ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
May
18

Agricultural Anti-Crisis Plan Assessment

Agricultural and rural development play an important role in the country’s socio-economic development. The restrictions imposed during the pandemic have hindered spring agricultural works which has significantly worsened conditions for farmers and stalled their future potential. Consequently, the Georgian government developed an anti-crisis plan, “Caring for Farmers and Agriculture”, that was presented on 12 March. The proposal entails two forms of aid: direct assistance and sectorial support. Table 1 summarizes each component of the plan: Table 1. Suppo...
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May
01

The Implications of COVID-19 on the Georgian Power Market

The consequences of COVID-19 on tourism and in the industrial and service sectors have been discussed broadly recently. However, little has been said about the current and future implications on the Georgian power sector. The worldwide pandemic has already had, and is still expected to have, quite significant implications on both the demand and supply sides of the electricity market. Although, at this stage, we cannot estimate the exact scale of the effects, it is possible to represent a general theoretical framework of the existing and potential impacts...
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Apr
06

Should the World Sacrifice the Economy to Save Lives Today?

No two countries that both have a McDonald's have ever been at war wrote American political commentator and author Thomas L. Friedman in 1996. Since then, of course, there have been plenty of instances of countries with McDonald’s warring, including Russia and Georgia. Though, one should not take Friedman’s phrase too literally. Rather he implies that the spread of McDonald's is a part of a worldwide phenomenon of countries integrating with the global economy, which, in turn, makes wars less likely. Well, Kudos to globalization. But also, thanks to globa...
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Apr
03

The Generation-Consumption Gap Keeps Increasing. What Could or Should Be Done About It?

Looking at the consumption and generation trends of the past year, it is evident that Georgia is an electricity importing country during most months, with consumption almost always exceeding domestic generation. The only exceptions over the last 12 months were May and June, when the generation-consumption gap briefly became positive, reverting to the negative again in July. This is quite a dramatic change from how the country’s generation-consumption gap looked back in 2010, when the country exported almost seven times more electricity (1524.3 GWh) than ...
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Mar
27

Regional Impacts of COVID-19 Shock to HORECA Sector

The outbreak of the virus and the corresponding containment measures have started to severely affect the global economy. The Organization for Economic Co-operation and Development (OECD), in its Interim Economic Outlook Report (2020) on March 2nd downgraded 2020 real GDP growth projections for almost every country. The largest reduction in growth projections is seen for China (-0.8 percentage points) with worldwide real GDP growth rate expected to decline from 2.9% (November 2019 forecast) to 2.4%. In their report on March 6th, Asian Development Bank (AD...
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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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