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Item Government debt as an important factor for the economy growth (on the example of Georgia after 2000-s)(Ivane Javakhishvili Tbilisi State University Press, 2019) Archvadze, JosephLoan and debt – are the most important economic categories of market economy. By means of a selected loan, the resources of the economy and its individual segments are reconciled, on a principle of equilibrium, there are transfer of excessive resources to those areas and segments of the economy where their defi cits are observed. As a result, economic processes, growth dynamism and, ultimately, the well-being of the entire society will accelerate. As a rule, borrowed money from the state debt creates additional fi nancial resources, mainly covering the budget defi cit, improving municipal and road infrastructure, energy sector development, etc. Private sector loans serve to expand relevant business activity. Overall, both forms of lending – public and private –if they are eff ectively used, have a positive impact on the country’s economy, its individual sectors or regions, on macroeconomic growth and ultimately on the welfare of the population. Despite the widespread assumption, the growth of Georgia’s economy over the past two decades exceeds the growth dynamics of public debt. If the debt-to-GDP ratio was 66.7 percent in 2000, despite the fact, that currently Lari is devalued, and the large number of state debts (more than 4/5) present foreign debt, it doesn’t exceed 45 percent. This share of public debt isoriginally exogenous (foreign). The role of international fi nancial institutions and leading states in the institutional reforms and economic development of our country is invaluable. At the same time, thanks to the growth of the Georgian economy and the development of the banking sector, it is possible to mobilize the country’s internal resources in the form of domestic debt. In general, fi nancial and economic system of the modern world is built on the principles that it is not important the size of the debt, but the ability to repay it. Wealthy countries and their entities conduct their activities largely by credits.- Low interest rates on loans, a stable and predictable business environment, enables them to meet their current needs in the shortest possible time and with minimal losses. In developed market economy contries, in comparison with Georgia it is about 2.5 times lower (Georgia on average- 7.2%). But this principle also implies strict adherence to therepayment terms of the debts owed. As countries diff er in size, population and economic strength, they can only be compared against public debt by two criteria: A) The debt-to-GDP ratio of the country; B) The largest debt per capita population. Georgia’s public debt per capita at the end of 2018 reached to 5.0 thousand GEL and their volume increased by 5.4 times in the last two decades (2018 year% to 2000 = 543.7%). Taken into the consideration that the country’s nominal GDP was growing faster than the state debts, the latter’s ratio to the country’s economy decreased from 67.7 percent in 2000 to 45.1 percent in 2018, though Georgia has had periods in nearly two decades when the mentioned ratio was much lower (see Table below). The ratio of public debt according to developed countries is much higher, for which, as a rule, the ratio of state debt to the country’s annual economy is signifi cantly higher. The ratio of state debts to GDP in the developed countries was four times more than the same index of the post-Soviet countries. In year 2018 in comparison with the year 2000 Georgia’s gross domestic product (GDP) increased by 6.8 times in GEL and by 5.6 times in US dollars. At the same time, state debt increased: by 4.5 times in GEL denominated and by 3.5 times denominated in US dollars (by 5.4 times and by 4.2 times per capita, respectively). Predominant growth of state debt per capita in comparison with the increase of total debt is driven by a sharp 17.7 percent decline of Georgian population over this period. Of course, the economies of these countries are much larger and stronger than Georgia, but they are far ahead by debt burden per capita than by the produced GDP. Therefore, to determine the real burden of the debt, its value is compared with the country’s main macroeconomic indicator –to gross domestic product. By this fi gure, Georgia is ranked 36th place out of 188 countries in the world (110% of GDP), „somewhere„ between Slovenia and Bhutan. For mobilizing additional fi nancial resources by help of foreign and domestic debts, Georgiangovernment prefers foreign debt–because of the big amount they can get. The lenders for such loans are international fi nancial institutions (IMF, World Bank, European Investment Bank, European Bank for Reconstruction and Development, Asian Development Bank, etc.) or specifi c countries (US, Germany, Japan, Kuwait, Turkey, Kazakhstan, Azerbaijan, etc.). According to the latest data, 73.7% of foreign loans come from international fi nancial institutions, 17.0% from other countries and 9.2% from securities (so-called Eurobonds). The average contractual deadline of all external debt is 22.2 years, with an average preferential period (ie, the time when the debt is not covered) – 8.1 years, with the interest rate (2.20%) it