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...
ISET Economist Blog
A blog about economics in the South Caucasus.
Dec
08
May
05
For a long time Russia was seen as the land of opportunity for foreign investors. The allure of the country with large population, vast natural resources, and more importantly, a large middle class willing to spend money, was irresistible. The burgeoning economy, however, held a few secrets which threatened to derail investors’ hopes.
Last week we started to discuss the ‘bear traps’ or structural inefficiencies built into the economic system in Russia. In particular, the rent management system in the Soviet Union centered around the idea of indirect reso...
Apr
28
Until very recently Russia was considered by many foreign companies a somewhat difficult but promising country for investment, a “land of opportunity” that perhaps necessarily came with a hefty dose of a “riddle wrapped in mystery inside of an enigma”. The difficulty was stemming primarily from Russia’s heavy-handed bureaucracy. Stories of corrupt practices, politically motivated court decisions and questionable tax authorities’ tactics abounded. While this may have scared off smaller investors, the large companies are typically no strangers to such chal...
Nov
18
In our last week’s article we examined Georgia’s economic growth in the 12 months before the 2012 parliamentary elections. In particular, we reviewed the popular argument that much of this economic growth was driven by the “political business cycle” effect of public (over)spending prior to the elections.
Our analysis showed that the construction sector (the prime suspect for politically motivated spending) did in fact exhibit an atypical growth pattern just before the elections, and that growth rates in construction collapsed right after October 20...
Our Partners
