iPods in the Caucasus: Indexing or Pricing?

Half-serious, half-joking, the Economist put forward the Big Mac Index as a comparative tool to measure purchasing power and currency valuation. The idea was that McDonald's, wherever it is, has standardized procedures for doing identical Big Macs -- consequently price differences should be fairly indicative of discrepancies in purchasing power. An overview of the idea is here (somewhat ungenerously, the Economist makes its Burgernomics available only to subscribers).

Recently an Australian bank suggested a similar comparison of iPods. Arguably this is more of an indicator for smart predatory pricing, since iPods sell for much more than their production costs. So what does this mean for our region of the world? You probably would expect sales price in the South Caucasus to be fairly homogenous.

Well, it isn't. Taking the 2 GB Nano iPod for comparison, the newly opened Apple shop in Yerevan asks its customers for a cool 288 US dollars. In Tbilisi, the same iPod will set you back 224 US dollars, whereas in Baku, the Apple website lists its price as 199 US dollars.

Various explanations are being offered. Azerbaijan may have a larger local customer base, allowing them to charge less for the individual item. Armenia may have higher transport costs, or simply a dealer that can keep a very straight face. It is also possible that many Armenian customers actually shop abroad, and those that are left locally are prepared to pay the premium. Internationally, the Caucasus stretches across the higher medium-range. In Brazil the same iPod Nano costs a whopping 327 US dollars, in the US a mere 149. Azerbaijan is somewhere close to the UK, Ireland, Finland. Details, with some discussion, here.

Further hypotheses welcome. Thanks to JonathanK for pointing out the topic, and our CRRC staff for instant research. A comparison of the Big Mac Index in the Caucasus to follow.

Child Poverty in Armenia

Gohar Jerbashian conducted a detailed, multi-dimensional analysis of child poverty in Armenia. She analyzed the data available from the CRRC 2004 Data Initiative and from the Family Poverty Benefit (FPB) databases and conducted a content analysis of other sources. By exploring various types of socially vulnerable families (for example, those who lost their income earners, experienced hardships because of the inadequacy of survivors’ pensions, or had two or more children under the age of 14) she found that neither survivors’ pensions nor FPB provided needy children with adequate financial resources to enable them to sustain decent living standards and acquire skills and knowledge to lift them out of poverty and take part fully in Armenian society.

As a result of her research, Jerbashian provided a set of policy recommendations to combat child poverty in Armenia, the most important of which included covering poor children with quality state-funded early childhood development programs, increasing the level of single parent employment, increasing the minimum wage, introducing tax credits for families with children, revising school programs and increasing childhood health care.

Jerbashian’s paper, in English, can be found here.

The Life of Conscripts in the Georgian Army

Rusudan Nadiradze analyzed problems of Georgian conscripts doing their compulsory military service. Throughout 2005, she conducted interviews with 57 soldiers of 4 military units in different regions of Georgia, and with 4 experts. While reform is in progress, the situation in military units changes daily. Therefore, social and living conditions vary.

The study shows a considerable difference between conditions in small versus big military units. Barracks of small military units are better equipped and there is enough space for the soldiers. In smaller units, the food is healthier, and more is available, too. Hygiene and clothing provision, however, tend to be problematic for both types of military units. The research also indicates that in smaller military units the relationship within and between ranks is better. In these smaller units, comradeship is easier to establish, therefore deeper conflicts are very rare, and this makes it easier for conscripts. On the whole, servicemen in small military units tend to be more satisfied with their work than soldiers in bigger military contingents.

Some of the respondents think that harsh conditions are an indispensable part of military life. Overcoming hardship is often associated with strength and bravery. During the interviews, soldiers also talked about reasons of desertion (unfortunately no quantitative data on desertion available). According to the soldiers, the main causes of desertion are the harsh social and living conditions, but in most of the cases these are additional personal conflicts. Most of the respondents are not aware about their rights; none of them have ever contacted any institution regarding their rights, because there is no real precedent or practice of exercising one's rights in this way.

The experts that Nadiradze interviewed think that a lot needs to be done to transform Georgian soldiers into a professional army: officers need to be trained to understand human rights; there should be more public control over the army; to establish army discipline, relevant principles and regulations should be developed; the government has to clamp down on all violations; all procedures need to be fully legalized and codified, and, as Nadiradze says “unlawful relations must be prevented”.

