Monday, September 29, 2008

Vouchers for Childbirth | A Field Study

CRRC fellow Simon Gabrichidze and his research partner Tamar Trapaidze evaluated the implementation of a newly launched State Assistance Program (SAP) by the Ministry of Labor, Health and Social Affairs aimed at providing better health services for people living under the poverty line in the Samegrelo and Adjara regions.

The fellow conducted focus groups with stakeholders and structured interviews with 320 mothers living in the abovementioned regions who gave birth in Zugdidi and Batumi between June and September of 2007. Gabrichidze compared three female target groups, those who:
  1. Were in the database of people living under poverty line;
  2. Were not in the database but applied for a "voucher" that covers delivery expenses;
  3. Did not apply for any assistance from the state and paid all the expenses related to child delivery themselves.

According to the findings, the general population is aware of the health benefits envisages by SAP, however, the level of awareness is rather low: only 57% of patients in Batumi and 60% in Zugdidi knew that a voucher for free medical service fully covers all the expenses related to child delivery; the rest of the respondents thought that the voucher only partially covers costs.

The main reasons for mothers not using the State Assistance were the regulations of the program. The study showed that trust in health care professionals was the lowest in this last group, those that paid all for themselves. So that people (curiously even those in need of the social assistance program) preferred to pay money for child birth, rather than visit doctors and health care service provides unknown to them. The respondents from the first group were most satisfied with medical service, while the ones from the second and third groups were more dissatisfied with out of pocket payment and financial affordability of the program.

According to doctors and social agents, very often comparatively rich pregnant women request voucher from the State; as the fellow recommends, the government should introduce more strict criteria for identifying beneficiaries of this group (or completely abolish it) and direct funds to the people that really need such assistance.

Here is the PowerPoint (although, note, this was for a verbal presentation, not specifically for the web). 

The full report is also available on the CRRC-Georgia website.

Friday, September 26, 2008

Russian Public Opinion | Levada Update

And here is an update on Russian views, made available by the Levada Center on the 22nd of September. As previously stated, this indicates that Russian public opinion generally supports the government's course.

In September 12-15, 2008, the Analytical Center of Yuri Levada conducted a poll among 1600 Russian respondents in 128 settlements of 46 regions. Margin of error is ± 3%.

When we talk about Abkhazia and South Ossetia – in your opinion, is the situation intensifying, staying tense, or tension is decreasing and life becomes more peaceful?

Situation is intensifying      6
Situation is staying tense 57
Tension is decreasing and life becomes more peaceful 30
Hard to answer     7

In your opinion, should Russia keep its military forces in South Ossetia or should they withdraw their forces?

Keep its military forces in South Ossetia 56
Withdraw its military forces from South Ossetia 27
Hard to answer 17

In your opinion, Russia’s recognition of independence of Abkhazia and South Ossetia will benefit Russia, will harm Russia, or will neither benefit nor harm Russia?

Benefit 40
Harm 15
Neither benefit nor harm  28
Hard to answer 18

What do you think about annexation of South Ossetia and Abkhazia into the Russian Federation?

This should be done as soon as possible 20
Probably this should be done, but later, when the tense will go away 26
This decision should be well thought, is it worth doing it or not 25
This should not be done 12
Hard to answer 18

What do you think of inclusion of South Ossetia and Abkhazia into the Union of Russia and Belarus?

This should be done as soon as possible 20
Probably this should be done, but later, when the tense will go away 20
This decision should be well thought, is it worth doing it or 24
This should not be done 14
Hard to answer 22


Now what would be interesting to test is how much average Russians actually know about the conflict. As has been reported somewhere (unfortunately we lost trace of the exact source), Russians typically overestimate the number of Georgians, Ossetians and Abkhaz. (One Moscow-based friend believed that Abkhaz and Ossetians together numbered 2 million, when the real combined number is unlikely to be beyond 300.000.)

So: what do Russians otherwise know? Do they believe that there were mass killings of Ossetians? Are they aware that there were several Georgian peace initiatives? Do they know that Georgia has experienced significant progress since 2004? It would be interesting to find that out.

