Globalization and Business

17-24

Authors: Revaz Gvelesiani, Givi Bedianashvili

The starting point for economic policy analysis is the difference between what exists and what should exist. Therefore, opinions (views) about what should be, can be used to assess the observed economic situation and development. It is possible to come up with recommendations on how to avoid the differences between what exists and what should exist. In reality, we find factual events that any person can check. There are also desirable events that go beyond such a check. It is on the basis of their comparison that the content of both evaluations and recommendations is formed. Normative views express subjective desires, so the result of the evaluation can not be considered "right" or "wrong". It is possible that the entity (or economic interest group) will consider them acceptable or even reject them. As a result of the significant increase in economic uncertainty in modern conditions, the complex presentation of the targeted aspect of economic policy, as well as the substantial improvement of the degree of policy adaptability itself, taking into account the requirements for ensuring the continuity of systemic long-term forecast work, are especially relevant.

30-34

Authors: Lela Bakhtadze

The article addresses the issues of ensuring the exchange rate stability of GEL - the national currency of our country and effective management and regulation of public debt as well as attaches weight to the mechanisms for overcoming the challenges of economic development in the country and to the selection and use of flexible tools. The article highlights the efforts of the leaders of the government and the National Bank of the country in developing and implementing the optimal macroeconomic policies, as well as in maintaining monetary policy stability and achieving sustainable economic development. Furthermore, considerable attention is given to the GEL exchange rate not only against to major currencies - the USD or the euro - but also to the currencies of the other partner countries of Georgia. The article analyzes the dynamics of changes in the GEL exchange rate against the currencies of partner countries, based on the statistical data of the National Bank of Georgia. Factors influencing both effective nominal and real exchange rates as well as government domestic and external debt are also assessed at different time intervals. Thus, the purpose of this article is to identify the issues related to the management and regulation of public debt based on the analysis of the dynamics and structure of public debt of Georgia, as well as to study the factors that have a positive and negative effect on them. This article aims to identify the issues related to the management and regulation of public debt obligations, on the basis of public debt sustainability analysis. The article, on the basis of statistical data, analyzes the dynamics and structure of public debt in 2010-2020. The problematic issues in the financial and monetary system are also identified and their determinants are investigated. Recommendations have been developed to reduce the debt burden and overcome the negative consequences caused by them. Based on the analysis of the economic situation in Georgia and the dynamics of the exchange rate, the recommendations for stabilizing the exchange rate of the financial sector, effective management of public debt and achieving sustainable economic growth have been developed in this article. Subject and object of research. The subject of the article's research is to identify problems related to the fluctuation of the Georgian national currency exchange rate and public debt regulation. While the object of the article is monetary policy that have been developed and implemented by the National Bank of Georgia and the Ministry of Finance of Georgia. Research methods. Relevant scientific literature as well as statistical data from the National Bank of Georgia, the Ministry of Finance and the National Statistics Office of Georgia were found at the initial stage of the research. In addition, the studies and articles by Georgian and foreign scholars on public debt issues and the materials of the International Monetary Fund were used. The scientific value of the article. The article analyzes the dynamics and structure of the GEL exchange rate and public debt in 2010-2020 based on the statistical data of Geostat and the Ministry of Finance of Georgia. Problematic issues in the field of finance and monetary-credit have been identified and their causes have been investigated. The recommendations have been developed to alleviate the debt burden of Georgia and overcome the negative consequences caused by them. Based on the analysis of the economic situation in Georgia and the dynamics of the GEL exchange rate, the article develops recommendations for improving the financial sector, stabilizing the exchange rate and ensuring effective public debt management and sustainable economic growth. It should also be noted that, the article addresses and assesses the approaches of the leaders of Government of Georgia and the National Bank to ensuring the formation and improvement of a stable macroeconomic environment. The role of monetary policy in ensuring the sustainable development of the economy is revealed. In addition, the mistakes in exchange rate regulation and public debt management are also identified and assessed. The article substantiates the crucial role of ensuring the stability of the GEL exchange rate in achieving economic growth. Besides, reviewing the GEL exchange rate is important not only against the USD, but also against the currencies of other trading partner countries. Accordingly, the paper, based on the statistical data, also analyzes the dynamics of changes in the GEL exchange rate against the currencies of partner countries. The article also analyzes the key factors affecting both effective nominal and real exchange rates, as well as domestic and external debt at different time intervals.

