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‘Attic Standard Zone’, Eurozone and Georgia: Historical Comparative Analysis

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Authors: Prof. Dr. Tedo Dundua, Dr. Emil Avdaliani

If you cross the state borders freely, seeing all the cargos moving without delay, money standard and the name being identical everywhere, that means you are in Eurozone. The reality has its remote pattern, Athenian (Attic) case with Colchis (Western Georgia) being involved. If Colchis was in “Attic standard zone”, why to deny Eurozone to Georgia? Below Athenian and modern European cases are discussed.

“If anyone mints silver coins in the cities and does not use Athenian coins or weights or measures, but foreign coins, weights and measures, I shall punish him and fine him according to the previous decree which Klearchos proposed” (A Selection of Greek Historical Inscriptions. To the End of the Fifth c. B.C.  Edited by R. Meiggs and D. Lewis. Oxford. 1969. Printed to the University 1971, p. 113; Chr. Howgego. Ancient History from Coins. London and New York. 1995, p. 44).  This is what a secretary of the Athenian Council (Boule) had to add to the Bouleatic oath from the famous Athenian decree enforcing to use the Athenian coins, weights and measures within the Athenian Alliance. The Athenian officials in the cities were responsible to carry out the decree, and the local officials too (A Selection of Greek Historical Inscriptions. To the End of the Fifth c. B.C.  Edited by R. Meiggs and D. Lewis, p. 113). The date of this decree is problematic, but still between 450 and 414 B.C. (A Selection of Greek Historical Inscriptions. To the End of the Fifth c. B.C.  Edited by R. Meiggs and D. Lewis, pp. 114-115; C. G. Starr. Athenian Coinage. Oxford. 1970, p. 68 n. 15; Chr. Howgego. Ancient History from Coins, p. 44).The text was carved on stelai and set up at Athens and the other cities – members of the League. Seven fragments of this text have been already discovered in various places (A Selection of Greek Historical Inscriptions. To the End of the Fifth c. B.C. Edited by R. Meiggs and D. Lewis, p. 111; “Athenian coinage decree”. J. M. Jones. A Dictionary of Ancient Greek Coins. London. First Published in 1986). There are several attempts to interpret the decree. One thing is clear – this decree is imperialistic in tone, and if some of the cities within the Athenian “Empire” were still supposed to issue own money, only Attic weight coins had to be used. Electrum staters remained popular (A Selection of Greek Historical Inscriptions. To the End of the Fifth c. B.C.  Edited by R. Meiggs and D. Lewis, p. 113). Later this decree is parodied in the “Birds” of Aristophanes (C. M. Kraay. Coins of Ancient Athens. Newcastle upon Tyne. 1968, p. 5).

The decree seems to be very comfortable for trade and taxation – indeed, Athenians were scrupulous while collecting taxes within the League.

The whole story about the Greeks shaping Europe has been already told. Macedonia contributed much as a recruitment area, but earlier Athens had been thought to be a leader. It was merely a frustration – indeed, if the best city had to be stripped from a population, nothing would be created at all. While the Greeks still in this mistake, Athenians made a good deal – seizing the markets and imposing taxes.

Athenians cared much for the Black Sea areas; and Pericles even launched a special expedition (Plut. Pericl. 20). Then the numismatic visage of Colchis (Western Georgia) was changed as Athenian tetradrachms came in sight together with the Attic ceramics (G. Doundoua, T. Doundoua. Les Relations Économiques de la Colchide aux Époques Archaïque et Classique d’après le Matériel Numismatique. La Mer Noire. Zone de Contacts. Actes du VIIe Symposium de Vani. Paris. 1999, p. 111 №23; Очерки истории Грузии. т. I. ред. Г. А. Ме­ли­киш­ви­ли, О. Д. Лордкипанидзе. Тбилиси. 1989, p. 228). Moreover, Milesian, Aeginetan and Persian standards used for the autonomous coin issues of Phasis (modern Photi, Western Georgia) now disappear and Attic standard becomes unique.

