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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
12/11/2021
Sharing of Agricultural Education, Extension Experience with Azerbaijanis Colleagues

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.

02/12/2021
BageBee Beekeeping Regional Center Welcomes Jara

In November 2021 Jara hives took their place at the Beekeeping Regional Center, BageBee in Tbilisi for demonstration and educational purposes with the help of the Jara Beekeepers Association (JBA). The center is highly motivated to integrate Jara teaching in its beekeeping vocational programme now being developed under the project Modernization of Vocational Education and Training (VET) System Related to Agriculture - Work-based Learning. Last week, the JBA presented Jara honey to a wider audience at the Autumn Beekeeping Fair/Event, organized by the BageBee center, which was also attended by the Georgian Beekeepers Union (GBU) board members. Mutual cooperation between the GBU and the center is ongoing. The executive director of the GBU was invited to give a speech at the event and the director of the center was invited to the GBU Weekly Facebook Live meeting to present the center to the GBU member beekeepers.

Beekeeping Regional Center BageBee opened in Tbilisi in July 2021. The idea is to support the rural/urban connectivity, sustainable agriculture, and the vision of Tbilisi as a Green City.Key principles of the centre are environmental appreciation, sustainable resource use and inclusive growth. The BageBee center was built and equipped by the Czech Development Agency in the framework of the project Sustainable Development of Beekeeping in Georgia with a partnership of People in Need, Georgia, Association Agora and Tbilisi City Hall.

08/10/2020
Ensuring Animal Movement Route Sustainability

Animal Movement Route (AMR) stakeholders are working together to make an AMR Sustainable Development Roadmap, which will include an action plan and future management scheme. This idea came as a result of the AMR stakeholders meeting on October 8th, 2021. The First Deputy Minister of the Ministry of Environmental Protection and Agriculture, the Head of the National Agency for Sustainable Land Management & Land Usage Monitoring, representatives of the National Food Agency, the National Agency of the State Property, Shepherds Association of Georgia, Georgian Farmers Association, FAO National Animal Identification Registration and Traceability programme (NAITS) and Land O’Lakes participated in the meeting and discussed the future development, management and sustainability of the AMR.

 “To solve the complex problems connected to the land and management of the route we still need some help from the ALCP. Together we did seven Veterinary Safety Points and water points on the route. Now it is time to have a concrete vision and plan on the future development,’ – the Deputy Minister said.

In addition, Sheep Dipping Guidelines for Private Sheep Dips developed by the programme following Environmental, Health and Safety Assessments of three private sheep dips are ready to be approved by the National Food Agency. The guidelines provide simple operational and safety instructions for private sheep dip owners to mitigate potential environmental and health harm that can be caused by the sheep dipping process.

29/10/2021
J is for Jara

Jara took an honorable place in the Tourism Alphabet of Ajara, a new campaign implemented by the Department of Tourism and Resorts of Ajara AR. The idea is to link all 33 letters of the Georgian alphabet with attractions, locations, food, and activities worth visiting during the whole year. Jara was selected for the letter J.

Letter J will take tourists to Medzibna Village, Keda, where tourists will feel immersed with Jara hives hidden in nature.

'Jara honey is a unique product, it adds cultural value to our region, so it should be a well-packaged tourism product. So far, nothing has been done by the Department of Tourism to promote Jara, travel agencies and guides do not know much about the product, so linking J with Jara will be the first step toward to Jara promotion and awareness raise from our side' -Tinatin Zoidze, chairwoman of the Department of Tourism and Resorts of Ajara.

To boost the promotion, the Department of Tourism and Resorts of Ajara also developed a short video about Jara that will be advertised through their Facebook pageVisit Batumi, tourism information centers and media channels.

05/10/2021
Bulk, Brand and Niche - Georgian Honey Export Begins to Flow

Rebounding in spite of the pandemic, export markets for Georgian honey are beginning to flow and the volume of honey is growing rapidly. In the first eight months of 2021, 117 tonnes of honey were exported to eleven countries; France, Bulgaria, USA, Canada, Hong Kong, Japan, Kazakhstan, Azerbaijan, UAE, Qatar, and Saudi Arabia. Five times more than the  21.7 tonnes of honey, exported to six countries in 2020.

A major recent development has been the establishment of a contract for wholesale bulk honey between Api Geo Ltd in Samtredia and Naturalim France Miel a large honey company in France. In September, forty-three tonnes of honey was shipped to France. A second order is now being prepared for shipment. Strict testing in France and Germany and a new factory and equipment capable of homogenizing 20t of honey at a time mean that the company is the first in Georgia to able to reliably service such a market.

