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.

Technorati Profile

Schoolchildrens' Attitudes in Armenia: What Kind of Impact Has Civic Education Had?

Diana Ter-Stepanyan evaluated the effectiveness of the civic education training program implemented in Armenian high schools (upper grades of secondary schools). She conducted a quantitative (questionnaire based) survey among 494 tenth grade schoolchildren from all of Armenia’s regions to assess the effectiveness and efficiency of “Human Rights,” “Civil Society” and “State and Law” courses offered since 2001 in the scope of the civic education program in the schools. Particularly, she evaluated the knowledge and attitudes of schoolchildren in regard to various laws, crimes and punishment options, the role of the state, human rights and their violation, the need for and the topics to be included in the law courses offered in the schools.

The results of the survey indicate that, despite having a course on civic education, Armenian schoolchildren still possess controversial opinions/attitudes on various legal issues. For instance, only 48% of surveyed schoolchildren were ready to unconditionally follow the laws, while the rest mentioned that they would only follow the laws if they reflected Armenian traditions and social values. Furthermore, only 40% of schoolchildren accepted the role of the court as a mechanism to regulate disputes.

Such research cries out for a governmental response.

In parallel with educating schoolchildren on civic education, Ter-Stepanyan recommended to convey certain values to the children which would motivate them to follow the laws. She also recommended providing training to the teachers of civic education and developing interactive training materials which would increase the effectiveness of the training sessions.

Information about Ter-Stepanyan’s work, along with other CRRC-Armenia fellows can be found here.

Barriers to Cooperative Ventures in Rural Georgia: Feisty Farmers

Much has been made about the collapse of agriculture in Georgia. From the overgrown tea plantations surrounding Zugdidi to the sere fields that used to be replete with apples in Gori, one encounters fallow land wherever one goes.

The international community and increasingly the Georgian government itself have been asking how successful agricultural ventures can be increased throughout Georgia. Sergo Baramidze, a CRRC fellow, set out to investigate barriers hindering the development of cooperatives and other forms of business partnerships in the rural areas of West Georgia.

Baramidze found that in rural communities of Georgia, peasants and small-scale farmers tend to be self-reliant and not interested in forms of cooperation, such as agricultural or credit cooperatives. For instance, only 5% of the credit unions developed through the World Bank attained a modicum of success.

The researcher highlighted five main barriers hindering co-op developments in rural areas of Georgia: 1) peasants and small-scale farmers are unfamiliar with the benefits of cooperation; 2) farmers are not educated about the principles of community resource management; 3) there is no concrete plan for the development of small farm cooperative markets in rural communities; 4) villagers distrust each other too much to cooperate; 5) a lack of financing exists for agricultural development.

In order to improve co-op development in rural areas, Baramidze suggests developing cooperative management training materials based on recommendations developed by the Food and Agricultural Organization (FAO) and Credit Agricole and adopting them to the local Georgian environment taking into consideration aspects of Georgian cooperative heritage – soviet farms (kolkhoz) and Georgian co-ops that existed before the Soviet revolutions in 1917 and 1921 – that may still be useful in contemporary Georgia. Moreover, Baramidze suggests incorporating the best types of social interactions of communities existing in rural Georgia’s day-to-day life into the business cooperation. For example, Baramidze believes that practices developed from Georgian eating and drinking culture such as the unique method of delegation of toasts to other members of table (alaverdi) could be transferred into the business life of rural communities.

The idea of using traditional practices and incorporating them into modern democratic traditions is an exercise most certainly worth further consideration.

The Dynamics of Diaspora Investment in Armenia

In the South Caucasus, the question of investment from Diaspora communities has become increasingly important. With the largest and most well developed Diaspora network, the dynamics of Diaspora investment in Armenia is of special importance.

Manuk Hergnyan examined the impact of the Armenian Diaspora on generating Foreign Direct Investment (FDI) in Armenia between 1994 and 2004. He conducted a detailed company-level survey among Armenian companies with foreign capital, collected information from the Internet, State Registry of Armenia, Spyur Armenian business directory and several consulting companies.

Hergnyan found that although the Armenian Diaspora played an important role in foreign direct investment attraction processes in Armenia in the transitional period, its level of involvement was less than expected. About 69% of all foreign investors that directly invested in the Armenian economy in 1998-2004 were Diaspora-connected investors, while in financial terms the total value of those investments made up only 24% of total FDI in Armenia.