is close to the infl ation rate of developed countries. For example, infl ation in the US from the past 18 years in the 21st century, it has been above 2.2% during the nine years. The 5% of GDP is considered to be as the marginal indicator of public debt coverage (currently by the data 2019it is around 2.2% in Georgia). By 2021, when the most „exotic„ foreign debt in the most recent history of Georgia must be covered–so calledEurobonds ( 500 million US dollars), the ratio of external debt coverage to state budget revenues will eventually double and reach 16.5% instead of 8.5% that was in year 2018. The Government of Georgia has issued 6- and 12-month Treasury Bills, 2-, 5- and 10-year Treasury Bonds. The annual average interest rate was 8.3% at the end of 2018, which is almost 3.8 times higher than the average annual interest rate on external debt (2.20%). Because of this in 2018, despite the relatively low share (less than 1/5) in total government debts, almost half (47.0%) of total debt payment was made on domestic debt service. Both foreign and domestic debt growth is projected to increase in the coming years due to the latter’s faster growth (external debt volume will increase by 56.9% in 2023 in comparison with the year 2016, while domestic debt will increase by 103.3%. As a result the share of external debt in the whole state debt, will maintain a leading role, though its share will be somewhat reduced –from 79.1 percent of the year 2016 to 74.8 percent by the year 2023).Item The subsistence minimum in Georgia and the necessity for determining its optimal level(Ivane Javakhishvili Tbilisi State University Press, 2020) Koguashvili, Paata; Archvadze, JosephSubsistence minimum is a kind of social reference, social standard of living used for fixing the amount of the wages, pensions, stipends, allowances and other social benefits. The full value of subsistence minimum consists of the cost of food products (the so-called “food basket”) required for a healthy and productive life of an able-bodied person as well as the minimum costs of nonfood consumer products and services (at market prices). The population of Georgia has been malnourished for years, unable to purchase and consume relatively expensive products (meat, milk and dairy products, fish, fruits, vegetables) in accordance with the real physiological standards, and satisfied food demands mostly by cheaper products, such as bread, which represents almost half the ration of food, while in the developed countries, the share of bread in the ration is only 12-15%. Because of all this, for years, the population has been suffering from protein deficiency, as well as lack of vitamins and microelements. With this in mind, one of the pressing problems that lie ahead in Georgia to addressed in the near future is to improve the food ration of the population and to ensure its pacing factor - food security. Its solution is a major socio-economic challenge. It implies the country’s ability to provide the basic foodstuffs to its population through indigenous resource production. Without this, not only the possibility of providing food to the population at the subsistence level will be called into question, but this also will increase the government’s motivation and “temptation” to revise these norms downwards in order to show the de-facto situation better than it is, as it once did in 2003. In particular, the Order No. 111 of the Minister of Labor, Health and Social Protection from May 8, 2003, approved norms that lagged significantly behind both internationally recognized and preexisting standards: for example, the meat consumption rate of 80g/day is 2.5 times lower than internationally recognized norm (200 g/day), the rate of milk and dairy products consumption decreased by 4.5 times (!) - from 960 grams to 215 grams, the vegetable consumption rate was halved - from 370 grams to 182 grams, sugar consumption rate decreased from 100 grams to 55 grams, while the rate of consumption of cheaper products, such as bread, which already exceeded significantly the international standard (200 g/day), increased from 350 grams to 400 grams per day (!). As a result of this methodological manipulation, the minimum amount of food that the population consumed was considered to be a physiological norm. The alarming situation of food security violations has been “resolved” in such a simple way, without utilizing budgetary resources and taking appropriate measures. As a result, in accordance with the so-called “norms”, the food consumption situation of our population looked “not so bad” visually (!). However, these standards lag significantly behind both internationally recognized and preexisting standards fall far short of those recognized by international standards, including those recommended in the US: 3.2 times lower for meat, 3 times lower for dairy products, 2.3 times lower for fruits, and 2 times lower for vegetables. Because of this, the contents of essential nutrients of proteins, fats and carbohydrates in the human diet also decreased significantly in Georgia. In general, this farce was done to reduce the cost of the food basket, in order to minimize as much as possible this huge difference between the actual basket and pensions, benefits and other allowances (and unfortunately, it still exists). Through this