This is just a start; we hope to export at least 100 tonnes of Georgian honey to France this year. We want to supply from smaller-scale beekeepers which will help them with selling their honey, which has been a problem for years in Georgia.’ - Gia Ioseliani, Founder of Api Geo Ltd.

September was also a fortunate month for Kakhetian Traditional Winemaking (KTW) producers of the Nena Honey brand which includes the first Bio-certified Jara honey in Georgia.  The company has just shipped a second large order of six types of Nena honey to Hong Kong, including chestnut, blossom, alpine, linden, Jara and honey with nuts including Bio Jara honey. Nena Bio Jara honey is also on its way to Doha, Qatar. Overall, since January 2021, the company has increased the volume of honey exported by 110%, compared to 2020, to markets in Canada, USA, Hong Kong, Japan, Azerbaijan and Qatar. 

Bio certification of Jara honey in Ajara is receiving considerable governmental backing.

We are proud that export markets for bio-certified Jara honey are growing and now it is being exported to countries like Japan, the USA, and Canada. We started to support Bio-certification of the Jara Beekeepers Association in 2021 to continue to supply diverse export markets for such a flagship product.’ - Giorgi Surmanidze, Minister of Agriculture of Ajara.  

The Jara Beekeepers Association is consolidating its entry into the Japanese market in partnership with MF Company Ltd. In September they exported honey to be shown at an exhibition in Tokyo in October, after which the next order will be placed.

Japanese consumers are loving Jara honey, some of them told us that it helps them with stomach problems. We believe that this exhibition in Tokyo will open up new opportunities for the Jara Beekeepers Association.’ - William Pratt, Co-founder of MF Company Ltd.  

24/08/2021
Fourth Georgian Milk Mark (GMM) Dairy Exports to the USA

Dairy Enterprise Leanka Ltd from Kakheti region sent 837 kg different types of cheese (Sulguni, Smoked Sulguni, Georgian cheese) via the exporter company Geoproduct Ltd for sale in New York and Philadelphia, USA. The dairy is a member of the Georgian Milk Mark the quality assurance label for Georgian natural milk and its products bare the GMM. The company expects further increased orders in the near future.


LATEST NEWS
Sharing of Agricultural Education, Extension 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.
BageBee Beekeeping Regional Center Welcomes Jara
02/12/2021
In November 2021 Jara hives took their place at the Beekeeping Regional Center, BageBee in Tbilisi for demonstration and educational purposes with the help of the Jara Beekeepers Association (JBA). The center is highly motivated to integrate Jara teaching in its beekeeping vocational programme now being developed under the project Modernization of Vocational Education and Training (VET) System Related to Agriculture - Work-based Learning. Last week, the JBA presented Jara honey to a wider audience at the Autumn Beekeeping Fair/Event, organized by the BageBee center, which was also attended by the Georgian Beekeepers Union (GBU) board members. Mutual cooperation between the GBU and the center is ongoing. The executive director of the GBU was invited to give a speech at the event and the director of the center was invited to the GBU Weekly Facebook Live meeting to present the center to the GBU member beekeepers. Beekeeping Regional Center BageBee opened in Tbilisi in July 2021. The idea is to support the rural/urban connectivity, sustainable agriculture, and the vision of Tbilisi as a Green City.Key principles of the centre are environmental appreciation, sustainable resource use and inclusive growth. The BageBee center was built and equipped by the Czech Development Agency in the framework of the project Sustainable Development of Beekeeping in Georgia with a partnership of People in Need, Georgia, Association Agora and Tbilisi City Hall.
Ensuring Animal Movement Route Sustainability
08/10/2020
Animal Movement Route (AMR) stakeholders are working together to make an AMR Sustainable Development Roadmap, which will include an action plan and future management scheme. This idea came as a result of the AMR stakeholders meeting on October 8th, 2021. The First Deputy Minister of the Ministry of Environmental Protection and Agriculture, the Head of the National Agency for Sustainable Land Management & Land Usage Monitoring, representatives of the National Food Agency, the National Agency of the State Property, Shepherds Association of Georgia, Georgian Farmers Association, FAO National Animal Identification Registration and Traceability programme (NAITS) and Land O’Lakes participated in the meeting and discussed the future development, management and sustainability of the AMR.  “To solve the complex problems connected to the land and management of the route we still need some help from the ALCP. Together we did seven Veterinary Safety Points and water points on the route. Now it is time to have a concrete vision and plan on the future development,’ – the Deputy Minister said. In addition, Sheep Dipping Guidelines for Private Sheep Dips developed by the programme following Environmental, Health and Safety Assessments of three private sheep dips are ready to be approved by the National Food Agency. The guidelines provide simple operational and safety instructions for private sheep dip owners to mitigate potential environmental and health harm that can be caused by the sheep dipping process.
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