Policy Papers
Georgia - Fit for the Age of Artificial Intelligence?

Artificial Intelligence (AI) is increasingly becoming a part of our everyday lives. The use of Unmanned Aerial Vehicles (UAVs) was observed in the Nagorno-Karabakh conflict; AI model was developed to diagnose COVID-19. The leader of the Georgian Dream criticized opponents for using deepfake programs to misinform the electorate during the 2020 parliamentary election campaign. AI offers tremendous benefits for our societies, in terms of public governance, business development and healthcare, but it also raises important economic, legal and ethical questions.

Governments aiming to develop effective AI policies face a twofold challenge. On the one hand, they have to create an AI friendly eco-system, attract AI investors, boost the development of AI technologies, increase the industrial application of AI and therefore, improve overall, AI-generated economic and social welfare. On the other hand, governments should create policy frameworks to balance AI associated risks, which might be related to personal data protection, targeting, algorithmic discrimination, cybersecurity, and/or AI liability.

AI technologies are expected to add US$15 trillion value to the global economy by 2030. According to PricewaterhouseCoopers (PwC) research, global GDP could be up to 14% higher in 2030, as a result of AI. Several countries developed national AI strategies during the last couple of years. EU recently announced ambitious AI goals to compete with the US and China and issued several AI policy documents. Some of the EU member states (MSs) also made significant progress, in terms of national or sector-specific AI policies. US & China are world leaders in terms of AI technologies, but countries like Canada, Japan and Singapore also allocated solid resources for AI policy and research development. Leading international organizations like the World Economic Forum (WEF) and the Organization for Economic Development (OECD) established AI policy programs.

AI positioning of the developing and the developed countries differ greatly; AI could even widen the gap between the rich and the poor nations, by shifting more investments into developing countries and replacing the labour force of the developed nations. Georgia’s AI positioning in the world is modest. According to the AI Readiness Index, the country was ranked #72 out of 172 countries and #5 in the region, below Turkey, Ukraine, Belarus and Azerbaijan. Interestingly, out of 10 ranking dimensions, Georgia received the highest score in Data Representativeness (70.91) and the lowest in AI Vision (0). Georgia is a country of limited human, economic and technological resources. Considering the current AI state of play in the country and especially the issue with the “vision”, it is important to take radical and effective steps to improve global and regional AI competitiveness and ensure that Georgia is not left behind by the “AI revolution”.

Following the international experience, the first step for Georgia to tackle the AI-related challenges and opportunities could be the development of a comprehensive AI strategy. The research aims to investigate the potential of developing a national AI strategy in Georgia, which could potentially create an opportunity for further sector-specific AI policy developments/research. Strategy document could serve as the foundation for AI ethics and policy development in the country.

Working on a national AI strategy requires the involvement of a wide group of actors, including government representatives, business companies/associations, international experts, representatives of academic/research institutions and the public.

AI technologies are broadly applied in several sectors, from military to education, that is why it is significant for the strategy document to be comprehensive and cover important areas of governance and economy. Having a clear strategy could help to coordinate several governmental policies and ensure that there is no contradiction between the AI strategic goals and certain sectoral goals. Therefore, the strategy preparation process has to be transparent and inclusive, to ensure the high legitimacy of the document. The international aspect of the AI policy is also significant, both in terms of potential risks and business opportunities.

The research would be based on a qualitative policy research method, combining the secondary research and interviews with the relevant industry experts. The quantitative method would also be used in certain cases. The research data will include official governmental documents (regulations, policy and strategy documents, decisions and the statements of the government officials) and academic literature related to legal, technical, economic and ethical aspects of AI. The scope of the research would be limited to the AI policy issues in Georgia, the EU, MSs. The examples from two neighboring countries of Georgia – Turkey and Russia would also be used.

The second chapter of the paper focuses on the definition, historical development, application and importance of AI. The third chapter describes recent AI policy developments in different countries and identifies the main characteristics of these policies. The fourth chapter maps AI in Georgia and explores the current state of play of AI in the country with regards to the policy/regulation, business and education sectors. Based on the findings of the previous chapters and considering the experience of foreign countries, the fifth chapter provides recommendations for governmental, business and education sectors. The findings of the research are concluded in the final chapter.

