Journal number 1 ∘ Ramaz Abesadze ∘

Circular Economy: Essence and modern challenges

Resume The vast majority of modern economies are characterized by the patronage of natural resources - the economic value of resources is not maximally used. Such economy, that is based on the growth of profit, is called a straightforward economy on the maximum satisfaction of today's demands. The linear (straightforward) economies have limited resources that are not effectively used and a large number of waste have a negative impact on the environment.The circular economy is the opposite of linear economy, which is focused on the maximum utilization of economic value of the natural resources and minimal pollution of the environment. Key words: circular economy, Linear economy, waste, Environment, Protection of nature Introduction Nowadays world is facing two major challenges, first of all, the world reserves of resources are gradually expiring and it is necessary to keep them as long as possible,until the alternative resources are not solved, renewable resources should

Journal number 1 ∘ Dariusz Prokopowicz ∘ Sylwia Gwoździewicz ∘

THE IMPACT OF THE DEVELOPMENT OF THE CREDIT DERIVATIVES MARKET ON THE PROCESS OF IMPROVING CREDIT RISK MANAGEMENT IN FINANCIAL INSTITUTIONS

Summary The development of financial markets since the 1970s has been subjected to increasing globalization. Globalization processes in the area of the international financial system, including the banking sector are becoming increasingly prominent in Poland as well. At present, the immediate source of the global financial crisis of 2008 is associated with the liberalization of the functioning of American investment banks, this is a process that began in the mid-1990s. These banks sold derivative instruments of the subprime type based on income from very risky mortgages. The characteristic feature of derivative instruments is that on this basis it does not occur to sell rights to income or property, as in the case of classical securities, but it happens to resell uncertainty about future market valuation of a financial instrument or other object of a financial market transaction. The emergence of the financial crisis in 2008 indicates the need of improving banking prudential reg

Journal number 1 ∘ Alfred Kuratashvili ∘

“INVISIBLE HAND” BY ADAM SMITH AND MODERN MANIFESTATIONS OF CAPITALISM (?!)

Expanded Summary The scientific work examines modern manifestations of capitalism, the underlying theoretical foundations of which lie in the so-called “Invisible Hand” of Adam Smith, but which (these manifestations) are especially characteristic of some states functioning as a result of fertilization of wild capitalism on the basis of pseudo-socialism. Special attention in scientific work is paid, first of all, to a fundamentally new understanding of that: What is capitalism ?! In particular, in contrast to the traditionally accepted - "classical" - view, according to which an indicator of capitalism is the presence of private property and the market - market relations, according to the author’s scientifically grounded statement, first, private property and market relations are peculiar not only to capitalism, and, secondly, in accordance with the theory of the true essence of capitalism, created by the author of this work, the characteristic feature

Journal number 1 ∘ Vakhtang Burduli ∘

THE TRANSFORMATION OF NATIONAL INNOVATION SYSTEMS IN SOME DEVELOPED COUNTRIES

Summary Тhis article gives a brief description of the main NIS models used in the world, investigated the nature of the development of NIS in France, South Korea and Finland, and in the last paragraph of this chapter, the relationship of the overall structural, structural industry (industrial), innovation and structural regional policy. All this enabled the author to formulate several recommendations in the context of certain directions of the Georgian NIS development. Keywords: national innovation system (NIS); financing innovative developmment; local innovation centers (technoparks, poles of competitiveness, etc.ж); borrowing innovation. INTRODUCTION As you know, in the last two decades in developed countries, a course has been taken to build an innovation economy. At present, Georgia is facing such a task. Therefore, in order to make fewer mistakes in its construction, it is necessary to study the experience of developed countries in this direction, especially in t

Journal number 1 ∘ Emir Eteria ∘

Economic Globalization and Regional Trade Agreements: Recent Developments

Summary Economic globalization and its influence on regional economic integration processes are among the most debated issues. Noteworthy, that neoliberal economic globalization has increased attractiveness of regional economic integration, which is reflected in growing numbers of trade agreements on bilateral, multilateral and cross-regional levels. Recent proliferation of Regional Trade Agreements (RTAs) involves developed and developing countries as well as countries with transition economies. In addition, a substance of RTAs changed significantly and includes issues which were not covered by previous trade agreements, such as services, investments, competitions. Thus, economic globalization is developing through increased regional and cross-regional integration and therefore, globalization and regional integration are the complementary process. Keywords: Economic Globalization; Regional Economic Integration; Regional Trade Agreements; Free Trade Agreements. 1. Introd

