almost every country that seeks territorial unity. Putting the arguments of equity or efficiency aside, states with high regional disparities are potentially exposed to the political risk of disintegration. This threat can come from both developed and underdeveloped regions. While more advanced regions are capable of independence and might even decide to strive for secession, weaker ones, especially those bordering unpleasant neighbor-...
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Guest — Eric Livny
While Michael is not signed on this post, I recognize his handwriting. Two points.FIRST, I don't quite understand the rationale fo... Read More
Friday, 21 June 2013 7:07 PM
Guest — RT
Don't you want this post to _make_ people interested in regional development of Georgia? ;-)
Friday, 21 June 2013 9:09 PM
Guest — Nino
RT, thanks for the suggestion. I will, if possible. However, I assume all those interested in the regional development of Georgia ... Read More
Friday, 21 June 2013 9:09 PM
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Jun
03

Riding the Dragon

Cultural and intellectual achievements herald economic success of a people, and the Chinese cultural and intellectual heritage is breathtaking. The Chinese discovered gunpowder, the compass, and the movable type printing press long before the Europeans. Admiral Zheng He’s fleet reached Mogadishu and Mombasa with up to 28,000 sailors at the same time when the Europeans set out to discover Africa with crews of not more than 300 sailors. Temporarily lamed by Mao and his followers, capitalism has unleashed the dragon once again! China is about to become the ...
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Guest — Eric Livny
A very interesting undertaking, thanks for posting. There is a development theory attributed to Alexander Gershenkron (http://en.w... Read More
Monday, 03 June 2013 10:10 AM
Guest — Simon Appleby
Good to see this analysis, well done. Xinjiang Hualing is a private company, albeit with close connections to the Chinese governme... Read More
Monday, 03 June 2013 10:10 AM
Guest — M
There is a history of Chinese immigration into Georgia jumpstarting domestic industries: "[...] a tea-specialist named Liu Junzhou... Read More
Monday, 03 June 2013 12:12 PM
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