Shortfalls of Deliberative Democracy in Rural Georgia: Analysis of the General Assembly of a Settlement in Mestia Municipality

This study analyzes the reasons behind citizens’ refusal to participate in public deliberation through the General Assembly of a Settlement mechanism in remote communities of Georgia. The report draws on the existing academic literature on both effective deliberation processes and reasons behind public disengagement in order to explain the indifference toward deliberation processes by populations in rural Georgia. By applying an analytical framework focusing on effective deliberation and the logic of non-participation, this research report uses a single case study (Mestia municipality) and qualitative research methods to show how superficial deliberation processes cause public disenchantment toward, and a lack of engagement in local decisionmaking processes and foster a public perception of civic participation mechanisms as ineffective.

Creative Industries - Anti-Piracy in Georgia

This paper concentrates on the production and post-production (of audiovisual content) value chains within the creative industries sector and aims to facilitate dialogue between private and public sectors on the most critical policy/regulatory challenges. The paper is developed by PMCG under the USAID Economic Security Program. 

Value Chain Analysis of Fruits (Apple, Pear, Plum), Vegetables (Tomato, Cucumber), Beekeeping and Non-Timber Forest Products in Mtskheta-Mtianeti Region

The study examines organic agricultural products in the Tianeti municipality and Lower Pshavi area (Dusheti municipality) of Mtskheta-Mtianeti region in order to introduce more economic opportunities in these deprived rural areas of Georgia. 

This study was conducted by PMC Research in collaboration with Biological Farming Association ELKANA, as part of an Austrian Development Cooperation project.

Value Chain Analysis of Rural Tourism in Mtskheta-Mtianeti Region

The study examines the rural tourism value chain in the Tianeti municipality and Lower Pshavi area (Dusheti municipality) of Mtskheta-Mtianeti region in order to introduce more economic opportunities in these deprived rural areas of Georgia. 

This study was conducted by PMC Research in collaboration with Biological Farming Association ELKANA, as part of an Austrian Development Cooperation project.

Reviewing Migration and Development: The Role of Local Authorities in Central Asia

The paper reviews developmental implications of labour migration from Central Asia, analyses policy gaps in development-oriented migration management and offers recommendations to facilitate impactful engagement of local authorities in migration governance.

This paper is written by Dr. Giorgi Khishtovani, Director at PMC Research, with contribution from Maya Komakhidze, researcher at PMC Research. 

Tourism Sector in Georgia

The aim of this document is to identify the key economic policy/regulatory challenges in Georgia’s tourism value chain and to facilitate dialogue between private and public sectors including a wide spectrum of civil society and political representatives. The paper is developed by PMCG under the USAID Economic Security Program. 

Monitoring the Implementation of the Strategy and 2019-2020 Action Plan for the Development of Penitentiary and Crime Prevention Systems in Georgia, and Review of International Best Practices

This study reviews each activity defined in the 2019-2020 action plan, which aims to develop the infrastructural part of the penitentiary system, and evaluates its implementation against pre-defined indicators.

China, EU and Georgia Nexus: Unpacking the Economic and Political Relations

The main objective of the research is to study the impacts that free trade agreements with the EU (DCFTA) and China had on Georgian economy and political implications that they might result in.

Economic Analysis of Georgia’s Free Trade Agreements with EU and China

It’s been five years after DCFTA was implemented and two years have passed since FTA with China. It is interesting to conduct ex-post analysis to find out how these FTAs affected Georgia’s economy. Goal of ex-post analysis will be to determine what qualitative and quantitative impacts are observed after Georgia signed DCFTA and FTA with China, on macro and sectoral levels. Also, the research paper will try to find if DCFTA and FTA with China resulted in welfare gains. To be more precise, the paper aims to determine whether the increase in trade was a result of trade creation or trade was diverted.

Another aim is to analyze quantitative effects on imports and exports on different aggregation levels. For conclusion, research paper will analyze differences and similarities between DCFTA and FTA with China and based on these empirical findings, the research will identify possible threats and opportunities, which may come from future free trade agreements.