Wednesday, September 24, 2008

Baku's Urban Change | Commentary and Photography

Interested in urban development? Want to know how outsiders describe the urban experience of Baku? Two young researchers from Germany have set up a blog to follow their project in tracking changes in Baku. Oriana Kraemer and Sebastian Burger take photographs, attend lectures, and comment on what they observe. Given the inflow of sudden wealth, Baku witnesses comprehensive change. A great project, therefore. 

In photos and blog entries they chart the rhythm of the city, how old buildings yield to new ambition, the beautification of façades, and their own encounters. They bring a particularly good eye, and the slideshows add context with the subtitles (see below).

Among other things, the researchers also summarize a recent lecture by Anar Valiyev at CRRC Baku, who compared differences between urban development in Azerbaijan and America. It's a short post, but it's a good entry towards exploring their blog, and the fascinating issue of urban development in Baku.

Tuesday, September 23, 2008

Central Eurasian Studies Society (CESS) 2008 Conference

As last year, we again went to the annual conference of the Central Eurasian Studies Society (CESS). This year, it was held at Georgetown University. CESS conference focuses on issues that pertain to Central Eurasia (from the Kurds to the Mongols). What makes this conference attractive, then, is its geographical focus, and that it brings scholars together from a broad array of disciplines: demographers, sociologists, political scientists, ethnographers, linguists, historians, as well as a scattering of other niche groups.

The Caucasus usually has a slightly tenuous position within this conception of Eurasia, perched almost out of sight. This year, because of current events, it had more prominence (although the grand hall seen in the image below was only used for the keynote address on Afghanistan, otherwise we were in fairly grotty underground rooms).

One paper by Reid Hamel, a Ph.D. student in Demography at UC Berkeley and our former Summer Fellow, was based on CRRC data. Separately, we presented results from various opinion surveys at a Georgia-focused roundtable (with Julie George, Stephen Jones, Svante Cornell).

Striking, in many of the debates on ongoing issues, how, as one prominent Caucasus scholar put it, everyone is "so eager to confess others' sins". Indeed, one of the main impediments to scholarly debate was the repeated intrusion of standpoint statements ("what you said is an insult to all the victims..."), and the search for moral acclamation.

An urgent need, then, to move beyond the exchange of accusations, and for all sides to examine how they contributed to current events, and what they will need to do better. As Percy Cradock, a former British diplomat once put it: it's never the other side you have to worry about, it's your own. That change of approach would go some way towards the statesmanship that the Caucasus now needs: recognizing your own limitations and from such a precise understanding, forge new possibilities. Unrealistic ambitions can hold you hostage, sometimes more than an external power.

But in between, constructive debates, a variety of viewpoints, and a very rich list of topics. If you want to see who is working on what types of issues, take a look at the conference program. Kevin Tuite, Paul Crego, Julie George, Babken Babajanian and various other Caucasus scholars were present, and you may be interested in checking out what they are up to.

Wednesday, September 17, 2008

What do Russians think about the situation in Abkhazia and South Ossetia? -- Data Snapshot

How do urban Russians view the conflicts in South Ossetia and Abkhazia? From September, 5th-8th, 2008 the Analytical Center of Yuri Levada conducted a survey in ten big cities of the Russian Federation, interviewing 1000 Russian respondents. We have translated the results into English here, as they are only available in the original Russian on the Levada website.

Indeed, the results are slightly unintuitive and several different and overlapping interpretations could be kept in mind when reading the results.

  • The results demonstrate that Russians still hold a deeply imperial mentality, which rues the loss of influence over both territory and people, despite the fact they are not co-ethnics.
  • Respondents are afraid to share their opinion and are just towing the party line.
  • Media coverage has swayed the Russian population's view to be more in line with the government.

Without further adieu, the results:

The overwhelming majority of respondents (80%) said Russia’s recognition of Abkhazia and South Ossetia was the right decision, demonstrating their support of their government's decision -- unpopular in the West -- to recognize these territories.

When asked about timing, most thought it was either well-timed (34%) or overdue (30%) and only 4% thought is was incorrect. A further 8% believed that the territories should have been immediately absorbed into Russia.

On the question whether the Russian army should stay on the territory of South Ossetia, should Russia keep only its peacekeepers for separating conflicting parties, or should the Russian regular army withdraw and be completely replaced by an international peacekeeping force led by the UN and the EU, again the majority supported a Russian solution to the problem.

