From the ISET Economist news (http://www.iset.ge/news/?p=4633)
By Eric Livny
The “do no harm” (primum non nocere) principle is well known to students of medical schools. It is one of the most fundamental maxims in medicine, as formulated, for example, in the Epidemics book of the Hippocratic Collection:
“The physician must … have two special objects in view with regard to disease, namely, to do good or to do no harm“.
Doctors are taught that medical interventions are not risk-free. Thus, when facing a “problem” one should consider whether to use a particular procedure (e.g. surgery or chemical treatment) or do NOTHING.
Not surprisingly, this very principle has applications in many fields other than healthcare. And it is high time for this principle to be studied and applied in Georgian policymaking.
THE HARM OF OVERZEALOUS “HARMONIZATION”
Ever since signing the EU Association agreement in June 2014, Georgia has embarked on a spree of initiatives seeking to “harmonize” Georgia’s legislative and regulatory environment with EU’s acquis communautaire. The aim, so it appears, is to instantly transform Georgia into a European nation.
It all started on September 1, 2014, with the introduction of new VISA AND RESIDENCY REQUIREMENTS, modeled – so the Georgian public was told – after the best EU regulations, and intended to meet EU requirements as part of the visa liberalization process.
Within just a few months, several other pieces of legislation have been drafted and submitted to parliament (a few more may be in the pipeline without any knowledge on the part of relevant businesses and civil society stakeholders), allegedly as part of the harmonization effort.
- A new law onLABOR MIGRATION, submitted to the Georgian Parliament in early 2015, sought to prevent trafficking (a goal consistent with Georgia’s obligations under the visa liberalization plan), but also (Article 16) to restrict the ability of Georgian companies to hire badly needed international experts. Hard to imagine, but true! Thanks to a concerted communication effort by the Georgian business community, and goodwill on the part of the Ministry of Economy and Sustainable Development, Article 16 was swiftly removed from the draft law.
- Recent amendments to the Georgian law onBROADCASTING (Article 64 § 2) restrict sponsorships and limit advertising to 12 minutes per hour. The idea to reduce advertising time to somewhat more civilized levels is consistent with EU rules, yet Georgia seems to be in a particular hurry to tick off this harmonization box. Whereas the Association Agreement talks about gradual “approximation” over a period of 3-5 years, Georgian parliamentarians opted to dramatically accelerate the process by making these truly life-saving amendments effective almost immediately (as of April 1, 2015). Instead of creating harmony, this kind of fast-track overzealous approximation does not allow private broadcasters any time for adjustment, jeopardizing their ability to generate income, produce high quality content, and maintain independence. Unfortunately, suggestions by Rustavi 2 and other TV channels to stagger reductions in advertising time over several years have so far fallen on deaf ears.
- Yet another example of rushed legislation that appears to ignore the interests of businesses concerns the recent decision to increase EXCISE TAXES ON ALCOHOL AND TOBACCO as of January 1, 2015. The Government’s official aim was to increase budget revenues while harmonizing Georgia’s regulatory environment with that of the EU. Yet, the manner in which the whole process was rushed raises many questions. Georgian companies were not allowed any time to adjust their investment and production decisions, leaving them with excess capacity and losses. Furthermore, the level of excise taxes on alcohol was set at a level exceeding that of many European nations. This was decided without examining relevant demand elasticities, that is, the extent to which higher taxes will affect sales and budget revenues. In a country with rich traditions in home production of high quality alcoholic drinks (that are not subject to excise taxes), demand for alcohol is likely to be quite a bit more elastic than in most European nations. After all, Georgian consumers can switch to homemade wine or chacha, spelling doom for Georgian government’s plans to raise an extra 100mln GEL in excise tax revenue.
A COMMON PATTERN?