Since army reform is a priority for the Georgian government (and vital for moving closer to NATO), this bottom-up view of the conditions adds a valuable perspective. It would be interesting, furthermore, to study the socialization processes in the smaller units, and how they draw on established Georgian socialization practices.

Georgian language reports available on our website.

Facets of Women's Unemployment in Armenia

What kind of differences are there in the way men and women approach unemployment in Armenia?

Anahit Mkrtchyan’s main explanation for Armenian women’s high unemployment rate and political inactivity is the fact that women’s behavior is directed towards survival instead of development and self-expression in the public sphere.

Furthermore, Mkrtchyan found that a very small share of unemployed women applied for state or private employment agencies in Armenia (11% and 3.2% respectively). Mkrtchyan explained the latter as a result of the fact that a) Armenian women want to avoid having the stigma associated with the unemployed; b) they avoid boring bureaucratic procedures, c) “good” jobs are not publicly announced (the information is disseminated mainly through a network of friends/relatives).

The scholar published a paper and recommendations, both in Armenian.

Baku, Yerevan and Tbilisi: Similarities and Differences

The term metropolis has gained increased intellectual backing in recent years. Indeed, several social researchers have postulated that, due to the dyanism of large cities, cities will continue to look more theoretically similar to each other. A postulate of this theory is that urban and rural communities within the same countries will continue to diverge in terms of behavior on a wide range of issues. Samvel Manukyan's research locates itself within this debate and begins to develop some indicators for comparing urban development across the South Caucasus. The scholar conducted a cross-country analysis of the sociopolitical processes in the capital cities of Baku, Yerevan and Tbilisi.

By analyzing the regional CRRC Data Initiative (DI) 2004 database, Manukyan constructed several typologies of SC capitals’ societies and used mathematical methods to explain the socioeconomic, political, demographic and cultural trends in the region. For instance, he introduced the term “traditionality index,” which is a function of various elements of social behavior. Among other results, he found that men and women in Tbilisi had the most liberal behavior, followed by Yerevan; and that people were most conservative (traditional) in Baku. Overall, Manukyan found that the post-Soviet transition has led to the reconstruction of national self-identification across the South Caucasus capitals. In his 150-page report the researcher developed tools (indices) to measure how the three South Caucasus capitals follow specific patterns in terms of freedom of behavior, as well as the level of tolerance both within and across societies. In his research, the fellow cooperated with Irakli Sakandelidze from Georgia and Inshallah Gafarov from Azerbaijan.

Not surprisingly, the research shows that the South Caucasus cities may not have many of the characteristics of metropolises. However, the research creates a framework to investigate the continuing transitions on the capital cities of Baku, Tbilisi and Yerevan.

Manukyan's report, in Armenian, is available here.

Recidivism and Reintegration in the Georgian Penitentiary System: Research and Prospects

Many organizations such as Human Rights Watch have decried the state of Georgian prisons, but very little research has been done into either recidivism or methods of reintegration in Georgia.

According to interviews done by the CRRC fellow, Eka Kavtiashvili, in Georgia, 90% of prisoners are unemployed when they enter prison and do not have any professional qualifications and, therefore, most probably will remain unemployed, even after they are released from jail. Furthermore, medical assistance is extremely limited and sanitary conditions do not meet basic health standards.

Unfortunately, there is no organization in Georgia that helps released prisoners to reintegrate into the workforce. Moreover, regardless of the fact that only 9.7% of prisoners have obtained a tertiary degree and only 48% a secondary degree the prisoners, even the ones who are under age, cannot receive any education while in prison.

Unfortunately, the researcher was not able to obtain statistical data showing the rate of recidivism. However, according to those familiar with the penitentiary system, the percentage of such prisoners is very high. Due to the fact that reintegration programs do not exist in Georgia, most of those released from jails cannot find work and cannot reintegrate into mainstream society and, therefore, commit a crime again.

The fellow stresses the need to create reintegration programs for prisoners in Georgia, however, she suggests that a necessary precursor to such programs involves improving living conditions in prisons, creating employment as well as educational programs within the prisons, and increasing and improving access to medical care. Kavtiashvili also emphasizes the necessity of involving psychologists and social workers in counseling prisoners.

For more information about the Georgian penitentiary system you can get in touch with the fellow directly.