While the respondents answers to these questions apparently point towards support of maintaining Russia's sphere of influence and backing of the Russian government's positions, the majority of respondents do not appear to be comfortable creating ethnic homelands for either the Abkhaz or the Ossetians. Of respondents, 64% believe that Russia should support the return Georgian refugees (and ostensibly IDPs as well) to Abkhazia and South Ossetia and protect them from oppression from the Abkhaz and Ossetians, while only 25% do not. Logically, this also means that they would support Georgians becoming Abkhaz and Ossetian (and most likely also Russian) citizens.

Russian public opinion, then, on the issue of return will most likely signifigantly differ from the opinions Abkhaz and Ossetians living in the conflict regions, though measuring this would of course be fascinating (but currently undoable).

You can read more here (note that the survey is in Russian, for our English translation send us an email).

Of course, it would also be great to have data on Georgians’ attitude toward the August crisis.

Friday, September 12, 2008

Credit Crisis in the Caucasus?

Over the past year questionable lending practices by major banks and lack of consumer education about credit risk in the United States among “sub-prime” borrowers caused a credit crunch that in turn erupted into a major financial crisis that threatens to lead to a recession and an international economic downturn.

Although little attention is paid to the issue of credit and debt, analogous risky practices are taking place in the banking sectors of the countries of the South Caucasus. A similar financial crisis in these countries could have a far more devastating effect, since one of the population groups most exposed to consumer debt is the small but consolidating middle class in the urban centers. This issue becomes particularly important in the wake of the August war in Georgia, as the region attempts to maintain economic stability in the face of infrastructural damage and reduced foreign investment.

The emerging middle class has been both a cause and a result of high levels of growth in the economies of all three South Caucasus countries over the past several years, and the banking sectors in these countries has been an area of particularly high growth because of structural reforms, increasing government regulation, and high demand for investment capital.

Banks have become more eager than in the past to extend consumer credit, but for a number of reasons interests rates in the region are extremely high: because of perceived risk of investment in the region and the risk of devaluation of local currencies (the highest interest rates for deposits are for accounts held in local currencies), and because of physical shortages of currencies as governments reduce outputs to combat inflation. Rates for consumer loans in the region average 15-20 percent, which are significantly higher than the 7-9 percent rates for sub-prime mortgages that precipitated the crisis in the United States.

Banks in the region have also been eager to introduce credit card services, offering the convenience of credit lines to their clients for purchases along the model long familiar in developed countries, with no interest if payments are made on time, but stiff penalties for missed payments. Advertising for loans and credit cards are ubiquitous in the capital cities, and credit booths are common in computer and furniture stores.

Yet although micro-credit programs have been functioning in the region for a number of years, particularly in rural areas, the whole phenomenon of commercial consumer credit is largely a new concept for the urban middle class. New borrowers have neither credit histories upon which banks can determine levels of risk, nor experience or deep understanding of the potential hazards involved in taking loans.

According to data from the Caucasus Research Resource Centers’ Data Initiative Project, while the number of households in Azerbaijan, Armenia and Georgia that take loans overall is not large (and real mortgages are practically nonexistent), the number is substantial enough to merit concern: 4% in Azerbaijan, 15% in Armenia and 9% in Georgia. The majority of those loans are for more than 100 USD (78% in the case of Georgia), and in Armenia and Georgia more than half of those who use credit have taken two or more loans. And while a portion of these loans in all three countries are taken for essential expenses such as medical care, utilities or food (demonstrating extreme poverty), approximately half of loans in all three countries are taken for consumption, investment or business purposes, or to repay previous loans.

While many consumers in the region may be making careful strategic choices in using credit, it seems that a significant amount of loans are being used for highly speculative investments, such as in real estate or in businesses that have been profitable in the past but are now close to saturation (e.g. restaurants and cafes and importing automobiles). The real estate markets in particular seem to be highly inflated in the urban centers (again, fueled by speculative trading financed by very high interest loans) and the resulting bubble is likely to burst if perception of a slowdown or reversal in rates of price increases were to appear.

For their part, banks in the region seem to take little interest in the types of projects that loans are being requested to finance, have set only the most minimal requirements for the extension of loans and credit cards (usually a letter from an employer stating a minimal average salary is sufficient), and have taken little initiative in providing consumer education for their clients.