measure, the government attempted to close the gap between supply and consumption of food and create a visual image that is close to normal. Despite this decline, the amount of food resources currently existing in Georgia (except for eggs) is significantly lower not only in comparison with optimal, but also as compared to critical. The fact that agro-food products imported to Georgia in 2011-2019 worth more than US$ 11.0 billion (92.5% of the country’s GDP in 2019) indicates serious decline in the agrarian sector and insufficient level of the country’s food security (consisting of four key components, such as - Providing the population with: 1. Adequate quantities of food stocks; 2. Nutritious and balanced food; 3. Safe food; 4. Affordable food). The current subsistence minimum is unrealistic - it creates a false picture of the adequacy of the amount of food consumed by the population, as well as it gives off the illusion that its food ration (which is completely out of real physiological norms) is normal. As a result, focusing on them increases the risk for people to become a victim of various severe diseases. With this in mind, the existing methodology for calculating living wage calculation the subsistence minimum requires urgent modification, and in order to determine a real subsistence minimum, it is necessary: 1. To restore and adhere to the actual physiological norms established for the population of Georgia, harmonized with international standards; 2. To use the actual cost of food to be taken into account in current prices, when defining the food basket based on these norms. The most optimistic calculations resulted in 13.5% discount rate for bargain with, but in practice, it should not actually exceed 2-3%. 3. In the subsistence minimum, the share of food basket should not be 70% (which is completely unacceptable), but only 50%, and the ratio of food and other costs in the subsistence minimum should be not 70/30, but 50/50. If the proportion of calories recommended by nutritionists is observed in terms of vegetable and animal origins (40/60, instead of the current 60/40), this will increase considerably the cost of per 1,000 kcal: calories of animal origin cost 5-6 times as much, than calories of vegetable origin (for example, the latest data on this difference for bread and beef have been confirmed by 13-fold increase in favor of beef), and this difference is even greater from to year. By changing the proportions in favor of animal origin calories, the food component of the subsistence minimum will increase further, which will eventually give us the subsistence minimum worth almost GEL 520 (I believe that this proposal should be acceptable and accessible to the authorities for the first step). In order to translate the subsistence minimum into reality, it will be necessary to implement actively the social programs at the State level, generate new jobs, increase salaries, pensions, tax benefits and so on, which will boost people’s income generation, raise their purchasing power and access to food, basic necessities and various services.Item Transformation of state function in the post-pandemic period(Ivane Javakhishvili Tbilisi State University Press, 2021) Archvadze, JosephIn the history of mankind, one can count on one fingers the years with which mankind has associations with specific historical events: 1453 - the fall of Constantinople, 1492 - the discovery of America, 1789 - the beginning of the Great French Revolution. With high probability, 2020 will enter in the history of humanity as the year of the coronavirus pandemic, which has had an incredibly great impact on economic, on social and political processes almost all over the world, on interpersonal relations and on the psychological state and expectations of the latter. It should be said unambiguously that this epidemic can not be regarded as another force majeure. The COVID-19 pandemic revealed, on the one hand, the entire absurdity of the libertarian view of the omnipotence of the market and, in contrast, emphasized the importance of the stabilizing and organizing function of the state. It is Fact that humankind and its institutions and intellectual elite met with less readiness to the attack of Covid-19 and economic crises caused by it. This was especially clearly manifested in the medical field, where in the “brainstorming” regime it was necessary to simultaneously carry out treatment and care to prevent the spread of the virus, and the development of an appropriate therapeutic vaccine, and to minimize losses from a pandemic and to ensure social protection of the population. The situation was and remains so extraordinary to this day that figuratively speaking, states, their medical (and not only) logistics had to learn walking skills during a forced run. Coping with the pandemic and the economic crisis caused by it is possible only at the expense of the only institution that has the ability to accumulate and use purposefully all resources and determines the rules of citizens’ behavior - the State. What is currently taking place in defining the role and function of the state can be figuratively called as a reverse version of the “return of the prodigal son” or “the insight of King Lear”, which gradually regains its immanent functions previously “voluntarily” transferred to the market.