Taken alone, none of these legislative initiatives are particularly damaging for the Georgian economy. Georgian companies would have quickly acquired the ability to handle the extra layer of bureaucracy when bringing foreign experts and workers. Broadcasters will raise per minute prices for advertising and sponsorships, and advertising companies will learn to deliver their marketing messages in fewer seconds. Forced to pay higher excise taxes, Georgians will drink less beer and more wine. Breweries will adjust production volumes or export to Azerbaijan. The Association Agreement will be implemented ahead of schedule. At least on paper.
The problem with all these initiatives is that they represent a pattern of policymaking that is very different from the European ideal which Georgia is supposed to aspire to. And, taken together, they defeat the very purpose they are supposed to serve: bring Georgia into the European family of nations.
First and foremost, the manner in which these new regulation are enacted undermines Georgia’s reputation as a great place to do business. A key consideration for new investors is stability and predictability of the business environment. Countries may certainly change their internal regulations from time to time, but this should be done in coordination with the business community, while listening to companies and allowing them sufficient time to adjust.
Second, Georgian policymakers should learn to do much better homework before coming up with new laws and regulations. To do no harm, doctors may prescribe additional X-ray or blood tests. Policymakers can employ standard tools of applied economics analysis to simulate the impact of proposed regulations on tax revenues, GDP, income and investment levels, as well as evaluate associated corruption risks. While common in Europe, none of these tools are used in Georgia. Yet another good possibility is to move in small steps, conducting policy experiments and assessing their impact.
Third, unless dealing with urgent or complicated technical matters (such as Lari devaluation), Georgia’s policymaking process could benefit from greater participation by interested parties. Practically all EU approximation measures could and should be subjected to a lengthy and inclusive process of public consultations that would increase their chances to be politically accepted. In fact, such consultations are explicitly encouraged by the EU Association Agreement.
Last but not least, the hasty attempts to tick off boxes on EU harmonization may undermine the very process of Europeanization the Georgian government is trying to promote. The use of the Association Agreement as a smokescreen for passing dubious laws not only harms Georgia’s immediate economic interests, but also plays into the hands of those political forces that aspire to bring Georgia back into the Russian fold.
* * *
The other day, I heard Giorgi Kadagidze, the governor of the National Bank of Georgia, speaking about the need for Georgia to grow at a faster pace, and how faster growth is predicated on the government’s ability to implement painful and costly adjustments. The kind of “second-generation” structural reforms envisaged by governor Kadagidze would take time to implement. Until then, however, there are many things the Georgian government could STOP DOING. In this way the government would save taxpayers money, save itself the embarrassment of backtracking and apologizing, and save Georgian businesses the nervous energy and resources that could be put to more productive uses.
It is time for the Georgian policymakers to learn the Hippocratic principle: do no harm!
The Jara Beekeepers Association (JBA) has registered the Jara honey mark in the National Intellectual Property Centre of Georgia - Sakpatenti.
The mark ensures the protection of Jara honey from falsification and represents a quality compliance guarantee verified by the JBA who are dedicated to preserving traditional beekeeping practices based on Quality Assurance Standards developed by the JBA last year.
In 2018, Jara honey was commercially harvested and packaged according to the standards for the first time. This year it was exported to the United Arab Emirates and the export market is growing.
On 16th of December 2019, the Georgian Milk mark organized a Georgian Cheese and Wine evening at 8000 Vintages to introduce cheese with Georgian Milk mark (GMM) to the supermarkets and encouraged them to pass information on the advantages of GMM cheese to consumers. Cheese with Georgian Milk mark does not contain milk powder or any vegetable oils, it has laboratory analysis and is produced in the enterprises which are HACCP certified.
The Guests had the opportunity to taste different types of cheese made from natural raw milk produced by thirteen enterprises: Milken Ltd, Tsintskaro + Ltd, I.E Hakob Hambaryan, I.E Karen Simonyan, I.E Tsolak Grigoryan, Tsifora –Smatskhe Ltd, Tsalka +Ltd, Dairy Products Company Tsezari Ltd, Gocha Gagashvili – brand name Tsivis Kveli, Levan Bejanishvili-brand name Shuamta, Badri Gogoladze – brand name Cheese Hut, Coop. Tanadgoma, Coop. Disvelli. The Information per enterprise is available on www.georgianmilk.ge. The website allows consumers to look up the products they are buying using a unique register number printed on a label.