High interest loans and risky investment decisions thus create a very real possibility of overextension by clients of consumer credit who owe more money than they currently earn, which in turn presents a very serious risk of a financial crisis that could threaten to undermine the banking and real estate sectors, particularly given the shocks to the system that resulted from the Georgian-Russian war in August. Such a financial crisis would most likely have far more serious consequences for the fragile economies of the South Caucasus countries than in more developed countries. It would threaten most directly the nascent middle class, which is such an important constituency for the further development of stability, rule of law and democracy in the region, and could therefore have serious consequences as well for the political stability of the region. It is in the interests of both governments and commercial banks and loaning organizations in the region to forestall such a crisis by implementing more rigorous requirements before extending credit and devoting resources to consumer education.

Doing business in Azerbaijan: easy in theory

Results of the World Bank’s Doing Business 2009 project, claims to present "objective measures of business regulations and their enforcement across 181 economies and selected cities at the sub-national and regional level", were made public today.

According to the report, Azerbaijan made the biggest progress in reforming business regulations among all surveyed countries and rose from last year’s 96th place to the 33rd in 2008. Azerbaijan came ahead of most CIS countries, excluding Georgia with its 15th rank in the report.
The Bank ranks countries according to the following 10 sets of indicators: starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and closing a business.

Azerbaijan has improved its ranking in all of these indicators, with the exception of closing a business. The biggest positive changes were achieved in protecting investors, registering property, starting a business, and employing workers through several steps such as substantial amendments to the labor code simplifying hiring and dismissal, creation of a second commercial court in Baku, a new unified property registry, and a one-stop shop for company registration.

Local experts do not agree with the overly optimistic results of the report. Just yesterday the Entrepreneurship Development Foundation, a local NGO, presented results of a survey conducted among businessmen in Baku and regions in May-July 2008. According to the survey, that included 41 questions on entrepreneurship, about 52% of small entrepreneurs in Azerbaijan consider it impossible to conduct business without violating laws and regulations. Sabit Bagirov, the chairman of the Foundation, added that the fear of being persecuted led to a quite high non-response rate.

Another local economic expert, Gubad Ibadoglu, told Radio Liberty that since the World Bank partners mainly with the Government, the ranking resulted from long and intensive negotiations between the Government and the Bank officials.

The Doing Business methodology relies on surveys among “local experts, including lawyers, business consultants, accountants, freight forwarders, government officials and other professionals routinely administering or advising on legal and regulatory requirements”. As noted by a 2008 independent evaluation of the Doing Business project (available here) , the report is based on the assumption that improved regulatory environment leads to the improved firm performance and economic outcomes. It does not capture how the regulations are actually applied, or whether they work in the reality. Among other things, the evaluation recommended to expand the informant base and to make the selection of informants more transparent.

Beyond a doubt, the report succeeded in influencing policy makers and giving an impulse to a number of policy changes in Azerbaijan, but one must use caution when interpreting its rankings.

Tuesday, September 09, 2008

Surveying Corruption | Details Matter!

Corruption remains an endemic feature in the region, outside Georgia. No wonder, then, that it continues to receive considerable attention from organizations and donors. Currently, we are being asked to run a survey (we will publish details on that later). How do you do this? Not all of this research is intuitive. Here are a couple of examples of what can go wrong, taken from the draft questionnaire we were given.

One obvious way of getting at the issue is to measure experience, to ask whether people themselves have paid bribes in the last 12 months. Is that a good way of measuring levels of corruption? Well, there are limitations. One limitation is that you simply don't know how much people have actually interacted with institutions that may demand a bribe. If you don't have a car, if you don't need any official document, are not enrolled at a university, and don't visit a hospital you simply may not become a target. In fact, one likely result of corruption is that you minimize contacts with official institutions in order to reduce your exposure to corruption. So you definitely need to measure the extent of contact, in addition to asking people's experiences.

What actually is NOT a big problem is whether everyone will tell you the truth. The survey questionnaires typically are set up to get people talking, and ask the more sensitive questions half way through, so that the respondent already feels comfortable. Sure, quite a few people will still be reluctant to admit that they paid a bribe, so what you measure is only the number of respondents that tell you that they paid a bribe. But this in itself is valuable: the honesty typically stays pretty constant, making responses from 2007 well comparable with those from 2008.