Hergnyan concluded that the strategy towards Diaspora should become more differentiated; because different Diaspora groups have different motivations, the policy should capture these differences by a segregated and well-thought out approach to each group. Mr. Hergnyan also suggested that the informal and altruistic intentions directed towards families and friends of Armenia-born Diasporans can be encouraged and translated into additional investments instead of direct assistance in line with improvements in the business climate for small and medium enterprises.

The paper, in English, is a must read for those interested in FDI in the region. A version of it will be published in the forthcoming edition of the AIPRG Journal. The level of research is incredibly detailed and provides an excellent set of insights.

Labor Migrants Who Returned to Georgia

Mariam Sakevarishvili analyzed the life of labor migrants returning to Georgia. She combined CRRC 2004 Data Initiative findings with 50 interviews across Georgia (conducted in 2005). The interviews very much replicated the findings from the Data Initiative: prior to emigration 37% of respondents did not have adequate income; 31% were unemployed; 16% cited personal reasons for migration.

The priority for most of the migrants was providing financial support to their families. All respondents had realistic expectations about migration, therefore most were satisfied and thought that they had achieved their goals - purchased an apartment, returned loans, and met other immediate needs .

The research indicates that many male migrants are involved in criminal activity. For many this seems the only escape from poverty (especially because illegal immigrants are excluded from the formal employment sector). Sakevarishvili suggests that this contributes to building stereotypes of Georgian males as being criminal and dangerous. Apparently Georgians themselves tend to be cautious about establishing connections with their compatriots abroad.

The majority of the respondents say they may migrate again. The respondents said that the biggest discomforts for them were nostalgia and the relationship with the host country police. Conversely, they reported that the migration experience had helped them develop their own self-esteem, and that this was one of its biggest benefits. As for the adaptation process in foreign countries, Sakerashvili found that emigrants adjust better in Russia, Israel, Spain and Portugal, in the order in which they are listed. Respondents who lived in Russia even did not use the word “adaptation” in the conversation. For them, Russia has closer ties with Georgia than any other European country and both nations have a lot in common.

According to the research most of the emigrants used to live in Russia. More specifically, based on CRRC DI 2004 data (some caveats about existing migration data are appropriate) 31% of respondents said that their relatives were living in Russia, 16% in Greece, 13% in Germany, 13% in the US, 7% in Israel; 7% in England.

After coming back from abroad the respondents did not really notice tremendous changes in Georgia. For most, the changes that they found in their homeland were superficial. The above mentioned findings are based on the analysis of migration block of CRRC DI 2004 and face-to-face, in-depth interviews with 50 respondents in Tbilisi, Gori, Dmanisi, Kutaisi and Lanchkhuti.

And where do you find more about this research? As usual, on our website, in Georgian.

HIV/AIDS: Azerbaijanis' Attitudes and Knowledge Explored

There has been growing concern about HIV/AIDS in the South Caucasus. But what kind of knowledge and attitudes about the disease exist in the region? By using data from the CRRC 2004 Data Initiative (DI) and conducting focus groups Gulshan Tagiyeva analyzed the knowledge and attitudes about HIV/AIDS in Azerbaijan.

Based on the results from 2004 CRRC DI survey, the fellow showed that the population in Azerbaijan is less informed about HIV/AIDS and other sexually transmitted diseases than Georgians and Armenians. Additionally, a large percentage of Azerbaijanis, particularly women, are unsure about how people become infected with HIV/AIDS. There is also very low social acceptance of those who are HIV positive. For example, of respondents in Baku only 8.9 % do not mind doing business and 5 % being friends with people who have HIV/AIDS (2004 CRRC survey).

This research demonstrates more work clearly needs to be done in Azerbaijan to increase HIV/AIDS awareness and social acceptance of those who have HIV/AIDS, particularly among women. The author has drafted a manual (in Azeri) to help promote AIDS education. Her report and a presentation (both in Azeri) can also be downloaded.

Unemployment in Azerbaijan: Beyond the Economic Consequences

Unemployment following the collapse of the command economies in the Caucasus has had consequences far beyond the traditional questions of income. Unemployment affects people’s psychological condition and, on a more basic level, the very fabric of society.