 Dioscurias (Modern Sokhumi, Western Georgia) was a splendid Greek city dominated by a mercantile oligarchy, a foundation of Miletus, sometimes – being troubled by the natives from the hinterland. Then it seems to be completely assimilated. History of Dioscurias is full of tremendous events and clashes. And the clashes were back again in the summer of 1993 as the civil war broke out in Abkhazia. Still one missile was especially lucky as it buried itself deep in the earth and showed a coin-shaped white metal. The description is as follows: weight – 300.37 gr. d=70 mm. Head of Athena wearing a crested helmet (the fashion is that of “old-style” coinage)/Owl. Obviously Athenian weight, it was offered for sale to Simon Janashia State Museum of Georgia.

The greatest number of the marked weights found in the Agora are small roughly square lead plaques. Sometimes these official weights are marked with the same symbols as the coins – head of Athena/owl (The Athenian Agora. v. X. Weights, Measures and Tokens by M. Lang and M. Crosby. Results of Excavations Conducted by the American School of Classical Studies at Athens. Part I. Weights and Measures by M. Lang. Princeton. New Jersey. 1964, p. 6). Large circular stamp with helmeted head of Athena appears on the lead weight of the Roman time (The Athenian Agora. v. X. Weights, Measures and Tokens by M. Lang and M. Crosby, p. 31 pl. 9 LW (lead weight) 66).  Bronze weight too of some 69.9 gr. has an owl incised. This seems to be a coin weight, 1/6 of mina (The Athenian Agora. v. X. Weights, Measures and Tokens by M. Lang and M. Crosby, p. 26 pl. 1 BW (Bronze weight) 5). Even countermarks for the weights represent double-bodied owl and helmeted head (The Athenian Agora. v. X. Weights, Measures and Tokens by M. Lang and M. Crosby, p. 28 pl. 6 LW 26, p. 30, pl. 8 LW 46). The dry measure also has two stamps: the double-bodied owl and helmeted head of Athena (The Athenian Agora. v. X. Weights, Measures and Tokens by M. Lang and M. Crosby, pl. 14 DM (dry measure) 44, 45; pl. 18 DM 44, 45).

The Athenian coin mina, consisting of 100 drachms, weighted approximately 436.6 gr. There was also another mina, used for weighting market produce, equal to 138 coin drachms, or 602 gr. (“Mina”, “Attic weight standard”. J. M. Jones. A Dictionary of Ancient Greek Coins).  

So, the piece from Dioscurias should be considered as Athenian trade-weight – half mina.

What conclusions are we to draw from all this?

1) Dioscurias had to receive or was glad to receive the official Athenian weights as the city became a subject of the Alliance.

2) And Phasis should have accepted even a coin mina and Attic standard too while already in the Alliance. Was there any legislation in favour of democracy; what does a maintenance of “Archaic smile” on the Athenian (“Old Style” coinage) and Phasian coins mean? We shall never know.

3) One thing is clear – Attic standard was installed in Colchis between 450 and 414 B.C. And the effect was similar to the modern introduction of euro across much of the European Union.

From Ancient Period to Modern Europe

Creating a common economic space was a recurring ambition throughout European history. The above-discussed “Attic standard zone” was one of the pertinent examples from Ancient history. From modern period the best example perhaps is the European Union (EU) which from the late 1960s aimed at coordinating economic and fiscal policies. It also included the establishment of a common monetary policy as well as the introduction of a common currency. The principal arguments in favor of its adoption were economic stability and unencumbered cross-border trade.

In 1979 the European Monetary System (EMS) was launched. Later on during the European Council session in Maastricht, 1991, the Treaty on European Union, which contained various provisions necessary for successful implementation of the monetary union, was agreed upon (https://europa.eu/european-union/about-eu/euro/history-and-purpose-euro_en).

