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!
Georgian Honey under Nena brand has successfully entered the Hong Kong market with a repeat order received soon after the first one. Hong Kong is the new market for Nena honey following USA, Canada, Japan and UAE.
Three Georgian honey producers received Silver Quality Award in the quality category at the London International Honey Awards. These companies were supported by the Embassy of Georgia to the UK and the Georgian Beekeepers Union (GBU) to participate in this prestigious competition in London for the first time among 290 honeys from 20 countries.
The purpose of the LONDON HONEY AWARDScompetitions is to inform honey-growers, honey producers, beekeepers, processors, and retailers, who distribute their standardized products legally, to preserve and to ameliorate the quality of their branded product by promoting high-quality honey products in every aspect of the spectrum of its use and consumption.
The awarded Georgian honey producers are Nena Chestnut Honey / KTW, Nena Jara Bio Honey / KTW, Ninotsminda Honey (Alpine) / Cooperative KODY and Chestnut Honey / Rukhi Queen
You can see here the post of the embassy on Facebook.
On May 27th-28th, more than two thousand beekeepers in all regions of Georgia attended a training on bee treatment practices as a response to the massive bee colonies collapse this year. The Georgian Beekeepers Union (GBU) initiated and advocated the first nationwide trainings with the Rural Development Agency (RDA) based on the online research data gathered. The GBU developed a trainer’s handbook and Varroa Treatment guideline, which was translated and available for Azerbaijani and Armenian beekeepers; and delivered a Training of Trainers for eighty-five beekeepers.
‘Beekeepers received important information about new methodology how to treat Varroa. This was the first training organized in coordination with the GBU, which is the main actor in the beekeeping sector and our collaboration will continue.’ – Lasha Shalamberidze, the Head of the Regional Relations Department at the RDA.
‘I think, a key outcome of these trainings is that our Union expanded its team across Georgia. We now have the representatives in each municipality and we will continue teaching and delivering important information to the beekeepers.’ – Aleko Papava, the Head of the GBU.
A seventh Veterinary Surveillance Point (VSP) of the National Food Agency (NFA) opened recently in Dusheti municipality to serve nomadic farmers migrating on the north part of the Animal Movement Route of Georgia. This is the first and the only VSP in Mtskheta-Mtianeti region, where disinfection of sheep and cattle against ecto-parasites is provided by the State. Up to 100,000 head of sheep will be dipped there during every transhumance season, free of charge.
The point was constructed by the NFA following the petition of shepherds from the region at the ALCP’s 11th Advisory Committee meeting and was approved by the Minister of Environmental Protection & Agriculture – Levan Davitashvili in March 2019, based on the positive benefits of the existing points.
In 2015 the VSP model was created by the ALCP commissioned British livestock expert Edward Hamer and an MOU was signed between the Ministry of Agriculture, the NFA and the ALCP to construct six VSPs, two of them were financed by the programme and four by the State. In 2016-2018 all six points were finalized and opened. This year additional water points were also opened on the route. The VSP’s record and monitor the nomadic sheep and cattle population and underpin Georgia’s credibility in livestock export markets.
As Dick Whittington found out the London streets are not literally paved with gold. However four Georgian honey companies are participating in a celebration of the liquid kind. The London International Honey Awards held from May 30-31st, have two main award categories: quality and design, and feature honeys from all over the world, from Canada to the Mediterranean to New Zealand and everything in between. Competition is fierce. The four Georgian honey companies, Nena, Rukhi Queen, Honey and Irinola Company and Cooperative Kodi, were supported to participate by the Embassy of Georgia to the UK and the Georgian Beekeepers Union (GBU).
On May 18th-19th, twelve VET college representatives from seven regions of Georgia attended a Training of Trainers in Jara Honey Production hosted by the Georgian Beekeepers Union (GBU) and the Jara Beekeepers Association (JBA) in Keda, Medzibna Village.
The trainees learnt how to teach beekeeping students Jara honey production and how to obtain Bio certification. They also visited a Bio certified Jara apiary and the Agro-Keda factory to see the process of Jara honey processing and packaging.
Akhali Talga VET College in Kobuleti and Khulo, who have already integrated the Jara teaching materials into their one-year beekeeping programme since October 2020, also shared their experience of including and teaching Jara production.
‘I am happy to attend this training, as I learned a lot. I am ready to teach Jara beekeeping to my students, because it will make our beekeeping programme even more interesting.’ – Ilia Khazarishvili, a lecturer at the Public College Aisi, Kakheti.
‘I am glad that all of the colleges now acknowledge that Jara teaching is an essential part of Georgian beekeeping programmes. During these two days they heard about a wide range of Jara topics, for example, Bio certification, which was impressive for them. Now they are convinced that Jara teaching has a future and this will help them to attract more students to beekeeping. They also saw the demand from businesses after visiting two Jara honey processing entities.’ - Aleko Papava, the Head of the GBU.
The National Center for Educational Quality Enhancement and sectoral skills organization Agro Duo are supporting Jara teaching integration in the VET colleges.
On June 1st, the GBU is organizing an online event Highlights So Far: Jara in VET, which is bringing together VET colleges, specialists, agro journalists, donors, and public officials to further promote Jara teaching in VET colleges and share reflections on the training.
