Journal number 1 ∘ Ramaz Abesadze ∘

Fundamental factors of economic development

Summary. In the work is discussed about fundamental factors of economic development such as: entrepreneurship, potential of natural resources, science, technologies, innovation and other factors. Also is shown that the correct combination of these factors takes place when government fulfills its role as the "helmsmen" of economy. Keywords: Economic development, education and science, invention, physical and human capital, natural resources Introduction Economic development is the process of transitioning to a qualitatively new, more perfect level of the economy. Unlike of economic growth, it is associated with progressive qualitative changes in economics, while economic growth was driven only by quantitative changes. During a very long period of mankind existence, the well-being of humans was only source of economic growth, as qualitative change in economy proceeded at a very slow pace. However, each new stage of economic development was precisely dri

Journal number 1 ∘ Gyulshen Zayd kyzy Yuzbashieva ∘ Tariel Gurbanov ∘ Asif Mirlazim Mustafayev ∘

The significance of structural changes in the process of strengthening government intervention in the economy

Expanded Summary The article “The Importance of Structural Changes in the Process of Strengthening State Intervention in the Economy” notes that one of the most important tasks of structural policy is the influence of the state on the formation of effective proportions between the public and private sectors. The task is not justification of the need and significance of the public sector, but in determining its scale and effective correlation, interaction with the private sector. It is advisable to study not only the modern structure, but also the structural shifts occurring recently. An important factor in economic growth is the economic structure, i.e. what potential growth is it capable of, what structural changes will lead to future growth, and which will slow down, on this basis, the increase in economic activity, ensuring the competitiveness and efficiency of the economy. The article also states that it is important to switch from the government’s chosen course

Journal number 1 ∘ Alfred Kuratashvili ∘

SCIENTIFIC CREATIVITY – MAIN CRITERION OF EFFICIENT COMPETITIVENESS AND THE NECESSARY BASIS OF SOCIAL-ECONOMIC PROGRESS

Expanded Summary. In scientific work, scientific creativity is considered as the main criterion for effective competitiveness and as a necessary basis for sociall-economic progress. It should be specially noted that without education there can be no true science, but without scientific creativity the development of science itself is impossible, and, therefore, the development of education, society, the state and humanity as a whole is impossible. That is why, scientific creativity must be considered – as the main criterion for effective competitiveness, because without scientific creativity it is impossible to achieve an advantage in the competition, and therefore it is impossible to achieve real social-economic progress. Consequently, scientific creativity is quite logical and it is naturally to consider – as a necessary basis for social-economic progress on a global scale. At the same time, this scientific work considers the “killing” of science as

Journal number 1 ∘ Revaz Javakhishvili ∘

Human capital in the Japanese economy

Expanded Summary Japan is a classic example of how, with the right resources and in the shortest possible time, based on the development of human capital country can overcome economic backwardness and become one of the most developed countries. According to the human capital index, Japan ranks second in the world, along with South Korea. He did this primarily through a radical transformation and improvement of the education system. Currently, this system in Japan has the following components: 1. Secondary education, divided into three levels: primary, secondary and high school; 2. Higher education institutions with their four levels: universities, vocational colleges, specialized universities and postgraduate education organizations. Primary and secondary education, which is free, is considered compulsory in the country. All secondary education continues in gymnasiums, and half in higher education. In total, Japan needs 18 years of education at all levels, while in Russia

Journal number 1 ∘ Zurab Garakanidze ∘ Giorgi Khvichia ∘

THE POSSIBLE INFLUENCE OF THE RECENT RFS WINE LEGISLATION ON THE GEORGIAN WINE EXPORT

Expanded Summary Russian President Vladimir Putin signed a law under which the excise duty for wines have significantly increased from January 1, 2020. The document published on the official portal of legal information amends Part 2 of the Tax Code. As appears from the document, the excise rate by usual wines will increase from 18 rub to 31 rub for liter in 2020, 32 rub - in the 2021st and 33 rub in the 2022nd. On sparkling wines, the rate will increase from the current 36 rubles to 40 rubles/l in 2020, 41 rubles - in 2021 and 43 rubles - in 2022. The financial and economic justification of the law states that its entry into force will ensure the receipt of additional budget revenues in the amount for about 22 billion rubles annually. At the same time, the law refers to sub-excise goods wine materials and grapes used for wine production. Excise rates on them should be 31 rubles/l and 30 rubles/t respectively, with an increase of 1 ruble in the next two years. At the same time, wine