Then came the Economic and Monetary Union (EMU) which aimed at step-by-step economic integration of a number of countries. EMU was designed to support sustainable economic growth and a high level of employment. This specifically comprised three main fields: 1. implementing a monetary policy that pursues the main objective of price stability; 2. avoiding possible negative spillover effects due to unsustainable government finance, preventing the emergence of macroeconomic imbalances within Member States, and coordinating to a certain degree the economic policies of the Member States; 3. ensuring the smooth operation of the single market (https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/economic-and-monetary-union/what-economic-and-monetary-union-emu_en).

It was not however until 1999 that a common currency – the euro – appeared with 11 countries – Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain – fixing their exchange rates and creating a new currency with monetary policy passed to the European Central Bank.

For the first three years euro did not exist as it essentially was an “invisible” currency. It was used mainly for accounting purposes. In 2002, however, first euro coins and banknotes were introduced in 12 EU countries thus ushering in, arguably, the biggest cash changeover in history. Nowadays, the euro is in circulation in 19 EU member states. There are a number of advantages attached to the use of the euro: low costs of financial transactions, easy travel, increased economic and political role of Europe on the international arena (https://europa.eu/european-union/about-eu/euro/which-countries-use-euro_en).

Parallel to the creation of the unified economic space ran the establishment institutionalized freedom of movement within most of the European states. The treaty came to be known as the Schengen Agreement signed on June 14, 1985, which led most of the European countries towards the abolishment of their national borders. The concept for free movement between the European countries is very old and it can be found through the Middle Ages (https://www.schengenvisainfo.com/eu-countries/).

As was the case with the “Attic standard zone” modern Georgia aspires to become an economic part of Europe, its monetary system, unified currency – euro. Major steps have been made to this end since the break-up of the Soviet Union. The current EU-Georgia close relationship is based on the EU-Georgia Association Agreement. More importantly, the latter involves a Deep and Comprehensive Free Trade Area (DCFTA), which came into force in mid-2016 and along with closer political ties aims to achieve deeper economic integration between Tbilisi and the EU (https://ec.europa.eu/trade/policy/countries-and-regions/countries/georgia/).

Simultaneously with Georgia’s slow and steady economic integration into the EU economy, the country has also started to enjoy the benefits of institutionalized free movement of citizens across much of the European continent.

Thus there is a long history of Georgian economic and territorial integration into the European models of unified economic spaces. The above examples of the “Attic standard zone” as well as the modern European Union prove this point.

Author’s note: first published in Georgia Today

Prof. Dr. Tedo Dundua is the Director of the Institute of Georgian History, Faculty of Humanities, at the Ivane Javakhishvili Tbilisi State University.

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Eastern Europe

As Georgians Fight Each Other, Russia Gleefully Looks On

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Earlier today, the leader of Georgia’s major opposition party – United National Movement (UNM) – was detained at his party headquarters by government security forces, the most recent escalation in a drawn-out political crisis. This could well be the beginning of a new troubled period in the country’s internal dynamics, with repercussions for the country’s foreign policy.

The optics favor the opposition. Images of armed and armored police storming UNM’s headquarters was damaging to the ruling party, Georgian Dream (GD). Western diplomats expressed grave concern over the events and their repercussions. Protests have been called, and will likely be covered closely in Western media.

What comes next, however, is not clear.

Much will depend on what long-term vision for the country the opposition can articulate in the aftermath of the most recent events. It was not that long ago that UNM was declining as a political force in Georgian politics. There is a real opportunity here. But the burden is on the opposition to make a play for the loyalty of voters beyond its circle of already-convinced supporters.

Appealing to ordinary Georgian voters is ultimately the key to resolving the crisis. Beyond the intra-party clashes about the legitimacy of the most recent elections, there is a growing chasm between political elites and the challenges faced by people in their daily lives. And tackling these challenges successfully will not be easy.

