Economic Liberty as a Response to Georgia's Social Problems

Murtaz Kvirkvaia, a CRRC fellow, investigated a range of social problems in Georgia. According to his findings, 55% of the population lives on the brink of poverty and 9.6% of the population is extremely poor. By Kvirkvaia’s estimations, the unemployment rate is 3.5 times higher than the official data claim and a third of economically active citizens are jobless.

However, the most vulnerable of groups, the fellow argues, are pensioners. The analysis showed that the pension system is founded on an intergenerational contract, where today’s pensions are being paid by future generations, which makes pensioners’ social problems impossible to resolve.

Based on his research, the fellow put forth a framework to resolve Georgia’s social problems. He argues that the state cannot play the leading role in resolving social problems for the majority of the population, like it used to do during the Soviet era. Accordingly, Kvirkvaia considers economic liberty as the main factor in economic growth and the best solution to social problems. Economic liberty would enable the government to liberate itself from the necessity of solving economic and social problems that should not fall within its purview. For instance, the fellow argues that a system based on an intergenerational contract, which underlies what is known as the “Bismarck model” for pension systems, is effective only in cases where the number of employed people is four times larger than the number of pensioners; this is clearly not the case in Georgia, which must develop a pension system that is more reliant on the market.

If you are interested in research about economic liberty in Georgia, you can get in touch with the scholar directly.

Methods of Political Corruption in Armenia

Part of the problem in coping with corruption is actually identifying the methods that corrupt officials use to besmirch their office. These techniques often vary from country to country and prove difficult for non-locals to fully understand.

To help clarify methods of corruption in Armenia, Masis Poghoyan analyzed the undemocratic techniques used during political elections and developed recommendations to promote free and transparent political campaigns and democratic elections in the country. He conducted this research using qualitative methods including expert interviews and focus groups.

From his research, Poghoyan developed a typology of the undemocratic methods used in Armenia, which included categories such as “usage of resources available to the candidates occupying administrative posts,” “application of pressure on voters,” “buying/bribing of voters,” “manipulation of public opinion” and “falsification of election results.” He gave a detailed explanation of each undemocratic technique and its subtypes and showed that these techniques were often combined.

Based on his typology, Poghoyan developed a set of recommendations for combating fraudulent election processes, which include the implementation of legislative reforms, public information campaigns, the provision of consultation/training to voters, and the improvement of the election commissions. The researcher's paper is available from the CRRC-Armenia Web site, however, we also encourage you to get in touch with the scholar directly. His email address is also available on the CRRC-Armenia Web site.

Cows in the Caucasus: overgrazing, underfed

How do we get a measure on what's happening with agriculture? It turns out that dairy farming provides powerful indicators. According to an IFC expert, the average Georgian cow yields 1000 liters of milk per year. By comparison, a wholesome Swedish cow can provide up to 9000 liters.

Intensive Western farming practices may not be a desirable model -- they require investment, expertise, and bring their own perverse results. Nor can practices be transplanted: under current circumstances, the expert said, a Holsten cow in Georgia simply would not survive.

But the status quo is not sustainable either. There are an estimated 700.000 cows in Georgia, severely overgrazing the pastures (together with the sheep, and overall numbers are growing). It is a classic example of the tragedy of the commons: a free resource for which there is unlimited appetite eventually gets exploited beyond carrying capacity. In the Caucasus overgrazing leads to desertification and erosion, while also destroying the habitat of other species.

If properly fed and kept, the average Georgian cow could provide 4000 liters. What is missing? Expertise is in short supply, and so much farming is subsistence-based that it is difficult to introduce better practices. Cows themselves count as capital, so farmers don't think much about increasing the productivity of individual cows, but rather want to have more of them. Larger dairy farms are very rare. Nor are the cows bred systematically. Investment would be required, but there is little capital. One of the problems is also that milk powder, subsidized by the European Union, apparently is smuggled in from Russia and makes dairy farming uncompetitive (many locally-made milk products actually are made from EU milk powder, rather than from local milk).

Land reform may be one solution, but there is little political appetite for it. In the meantime, various organizations are working with farmers to bring more expertise. Fortunately, it is easy to demonstrate the impact of better practices, so some farmers are catching on.

Households and Their Economic Condition

Ekaterine Pirtskhalava analyzed the incomes and perceptions of poverty and wealth in the three South Caucasus countries, based on the 2004 CRRC Data Initiative data. At the same time, she studied similarities and differences in the profile of poverty and reasons leading to it across the three countries.