Journal number 1 ∘ Nino Rukhaia-Mosmgvdlishvili ∘

Strengthening Competitiveness and Income in the Georgian Agrarian Sector

Abstract This work was supported by Shota Rustaveli National Science Foundation (SRNSF) YS-2016-23 Young Scientists Research Grant. In this paper we discuss ways of cooperation in agrarian sector and its role in developing the field and stimulating export. During last year, using secondary and empirical studies, we have studied difficulties in Georgian agrarian sector, corresponding problems and different ways of their solution proposed to government by scientists. Regarding the purposes for the study, the following tasks have been outlined: 1. The survey of main workforce- peasants and farmers in field and rural areas, their attitudes and opinions analysis. This study gave us the information about the mood of population, analysis of their problems assisted us in determining the principle messages of PR campaign while economic policy formation. In addition, it is possible to identify a new type of

Journal number 1 ∘ Tengiz Verulava ∘

Access to Medicines for Pension Age Population in Georgia

Expanded Summary Pension age population belong to the largest risk group within insurance sphere. Healthcare for pensioners often represents catastrophic expenses and has become the major reason for their impoverishment. Families in Georgia spend about 60% of all their healthcare expenses on medicines, this being one of the highest rates across the world. There is some evidence that the high costs of medicines are due to a combination of factors, including insufficient usage/administering of generic medicines, lack or inadequate utilization of prescription mechanisms, insufficient financial limit for medicines within the state healthcare programs, and aggressive marketing by the pharmaceutical industry. The government has been trying to decrease the out-of-pocket spending via different strategies, including universal health coverage (UHC). Since February 2013, the Universal Health State Program came into force, targeting two million of uninsured population and providing a basic packa

Journal number 1 ∘ Givi Makalatia ∘

Georgias adverse budget and state debt

Expanded Summary Georgias adverse budget has significantly increased the state external debt since 2008 and is now USD 5,1 billion, while the domestic debt exceeds USD 1 billion. In the current period, the state debt is 43% of GDP, which is within the parameters of the Law on Economic Freedom adopted back in 2011 (60%). Despite the fact that the mentioned law has not been violated, our goal in this article is to evaluate the purpose of spending the state debt caused by the adverse budget and the analysis of the received benefits. Over the last few years, changes in liabilities make up to 10% of budget payments. The financial resources raised from donors are mainly focused on infrastructural projects. Nowadays, hindering factors for small and medium businesses are mostly expensive credits and non-competitive markets. This work discusses the necessity of market diversification, especially on the financial market. The article emphasizes that the state debt contributes to economic grow

Journal number 1 ∘ Bondo Gasviani ∘

Organizational development stages and growth trends of entrepreneurial company

Expanded Summary The article reviews the history and significance of the "life cycles" theories. Thoroughly reviewed, compared and analyzed two basic models. In addition, to confirm the adequacy of the practical use of models in Georgian reality, relevant studies were conducted. In particular, it questioned 100 Georgian companies and was established stage of their development, what generated a general picture about the level of organizational development and major organizational problems of companies operating in the country. Keywords: Organizational development, Life cycles of the organization. Content Nowadays, organizational development has received a lot of attention. Basically, this concept refers to certain target changes made by managers to improve organizational performance. Some organizations are more successful and dynamic compared to others, others seem to have stopped, while third ones constantly face certain obstacles. Kenneth Boulding was the author who firstly used