But the questionnaire is also tricky in other ways. Let's say you want to get a sense of peoples attitudes towards paying a bribe. The following may strike you as a useful question, at face value.

But there is something wrong with asking this speculative question, since corruption is contextual. Let's look at three very different cases:

  1. You may be subsidizing an underpaid doctor so that she looks after your grandmother. Without these payments, the doctor couldn't survive. Would you refuse to pay the doctor? Probably not. Such private additional payments in exchange for a real service contrast sharply with the next case, which is...
  2. ...the public official who uses an artificially constructed bureaucratic hurdle to extract a bribe from you. Do you want to pay a bribe here? In this case, you begin to weigh short-term advantages against long-term effects.
  3. Next case: the civil servant who breaks the law and betrays public trust in return for payment. In this case, corruption could consist of granting exclusive monopolies, unwarranted certificates or permits, or desisting from prosecution when it is called for. Would you approve of paying here? Hopefully not.
Three very different cases, but all of these can be projected into the question above. The way to fix the question is to actually create various scenarios, to measure what people consider acceptable.

Note, also, that the responses are problematic. Yes, No, make sense. But how would we make the verbatim responses useful? This question needs to be closed, offering exhaustive options. After all, a survey is not a focus group.

Other useful features? Ask respondents whether they have relatives that work in the public sector, or for local police. Likely, this will have an impact on their views. Check whether they are on the Internet. Those that are again will have access to more information, be better informed, and likely that's a group that will look at things differently. English-speakers are different as well. Are respondents pro- or against the government? Do they have a car? Enriched in this way, this survey can yield powerful information. And, and, and...

Corruption remains important issue, but capturing what actually goes on is not entirely easy. We will keep you updated.

Friday, September 05, 2008

Georgia Post-Conflict Phone Survey | may be a first glance?

Georgian IPResearch (first time we heard of them, actually) conducted a phone poll between Aug.25 and Sept.2. 450 respondents were questioned countrywide. While we have our strong reservations about these telephone polls (they are biased towards people with phones, picking up calls from strangers, and bored enough to chat), they may serve as a preliminary indication. Here are the results:

1. Was the international community active in stopping the Russian aggression?

Yes 73.3%
No 24%
NA 2.7%

2. Which state was the most active in stopping Russian aggression?

USA 64,2%
France 20,9%
Poland 4,9%
Baltic states 2,2%
Germany 1,6%
UK 1,1%
Ukraine 0,7%
None 1,3%
NA 3,1%

3. Which organization was the most active in stopping Russian aggression?
EU 26,7%
UN 17,6%
NATO 14%
CoE 3%
OSCE 3.1%
All 5.1%
None 4.0%
NA 26.2%

4. Which is the most positive politician in stopping Russian aggression?
Nicolas Sarkozy 35.6%
George W. Bush 17.8%
Condy Rice 12.0%
Angela Merkel 7.8%
John McCain 5.6%
Lech Kaczynski 4.2%
Bernanrd Kouchner 3.3%
Mat Bryza 1.8%
David Miliband 1.6%
Barack Obama 0.9%
Other 2.8%
None 1.3%
NA 5.3%

5. Which is the most friendly country for Georgia?
USA 72.0%
France 42.9%
Ukraine 20.9%
Germany 13.6%
Poland 12.0%
Baltic states 11.6%
UK 7.8%
Turkey 2.2%
Israel 0.7%
Azerbaijan 0.4%
Other 0.6%
None 1.6%
NA 8.9%

(Respondents were asked to name max. 2 states, therefore the total number exceeds 100%)

6. Do you think that the Georgian government could have avoided Russian aggression?

Yes 42.4%
No 46.7%
NA 10.9%

7. Will Georgia receive NATO MAP in the near future?
Yes 80.9%
No 6.9%
NA 12.2%

Perhaps the most interesting part is that more than 40% of respondents think that the Georgian government could have avoided the confrontation. This means that the country might very well be split, with a lot of people thinking that what happened was a big mistake. But as mentioned, we cannot vouch for the quality of this survey.

It will be interesting to examine whether indeed so many people are critical, and who precisely they are. We are planning to conduct our own survey in the next few weeks. If you want to suggest questions that you think should be asked, let us know as soon as possible.