Both the ruling party and the opposition have been facing declining support from the public at large. Long-term economic problems, which have been greatly exacerbated by the pandemic, have not been credibly addressed by either side. Instead of solutions, both sides have engaged in political theatrics. For many voters, the current crisis is more about a struggle for political power, rather than about democracy and the economic development of the country. No wonder that most people consider their social and economic human rights to have been violated for decades no matter which party is in power. These attitudes help explain high abstention rates during the most recent election. Despite remarkable successes in the early years after the Rose Revolution, Georgia has lacked a long-term policy for reimagining its fragile economy since its independence and the disastrous conflicts of the 1990s.

None of this, however, should minimize the threats to Georgian struggling democracy. Today’s arrests reinforce a longstanding trend in Georgian politics: the belief that the ruling party always stands above the law. This was the case with Eduard Shevardnadze, Mikheil Saakashvili, and is now the case with the current government. For less politically engaged citizens, plus ça change: Georgian political elites for the last 30 years have all ended up behaving the same way, they say. That kind of cynicism is especially toxic to the establishment of healthy democratic norms.

The crisis also has a broader, regional dimension. The South Caucasus features two small and extremely fragile democracies – Armenia and Georgia. The former took a major hit last year, with its dependence on Moscow growing following Yerevan’s defeat in the Second Karabakh War. Today, Russia is much better positioned to roll back any reformist agenda Armenians may want to enact. Armenia’s current Prime Minister Nikol Pashinyan has been weakened, and easily staged protests are an easy way to keep him in line.

Georgia faces similar challenges. At a time when Washington and Brussels are patching things up after four years of Trump, and the Biden administration vigorously reiterates its support for NATO, Georgia’s woes are a boon for Moscow. Chaos at the top weakens Georgia’s international standing and undermines its hopes for NATO and EU membership. And internal deadlock not only makes Georgia seem like a basket-case but also makes a breakthrough on economic matters ever more unlikely. Without a serious course correction, international attention will inevitably drift away.

At the end of the day, democracy is about a lot more than finding an intra-party consensus or even securing a modus vivendi in a deeply polarized society. It is about moving beyond the push-and-pull of everyday politics and addressing the everyday needs of the people. No party has risen to the occasion yet. Georgia’s NATO and EU aspirations remain a touchstone for Georgian voters, and both parties lay claim to fully representing those aspirations. But only through credibly addressing Georgia’s internal economic problems can these aspirations ever be fully realized. The party that manages to articulate this fact would triumph.

Author’s note: first published in cepa.org

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Eastern Europe

A Fateful Step Towards Annexation

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It’s easy to lose sight of regional developments amid high political drama. The story of Alexei Navalny’s poisoning, flight to Germany, return, and arrest has dominated Russia coverage in the West. Specialists have also been focusing on the struggle over the Nord Stream 2 pipeline, and the fallout of the Nagorno-Karabakh War. Meanwhile, when in November of last year Georgia’s Russian-occupied region of Abkhazia signed a 46-point agreement to create a unified socio-economic space with Moscow, not many took note. While pitched as a move to alleviate the territory’s economic troubles, the program marks a huge step toward eventual annexation of Georgia’s region by Russia.

Multiple new provisions feature in the new document which were absent in the 2014 military agreement. The new pact creates various provisions for the sale of local real estate, among them a stipulation on dual citizenship allowing Russians to get Abkhaz passports. A whole range of laws will be introduced whereby Russian investors will be able to invest money into and buy majority shares in what still remains valuable in Abkhazia.

The latest agreement also proposes allowing the Russians to buy into Abkhazia’s energy sector. Additionally, the Abkhaz will make legislative and administrative amendments according to the Russian law in social, economic, health, and political spheres. There is also a stipulation on simplification of law procedures for Russian investors.

While this may end up giving a shot in the arm to a decrepit Abkhaz economy, the high level of harmonization with Russian laws lays the groundwork for a future merger with Russia. It is this dilemma between closer cooperation with Russia and deep fear of Russian intentions that will haunt the Abkhazian political class for the foreseeable future. Though officially the new “socio-economic” program does not involve a change in Abkhazia’s political status, Abkhaz elites fret they are heading down the path to eventual incorporation into Russia.