Rufat Efendiyev conducted a quantitative survey among 492 individuals (proportionally selected in each district) who were registered as unemployed in Baku. In his research, Efendiyev found a steep increase in the number of physical and mental illnesses of the unemployed population. Additionally, 67% of respondents described their psychological condition as stressful because of financial difficulties.

In a particularly worrying development, Efendiyev also highlighted the age discrepancies in the unemployed population. Among those officially registered as unemployed in Baku those between 24-29 years predominate (24.4%) compared to other age groups. Efendiyev also found that 26.6% of respondents mentioned the absence of connections and friends as a barrier to getting a job.

Young, unemployed and disgruntled males, as has been shown in other contexts, is one of the most important groups to properly integrate into the workforce; this group is capable of creating large and possible traumatic social upheaval if their expectations with regards to the future are not met. The research points to the importance of youth employment programs and efforts to combat non-economic manifestations of unemployment.

Efendiyev’s book in Azeri, English and Russian is available here or from the CRRC Web site.

Georgians living in Gali

Rusudan Velidze analyzed the living conditions of the Georgian population living in Gali, in Abkhazia. For those unfamiliar with the circumstances, these mostly are (Georgian) Megrelians, and the area is under control of the de facto Abkhaz authorities.

The researcher, on a CRRC research stipend, conducted face-to-face, in-depth interviews with 60 respondents in 2005. After the change of the Georgian government in 2003, the number of population returning to Gali increased, but their economic condition remains harsh.

Some of Velidze's main findings include: most of the respondents believe that the war was triggered artificially and that Shevardnaze’s government contributed to the escalation of the conflict. As for the current government, the population trusts it more and hopes that the territorial integrity of Georgia will be restored.

After establishing Georgian schools in the district, the educational problems are more or less resolved. There are 32 Georgian schools, charging a monthly fee of 4 to 7 GEL. The level of education is good. But healthcare remains one of the major problems. The healthcare system is disorganized and there exists only one hospital in the district, which lacks medical supplies and qualified doctors.

The main information source for the population is television. Georgian, Russian and Abkhaz TV channels are available in the district. Velidze also reports that the Georgian population does not have any relationship with Abkhaz people and do not know much about their everyday life.

A Georgian language report is on our Website, and more detail available from Velidze directly.

Asylum applications by Georgian citizens -- 1990-2005

How many Georgians have applied for asylum in the last 15 years? According to UNHCR data, about 66,600 Georgian citizens have applied. Interestingly, the numbers have kept going up:

1992 -- 350
1994 -- 2,504
1996 -- 3,099
1998 -- 4,108
2000 -- 3,904
2001 -- 6,264
2002 -- 8,422
2004 -- 8,934
2005 -- 7,051

So no reduction after the Rose Revolution.

How do they distribute across the countries? Germany received almost 20,000 applications. France is next with about 7,300 applicants, followed by Austria with 7,000 and then Switzerland (4600), and the Netherlands (4100).

By 2005, Greece received the highest number of applications (almost 1900, up from 323 in the previous year). The reasons for this are not entirely clear to me yet. One explanation is that other countries may have toughened their view of Georgian applicants (Germany had its lowest number of applications since 1993).

I have a spreadsheet as hardcopy, and can try to make it available upon request.

Higher Education and Employment -- a broken link

One of the key problems in post-Soviet higher education is that it does not prepare graduates for the labor market. Studying the situation in Azerbaijan, Firdovsi Rzayev argues that one of the reasons for this is that there is no link between higher education and employers. Although in principle employers are willing to help developed curricula, organizing the practical trainings for the students, and strengthening the material-technical base of vocational schools, there is no formal mechanism for doing this.

Rzayev argues that there should be a unit under the umbrella of the Cabinet of Ministers, bringing together the various ministries (economic development, labor, education) with other stakeholders (employers' associations), and researchers. This unit could help to set directives for a higher education that better meet market needs.

Arguably there remains, however, a chicken-egg problem: for such a mechanism to work, there needs to be a willingness to implement comprehensive reform; moreover, the employers themselves don't always have the most modern practices. Maybe the best way is to short-circuit this by importing recognized vocational certification from abroad, instead of trying to set up a similar system oneself. This does not work in all sectors, but should not be a major problem in some (computer skills, IT, financial services), which then can provide a role model.

Details of the study, in Azerbaijani, on the CRRC website.

Migration between Georgia and Azerbaijan

Sergey Rumyantsev studied migration from Georgia to Azerbaijan. He interviewed 460 ethnic Azerbaijani respondents who had migrated from Georgia to Azerbaijan. The majority of respondents said that the socioeconomic situation in Georgia was the prime reason for the migration. Ethnic discrimination did not play a significant role in the perception of Azerbaijani migrants (indicating that media reports of tensions between ethnic Georgians and Azerbaijanis may be overblown). About 80% of respondents still had relatives in Georgia. More than 60% of the migrants left for Azerbaijan in the early 1990s, when times in Georgia were particularly tough.

Rumyantsev also interviewed 170 Ingiloys (ethnic Georgians originally from the Qakh region of Azerbaijan), who had not yet migrated anywhere. Among the Ingiloys who were considering migration, only very few wanted to go to Georgia. Western Europe was more popular, followed by Russia. (The data obviously is not fully representative, which is why actual numbers might be misleading.)

Again, research (in Azerbaijani) with more findings available on our website, and even more information available if you contact the fellow directly.

Gabala Radar Station -- local health awareness

Rashida Abdullayeva examined a curious relic from Cold War days: in Gabala, Northern Azerbaijan, there is a giant radar station, which is leased out to Russia until 2012. According to reports citing the Russian Ministry of Defence the radar station has a range of up to 6000 km, was designed to detect missile launches from the Indian Ocean, and hosts around 1200 Russian servicemen. It is generally accepted that this powerful radar has a significant impact on the environment and the health of the local population. A somewhat dramatic assessment can be found here.

But what does the the local population actually know about the hazards? Although they complain of symptoms such as headaches, dizziness, and chronic ailments, there seems to be little awareness of potential preventive measures that could at least alleviate the impact of the electromagnetic rays.

On her CRRC research grant, Abdullayeva put together a short booklet documenting very simple preventive measures, such as blocking direct line-of-sight between the radar station and settlements (even planting small trees, she says, could help here). She also has extensive photographs of her fieldwork, showing a fairly hapless, resigned population, as well as deformed animals. It is not a public health baseline study (which might be difficult to conduct), but still conveys a powerful impression.

The radar station is likely to remain a bargaining chip in the complex tournament of Russian-Azerbaijani relations: Russians want to keep the asset, Azerbaijanis are happy that they have an asset that gives them some leverage on Russia.

Details of the study online, in Azerbaijani.

Drugs Use Survey of Georgian Students, 2003

The Georgian Research Institute on Addictions (GRIA) in 2003 conducted a survey of about 700 students in Tbilisi's universities.

52.6% of male respondents say they have used hashish at least once. About 8% of males responded that they smoked it regularly over the last year, with a total of 4% claiming they used it very regularly over the last 30 days.

The data probably is unreliable (I have not seen the actual study), but the one interesting feature is that only 3.4% of female respondents say they had ever used hashish. And none said they use it regularly. Overall, this seems to tally with the results from CRRC's Data Initiative on smoking: there is a very strong gender discrepancy, with around 5% of female Georgian respondents admitting to smoking (whereas around 45% of males say they smoke).

According to the Ministry of Interior, 2004 prices for 5 g of marijuana are roughly 7-9 US dollars.

Source: Georgian Research Institute on Addiction, Georgia Today, 8-14 December 2006

Snapshot: Border Crossing Armenia-Georgia

Earlier this morning some observations that in themselves can almost serve as indicators:

• Number of trucks waiting on Armenian customs, headed towards Georgia: 51
• Number of interlocutors who had any idea what the reason for the actual problem was: 0
• Number of types of uniforms worn by officials on the Armenian side: 5 (probably more)
• Number of officials, or people acting as officials, wearing no recognisable uniform on the Armenian side: 6 (likely more)

If you want to get a first class fake $20 bill, pay your $30 Armenian visa with a $50 banknote. I have now twice seen the friendly Armenian official returning a fake 20$ bill as change for the 50$ he received. Visually, the bill is almost perfect. The only significant difference is in its feel. (Recently, it was claimed that large-scale production of counterfeit currency can be traced to South Ossetia)