ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Mar
17

It’s Not Who You Trade With – It’s Who You Produce With: Measuring Georgia’s Integration into Global and Regional Value Chains

  GLOBAL VALUE CHAINS AND THE CHANGING NATURE OF COMPARATIVE ADVANTAGE We live in the world where production of a single good typically involves manufacturing inputs from many different countries around the globe. For example, a typical iPhone production takes place in as many as 7 countries, including USA, Mongolia, Japan, Korea, Taiwan, China and even Switzerland. This is what is known to economists as global value chains (GVC). The emergence of GVC more than two decades ago transformed the way economists think about countries’ comparative advanta...
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Mar
09

Agriculture in Georgia: Are There Any Real Changes in the Sector?

After years of negligence, from 2012 onwards, Georgian agriculture returned to the spotlight. State funding for the sector grew from 85 mln. GEL in 2011 to more than 200 mln. GEL in the consecutive years, and up to 293 mln. GEL in 2020. The state launched more than ten agricultural support programs and established a separate agency, the Agricultural Projects Management Agency (APMA), in 2013 for their management. Those engaged in agriculture obviously welcome the increased state support to the sector, however many now question the results. The various ou...
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May
12

Is Abkhazia Consuming Too Much? – March 2018 Electricity Market Review

In March 2018, Georgian power plants generated 997 mln. KWh of electricity (+35% compared to March 2017, and + 7% compared to February 2018). Nearly a quarter (24 %) of this electricity was produced by the Enguri and Vardnili hydropower plants, which produced 188 mln. kWh and 49 mln. kWh, respectively. Consumption of electricity on the local market was 1,116 mln. kWh (+9% compared to March 2017, and +5% compared to February 2018). Around 19% of this electricity was consumed by Abkhazia (207 mln. kWh). The Enguri and Vardnili HPPs represent nearly the onl...
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Feb
26

Organic Is The New Black!

  Year by year, interest in the organic market is increasing all over the world. According to STATISTA, worldwide sales of organic food quintupled in the 21st century (18 billion USD in 2000, versus 90 billion USD in 2016), while, according to TechSci Research, the total worth of the market is projected to grow at a compound annual growth rate (CAGR) of 16.15% during the period 2017-2022. In fact, in some developed countries, the growth of supply of organic foods cannot keep up with the growth of demand (OCA, 2018), as the transition from conventio...
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Dec
03

The Textile Industry Stopping by in Georgia

My dad used to tell me stories about the exciting period when the Soviet Union’s economy started faltering and public resources were suddenly up for grabs in the chaos capitalism that emerged. While this period is usually associated with the appearance of crafty oligarchs, in Georgia also less wily businessmen could exploit the circumstances, among them many Turks. As the American journal The Tennessean wrote in 1977: “Soviet blue jeans may look like jeans, but that doesn't mean they are… One of the country's most exasperating problems is trying to satis...
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Irakli Shalikashvili
I also heard stories from my grandparents about the greatness of USSR, and they all were sad about the destruction of the system –... Read More
Tuesday, 13 December 2016 11:11 AM
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Nov
12

Thinking Forward through the Past

Under the Soviet system, farmers worked under strong central control; everyone knew what to do. Important economic decisions were not left to the market, or decided by self-interested individuals. Instead, the government, which owned or controlled much of the economy’s resources, decided what, when and how to produce. Along with providing necessary inputs, the state ensured that farmers had access to markets for their goods. After the collapse of the Soviet Union, state-provided coordination was abolished. The newly shaped market system brought a lot of ...
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Irakli Shalikashvili
It is very interesting to discuss alternative systems for Georgian farmers, but at the same time the Soviet Union left-overs in ag... Read More
Tuesday, 13 December 2016 11:11 AM
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