Journal number 1 ∘ Gogita Todradze ∘

Scales of non-observed economy and its estimation practice in Georgia

Expanded Summary Estimation the share of non-observed economy is utmost important for the production of high-quality national accounts and for drafting clear picture of the economy. Non-observed economies are typical for all countries;however, this is particularly relevant for countries with transitional economies. Definition of non-observed economy is based on the concepts of national accounts, according SNA 2008, butcategories and estimation methods are defined by the Eurostat. The Non-observed Economy refers to all productive activities that may not be captured inthe basic data sources used for national accounts compilation. The following activities areincluded: underground, informal (including those undertaken by households for their own final use),illegal, and other activities omitted due to deficiencies in the basic data collection programme. Theterm ‘non-observed economy’ encompasses all of these activities and the related statisticalestimation problems. There ar

Journal number 1 ∘ Besik Bolkvadze ∘

PECULIARITIE OF MANAGEMENT OF LIQUIDITY POSITION IN BUSINESS ENTITIES

(Expanded Summary) The paper refers to the inevitability of utilization of companies’ liquidity instruments in business sector. The necessity of envisaging of specific nuances by the financial managers and analysts is also highlighted that will raise analytical “culture” level and effectiveness of economic activity assessment of business entities. Key Words: Business entity, Financial analysis, Liquidity analysis, Financial ratio, Solvency. The paper considers one of the topic issues of the functioning of business entities as liquidity position and its quantitative and qualitative charasterictics. As it’s well known liquidity level of any company is the main analytical tool in its operation. That’ s why it is important for financial managers and analytists of companies to evaluate and assess of the liquidity paramiters, ratios and aspects impacted on their liquidity level as well as take into account all the factors related

Journal number 1 ∘ Irma Baratashvili ∘ Marika Kldiashvli ∘

CHANGES AND TRANSFORMATIONS IN SMES

Expanded Summary One of the hallmarks of this century's business environment -is the constant shifting of external factors as well as the internal processes of companies. economic - technological development and globalization as a result of the frequency of changes increases, that makes us think about the fact that the modern business world must receize current trend changes as a standard and develop appropriate methodologies, to help manage the changes with maximum efficiency and adapt timely to new circumstances. For every 5-7 years, the amount of knowledge that mankind possesses almost doubles. Consequently, the number of new situations that require new decision making and the use of new methods will be doubled. Naturally, this fact significantly increases the importance of managing news and changes. The reasons for organizational changes can be economic, ideological, organizational, informative, human resources, etc. The most common reason is environmental change and technol

Journal number 1 ∘ Teona Mekhrishvili ∘

THEORETICAL PROBLEMS OF ECONOMY AND MANAGEMENT IN THE FIELD OF HIGHER EDUCATION

Expanded Summary. The scientific work examines the theoretical problems of economyand management in higher education in foreign countries and in Georgia. Particular attention is paid, on the one hand, to the justification of the need to study the problems of higher education, and, on the other hand, to the disclosure of existing problems in the field of higher education, both in foreign countries and in Georgia, because without studying the problems of higher education, it is impossible to develop ways and mechanisms for solving these problems. Moreover, it is noteworthy that the scientific work focuses on the study of the problems existing in the field of higher education from the point of view of the targeted orientation of the functioning of the higher education system, because the higher education system should prepare not only highly qualified specialists in one or another field, but these specialists must be trained with a specific focus – with a focus on serving t