35-38

Authors: Jemal Kharitonashvili

The paper discusses the influence of the proportions of production factors on the establishment of public equilibrium. The theory of production factors occupies an important place in the history of economic thought. The creator of the theory of factors is considered to be the famous French economist Jean Baptiste Say (1767-1832). J. B. Say campaigned against mercantilism and protectionism and advocated a policy of free trade. Factor theory finds significant application in the international division of labor. Another French economist, Frédéric Bastiat, developed the theory of economic harmony. In this theory F. Bastiat sought to reach an economic agreement between different groups of the society, through their cooperation. Canadian engineer-technologist P. Monsarov developed a theory of four factors. Nowadays, Heckcher-Ohlin Theory is widely used in the international division of labor.

51-56

Authors: Vakhtang Charaia, Mariam Lashkhi, Mariam Lashkhi

Paper provides an analysis of FDI challenges and their impact on the service sector of Georgia, under the covid-19 global pandemic, along with the armed conflict factor in Eastern Europe, between Ukraine and Russia. The article also discusses such issues as public debt, economic growth, employment, international rankings, trade, tourism and etc. Since the cases of different countries vary according to their economic structure, political reality, and even the readiness to overcome those newest and unprecedented challenges, the case of Georgia provides a great example of a small, democratic, developing economy, which significantly depends on foreign direct investments both inward and outward, regional stability and not the least - western cooperation and support.

61-64

Authors: Manana Kharkheli

In the first half of 2020, as a result of the spread of coronavirus in the world and the implementation of preventive measures, the volume of production was sharply reduced, there were shortages in the supply of goods the service sector was limited. Additional difficulties for Georgia and many other developing countries have been created by the sharp decline in remittances from our citizens in other countries, which has become one of the reasons for the decline in retail trade. Countries whose tourism accounts for a significant share of their economy have been particularly hard hit. In countries where restrictions were delayed, more massive pandemic outbreaks occurred, with high mortality rates and severely restricted business activities. As a result, unemployment and poverty rates have risen. After the "repulsion" of the first wave of the virus, in many countries, including ours, there was a certain revival of the economy. However, this increased mobility has led to an even more devastating second and subsequent waves of the virus and the world is currently fighting yet another wave. The pandemic factor in Georgia, in parallel with the second, third and subsequent waves, was accompanied by an unstable political situation. This has become an additional pressure and impacted the economic downturn and the devaluation of the Georgian Lari. As in the rest of the world, the coronavirus pandemic in Georgia has had a direct impact on human capital, with a negative impact on education and human health. Unlike natural disasters, devastating effects of which on physical capital are far greater than on human, the pandemic has left factories, plants, infrastructure intact, but has had an extremely negative impact on human health, disrupting the learning process of pupils and students. The closure of schools and colleges and the transition to distance learning have resulted in the loss of much of the school year. A separate problem is the less efficiency of the distance learning process and the difficulties associated with knowledge testing. At the same time, the current situation exacerbates the divergence between different social strata in terms of access to full-fledged education. Pandemic kills thousands of people. Many of those who recovered from the pandemic suffer from both health and psychological problems. In the current situation the health sector is not given the full opportunity to deal with other diseases. Once the pandemic is over, significant investments will need to be made in both education and healthcare. The level of human capital development is an important factor for the economies of all countries. Differences between countries in GDP by 10-30% are caused by differences in the level of human capital development. It is noteworthy that the current shortcomings caused by the pandemic in the development of human capital will have a negative impact on many in the coming years. Since 2018, the World Bank has been implementing the Human Capital Development Project. Within the framework of this project, a so-called The Human Capital Index (HCI) was developed, which shows the productivity of the next generation of workers compared to the standard of complete education and perfect health. Due to the pandemic, this index has deteriorated in all countries of the world, including Georgia.

73-82

Authors: Murman Tsartsidze

In the interests of economic development and economic efficiency, in the current global crisis, priority is given to the development of human capital, increase the competitiveness of the workforce, creating fundamentally new mechanisms to stimulate labour, this, in turn, ensures an increase in labour productivity, its quality and efficiency. The successful solution of this problem requires the improvement of the organization of wages and its optimal state regulation. In the conditions of the current global crisis, role of the state in the field of wage regulation is more social in nature and its main function is to ensure a minimum level of income for the population. This last one, should be carried out by establishing a real subsistence minimum, a minimum wage and establishing an optimal ratio between them. In developed countries, the minimum wage is regulated on the basis of economic development, labour productivity, the level of average wages and the real value of the minimum consumer budget. The specific amount of the minimum wage is set at the national level by the legislature of the country, and its size in a particular area or region is determined by agreements concluded between trade unions and representatives of trade unions. In determining it, the following shall be taken into account: the needs of workers and their family members; the overall level of wages in the country; the value of life and its change; factors of economic development; level of labour productivity and opportunities to achieve and maintain a high level of employment. The purpose of establishing a minimum wage is to provide social protection for employees. Indeed, "The minimum wage has historically been a social protection mechanism which should protect low-wage workers and their families from poverty" (Khelaia, 2020,2). This problem is especially relevant for our country, because to date, there is no comprehensive mechanism for state regulation of the minimum wage and its defining Legislative Framework. In a scientific article is presented the formation of the minimum wage and its peculiarities of regulation, analysis of the related legal framework from the Soviet period to the present day in Georgia. Is established the basic principles, goals and objectives of minimum wage formation. Particular attention is paid to the assessment of the pros and cons of the legally established minimum wage. The final section presents the main directions for calculating the minimum wage and improving its state regulation in Georgia.

99-106

Authors: Nana Jgharkava

Development of the demographic aging is one of the characteristics out of many challenges of the modern world population. Demographic aging is demonstrated in increased number of the older population and is the sign of the aging structure evolution. The results of the demographic aging are obvious in many countries of the world, including Georgia. The outcomes are reflected in various fields, like family structure, savings, economic development, change of consumption forms, the balance of demand and supply at the labor market, healthcare and social protection services. Increased number of the elderly people will raise the costs of the retirement allowance and care and will be the kind of test for the country economy (Bruni …2017, 20) Despite the trend of increasing proportion of the elderly population in the world, demographic aging is characterized by significant variety. The paper reads the demographic indicators (evaluations and predictions), describes period between 1990-2050. The portion of the population above 65 in entire world of the period was increased from 6.2% to 9.3%. According to the UN scale the world is aged, though least developed countries still maintain demographic youth, though according to forecast, the mentioned counties will be aged from 2030. Based on estimation of the correlation between demographic aging coefficient and factors influencing it there are the following findings, in particular, correlation between demographic aging and birth general coefficient (-0,876) for entire world, as well as total birth coefficient (-0,812) is strong. The linkage between less developed regions is the same, while there is average linkage in the developed regions. As for relationship with migration it is average in developed regions, while it is weak in less developed regions and countries. The most important correlation was identified between the demographic aging and median age reaching almost full relationship (0,973-0,981). It shows that change of median age is the key indicator influencing demographic aging. Demographic changes has been started by reduction of the birth rate since 19th century in Georgia, while portion of the elderly population exceeded 8% since 20s of the twentieth century. The paper refers the data from the public census for description of the demographic aging stages in Georgia according to the age groups (1897-2002); the factors influencing demographic aging are also learnt. The aging index within Georgian population corresponds to the index of the developed regions; this is why the influencing factors on the aging (birth, median age, life-span) mainly look similar to developed regions’ tendencies. It was reflected and will be reflected in aging and the rate forecasted by the UN for 2050 is around 21.8. As for migration, considered as one of the influencing factors on aging, it has a negative impact, characterized for less developed countries. According to the UN forecast migration coefficient for 2020 was 2.5, actually it reached 4.2, what can be the result of COVID 19 pandemics. As for the demographic aging linkage with the influencing factors in Georgia, the correlation of birth indicator is medium (general birth rate is 0.395, total birth rate is 0.612), while the strong linkage was identified between the migration and median age (median age was 0,935; migration was 0,988). The changes derived from demographic aging are reflected in the age structure of the work-capable population, reduction of labor supply. The paper provides three age groups of the labor-capable population (1994-2020), where there is the reduction by 42% of 15-29 age group compared to baseline period. This is the most serious result of the demographic aging. Reduction of the youth share among the work-capable population can have significant losses in terms of innovation, as well as less adaptation to the technological development. It was more obvious during the COVID 19 pandemics. The pandemics highlighted unequal access of the population to the digital technologies. Elderly people are more digitally-isolated and have barriers in accessing commodities and services which are provided online more and more (Ageing in the Digital Era, 2021). The same problem is faced by the population of pre-retirement period as during working processes appliance of digital technologies has been increased in the services. It is estimated that when younger part of the work-capable population be in the young adulthood age, the access to the modern requirements and media literacy will be increased, it will reduce the risk estimated by many scientists on slowing economic development down due to demographic condition during the next few decades. The economy is able to adjust to the changes of the population age structure due to new technologies.

111-114

Authors: Tinatin Mshvidobadze

The article describes the impact of digital technologies on the level of social and economic development of the society, provides a rating of the largest IT companies in terms of the volume of business capitalization. The necessity of digital transformation of the management of the socio-economic development of society and organizations is substantiated. The research used groupings of economic activities that directly influence the development of the digital economy. Using the data of regression models, the coefficients of GDP elasticity from the development of the studied sectors were calculated and used to forecast GDP under the development influence of the studied sectors while maintaining the existing trends. A forecast of GDP growth in Ukraine has been constructed, taking into account the processes of digitalization of the economy in accordance with certain trends. The forecast dynamics of changes in GDP under the influence of the IT sector development until 2023 was also illustrated. The results showed that stimulating the development of information and communication technologies has significant prospects for activating digitalization processes in all spheres of the economy and society and increasing GDP.

128-133

Authors: Tamar Makasarashvili, Giuli Giguashvili

Tourism and hotel businesses are the sectors most affected by the COVID-19 pandemic in the Georgian economy. Despite the gradual removal of restrictions imposed during the pandemic period in early 2022, despite the transition to the tourism industry recovery phase, it is important to assess the impact of the pandemic on the hotel sector to better identify post-pandemic challenges and plan sustainable business development measures. The paper analyzes the impact of the global pandemic and other negative factors on the development of the hotel business in Georgia, the main challenges, measures taken to mitigate the damage caused by the pandemic to the hotel sector, and the measures taken to save the hotel business. The paper is based on a review of leading scientific publications and statistical data, an assessment of the main directions of the state anti-crisis policy, government program 2021 - 2024 "Building a European state". Opinions are expressed on the mobilization of existing opportunities in the process of hotel business development in Georgia in the post-pandemic period and the emergence of new perspectives; in the new reality with the services traditionally considered for the hotel business, the introduction of innovative technologies and innovative products.

134-137

Authors: Ioseb Kartvelishvili, Tea Todua

In today’s globalized, dynamic world, organizations’ dependence on information and, consequently, their interest and demands for information is growing. Information technologies play a crucial role in effective functioning and control for modern companies and business. In the conditions of operational accessibility of necessary information it is possible to adequate evaluation of current situation and to make timely decision. At the same time, information must be available only to those to whom it is intended and unavailable - to all remaining. Computers are integrated into a common network for fast data transfer and efficient interaction. This connection must be reliable and secure. Modern companies are interested in possibility of using Internet channels. However, the principles of building of the Internet give the chance to malefactors to steal and distort information purposely. Corporate and broadcasting networks which are based on TCP/IP protocols and are constructed on standard Internet applications (E-mail, Web, FTP) have no warranty from invasion of unauthorised persons. In article the technology of creation of the virtual private networks (VPN), which is one of the optimal variants for creation of secure channel of communication, is considered.

143-148

Authors: Paata Beridze

The world experience confirms that the state-supported / operating enterprises are often inefficiently managed, which is a precondition for statization and privatization of state-owned enterprises. The policy of the state towards insolvent enterprise implies to conduct bankruptcy-liquidation procedures, however, at the same time, the establishment of the state-supported entrepreneurial entities is underway. The most state-owned enterprises are unprofitable enterprises, which are also characterized by a very low degree of accountability, which in turn prevents formation of an optimal business strategy. The main purpose of this paper is to study the mechanisms for improving the management policy of the enterprises owned by the Autonomous Republic of Adjara and municipalities and to develop proposals for its further implementation in practice. The theoretical significance of the paper lies in the fact that the results of its main research can be used to further improve the legislative and normative acts in the field of management policy of the existing, as well as state-supported enterprises and enterprises supported by the Autonomous Republic of Adjara and municipalities, and the practical significance is reflected in the fact that the results, conclusions and proposals obtained in the process of researching the paper can be used directly in the field of management of the existing, as well as state-supported enterprises and enterprises supported by the Autonomous Republic of Adjara and municipalities.

154-159

Authors: Ana Elizarova

Since the dawn of the computer and internet era, many online users have exploded, and more people are using the Internet to spend their money online. Georgia is well-known and well-positioned as a regional gambling hotspot. Gambling is a strategically vital and financially lucrative industry for the country. Gambling business plays a crucial role in the Georgian economy by contributing to its budget revenues via income generated from licenses and spending of foreign tourists and increasing employment by hiring a steadily increased number of employees in the field. Gambling is a steadily growing industry with an increasing number of players raises several behavioral questions on why so many people decide to play online and the main factors that determine and affect their choices. Even though online gambling is a strategically important and financially attractive field for Georgia, it is, at the same time, a source of many social problems such as gambling addiction, the involvement of adults, and financial problems. Gamblers maintain behavioral habits by attempting to deny concerns and a false sense of control. As a result, gambling becomes the most important activity in a person's life. Its nature is so broad that it complicates the process and makes it difficult for gamblers to recover. Therefore, this case requires a thorough study from various perspectives. These aspects lack scientific studies of the local market or other related research papers that add novelty to the Georgian online gambling segment. This research examines several traditional approaches to gambling behavior, their proclivity for problem gambling, and the primary elements that influence it.