The survey data elucidate the difficult economic conditions in which citizens of the three countries live. Those families that perceive themselves to be poor or extremely poor families compose the largest percentage of respondents in Georgia (48.7%), and a slightly smaller percentage (46.2%) in Armenia. The situation is much better in Azerbaijan, where only 37.9% consider their families poor and improvements over the past three years were noted by one third of respondents. The perception that the economic situation was worsening was more prevalent among Armenian households (26.2%) compared to Azerbaijani (13.9%) and Georgian households (3.6%). Georgian respondents were, by far, the most optimistic about their future. The study showed that 79.4% of Georgian respondents believed that their economic situation would improve. This may be partially attributed to the drastic political change of November, 2003.

Gender also clearly plays a role in the economic well-being of families. Of female-headed households, 54.4% (compared to 41.0% of male-headed households) described their households as poor. The average income of male-headed households was substantially higher at 167.8 dollars compared to female-headed households where the average income was only 115.5 dollars. Female-headed families were not only poorer than male-headed households, but they more often perceive their economic status as having worsened. According to the findings, 37.8% of female-headed households compared to 31.8% of male-headed ones pointed to the worsening of their economic condition during past three years. This research raises important questions about how to help single women raising children in the South Caucasus.

Minority Youth in Georgia

Nino Japaridze analyzed what is needed to integrate Azeri and Armenian youths into Georgian public life.

What are some of their main grievances? The focus groups (ethnic minorities and Georgians) in Tbilisi, Marneuli, Bolnisi and Akhaltsikhe showed that education is a major problem. Minorities don’t know Georgian, and therefore said that they were not able to participate in the national university entrance exams. As a consequence, they were not happy about the educational reform.

What else? Youths say they need employment. They also want places for entertainment, a space that is for them to socialize. Drug addiction was mentioned as a big problem.

Japaridze's recommendations are not new, but almost by default one sounds like a broken record when talking about minority integration:

1. give minority groups the feeling that grievances are being heard and addressed;
2. offer Georgian language classes;
3. provide training courses on rights, so that citizens know and can exercise their rights;
4. start regional healthcare reform;
5. facilitate investment, to reduce unemployment.

Additionally, Japaridze used the CRRC Data Initiative 2004 to analyze the attitude of South Caucasians toward certain groups of people (homosexuals, drug addicts, alcoholics, those with HIV, and people having tuberculosis). According to the data, Georgians are most tolerant, with Armenians second, followed by Azerbaijanis. Most respondents prefer marriage with the same nationalities, but regarding friendship a third of the respondents express no national preferences.

Details on our website.

OSCE on Islamic and Ethnic Identities

The OSCE has recently released a new discussion paper entitled, "Islamic and Ethnic Identities in Azerbaijan: Emerging Trends and Tensions"(in PDF format).

In the paper, Hema Kotecha, aims to analyze sources of instability in Azerbaijan emanating from Islamic and ethnic groups. Overall, the report provides a decent overview of many of the main ethnic and Islamic identities now prevalent in Azerbaijan and gives some description of how they interact with the Azerbaijani state; the report does better with the ethnic identities than it does with the religious ones. However, the report aptly notes the difficult of disentangling these various identities and the author often struggles to succinctly summarize the relationships between the various groups.

The report also gives some interesting statistics. For instance, the author notes that in one survey, "83% of respondents considered the religious affiliation of a marriage partner to be important. Yet the total number of respondents who identified themselves as 'religious' (dine inananlar) and 'devout' (dindarlar) is lower, 78.3%, indicating that those who are simply 'respectful towards religion,' 'atheist,' or neither, religious identity is an important factor" (Kotecha 2007: 3). But the scholar fails to meet basic academic standards of documentation by not naming the survey from which these statistics came from or what kind of sample was involved when these data were collected.

Indeed, the report highlights the continued role of anecdotal evidence in research in Azerbaijan and raises the need for more comprehensive survey data. The paper also raises the problem of of interviewing local elites and claiming they represent the population as a whole. Local elites in places like Zaqatala or Khachmaz are certainly not the Baku intelligentsia, however, they may not represent people who do not take part at all in local politics or civil society.

The problems in both interviewing and quantitative data collection show the need of having researchers who invest in the long term. Most of the religious developments in Azerbaijan will not easily be understood by people who have not invested considerable time and resources--often years--and this kind of investment is rarely undertaken by outside consultants.