Journal number 1 ∘ Lasha Kelikhashvili ∘

EFFECTS OF PUBLIC DEBT ON PRIVATE INVESTMENT BASED ON LONGITUDINAL PANEL DATA

Summary: This article discusses the effects of public debt on private investment activity. The research is based on an econometric approach, which analyses theoretical determinants of private investment including level of public debt, as a potential determinant. Potential effects of public debt on private investment is essentially important in modern world, as most governments tend to overhang debt and sometimes it can be obstacle for the private sector. Key words: Public Debt, Private Investment, Debt Overhang. Introduction Most governments in the modern world use borrowed resources to finance their operation related to the infrastructure development or merely current needs. Despite positive sides of financing government operations with borrowed sources, sometimes there can be a tradeoff between governmental and private sector activities. Namely, according to the economic theory, excess borrowing by government from the local market may cause private investments crow

Journal number 1 ∘ Nino Chubinidze ∘

Methods of Improving the Management System of Higher Education Institutions Under Reform

Expanded summary In the article the author discusses the reform of the higher education system, which he thinks affects all elements of the higher education system management system. According to the author, in such conditions, there is a need to improve the system and the methods used by its subjects. The article highlights the main domains of the development of the Georgian higher education system, provides an overview of the higher education system management approaches, outlines the key management practices of higher education institutions in the context of higher education reform. The author concludes that in order to improve the management system of higher education institutions, it is necessary to focus on changing operating conditions, which will make it more open and flexible and meet the requirements of any level of education under the “Lifelong Learning“ scheme. Keywords: higher education institutions, higher education management system, higher education reform

Journal number 1 ∘ Natalia Dzidziguri ∘

The Modern Challenges of Decentralization Process in Georgia

Expanded summary Creation and development of full-fledged local self-government is one of the key goals of state governance system. In the countries of European Union reforms are still on-going, aiming further distribution of state powers in already decentralized countries where the principle of connexion is supported by the constitution. The self-governance has centuries-old history in Georgia. In the period of democratic republic (1918-1921) the modern two-level self-government system has been created. Obviously, the soviet period has retreated development of local self-government and only since 1990s after announcement of independence in Georgia, the changes did began for institutionalization and legislative regulation of local government. The implementation of decentralization depends on strong, reliable, transparent, systematic, single standard and citizen-oriented self-government. Government of Georgia has adopted several strategic documents since 2014, the purpose of which a

Journal number 1 ∘ Qristine (Ketevan) Kuratashvili ∘

ECONOMIC THEORY AND THE VALUE OF THE CULTURE FACTOR FOR THE EFFECTIVE FUNCTIONING OF SOCIETY AND THE STATE

Expanded Summary. In scientific work, in connection with economic theory, the importance of the factor of culture for the effective functioning of society, the state and humanity as a whole is considered, for culture, and in particular, spiritual culture, according to the author, is the ideological basis for the effective functioning of society and the state. It is noteworthy that education – as a culture, science – as a culture, as well as legal culture and managerial culture, are considered by the author as a cultural factor, moreover, – as a predominantly directly acting cultural factor, while artistic culture, according to the author, is presented as a predominantly indirect acting cultural factor. Therefore, there can be no doubt that the factor of culture – as a predominantly directly acting factor of culture, as well as a predominantly indirectly acting factor of culture – have an impact on the social-economic development of society and the

Journal number 1 ∘ Lela Kintsurashvili ∘

Human Capital in Georgian Labour Market

Expanded Summary Capital is valued for its useful functions in the creation on wealth. Its use increases the efficiency of production and the productivity of all the factors with which it’s used. One of the prominent forms of capital is human capital. Efficient use of human capital and taking care of its quality in the global labour market is becoming more and more priority. This article is an attempt to transfer basic view about human capital and its use in the labour market. Human capital is a combination of labour skills, education and opportunities, the level of development of which depends on the success of the state, its ability to produce, effective implementation of productive process and revenue growth. Thus human capital is one of the main sources of economic and social progress of the country and therefore education and science are priority areas of long-term development. Education this is a business product that can be realized with high returns. Knowledge and e

