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.
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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 ‘Georgian Milk’ mark has been registered in the National Intellectual Property Centre of Georgia - Saqpatenti. The mark is now protected to avoid falsification and strengthen the ownership of Business Institute of Georgia, an independent body which will regularly audit dairies granted license to use the mark.
Eighteen dairy enterprises have already applied to use the mark.
The new ‘Georgian Milk’ mark will distinguish dairy products made from natural raw milk.
Information per enterprise will be published online on a www.georgianmilk.ge website which will come online at beginning of March. This will allow consumers to look up the products they are buying using a unique register number printed on the label.
A national promotion campaign conducted by GMA international marketing company to introduce the mark to the public and retailers will be rolled out from the end of next month.
A presentation of a new ‘Georgian Milk’ mark was held on the 22nd of January at Hotels & Preference Hualing Tbilisi.
Up to 150 dairy enterprises and representatives of supermarkets, agri markets, sectoral associations and Government Agencies participated in the meeting.
The new ‘Georgian Milk’mark will distinguish dairy products made from natural raw milk. The ‘Georgian Milk’ mark will be found only on dairy products produced from Georgian natural raw milk and which do not contain milk powder and/or any vegetable oils. The purpose of the mark is to promote products made from Georgian natural raw milk, which will help consumers make informed decisions while buying milk and other dairy products. A recent large national consumer survey by the Caucasus Research Resource Centre of urban consumers across Georgia showed that consumers want to be able to buy ‘ecologically clean’ dairy products, meaning clean milk that comes from healthy grass fed cattle and dairy products produced in clean regulated enterprises. The research found that the majority of consumers had difficulty in identifying or being able to buy such products as these products are currently undifferentiated in shops. The ‘Georgian Milk’ mark will therefore solve this problem.
The ALCP facilitated the Georgian Beekeepers Union to develop infographic regards Do’s and Don’ts of Antibiotic Use, providing guidelines for the beekeepers on proper usage of antibiotics and preventing honey and beeswax from contamination with the antibiotics. The full version of the infographic is available here.
On December 26th, the Journalism Resource Centre presented its second edition of the agri journalism module. About hundred guests from the government, business and academic sphere attended the event.
The Minister of Environmental Protection and Agriculture of Georgia, Levan Davitashvili stated: ‘I am very glad to hear about all the initiatives related to agri journalism. Education is very important in agriculture for ensuring information dissemination for farmers. The door of the Minister of Agriculture is open for you at any time and our partnership with regional media is very important.’
The agri module was created for inclusion in BA in journalism degrees. Now, ten universities across Georgia have the agri journalism module established in their curriculum, lasting one semester with a total of 15 credit hours. Four more universities are about to do the same this year. 369 students have undergone the course in Georgia to date. Now those initiatives are ready for transfer to Armenia and Azerbaijan.
During the event, the Journalism Resource Centre awarded farmers and specialists within the agricultural sector. The Best Female Farmer of the Year award was given to beekeeper Mariam Kiladze; the Best Vet of the Year was Giorgi Tcikhelashvili from Dmanisi, he is 25 years-old who graduated from the Vet Department at Agrarian University and went back to Dmanisi and is working as a vet. The Best Male Farmer award was given to shepherd Giorgi Imerlishvili. Credo and the EBRD were recognized as financial institutions that supports agriculture, and SDC Project Mercy Corps Alliances Caucasus Programme for supporting agri media journalism.
At the end of the event, the Journalism Resource Centre announced the establishment of the Agro Guild, which unites journalists and media organizations, businesses, farmers, public officials, and universities and sets up annual or bi-annual advisory committees. The members of media associations and the JRC also announced that they are planning to establish an Agri TV program, the pilot of which will start in three months.
Follow this link for additional news regarding the event.
For the first time ever, twenty Jara producers have sold their entire crop of Jara to a commercial enterprise. Jara honey will soon be available in shops in Georgia.
See photos below.
The construction of a new Veterinary Surveillance Point has recently started in Bolnisi municipality. The works will be finished in December 2018. The point will be the six and final point in the Veterinary Surveillance network throughout the Animal Movement Route.
During five transhumance seasons in 2016-2018 total 1.4 million heads of sheep and cattle were treated against ecto-parasites free of charge at all operational Veterinary Surveillance Points in Rustavi, Marneuli, Signagi, Dedoplistskaro and Kvareli municipalities.