The evening of Georgian Cheese and Wine was attended by Mr. Levan Davitashvili, the Minister of Environment Protection and Agriculture of Georgia, by the Swiss Agency for Development and Cooperation Project Alliances Caucasus Program (ALCP) implemented by Mercy Corps, Georgian Milk Mark Project Administrator - Business Institute of Georgia and Marketing Company GMA Representative, the supermarkets and the dairies using the Georgian Milk mark.
The evening was headed by Zaza Grigalashvili, an '8000 Vintages' Sommelier, who spoke about Georgian cheese and wine pairing.
Helen Bradbury, ALCP Team Leader: ‘We have private sector cheese enterprises in the room from different regions, these are a real dairy businesses operating for years and years. It is very important that this is Georgian Milk from Georgian cows who eat Georgian grass. Consumers want to eat natural, healthy, good country food which comes from this beautiful land, from this beautiful clean water, from happy cows and are made in communities living in countryside. Today we are at 8000 Vintages and we all know the history of wine. If you want ‘Qvevri’ wine or European style wine we know from where it comes from its name and the consumer can choose according wine value and its good for the producer, they can add more value and then this value goes back to the jobs, factories in the communities. So in the dairy sector it is going to be the same: as cheese will have the name, taste, value, style and its started to develop, the money supporting these factories goes back to women who are supplying milk, their families, they are putting money to their children education and investing in their life'.
Levan Davitashvili, The Minister of MEPA: ‘I think the most difficult sector in Georgia is adairy sector and we have a lot to do together. A good presentation of a final product the market and how we bring cheese to the consumer is very important. We can say that competition between the enterprises is unfair, but we work on this via new the regulations to change the situation in the sector, we also empower our laboratories to have better quality and safe products. Today we have Georgian Milk mark presentation which is a very good idea for providing information to the consumers about dairy products, which also gives advantages to producer'.
The Products with the mark are available in Madagoni, Spar, Ori Nabiji, Nikora, Zgapari, Fresco, Carrefour, and Goodwill supermarket chains.
Tsintskaro + and Tsipora-Samtskhe dairy products with the Georgian Milk Mark were introduced at the Cheese and Hot Drinks Festival organized by Anna Mikadze – Chikvaidze, the Head of Cheese Producers Guild and held at the Mtatsminda Park on 10th of November, 2019. The visitors tasted cheese and received information about the Georgian Milk mark.
‘What makes this festival important is to introduce cheese with the Georgian Milk mark, which says to consumers that cheese is made from natural raw milk’ - stated Anna Mikadze - Chikvaidze.
Currently seven dairy enterprises are using the Georgian Milk mark: Milkeni; Tsintskaro +; Tsipora –Samtskhe; Cheese Hut; Tsezari; Tsivis Kveli; Shuamta.
Products with the mark are available in Madagoni, Spar, Ori Nabiji, Nikora, Zgapari, Fresco, Carrefour, and Goodwill supermarket chains.
Information per enterprise is uploaded on www.georgianmilk.ge. This allows consumers to look up the products they are buying using a unique register number printed on the label.
A 22 km route in Shiraki pastures, Dedoplistskaro municipality has received the status of becoming part of the official Animal Movement Route (AMR) last week. The unofficial route, which had been used for livestock seasonal migration for decades, had not been officially registered as the AMR before. As a result of a joint effort between the ALCP the Shepherds Association, The Ministry of Environmental Protection and Agriculture (MEPA), the National Agency of State Property and the Ministry of Economy & Sustainable Development, the route and297 ha land, is now officially registered as the AMR by National Agency of Public Registry of Georgia.
The section of the route is now protected from saleas according current regulations, AMR land is not allowed to be sold or rented. A water point located in this area will be restored soon as well, within the planned Water Point’s project of the ALCP and MEPA.