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 ∘ Fundamental factors of economic development Summary. In the work is discussed about fundamental factors of economic development such as: entrepreneurship, potential of natural resources, science, technologies, innovation and other factors. Also is shown that the correct combination of these factors takes place when government fulfills its role as the "helmsmen" of economy. Keywords: Economic development, education and science, invention, physical and human capital, natural resources Introduction Economic development is the process of transitioning to a qualitatively new, more perfect level of the economy. Unlike of economic growth, it is associated with progressive qualitative changes in economics, while economic growth was driven only by quantitative changes. During a very long period of mankind existence, the well-being of humans was only source of economic growth, as qualitative change in economy proceeded at a very slow pace. However, each new stage of economic development was precisely dri Journal number 1 ∘ Gyulshen Zayd kyzy Yuzbashieva ∘ Tariel Gurbanov ∘ Asif Mirlazim Mustafayev ∘ The significance of structural changes in the process of strengthening government intervention in the economy Expanded Summary The article “The Importance of Structural Changes in the Process of Strengthening State Intervention in the Economy” notes that one of the most important tasks of structural policy is the influence of the state on the formation of effective proportions between the public and private sectors. The task is not justification of the need and significance of the public sector, but in determining its scale and effective correlation, interaction with the private sector. It is advisable to study not only the modern structure, but also the structural shifts occurring recently. An important factor in economic growth is the economic structure, i.e. what potential growth is it capable of, what structural changes will lead to future growth, and which will slow down, on this basis, the increase in economic activity, ensuring the competitiveness and efficiency of the economy. The article also states that it is important to switch from the government’s chosen course Journal number 1 ∘ Alfred Kuratashvili ∘ SCIENTIFIC CREATIVITY – MAIN CRITERION OF EFFICIENT COMPETITIVENESS AND THE NECESSARY BASIS OF SOCIAL-ECONOMIC PROGRESS Expanded Summary. In scientific work, scientific creativity is considered as the main criterion for effective competitiveness and as a necessary basis for sociall-economic progress. It should be specially noted that without education there can be no true science, but without scientific creativity the development of science itself is impossible, and, therefore, the development of education, society, the state and humanity as a whole is impossible. That is why, scientific creativity must be considered – as the main criterion for effective competitiveness, because without scientific creativity it is impossible to achieve an advantage in the competition, and therefore it is impossible to achieve real social-economic progress. Consequently, scientific creativity is quite logical and it is naturally to consider – as a necessary basis for social-economic progress on a global scale. At the same time, this scientific work considers the “killing” of science as Journal number 1 ∘ Revaz Javakhishvili ∘ Human capital in the Japanese economy Expanded Summary Japan is a classic example of how, with the right resources and in the shortest possible time, based on the development of human capital country can overcome economic backwardness and become one of the most developed countries. According to the human capital index, Japan ranks second in the world, along with South Korea. He did this primarily through a radical transformation and improvement of the education system. Currently, this system in Japan has the following components: 1. Secondary education, divided into three levels: primary, secondary and high school; 2. Higher education institutions with their four levels: universities, vocational colleges, specialized universities and postgraduate education organizations. Primary and secondary education, which is free, is considered compulsory in the country. All secondary education continues in gymnasiums, and half in higher education. In total, Japan needs 18 years of education at all levels, while in Russia Journal number 1 ∘ Zurab Garakanidze ∘ Giorgi Khvichia ∘ THE POSSIBLE INFLUENCE OF THE RECENT RFS WINE LEGISLATION ON THE GEORGIAN WINE EXPORT Expanded Summary Russian President Vladimir Putin signed a law under which the excise duty for wines have significantly increased from January 1, 2020. The document published on the official portal of legal information amends Part 2 of the Tax Code. As appears from the document, the excise rate by usual wines will increase from 18 rub to 31 rub for liter in 2020, 32 rub - in the 2021st and 33 rub in the 2022nd. On sparkling wines, the rate will increase from the current 36 rubles to 40 rubles/l in 2020, 41 rubles - in 2021 and 43 rubles - in 