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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
10/06/2020
Georgian Milk Mark on National TV

From the beginning of June, the two most popular national TV stations Imedi TV and TV Pirveli have been broadcasting the Georgian Milk Mark (GMM) animation video five times a day during prime time for free as a part of social advertising. Those televisions have national coverage reaching a high number of consumers.

There are now ten GMM dairy enterprises’ products available in fifteen supermarket chains across Georgia. Detailed information to be found on www.georgianmilk.ge.

22/05/2020
New Beekeeper Info Links Launched

On the May 20th, 4,400 beekeepers registered in the new GBU database received an SMS notification from the Georgian Beekeepers Union (GBU) on how to treat Varroa, the most common bee disease in Georgia.

The GBU will continue informing its members through phone Facebook. And their new official webpage is now online: www.geobeekeepers.ge.

Created in 2018, the GBU is an umbrella association uniting ten beekeeping associations and three commercial beekeeping companies.

 

21/05/2020
Beekeepers Union Keeps Bees Moving

The Georgian Beekeepers Union (GBU) successfully advocated for permits to be issued for beekeepers allowing them to continue work during the curfew.

The Government of Georgia declared the nationwide curfew on March 30th, 2020 to restrict the spread of the COVID-19 virus, prohibiting any movement from 9:00 PM to 06:00 AM. This posed a serious problem for beekeepers who rely on transhumance predominantly at night.

In Georgia, bee transhumance allows for beekeepers to place hives at different altitudes to capture the flowering of different plants. Starting from late Spring, Georgian beekeepers start to move apiaries to get different types of honey including Acacia,Chestnut, Alpine, Linden. The transhumance of bees significantly increases their honey productivity.

On April 4th, the GBU sent an official letter to the Ministry of Environmental Protection and Agriculture of Georgia (MEPA) asking for the issuing of permission/passes for beekeepers including the guidance it developed for beekeepers during the Covid-19 outbreak.

We asked the Minister to mediate with the appropriate agencies to issue special permits, so that beekeepers may access their apiaries and work there, transport beekeeping apiaries for transhumance on pre-determined routes within the curfew conditions.’ – Avksenti Papava, the Director of the GBU.

Up to eight hundred beekeepers have already used permits, who are now able to visit apiaries and carry out vital seasonal treatment and maintenance.  Bees are transported at night where possible, because they do not leave a hive during night, which the permit makes possible.

‘I have my apiaries located in the different regions for getting various types of honey. I was very happy to hear about special permit for beekeepers, as it is very active season in beekeeping. I am able to freely move to the locations and do not worry about time limitations’ – Kakhaber Zirakasvili, a beekeeper.

Guidance and contact information on getting permits and the Covid-19 recommendations have been shared by the GBU on its facebook page.

The Georgian Beekeepers Union (www.geobeekeepers.ge) is an umbrella association uniting ten beekeeping associations and three commercial beekeeping companies with more than four thousand Georgian beekeepers. It was established to represent their interests and to promote the health and development of the honey sector in Georgia with the facilitation of the Swiss Agency for Development and Cooperation (SDC) project the Mercy Corps Georgia implemented Alliances Caucasus Programme (ALCP).


19/05/2020
Kindness is Contagious

In the midst of anxiety under the COVID-19, some people rise to the occasion when faced with adversity and it is uplifting to hear stories about them. As for many others it has been difficult times for the client businesses of the programme, but they have continued to help people most affected by the current crisis over the past two weeks.  

Ten dairy enterprises with the Georgian Milk Mark www.georgianmilk.ge provided cheese for the medical staff of hospitals in the frontline of battling the virus as well as people under quarantine and locals in the lockdown areas in the different regions of Georgia, who have limited access to the markets.

‘It is now important to show support to each other. I was very happy to see reactions from people, who were very surprised and thankful. I think those GMM enterprises set very good example for others.’ – A GMM cheese distributor.  

The Georgian Beekeepers Union (www.geobeekeepers.ge), uniting ten beekeeping associations and three commercial beekeeping companies supplied 1.2 tonnes of honey for further distribution among medical staff and vulnerable groups.

The Kakhetian Traditional Winemaking group’s (programme facilitated honey aggregator and exporter company) forty-one rooms hotel-complex is being used as a quarantine zone, the company also supplied food to locals over seventy in two regions of Georgia within a social project ‘Care for Each Other’ initiated after the virus outbreak and is now offering online sales and a free home delivery of its products (wine, compotes, jams, including, honey); the company’s webpage Old Kakheti went online to improve online sales.

These are a few examples and continuation of the kindness acts that started a month ago.

07/05/2020
Liquid Gold Reaches the Market

Referred to as Liquid Gold, for its color and perceived health benefits, Erbo the Georgian word for melted butter is a well-kept secret in Georgia. Traditionally made at home Erbo is much used in local traditional cuisines.  Butter is an important fat in Georgia, very common in Azeri cuisine and in mountainous regions where both the harsh winter climates and distance from markets increased the importance of butter which can be stored, in communities dependent on dairy farming.

Now thanks to Milkeni Ltd who have started to produce and sell Erbo as part of their products made under the Georgian Milk Mark, quality assured Erbo is now available commercially for the first time in Georgia in Madagoni and Libre supermarkets chains. Interest and demand is growing rapidly.

Of all regions, perhaps Ajara is most famous for its use of Erbo. Most traditional Ajarian dishes contain Erbo.  Borano is a dish of melted butter containing traditional Chechili cheese, a dish which been awarded the status of Intangible Cultural Heritage and Khavitsi a sauce made with flour and Erbo.