Journal number 1 ∘ Keti Tskhadadze ∘

TARGETING INFLATION IN EMERGING MARKET COUNTRIES

Expanded Summary Emerging market economies are very different from advanced economies and therefore, in the article we have emphasized important implications that need to be factored in when designing macroeconomic policies. According to the aspect that targeting inflation in emerging markets may lead to poor macroeconomic outcomes, in the article we are covering major elements that inflation targeting comprises and the conditions that are crucial for achieving inflation targeting’s efficiency. Additionaly, we clarify how the emerging market economies differ from advanced economies and then we discuss why there is a need of developing strong fiscal, financial and monetary institutions to the success of inflation targeting in emerging markets. In emerging market countries international monetary fund’s role is quite critical in promoting the success of inflation. As a precondition of inflation targeting is considered existence of financial dollarization, according to which f

Journal number 1 ∘ Nino Sagareishvili ∘

The Factors Affecting Production of Domestic Agricultural Goods and Export Promotion

Expanded Summary Countries use different strategies to develop domestic production and get positive trade balance. Economic development of the country highly depends on international trade. To make an in depth analysis of this topic, we can discuss two alternative strategies: Import substitution; Export promotion. The paper overviews both strategies and determines its positive and negative aspects. It mainly concentrates on direct and indirect effects of export promotion on increase of domestic production. Import substitution is a government strategy that stimulates increase of domestic production and substitutes import. It is worth mentioning that import substitution strategy does not mean increase of export of agricultural goods. It is beneficial for increasing employment rate, for decreasing demand on foreign currency and for giving an opportunity to the country to satisfy market demand by domestic production. At the same time export promotion stimulates export. It gives p

Journal number 1 ∘ Mariam Saghareishvili ∘

Competition on Georgian Agricultural Market and Challenges in Agricultural Production

Expanded Summary Agriculture has an important role[1] in development of the countries with transitional economies, such as Georgia. Notably, since 2012, Georgian government has recognized agricultural sector as one of their priorities[2]. Therefore, number of programs and projects are being implemented to support the sector by Agricultural Project’s Management Agency of the Ministry of Environmental Protection and Agriculture of Georgia[3]. The paper discusses competitiveness of Georgian agricultural products and tackles the main challenges hindering its increase. In 2017, compared to the previous year, the share of agricultural sector in country’s total GDP declined by 0.8-percentage point and amounted to 8.2% (Geostat, 2018). In addition, in 2017 there was a negative real growth (-4.1%). The volume of agricultural production is increasing with moderate growth rate (2% increase in 2017, compared to 2016). However, the budget of the Ministry of Environmental Protection an

Journal number 1 ∘ Alexandre Nachkebia ∘

On the Place and Role of Personnel Controlling in Companys Management System

Expanded Summary Nowadays competition is becoming more aggravated both at national and world market. Companies actually faced necessity of search of qualitatively new conceptions and instruments of management. One of the modern fields in the theory and practice of management providing increase of production effectiveness is system of controlling. Personnel controlling system is especially important in it, invoked to efficiently employ personnel - the strategic resource of company. Controlling – means future management for the purpose of operation of company and its structural subdivisions within long-term. In order to have achieved objectives under the coordination, integration and operation of entire system of company management the controlling fulfils “management function of governance” and is synthesis of record keeping, controlling and economic analysis. Personnel controlling – it is the system of internal planning and control system in the field of emplo

Journal number 1 ∘ Tariel Lomia ∘

THE PREHISTORY OF THE MUNICIPAL WASTE COLLECTION AND MANAGEMENT SYSTEM

Expanded Summary Keywords: environmental protection, environmental damage, ecological validity, sanitation crisis, waste management system. With the development of the society, the waste generation in the natural environment has significantly increased. In the 21st century waste generation has become even more common, which on the other hand considerably aggravated the problems between human being and nature. Waste can be categorized into household, construction, medical, agricultural, industrial, etc. Plastic, metal, paper and all kinds of substances used by people at home or in the working environment over time are considered as waste. Considering their characteristics, they separate municipal, hazardous, inert and liquid waste. Hazardous waste is particularly risky and potentially dangerous for human health and environmental safety, which has poisonous, flammable, eco-toxic and other destrcutive features. There are different reasons for the current environmental conditions:

EKONOMISTI The international scientific and analytical, reviewed, printing and electronic journal of Paata Gugushvili Institute of Economics of Ivane Javakhishvili Tbilisi State University