2022. The financial and economic justification of the law states that its entry into force will ensure the receipt of additional budget revenues in the amount for about 22 billion rubles annually. At the same time, the law refers to sub-excise goods wine materials and grapes used for wine production. Excise rates on them should be 31 rubles/l and 30 rubles/t respectively, with an increase of 1 ruble in the next two years. At the same time, wine Journal number 1 ∘ Gogita Todradze ∘ Scales of non-observed economy and its estimation practice in Georgia Expanded Summary Estimation the share of non-observed economy is utmost important for the production of high-quality national accounts and for drafting clear picture of the economy. Non-observed economies are typical for all countries;however, this is particularly relevant for countries with transitional economies. Definition of non-observed economy is based on the concepts of national accounts, according SNA 2008, butcategories and estimation methods are defined by the Eurostat. The Non-observed Economy refers to all productive activities that may not be captured inthe basic data sources used for national accounts compilation. The following activities areincluded: underground, informal (including those undertaken by households for their own final use),illegal, and other activities omitted due to deficiencies in the basic data collection programme. Theterm ‘non-observed economy’ encompasses all of these activities and the related statisticalestimation problems. There ar Journal number 1 ∘ Besik Bolkvadze ∘ PECULIARITIE OF MANAGEMENT OF LIQUIDITY POSITION IN BUSINESS ENTITIES (Expanded Summary) The paper refers to the inevitability of utilization of companies’ liquidity instruments in business sector. The necessity of envisaging of specific nuances by the financial managers and analysts is also highlighted that will raise analytical “culture” level and effectiveness of economic activity assessment of business entities. Key Words: Business entity, Financial analysis, Liquidity analysis, Financial ratio, Solvency. The paper considers one of the topic issues of the functioning of business entities as liquidity position and its quantitative and qualitative charasterictics. As it’s well known liquidity level of any company is the main analytical tool in its operation. That’ s why it is important for financial managers and analytists of companies to evaluate and assess of the liquidity paramiters, ratios and aspects impacted on their liquidity level as well as take into account all the factors related Journal number 1 ∘ Irma Baratashvili ∘ Marika Kldiashvli ∘ CHANGES AND TRANSFORMATIONS IN SMES Expanded Summary One of the hallmarks of this century's business environment -is the constant shifting of external factors as well as the internal processes of companies. economic - technological development and globalization as a result of the frequency of changes increases, that makes us think about the fact that the modern business world must receize current trend changes as a standard and develop appropriate methodologies, to help manage the changes with maximum efficiency and adapt timely to new circumstances. For every 5-7 years, the amount of knowledge that mankind possesses almost doubles. Consequently, the number of new situations that require new decision making and the use of new methods will be doubled. Naturally, this fact significantly increases the importance of managing news and changes. The reasons for organizational changes can be economic, ideological, organizational, informative, human resources, etc. The most common reason is environmental change and technol Journal number 1 ∘ Teona Mekhrishvili ∘ THEORETICAL PROBLEMS OF ECONOMY AND MANAGEMENT IN THE FIELD OF HIGHER EDUCATION Expanded Summary. The scientific work examines the theoretical problems of economyand management in higher education in foreign countries and in Georgia. Particular attention is paid, on the one hand, to the justification of the need to study the problems of higher education, and, on the other hand, to the disclosure of existing problems in the field of higher education, both in foreign countries and in Georgia, because without studying the problems of higher education, it is impossible to develop ways and mechanisms for solving these problems. Moreover, it is noteworthy that the scientific work focuses on the study of the problems existing in the field of higher education from the point of view of the targeted orientation of the functioning of the higher education system, because the higher education system should prepare not only highly qualified specialists in one or another field, but these specialists must be trained with a specific focus – with a focus on serving t Journal number 1 ∘ Lasha Kelikhashvili ∘ EFFECTS OF PUBLIC DEBT ON PRIVATE INVESTMENT BASED ON LONGITUDINAL PANEL DATA Summary: This article discusses the effects of public debt on private investment activity. The research is based on an econometric approach, which analyses theoretical determinants of private investment including level of public debt, as a