Criticism of the pact in Abkhazia forced the region’s leader Aslan Bzhania to forcefully deny that Abkhazia was losing any sovereignty. Instead, he emphasized the positive elements of the document, especially the re-opening of Sukhumi airport. Bzhania also cited Abkhazia’s chronic energy shortages and the acute need for Russian assistance as justification for the deal. Still, fears persist. After all, unlike South Ossetia, the other Russian-occupied region in Georgia, Abkhazia has never entertained the idea of merging with Russia.

But Russia is playing a long game. Pressure on Abkhazia has been building up gradually over the course of 2020. After the resignation of Moscow’s preferred client Raul Khajimba, Bzhania’s candidacy was regarded with suspicion by Kremlin officials. As a result, when he won, Bzhania had to make multiple visits to Moscow to kiss the ring, even as Russian funding continued to dry up amid the pandemic. The cost of resuming aid, it appears, was increasing economic harmonization and with the looming threat of eventual assimilation.

With Russian investments into the energy sector and land purchases, Abkhazia will slowly lose its last vestiges of de-facto independence. On an economic level, Abkhazia is far richer than South Ossetia. But controlling it has other virtues. Out of all the separatist regions Russia controls, Abkhazia is arguably the most strategically located. A passage from the North to the South Caucasus, the region is also famous for its harbors and military infrastructure. Control over it gives Russia capabilities to check NATO/EU expansion into the region.

Russian plans in Abkhazia should be also seen within the context of Russia’s push to solidify its presence in the South Caucasus, especially in the aftermath of events in Karabakh and Russia’s peacekeeping mission there. Economic inroads into Abkhazia also mean a further distancing of other potential players such as Tbilisi and the collective West.

Author’s note: first published in cepa.org

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Eastern Europe

In Azerbaijan, Human Capital Investments are the Key to Resilient Growth in the era of COVID-19

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Photo: World Bank

By limiting access to health, education, social protection, and jobs, the COVID-19 pandemic threatens to reverse human capital gains in Azerbaijan. In a recently published report, Survive, Learn, Thrive: Strategic Human Capital Investments to Accelerate Azerbaijan’s Growth, the government of Azerbaijan and the World Bank identify the main challenges to building and activating human capital and put a spotlight on high-impact interventions that respond to constraints.

Fadia M. Saadah, World Bank Human Development Regional Director for Europe and Central Asia, reflects on the success and challenges of the past, and opportunities for the World Bank Group to partner with the government of Azerbaijan in ensuring resilient growth, powered by human capital investments.

Q. What do you see as the main challenges facing human capital formation and activation in Azerbaijan?

The government of Azerbaijan has achieved a great deal in terms of human capital development. Over the last five years, enrollment in higher education rose 21 percent. The introduction of mandatory health insurance supported an increase in the use of essential primary care level and improvements in efficiency. Contributory pensions and poverty-targeted social transfers raised the incomes of the bottom 40 percent substantially, facilitating household-level investments in health and education.

Despite this progress, gaps in human capital investments persist. On standardized tests, students from wealthier families score the equivalent of three years of schooling above students from poor families, an indication of wide inequalities in learning outcomes. Out-of-pocket payments remain high, despite the launch of mandatory health insurance, reducing access to services needed to control the rise of noncommunicable diseases. Only one in five households in the poorest quintile benefits from the targeted social assistance program, and labor force participation remains low, especially among women.

Azerbaijan’s Human Capital Index is 0.58, meaning that a child born today in Azerbaijan would be 58 percent as productive as she could have been as an adult if she had enjoyed full health and had benefited from a complete education. The COVID-19 pandemic has reduced access to social services and is projected to lead to an economic contraction of 4.2 percent in 2020. The government has risen to the challenge of recovering the gains in health and learning outcomes and ensuring that human capital development remains central to the political agenda.