DOI: 10.36172/EKONOMISTI E ISSN 2346-8432 Print ISSN 1987-6890	Journal number 1 ∘ Ramaz Abesadze ∘ Circular Economy: Essence and modern challenges Resume The vast majority of modern economies are characterized by the patronage of natural resources - the economic value of resources is not maximally used. Such economy, that is based on the growth of profit, is called a straightforward economy on the maximum satisfaction of today's demands. The linear (straightforward) economies have limited resources that are not effectively used and a large number of waste have a negative impact on the environment.The circular economy is the opposite of linear economy, which is focused on the maximum utilization of economic value of the natural resources and minimal pollution of the environment. Key words: circular economy, Linear economy, waste, Environment, Protection of nature Introduction Nowadays world is facing two major challenges, first of all, the world reserves of resources are gradually expiring and it is necessary to keep them as long as possible,until the alternative resources are not solved, renewable resources should Journal number 1 ∘ Dariusz Prokopowicz ∘ Sylwia Gwoździewicz ∘ THE IMPACT OF THE DEVELOPMENT OF THE CREDIT DERIVATIVES MARKET ON THE PROCESS OF IMPROVING CREDIT RISK MANAGEMENT IN FINANCIAL INSTITUTIONS Summary The development of financial markets since the 1970s has been subjected to increasing globalization. Globalization processes in the area of the international financial system, including the banking sector are becoming increasingly prominent in Poland as well. At present, the immediate source of the global financial crisis of 2008 is associated with the liberalization of the functioning of American investment banks, this is a process that began in the mid-1990s. These banks sold derivative instruments of the subprime type based on income from very risky mortgages. The characteristic feature of derivative instruments is that on this basis it does not occur to sell rights to income or property, as in the case of classical securities, but it happens to resell uncertainty about future market valuation of a financial instrument or other object of a financial market transaction. The emergence of the financial crisis in 2008 indicates the need of improving banking prudential reg Journal number 1 ∘ Alfred Kuratashvili ∘ “INVISIBLE HAND” BY ADAM SMITH AND MODERN MANIFESTATIONS OF CAPITALISM (?!) Expanded Summary The scientific work examines modern manifestations of capitalism, the underlying theoretical foundations of which lie in the so-called “Invisible Hand” of Adam Smith, but which (these manifestations) are especially characteristic of some states functioning as a result of fertilization of wild capitalism on the basis of pseudo-socialism. Special attention in scientific work is paid, first of all, to a fundamentally new understanding of that: What is capitalism ?! In particular, in contrast to the traditionally accepted - "classical" - view, according to which an indicator of capitalism is the presence of private property and the market - market relations, according to the author’s scientifically grounded statement, first, private property and market relations are peculiar not only to capitalism, and, secondly, in accordance with the theory of the true essence of capitalism, created by the author of this work, the characteristic feature Journal number 1 ∘ Vakhtang Burduli ∘ THE TRANSFORMATION OF NATIONAL INNOVATION SYSTEMS IN SOME DEVELOPED COUNTRIES Summary Тhis article gives a brief description of the main NIS models used in the world, investigated the nature of the development of NIS in France, South Korea and Finland, and in the last paragraph of this chapter, the relationship of the overall structural, structural industry (industrial), innovation and structural regional policy. All this enabled the author to formulate several recommendations in the context of certain directions of the Georgian NIS development. Keywords: national innovation system (NIS); financing innovative developmment; local innovation centers (technoparks, poles of competitiveness, etc.ж); borrowing innovation. INTRODUCTION As you know, in the last two decades in developed countries, a course has been taken to build an innovation economy. At present, Georgia is facing such a task. Therefore, in order to make fewer mistakes in its construction, it is necessary to study the experience of developed countries in this direction, especially in t Journal number 1 ∘ Emir Eteria ∘ Economic Globalization and Regional Trade Agreements: Recent Developments Summary Economic globalization and its influence on regional economic integration processes are among the most debated issues. Noteworthy, that neoliberal economic globalization has increased attractiveness of regional economic integration, which is reflected in growing numbers of trade agreements on bilateral, multilateral and cross-regional levels. Recent proliferation of Regional Trade Agreements (RTAs) involves developed and developing countries as well as countries with transition economies. In addition, a substance of RTAs changed significantly and includes issues which were not covered by previous trade agreements, such as services, investments, competitions. Thus, economic globalization is developing through increased regional and cross-regional integration and therefore, globalization and regional integration are the complementary process. Keywords: Economic Globalization; Regional Economic Integration; Regional Trade Agreements; Free Trade Agreements. 