potential determinant. Potential effects of public debt on private investment is essentially important in modern world, as most governments tend to overhang debt and sometimes it can be obstacle for the private sector. Key words: Public Debt, Private Investment, Debt Overhang. Introduction Most governments in the modern world use borrowed resources to finance their operation related to the infrastructure development or merely current needs. Despite positive sides of financing government operations with borrowed sources, sometimes there can be a tradeoff between governmental and private sector activities. Namely, according to the economic theory, excess borrowing by government from the local market may cause private investments crow Journal number 1 ∘ Nino Chubinidze ∘ Methods of Improving the Management System of Higher Education Institutions Under Reform Expanded summary In the article the author discusses the reform of the higher education system, which he thinks affects all elements of the higher education system management system. According to the author, in such conditions, there is a need to improve the system and the methods used by its subjects. The article highlights the main domains of the development of the Georgian higher education system, provides an overview of the higher education system management approaches, outlines the key management practices of higher education institutions in the context of higher education reform. The author concludes that in order to improve the management system of higher education institutions, it is necessary to focus on changing operating conditions, which will make it more open and flexible and meet the requirements of any level of education under the “Lifelong Learning“ scheme. Keywords: higher education institutions, higher education management system, higher education reform Journal number 1 ∘ Natalia Dzidziguri ∘ The Modern Challenges of Decentralization Process in Georgia Expanded summary Creation and development of full-fledged local self-government is one of the key goals of state governance system. In the countries of European Union reforms are still on-going, aiming further distribution of state powers in already decentralized countries where the principle of connexion is supported by the constitution. The self-governance has centuries-old history in Georgia. In the period of democratic republic (1918-1921) the modern two-level self-government system has been created. Obviously, the soviet period has retreated development of local self-government and only since 1990s after announcement of independence in Georgia, the changes did began for institutionalization and legislative regulation of local government. The implementation of decentralization depends on strong, reliable, transparent, systematic, single standard and citizen-oriented self-government. Government of Georgia has adopted several strategic documents since 2014, the purpose of which a Journal number 1 ∘ Qristine (Ketevan) Kuratashvili ∘ ECONOMIC THEORY AND THE VALUE OF THE CULTURE FACTOR FOR THE EFFECTIVE FUNCTIONING OF SOCIETY AND THE STATE Expanded Summary. In scientific work, in connection with economic theory, the importance of the factor of culture for the effective functioning of society, the state and humanity as a whole is considered, for culture, and in particular, spiritual culture, according to the author, is the ideological basis for the effective functioning of society and the state. It is noteworthy that education – as a culture, science – as a culture, as well as legal culture and managerial culture, are considered by the author as a cultural factor, moreover, – as a predominantly directly acting cultural factor, while artistic culture, according to the author, is presented as a predominantly indirect acting cultural factor. Therefore, there can be no doubt that the factor of culture – as a predominantly directly acting factor of culture, as well as a predominantly indirectly acting factor of culture – have an impact on the social-economic development of society and the Journal number 1 ∘ Lela Kintsurashvili ∘ Human Capital in Georgian Labour Market Expanded Summary Capital is valued for its useful functions in the creation on wealth. Its use increases the efficiency of production and the productivity of all the factors with which it’s used. One of the prominent forms of capital is human capital. Efficient use of human capital and taking care of its quality in the global labour market is becoming more and more priority. This article is an attempt to transfer basic view about human capital and its use in the labour market. Human capital is a combination of labour skills, education and opportunities, the level of development of which depends on the success of the state, its ability to produce, effective implementation of productive process and revenue growth. Thus human capital is one of the main sources of economic and social progress of the country and therefore education and science are priority areas of long-term development. Education this is a business product that can be realized with high returns. Knowledge and e