So what is special about Erbo?  People believe that it is a healthy fat, processed differently and beneficially in the body and is well absorbed in the human body; it does not contain lactose and casein, so it is recommended for those with lactose intolerance. Mountain people believe Erbo boosts metabolism and energy, improving brain function, memory and their immune system.

08/04/2020
New Jara Apiary Successfully Overwintered

In summer 2019, ten new Jara hives were placed in the Goderdzi Alpine Garden (GAG), Jara Beekeeping area, an area which aims to publicize Jara beekeeping and teach people interested in taking it up. With the help of the Jara Beekeepers Association (JBA) they were moved for wintering to Paksadzeebi Village in Khulo last autumn. Last week, all the hives were checked and fortunately, all the bee colonies are alive and working productively.  

This Jara apiary is currently undergoing the Bio certification process and is due to obtain certification in July this year. It will be moved back to the GAG (Goderdzi Pass, 2000m above sea level) in May and be the focal point of Jara beekeeping workshops for school students and garden visitors.

The Goderdzi Alpine Garden is a tourist and environmental hub in the rural part of Ajara, Western Georgia. It involves and develops a sense of ownership for rural inhabitants in the field of biodiversity and environment, showcases the beauty and ecological assets of rural Ajara and generates added value from rural tourism for locals.    


LATEST NEWS
The Georgian Beekeepers Union Celebrates Three Years Anniversary
20/12/2021
On December 20th, the Georgian Beekeepers Union (GBU) hosted an event to celebrate its third anniversary inviting key honey sector stakeholders to Hualing Tbilisi Sea Plaza.  Since 2018, the honey sector has seen huge gains under the auspices of the GBU, which is leading efforts to remove pervasive constraints to growth such as the widespread use of prohibited antibiotics and performing the role of non-governmental national representative of the honey sector. The GBU’s three years of extensive work resulted in increased honey quality, more effective governmental advocacy, better vocational education in beekeeping, including, Jara teaching, available information and trainings for beekeepers, promotion and improved image of Georgian honey at the Apimondia Congress and London Honey Awards, all that paving way for an increase of honey export.    ‘There are some major developments in improving honey testing capacity, increasing awareness of Georgian honey, and opening of new export markets. The comprehensive laboratory analysis, before carried abroad, is now available in Georgia, which resulted in decreasing transaction costs.’ – Giorgi Khanishvili, the First Deputy Minister of the Environmental Protection and Agriculture of Georgia (MEPA).    ‘We were able to achieve significant improvements during these three years. We are continuing cooperation with the government and other honey stakeholders to ensure production of safe and quality honey.’ – Aleko Papava, the Executive Director of the GBU.  Photo source: The MEPA
Jara Enters the Qatar Market
19/12/2021
Nena Jara honey, along with other types of Georgian honey, found its place on the Georgian honey corner opened at the SPAR supermarket branch in Tawar Mall, the largest shopping mall in Doha, Qatar. Georgian honey corner will be opened in every branch of the SPAR chain. The process is backed by the Embassy of Georgia to the State of Qatar. The ALCP facilitated the export of Jara honey. Local influential media AI Raya dedicated a comprehensive article to Georgian honey with a special highlight on Georgian beekeeping characteristics and traditional Jara.   The Qatar market seems promising. The Embassy’s previous facilitation for approval of a VET certificate, an essential requirement for honey export, has contributed to a 255% increase of Georgian honey export to Qatar in 2021 compared to 2020. The same figure saw a 350% boost in 2020.  Photo source: The Embassy of Georgia to the State of Qatar
Sharing of Agricultural Education Experience with Azerbaijanis Colleagues
12/11/2021
The Journalism Resource Centre (JRC), in partnership with the Society of Women for Rational Development in Azerbaijan (WARD), hosted a study visit of media and educational institution representatives of Azerbaijan. Agri-journalism students and lecturers at Caucasus International University shared agricultural journalism teaching practices. In Kakheti, they visited the farm of Beka Gonashvili, Head of the Georgian Shepherds Association, farmer, and entrepreneur.  They also visited Kakhetian Traditional Winemaking to see their Jara honey and wine production and the dairy Leanka in Dedeplitskaro.  The importance of education and information for farmers and producers and their cooperation with agricultural media was emphasized. Beka Gonashvili emphasized the importance of providing quality information to farmers and producers. He is both a blogger and a farmer, so he is regularly publishing useful agriculture-related posts. The female owner of Leanka dairy talked about how the enterprise is ensuring the quality and how media is playing a significant role in this. At Kakhetian Traditional Winemaking Company particpants saw wine and Jara honey production and their export and how the Georgian Beekeepers Union is advocating the interests of honey sector representatives and supporting the awareness raising of beekeepers, such as through the national information campaign - Do’s and Don’ts of Antibiotic Use. Participants also watched a report about Jara Honey by Al Jazeera and Jara the Movie. ‘We will all together will work well for expansion the teaching of agricultural Journalism in Azerbaijan’ – Natia Kuprashvili, the Head of the JRC. The Society Women for Rational Development (WARD) in partnership with the JRC is going to prepare a course of agricultural communication based on the study visit and share it with educational institutions in Azerbaijan. Please see the related links: a textbook of Constructive Agricultural Journalism and video lessons added to this textbook.
LATEST PUBLICATIONS
MONITORING, EVALUATION, AND LEARNING POLICY
A Gendered National Honey Sector Survey in Georgia
GENDER EQUALITY, DIVERSITY AND SOCIAL INCLUSION STRATEGY (2020-2023)