1. Introd Journal number 1 ∘ Nino Rukhaia-Mosmgvdlishvili ∘ Strengthening Competitiveness and Income in the Georgian Agrarian Sector Abstract This work was supported by Shota Rustaveli National Science Foundation (SRNSF) YS-2016-23 Young Scientists Research Grant. In this paper we discuss ways of cooperation in agrarian sector and its role in developing the field and stimulating export. During last year, using secondary and empirical studies, we have studied difficulties in Georgian agrarian sector, corresponding problems and different ways of their solution proposed to government by scientists. Regarding the purposes for the study, the following tasks have been outlined: 1. The survey of main workforce- peasants and farmers in field and rural areas, their attitudes and opinions analysis. This study gave us the information about the mood of population, analysis of their problems assisted us in determining the principle messages of PR campaign while economic policy formation. In addition, it is possible to identify a new type of Journal number 1 ∘ Tengiz Verulava ∘ Access to Medicines for Pension Age Population in Georgia Expanded Summary Pension age population belong to the largest risk group within insurance sphere. Healthcare for pensioners often represents catastrophic expenses and has become the major reason for their impoverishment. Families in Georgia spend about 60% of all their healthcare expenses on medicines, this being one of the highest rates across the world. There is some evidence that the high costs of medicines are due to a combination of factors, including insufficient usage/administering of generic medicines, lack or inadequate utilization of prescription mechanisms, insufficient financial limit for medicines within the state healthcare programs, and aggressive marketing by the pharmaceutical industry. The government has been trying to decrease the out-of-pocket spending via different strategies, including universal health coverage (UHC). Since February 2013, the Universal Health State Program came into force, targeting two million of uninsured population and providing a basic packa Journal number 1 ∘ Givi Makalatia ∘ Georgias adverse budget and state debt Expanded Summary Georgias adverse budget has significantly increased the state external debt since 2008 and is now USD 5,1 billion, while the domestic debt exceeds USD 1 billion. In the current period, the state debt is 43% of GDP, which is within the parameters of the Law on Economic Freedom adopted back in 2011 (60%). Despite the fact that the mentioned law has not been violated, our goal in this article is to evaluate the purpose of spending the state debt caused by the adverse budget and the analysis of the received benefits. Over the last few years, changes in liabilities make up to 10% of budget payments. The financial resources raised from donors are mainly focused on infrastructural projects. Nowadays, hindering factors for small and medium businesses are mostly expensive credits and non-competitive markets. This work discusses the necessity of market diversification, especially on the financial market. The article emphasizes that the state debt contributes to economic grow Journal number 1 ∘ Bondo Gasviani ∘ Organizational development stages and growth trends of entrepreneurial company Expanded Summary The article reviews the history and significance of the "life cycles" theories. Thoroughly reviewed, compared and analyzed two basic models. In addition, to confirm the adequacy of the practical use of models in Georgian reality, relevant studies were conducted. In particular, it questioned 100 Georgian companies and was established stage of their development, what generated a general picture about the level of organizational development and major organizational problems of companies operating in the country. Keywords: Organizational development, Life cycles of the organization. Content Nowadays, organizational development has received a lot of attention. Basically, this concept refers to certain target changes made by managers to improve organizational performance. Some organizations are more successful and dynamic compared to others, others seem to have stopped, while third ones constantly face certain obstacles. Kenneth Boulding was the author who firstly used Journal number 1 ∘ Keti Tskhadadze ∘ TARGETING INFLATION IN EMERGING MARKET COUNTRIES Expanded Summary Emerging market economies are very different from advanced economies and therefore, in the article we have emphasized important implications that need to be factored in when designing macroeconomic policies. According to the aspect that targeting inflation