On October 29th, theSwiss Agency for Development and Cooperation (SDC) project the Mercy Corps Georgia implemented Alliances Caucasus Programme (ALCP) hosted the President of the Swiss National Council Marina Carobbio Guscetti, First Vice President of the National Council Isabelle Moret, Second Vice President of the National Council Heinz Brand, Secretary General of the Federal Assembly at Swiss Parliament Philippe Schwab, Ambassador of Switzerland to Georgia Patric Franzen, Deputy Head of Embassy of Switzerland in Georgia Alvaro Borghi, and the Regional Director of the Swiss Cooperation Office in Georgia, Danielle Mewly Monteleone. The Mayor of Marneuli, MP’s of Marneuli and Rustavi and the Deputy Governor of Kvemo Kartli region were also present. The visit was part of an official visit of Swiss officials to Georgia, to open the new Swiss Embassy in Tbilisi, celebrate sixty years of UNICEF Switzerland, highlight the importance of the Swiss role in mediation and representation between Georgia and Russia and visit some of the outcomes of the significant investment through SDC in economic development in Georgia.
The delegation was introduced to the ALCP’s work in Georgia and the programme’s regional outreach in Armenia and Azerbaijan, emphasizing equitable impact and women’s economic empowerment in the dairy and honey sector’s and the regional programme of vocational agri-journalism trainings in fourteen universities in Georgia, Armenia and Azerbaijan. The delegation visited the Women’s Room in Marneuli municipality highlighting gender sensitive budgeting training delivered through UN Women and the projects for and started by women through funding facilitated by the Women's Room. They then visited Milkeni Cheese Factory in Rustavi where the importance of sustainable community based enterprises supplied by local farmers was emphasized, as was the growing influence of the new dairy quality assurance mark, the Georgian Milk Mark www.Georgianmilk.ge/Milkeni.
To date, the ALCP has facilitated thirty-two cheese factories, creating a regular market for 23,000 farmers, seventy percent of whom are women; the Women’s Room Municipal Service is now operating in twenty-eight municipalities of Georgia with more than 17,000 regular rural women users, facilitating to date $2.4 million USD in government, civil and private funding for women’s initiatives and projects.
Honey testing requirements for export and laboratory testing capability and reality in Georgia were the main topics of the ALCP Second Honey Sector Advisory Committee meeting on 9th of October, 2019. The meeting gathered up to forty key stakeholders of the sector, including the Georgian Beekeepers Union (GBU), the Minister and Deputy Minister of Environment Protection and Agriculture of Georgia, Head of the National Food Agency, the Laboratory of Ministry of Agriculture (LMA), private laboratories, a honey exporter company Kakhetian Traditional Winemaking KTW.
A laboratory service subsidy scheme was presented at the meeting, that serves for supporting honey export development through creating accessible and affordable laboratory testing services for the Georgian beekeepers and honey exporters, which still remains as one of the key constrains for exporting Georgian honey abroad.
“For me, the honey sector is one of the most complex sectors in agriculture and I think the format of this meeting helps us with finding the best solutions to keep the sector going. I am pleased that today’s topic concerns honey laboratory testing, as we are determined to make honey as an export product. We have already made some important steps, like, participation in Apimondia 2019 and other important events for honey promotion. I think we can elaborate and agree on a future working model” – Levan Davitashvili, the Minister of Environment Protection and Agriculture of Georgia.
“Access to affordable laboratory services will not only decrease prime cost of honey, but will ensure quality honey to be sold at local and international markets” – stated Mikheil Tetruashvili, the GBU board member.
The Minster of Environment Protection and Agriculture of Georgia appointed a focal point in the Ministry to improve communication with beekeepers. The meeting participants agreed to continue work on the topic together with the MEPA and NFA.
The meeting was facilitated by the Swiss Agency for Development and Cooperation (SDC) project the Mercy Corps Georgia implemented the Alliances Caucasus Programme (ALCP).
Photo Source: The Ministry of Environment Protection and Agriculture of Georgia