Q. Azerbaijan faces the dual challenge of recovering from the COVID-19 pandemic and strengthening health, education, learning, and employment services to facilitate growth. What strategic investments do you recommend for the human development sector in the short and medium term?

The government aims to balance the medium-to-long term objective of reforming social systems with the ongoing COVID-19 pandemic response. Hence, in the health sector, we recommend the digitalization and interoperability of health information systems to support comprehensive surveillance and facilitate continuity of care in the treatment of noncommunicable diseases. Reforming health financing to increase public health spending and protect households from out-of-pocket costs will be important to increase health care access.

As schools reopen, Azerbaijan is investing in remediating learning losses. Doing so may involve ensuring that schools follow health protocols to reduce their risks of becoming the source of group infections, providing students with financial and nonfinancial incentives not to drop out of school, and equipping schools and training teachers to better manage in-person and distance learning. We also recommend establishing a fund to support innovation in higher education.

Social assistance will be essential to ensuring that the most vulnerable households are able to access social services. Improving the coverage of the targeted social assistance program and increasing public financing for these transfers will further improve households’ resilience to consumption shocks. Including employers in the design and implementation of active labor market programs will help link people to jobs.

The potential for human capital investments to drive growth and resilience in Azerbaijan is significant. An analysis by the World Bank, The Changing Wealth of Nations 2018, reports that human capital comprises 64 percent of global wealth. If Azerbaijan ensured complete education and healthcare among children and adults, its long-run per capita gross domestic product could be 1.67 times higher than it is today.

Q. The World Bank has partnered with Azerbaijan on landmark reforms since independence. How do you see the engagement evolving over the next few years?

The next phase of the human capital policy dialogue in Azerbaijan can benefit from a focus on putting this agenda into practice through investments in human capital. The World Bank Group remains committed to providing technical and financial support for operationalizing and implementing this ambitious strategy. We highlight important areas of engagement in education, health, social protection, and jobs below.

Education: The World Bank Group has long supported the government in the development of the education system, including reforms in general education and formulation of the country’s education sector development strategy. The government has introduced per capita financing in tertiary education and a remuneration and quality assurance system in secondary education.

The Second Education Sector Development Project, which closed in 2016, focused on improving the quality of teaching and learning in general education. Through ongoing policy dialogue, the World Bank Group will continue to support education reforms, especially to increase access to early childhood education and spur innovation in tertiary education.

Health: The World Bank Group has engaged in the health sector over the past few years through policy dialogue and provision of technical expertise to support health financing reforms. At the request of the government, it is facilitating knowledge exchanges that may inform the implementation of mandatory health insurance, drawing on the experiences of Kazakhstan, the Republic of Korea, and Costa Rica.

With funding from the Japan Policy and Human Resources Development Fund, the World Bank Group is supporting efforts to improve the governance of digital data and leverage claims data to strengthen provider payment mechanisms within the mandatory health insurance system. Over the next few years, the World Bank Group will continue to engage in policy dialogue on priority issues, including health insurance, e-health and telemedicine, and the development of an integrated claims management system.

Social Protection and Labor: In the past few years, the World Bank Group has supported efforts by the government to raise the most vulnerable people in Azerbaijan out of poverty, by investing in the implementation of the National Employment Strategy and critical social assistance and disability reforms.

A recently approved Employment Support Project aims to improve vulnerable people’s access to employment by enhancing the scope and effectiveness of the government’s Self-Employment Program, enhancing employment services and programs, and building public sector capacity.

The Internally Displaced Person Living Standards and Livelihoods Project and Additional Financing, which closed in 2019, helped improve the living conditions and increase the economic self-reliance of internally displaced persons. The World Bank Group will continue to support Azerbaijan through ongoing policy dialogue to strengthen the social protection system as a platform to improve human capital outcomes and households’ resilience to shocks.

World Bank

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