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!
A German beekeeping magazine Deutsches Bienen-Journal with circulation of 52,000 copies a month published a comprehensive article on beekeeping in Georgia and its history, local bee breed Mountain Grey Caucasian Honey Bee (Apis mellifera caucasica) and Jara honey a special mention of the project’s work.
The International Labor Organization’s (ILO) Better Cheese, better work: The Alliances Caucasus Programme’s Impact on Informality and Working Conditions in Georgia’s Dairy Sector which explores formalization within the dairy value chain in Georgia stemming from ALCP market systems interventions, is now available on the ALCP website.
The ILO and ALCP worked together from summer 2019 to bring this research to completion. There are several reasons for the timeliness and importance of this report; chief amongst them is the ever present need for lessons learnt from MSD programmes, which can be applied in others, secondly the need to demonstrate the efficacy of the approach with a detailed account of systemic change and thirdly the growing importance in development programming of evaluating the efficacy of the MSD approach to develop quality employment at scale.
From the beginning of June, the two most popular national TV stations Imedi TV and TV Pirveli have been broadcasting the Georgian Milk Mark (GMM) animation video five times a day during prime time for free as a part of social advertising. Those televisions have national coverage reaching a high number of consumers.
There are now ten GMM dairy enterprises’ products available in fifteen supermarket chains across Georgia. Detailed information to be found on www.georgianmilk.ge.
On the May 20th, 4,400 beekeepers registered in the new GBU database received an SMS notification from the Georgian Beekeepers Union (GBU) on how to treat Varroa, the most common bee disease in Georgia.
The GBU will continue informing its members through phone Facebook. And their new official webpage is now online: www.geobeekeepers.ge.
Created in 2018, the GBU is an umbrella association uniting ten beekeeping associations and three commercial beekeeping companies.
The Georgian Beekeepers Union (GBU) successfully advocated for permits to be issued for beekeepers allowing them to continue work during the curfew.
The Government of Georgia declared the nationwide curfew on March 30th, 2020 to restrict the spread of the COVID-19 virus, prohibiting any movement from 9:00 PM to 06:00 AM. This posed a serious problem for beekeepers who rely on transhumance predominantly at night.
In Georgia, bee transhumance allows for beekeepers to place hives at different altitudes to capture the flowering of different plants. Starting from late Spring, Georgian beekeepers start to move apiaries to get different types of honey including Acacia,Chestnut, Alpine, Linden. The transhumance of bees significantly increases their honey productivity.
On April 4th, the GBU sent an official letter to the Ministry of Environmental Protection and Agriculture of Georgia (MEPA) asking for the issuing of permission/passes for beekeepers including the guidance it developed for beekeepers during the Covid-19 outbreak.
‘We asked the Minister to mediate with the appropriate agencies to issue special permits, so that beekeepers may access their apiaries and work there, transport beekeeping apiaries for transhumance on pre-determined routes within the curfew conditions.’ – Avksenti Papava, the Director of the GBU.
Up to eight hundred beekeepers have already used permits, who are now able to visit apiaries and carry out vital seasonal treatment and maintenance. Bees are transported at night where possible, because they do not leave a hive during night, which the permit makes possible.
‘I have my apiaries located in the different regions for getting various types of honey. I was very happy to hear about special permit for beekeepers, as it is very active season in beekeeping. I am able to freely move to the locations and do not worry about time limitations’ – Kakhaber Zirakasvili, a beekeeper.
Guidance and contact information on getting permits and the Covid-19 recommendations have been shared by the GBU on its facebook page.
The Georgian Beekeepers Union (www.geobeekeepers.ge) is an umbrella association uniting ten beekeeping associations and three commercial beekeeping companies with more than four thousand Georgian beekeepers. It was established to represent their interests and to promote the health and development of the honey sector in Georgia with the facilitation of the Swiss Agency for Development and Cooperation (SDC) project the Mercy Corps Georgia implemented Alliances Caucasus Programme (ALCP).
In the midst of anxiety under the COVID-19, some people rise to the occasion when faced with adversity and it is uplifting to hear stories about them. As for many others it has been difficult times for the client businesses of the programme, but they have continued to help people most affected by the current crisis over the past two weeks.
Ten dairy enterprises with the Georgian Milk Mark www.georgianmilk.ge provided cheese for the medical staff of hospitals in the frontline of battling the virus as well as people under quarantine and locals in the lockdown areas in the different regions of Georgia, who have limited access to the markets.
‘It is now important to show support to each other. I was very happy to see reactions from people, who were very surprised and thankful. I think those GMM enterprises set very good example for others.’ – A GMM cheese distributor.
The Georgian Beekeepers Union (www.geobeekeepers.ge), uniting ten beekeeping associations and three commercial beekeeping companies supplied 1.2 tonnes of honey for further distribution among medical staff and vulnerable groups.
The Kakhetian Traditional Winemaking group’s (programme facilitated honey aggregator and exporter company) forty-one rooms hotel-complex is being used as a quarantine zone, the company also supplied food to locals over seventy in two regions of Georgia within a social project ‘Care for Each Other’ initiated after the virus outbreak and is now offering online sales and a free home delivery of its products (wine, compotes, jams, including, honey); the company’s webpage Old Kakheti went online to improve online sales.
These are a few examples and continuation of the kindness acts that started a month ago.