Monday, September 01, 2008

Housing IDPs | Lessons Learnt

In the current situation, one issue facing Georgia is what to do with and for the Internally Displaced People (IDPs) that are now coming from South Ossetia and the Kodori Gorge, in Upper Abkhazia. A friend with significant experience in development work posted a candid analysis in an e-mail group. We thought that the analysis is worth sharing since this issue affects the region.

So here is what he had to say:


"I was speaking about this issue with some Georgian friends just yesterday. They have been involved in IDP shelter work with people from Abkhazia since the mid-1990s. I've done a bit of work with those shelters myself, and would STRONGLY encourage anybody getting involved with shelter issues now to visit some of these old shelters if they have not already done so, and not just in Tbilisi. Some of the shelters I saw in Kutaisi and Samegrelo were horrific. Families have been vegetating in them for fifteen years now, with every politician promising them return next year.

In our discussion, we came up with two big lessons learnt:

1. LESSON ONE: Don't pretend it's temporary

Yes, thankfully, most new IDPs - especially from Gori town - will go home soon. However, many IDPs in Georgia will not. It's not going to happen. Live with it. They weren't ethnically cleansed (houses burnt etc) to pave the way for their return, and Georgia lost the war. The Palestinians aren't returning any time soon, either. No idea how many people this is - let's say Kodori and South Ossetia. [...] We're prob talking 20,000 people minimum.

We should seek to identify those IDPs who will probably not go home soon, and seek durable, humane living conditions for them. Most of Georgia's old IDP shelters are a patchwork of small interventions - an NGO puts in windows, a year later, another puts in floors, two years later there's a new door. Look for yourself - this approach leads to crap results, not only in human terms, but also in terms of value for money. (Repeat assessments are one example - IDPs from Abkhazia have told me how sick they are of assessments by now.)

The key point to remember is that there will be loads of money coming in soon. After that, funds will dry up. By 2006, there was hardly any funding to be had for shelter work. Let's spend it well NOW, while there is money to be spent.

The main prob is that the GoG will probably not look favourably on this approach. IDPs in misery desperate to go home bolster Georgia's claim to these territories. One way to get round this would be to point out that should the IDPs return, the municipalities would get buildings in good shape, ready for privatization or social housing needs. Be diplomatic.

Urban Institute's voucher project was good, but the Georgian housing market was a lot less elastic than they thought. Handing out vouchers to buy flats worth 5000 dollars each to a few hundred families sent housing prices rocketing in Kutaisi (it wasn't enough to money to buy in Tbilisi or Batumi). Vouchers are not feasible on a large scale.

Privatization doesn't solve anything either. One day, your family lives in a crap shelter. The next day, it lives in a crap shelter you own. Without money to renovate, it improves security of residence, but living conditions are exactly the same. How will 50 broke families ever be able to repair their communal roof?

The way I see it, the only humane option is to (1) do large-scale thorough rehabilitation of existing buildings, or (2) to build new housing from scratch (NRC has done the latter on a small scale). A nice side effect is that such large-scale, donor-funded construction efforts will generate a lot of employment in a sector that will be badly affected by the probable fall in investment after this war.

2. LESSON TWO: Don't dump IDPs in depressed or remote areas

Placing people in "no future zones" like the town of Vani, where there is zero employment even for locals, is a bad idea. Also, some shelters in Samegrelo are in the middle of nowhere. Those IDPs who cannot escape get stuck there with nothing to do except to cry, to drink, or to do both. Some have been doing just that for over a decade now. Think poverty trap, think psychosocial problems, think domestic abuse. Also, microcredit or employment generation will not work in the back of beyond.

Maybe they should all be housed in Tbilisi?


That's just my take, and that of some friends of mine. The history of sheltering IDPs from Abkhazia has created lots of "lessons learnt". Ask your more experienced Georgian colleagues and LNGO partners what they think, and please do visit a few shelters from the 1990s outside Tbilisi before you start knocking out funky proposals. Let's use the money that's gonna pour in now wisely, because we are not going to get a second shot at this.

I would be extremely grateful if we could hear the thoughts of more people on this."


This, then, the comment of said person (who works in this field and therefore, for now, preferred not to be named). Any views?