in emerging markets may lead to poor macroeconomic outcomes, in the article we are covering major elements that inflation targeting comprises and the conditions that are crucial for achieving inflation targeting’s efficiency. Additionaly, we clarify how the emerging market economies differ from advanced economies and then we discuss why there is a need of developing strong fiscal, financial and monetary institutions to the success of inflation targeting in emerging markets. In emerging market countries international monetary fund’s role is quite critical in promoting the success of inflation. As a precondition of inflation targeting is considered existence of financial dollarization, according to which f Journal number 1 ∘ Nino Sagareishvili ∘ The Factors Affecting Production of Domestic Agricultural Goods and Export Promotion Expanded Summary Countries use different strategies to develop domestic production and get positive trade balance. Economic development of the country highly depends on international trade. To make an in depth analysis of this topic, we can discuss two alternative strategies: Import substitution; Export promotion. The paper overviews both strategies and determines its positive and negative aspects. It mainly concentrates on direct and indirect effects of export promotion on increase of domestic production. Import substitution is a government strategy that stimulates increase of domestic production and substitutes import. It is worth mentioning that import substitution strategy does not mean increase of export of agricultural goods. It is beneficial for increasing employment rate, for decreasing demand on foreign currency and for giving an opportunity to the country to satisfy market demand by domestic production. At the same time export promotion stimulates export. It gives p Journal number 1 ∘ Mariam Saghareishvili ∘ Competition on Georgian Agricultural Market and Challenges in Agricultural Production Expanded Summary Agriculture has an important role[1] in development of the countries with transitional economies, such as Georgia. Notably, since 2012, Georgian government has recognized agricultural sector as one of their priorities[2]. Therefore, number of programs and projects are being implemented to support the sector by Agricultural Project’s Management Agency of the Ministry of Environmental Protection and Agriculture of Georgia[3]. The paper discusses competitiveness of Georgian agricultural products and tackles the main challenges hindering its increase. In 2017, compared to the previous year, the share of agricultural sector in country’s total GDP declined by 0.8-percentage point and amounted to 8.2% (Geostat, 2018). In addition, in 2017 there was a negative real growth (-4.1%). The volume of agricultural production is increasing with moderate growth rate (2% increase in 2017, compared to 2016). However, the budget of the Ministry of Environmental Protection an Journal number 1 ∘ Alexandre Nachkebia ∘ On the Place and Role of Personnel Controlling in Companys Management System Expanded Summary Nowadays competition is becoming more aggravated both at national and world market. Companies actually faced necessity of search of qualitatively new conceptions and instruments of management. One of the modern fields in the theory and practice of management providing increase of production effectiveness is system of controlling. Personnel controlling system is especially important in it, invoked to efficiently employ personnel - the strategic resource of company. Controlling – means future management for the purpose of operation of company and its structural subdivisions within long-term. In order to have achieved objectives under the coordination, integration and operation of entire system of company management the controlling fulfils “management function of governance” and is synthesis of record keeping, controlling and economic analysis. Personnel controlling – it is the system of internal planning and control system in the field of emplo Journal number 1 ∘ Tariel Lomia ∘ THE PREHISTORY OF THE MUNICIPAL WASTE COLLECTION AND MANAGEMENT SYSTEM Expanded Summary Keywords: environmental protection, environmental damage, ecological validity, sanitation crisis, waste management system. With the development of the society, the waste generation in the natural environment has significantly increased. In the 21st century waste generation has become even more common, which on the other hand considerably aggravated the problems between human being and nature. Waste can be categorized into household, construction, medical, agricultural, industrial, etc. Plastic, metal, paper and all kinds of substances used by people at home or in the working environment over time are considered as waste. Considering their characteristics, they separate municipal, hazardous, inert and liquid waste. Hazardous waste is particularly risky and potentially dangerous for human health and environmental safety, which has poisonous, flammable, eco-toxic and other destrcutive features. There are different reasons for the current environmental conditions: