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How Much Regulation Does a Country Need?

From the ISET Economist news (http://www.iset.ge/news/?p=3871)

By Eric Livny

Democracy and Freedom Watch reported October 9, that “Georgia’s controversial new immigration law may be changed”. The law, writes DFW, “has caused a wave of confusion and irritation in the country’s expat community. Prime Minister Irakli Gharibashvili … told journalists that if any defects become apparent after the enactment of the new law, ‘we’ll surely correct it.’”

Just a month earlier, confusion, irritation and public outrage were caused by another piece of Georgian legislation – a law greatly limiting the sales of non-prescription drugs (see Florian Biermann’s post). The outrage was caused by the fact that many of the drugs affected by the new law, e.g. plain painkillers, were in extremely wide use. As a result, less than two weeks after coming into force on September 11, the law was amended by the health minister, Davit Sergeenko, allowing 772 medicines to be sold over the counter, without a prescription.

One could perhaps say, as the Germans do, ende gut, alles gut. But, alles is nicht gut. The fact that such REALLY BIG MISTAKES are allowed to occur in the first place suggests that something is deeply flawed in the Georgian policymaking machine. One obvious concern is the lack of due “public policy” process. Indeed, there was nothing particularly urgent about either piece of legislation; both could have benefited from a proper technical review, “stakeholder consultations” and a public debate.

Second, and very importantly, these grand failures suggest that Georgian lawmakers lack a proper understanding as to the role of regulation in an economy, and how much of it a country like Georgia needs (or can afford).

THE BENEFITS OF PROCRASTINATION AND DEBATE

Any discussion of regulations can easily get politicized, sparking seemingly futile and lengthy political exchanges. Left-wing intellectuals would argue that regulations are there to address market failures (such as drug addiction and overconsumption of antibiotics) or protect the weak and vulnerable (e.g. by securing their jobs and providing income support). The libertarians among us would argue that the market can correct itself, and that, in any case, state paternalism is not a solution to any problem. Rather, it creates unnecessary red tape and leads to unintended consequences such as laziness, corruption, illicit economic activities (“black market”) and smuggling. State failures, according to the enlightened libertarian view, are as much of a problem as market failures.

Such a clash of ideas is quite legitimate, and – if conducted in a civil and constructive manner – should be welcome in any community and polity. For one thing, it would provide legislators with a better understanding of the “problem” they are trying to solve (if there is a problem), such as:

the incidence of antibiotic resistance among Georgians;

immigrants competing with (or creating jobs for) low-skilled Georgian workers;

the extent of land grabbing (as well as investment and job creation) by Punjabi farmers.

Ultimately, whether liberal immigration regime (or free access to medications) is to be recognized as a “problem” is about politics rather than science. Still, having some evidence to consider before rushing with regulatory “solutions” would be a good step forward. It may well be the case that, while generating “killer” headlines, a “problem” is ridiculously small in magnitude or does not even exist.

Secondly, when faced with the need to publicly defend their proposals, proponents of regulations would be forced to analyze alternative solutions while taking into account the cost factor, effectiveness in terms of actually solving the problem at hand, related corruption risks, and other types of collateral damage.

DON’T BITE OFF MORE THAN YOU CAN CHEW!

But perhaps the most ideology-free criterion of evaluating the feasibility of regulations is whether a country has the requisite human capacities and skills. Even a relatively simple regulation, such as traffic lights, may be counterproductive if not properly planned and executed. First, there is the basic question of how to regulate a given intersection (traffic lights are effective only when traffic intensity exceeds a certain threshold level, which is almost never reached at night). Second, traffic lights have to be properly timed to maximize intersection capacity and minimize delays). Poorly planned traffic lights – hello, Tbilisi! – are not only a drag on traffic but also a safety hazard.

What is true about traffic, is equally true for extremely complex regulations such as anti-trust, labor, and food safety, which Georgia has subscribed to as part of the Association Agreement with the EU. For instance, it will take years – maybe even generations – to build the necessary professional capacities within the Georgian parliament and judiciary, the competition watchdog, the economics, legal and management professions in order to implement Swedish-style anti-trust law in the Georgian context. Thankfully, for now Georgia is paying lip service to some its EU-related commitments (e.g. by creating a competition agency and copy-pasting anti-trust legislation without caring to enforce it).

The botched attempts to rewrite immigration and pharmaceuticals laws suggest that professional skills are in extremely scarce supply throughout Georgia’s bureaucracy. After all, the Georgian state is one of the youngest in the world; Georgia’s educated urban elite is a tiny sliver of the population; and even this sliver has been impoverished by many years of brain drain and outmigration. In this situation, the Georgian state should not attempt to bite off more than it can chew. It should avoid complex regulations, even when these are theoretically desirable or required by its international partners. It should certainly avoid thoughtlessly copy-pasting regulations that have been designed for other times and other places.

* * *

A short story by Leo Tolstoy titled “How much land does a man need” describes the fate of a land-hungry Russian peasant, Pakhom, who is promised as much land as he can walk around from sunrise till sunset. One condition is attached: he has to make a full circle and return to the point origin by the end of the day. To maximize his future land holdings, Pakhom sets on a rather ambitious circular route, and is too late to realize that he cannot make it back on time. He runs as fast as he can and, exhausted from the effort, drops dead at the point of origin. His servant buries him in a grave only two meters long, thus ironically answering the question posed in the title.

OTHER NEWS
17/11/2020
Georgian Milk Mark in Ministry Magazine

Our Village, the Ministry of Environmental Protection and Agriculture of Georgia (MEPA) magazine with a circulation of 10,000 copies a month is publishing an article about the Georgian Milk Mark (GMM) in its October issue. The article provides comprehensive information about the GMM, a list of the GMM dairies and their products. Rural farmers across Georgia will receive the magazine through fifty-four MEPA Information Consultation Centers (ICCs) for free.

Currently, sixty-seven types of GMM dairy products from eighteen GMM  dairy companies are being sold  in Madagoni, Spar, Ori Nabiji, Nikora, Zgapari, Fresco, Foodmart, Carrefour, Goodwill, Willmart, Libre, Deili, Bilion supermarket chains. Details on www.georgianmilk.ge.


15/07/2020
Georgian Beekeeping Highlighted in German Magazine

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.


29/10/2020
Improvements in Sheep Shearing


In 2018, while thinking about improving the quality of supplied wool, the Georgian Wool Company purchased twelve sheep shearing machines and trained a group of twelve shepherds, to provide a shearing service to sheep farmers. The service is available on the pastures at the beginning of spring and at the end of summer, when sheep are usually sheared in Georgia. This year, up to five-hundred farmers were served, with hundred thousand sheep sheared.

 

Before, the wool suppliers of the company sheared sheep by hand, which damaged wool fiber and the quality of wool was poor. It took time with only up to thirty sheep sheared a day. The sheep farmers had to ensure the workforce for shearing by hand, they also had to arrange wool storage space in pastures and transportation of wool from pastures to wool collection centers. Incompliant shearing and storage was decreasing the quality of wool and causing about a ten percent loss (up to thirty kilos), which was usually left on pastures polluting the local environment.

 

Now, the sheep shearing machines prevent damaging of wool fiber and respectively, the quality of wool has been improved. The company’s sheep shearing machine service includes storage and transportation of wool from pastures to the company`s warehouse in Tbilisi. Sheep shearing is now time-efficient with up to hundred sheep/day sheared by one trained shepherd. While shearing of thousand sheep by hand took at least three days, now the same is done just in one day. For the company it means a stable supply of wool in better, cleaner quality; For farmers it translates into reduced transaction costs, time and about 0.7 Gel saved per sheep.

The Georgian Wool Company first exported wool to the United Kingdom back in 2016. Ukraine, Kazakhstan, India, Afghanistan are now among top wool export destinations. Along with growing demand, improving quality has become a particular interest of the company.

09/10/2020
VET Colleges to Teach Jara Wild Honey Production

On October 8th, the Georgian Beekeepers Union (GBU) hosted representatives of thirteen VET colleges from across Georgia and sectoral skills organization Agro Duo in Tbilisi. The meeting occasioned the integration of Jara honey production as a topic in VET college beekeeping programmes, something that the Georgian Beekeepers Union have been facilitating over the last year.

The participants received the Jara Honey Production Handbook and Bio Certification Guidelines for Beekeepers; and were introduced to two new websites www.honeyofgeorgia.com and www.jarahoney.com and a honey promotion video Discover Georgia: The Land of the Oldest Honey.

This year Akhali Talga VET College in Kobuleti and Khulo integrated the Jara materials into their one-year beekeeping programme in which twenty-eight beekeeper students are attending. At the meeting, Akhali Talga VET College shared their experience of successfully integrating the Jara materials into their beekeeping programme.

‘I had many calls before and after the meeting and I can say that the interest from the colleges is very high. We will provide support required and I am sure from the next year there will be more programmes with the Jara materials and improved content.’ – Aleko Papava, the Head of the GBU.

At the beginning of the meeting, the GBU and sectoral skills organization Agro Duo signed a Memorandum of Understanding pledging to work together to integrate Jara materials into the beekeeping programmes in all VET colleges in Georgia.

Jara is traditional wild beekeeping producing unique and pure honey rarely practiced nowadays, except for remote dwellings located in the subtropical and alpine zone of Georgia. However, for the first time in decades Jara production is being practiced again by new beekeepers or taken up again by those who had stopped. In 2018 the Jara Beekeepers Association was formed to represent producer interest and in the country first, twenty-three Jara beekeepers in Ajara have received Bio certification. Jara honey was commercially harvested and branded for the first time in 2018 and since then the market for Jara honey has grown in strength which is why the producers decided to become Bio Certified to further increase the value of their product. The Jara honey mark was registered this year to further protect this culturally important product.  

06/10/2020
Jara Beekeeping Brings Hope: Vazha’s Story

  

Fifty-seven years old Vazha Kedelidze from Kedlebi Village, Khulo is one of ten students who enrolled in the beekeeping programme at Akhali Talgha vocational college in August.

Vazha retired from his position as a fireman five years ago. Soon after, his wife had a severe injury that left her unable to take care of their farm. As Vazha says, beekeeping is now the mainstay of his family. His beekeeper friend helped him to arrange an apiary of twenty hives.

I discovered that beekeeping is a philosophy on its own. Sometimes I sit for hours and observe bees working. I am trying to understand the process.’- Vazha says.

As a beginner beekeeper, Vazha is striving for knowledge and struggling to gain comprehensive information, as internet sources are not targeted to beginner beekeepers and he needed something hands on. He then heard about the beekeeping course at the Akhali Talgha VET collegein Khulo.

‘I do not know curriculum details yet, but I am sure I will get answers to my questions and I am looking forward to starting the learning process.’ – Says Vazha.

Vazha was even more surprised when he found out a Jara beekeeping module:

‘I had heard about Jara from villagers and television. It is a fascinating and very unique tradition. Last year, I even made six Jara hives and could not proceed further due to a lack of knowledge. So, I am glad that I will learn more about this traditional beekeeping.’ – Says Vazha.

Akhali Talga VET college in Ajara is the first college in Georgia to have integrated Jara teaching in their beekeeping programme. They will teach the integrated programme from this semester to twenty-eight students.

In total, there are ten VET colleges in Georgia with either a two month or one-year beekeeping course. The Georgian Beekeepers Union (GBU), along with the Jara Beekeepers Association (JBA),  is now facilitating the integration of Jara module into beekeeping programmes of these ten colleges in cooperation with the sectoral skills organization Agro Duo and the Ministry of Education, Science, Culture and Sport of Georgia. The JBA developed the Jara Honey Production Handbook: for Beekeeping Programmes at VET Colleges.

Jara is traditional wild beekeeping, rarely practiced nowadays, except for remote dwellings located in the subtropical and alpine zones of Western Georgia, namely, Ajara, emphasizing the importance of co-existence between humans and wild nature. It is a family activity led by a family head, with strong roots in traditional agriculture practice, culture and a way of living as a whole. That makes Jara unique. However, due to a limited market, it was nearly fading outback in 2014 when the ALCP found out about it, and this is when the Jara journey began. It is now growing in 2018 the first commercial Jara harvest was 500kg it is now over 3 tonnes. Twenty-three Jara beekeepers are now Bio Certified and many people such as Vazha are anxious to start. Jara is a high value product with very strong demand it retails for 90 Gel/kg.

24/09/2020
Third Georgian Dairy Exports to USA

In mid September, dairy enterprise Tsintskaro+ Ltd in Kvemo Kartli sent 280 kg of different types of cheese (Sulguni, Smoked Sulguni, Georgian Cheese) and clarified butter produced by Milkeni Ltd through distribution company Geoproduct Ltd,  for sale in New York, USA after positive feedback received on product samples sent earlier in August. Both dairies are members of the Georgian Milk Mark the quality assurance label for Georgian natural milk and their products bare the GMM. The company expects a repeat order for at least 250 kg in the near future.

LATEST NEWS
Georgian Milk Mark in Ministry Magazine
17/11/2020
Our Village, the Ministry of Environmental Protection and Agriculture of Georgia (MEPA) magazine with a circulation of 10,000 copies a month is publishing an article about the Georgian Milk Mark (GMM) in its October issue. The article provides comprehensive information about the GMM, a list of the GMM dairies and their products. Rural farmers across Georgia will receive the magazine through fifty-four MEPA Information Consultation Centers (ICCs) for free. Currently, sixty-seven types of GMM dairy products from eighteen GMM  dairy companies are being sold  in Madagoni, Spar, Ori Nabiji, Nikora, Zgapari, Fresco, Foodmart, Carrefour, Goodwill, Willmart, Libre, Deili, Bilion supermarket chains. Details on www.georgianmilk.ge.
Georgian Beekeeping Highlighted in German Magazine
15/07/2020
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.
Improvements in Sheep Shearing
29/10/2020
In 2018, while thinking about improving the quality of supplied wool, the Georgian Wool Company purchased twelve sheep shearing machines and trained a group of twelve shepherds, to provide a shearing service to sheep farmers. The service is available on the pastures at the beginning of spring and at the end of summer, when sheep are usually sheared in Georgia. This year, up to five-hundred farmers were served, with hundred thousand sheep sheared.   Before, the wool suppliers of the company sheared sheep by hand, which damaged wool fiber and the quality of wool was poor. It took time with only up to thirty sheep sheared a day. The sheep farmers had to ensure the workforce for shearing by hand, they also had to arrange wool storage space in pastures and transportation of wool from pastures to wool collection centers. Incompliant shearing and storage was decreasing the quality of wool and causing about a ten percent loss (up to thirty kilos), which was usually left on pastures polluting the local environment.   Now, the sheep shearing machines prevent damaging of wool fiber and respectively, the quality of wool has been improved. The company’s sheep shearing machine service includes storage and transportation of wool from pastures to the company`s warehouse in Tbilisi. Sheep shearing is now time-efficient with up to hundred sheep/day sheared by one trained shepherd. While shearing of thousand sheep by hand took at least three days, now the same is done just in one day. For the company it means a stable supply of wool in better, cleaner quality; For farmers it translates into reduced transaction costs, time and about 0.7 Gel saved per sheep. The Georgian Wool Company first exported wool to the United Kingdom back in 2016. Ukraine, Kazakhstan, India, Afghanistan are now among top wool export destinations. Along with growing demand, improving quality has become a particular interest of the company.
LATEST PUBLICATIONS
Measuring Urban Consumers Awareness of the GMM
A National Qualitative Review of the Municipal Women's Rooms
Deutsches Bienenjournal about Georgian Beekeeping