Introduction

The COVID-19 pandemic has had a devastating effect on labour markets in both advanced as well as emerging economies. Massive lay-offs have become unavoidable, leading unemployment rates to soar. Accordingly, governments around the world have had to come up with novel and in many cases substantial relief programmes to mitigate the impact of the pandemic. Primarily, such relief can be divided into two types: measures whereby government agencies provide direct support to workers; and measures whereby the relief is channelled through pre-existing employment relationships (Rothwell, 2020).

The potential of a country to withstand the ongoing crisis greatly depends on the strength and resilience of its social security system. The transition economies of most post-Soviet states (transitioning from centrally planned to market-oriented) have been particularly vulnerable to this economic shock, given the ineffective operation of their labour market institutions and social protection systems in general. Against this background, this chapter examines the policy responses to the social crisis caused by the pandemic in the Republic of Georgia – a transition economy in the South Caucasus. The main argument is that Georgia's existing social security system was already ineffective in protecting workers from economic downturns before the pandemic struck. Therefore, its capacity to provide help to workers affected by the crisis was extremely limited.

This chapter is based on publicly available administrative statistics and a total of nine interviews with a combination of policy administrators (five) and informal sector workers (three). The main focus of this chapter is on informal workers because they represent a significant share (about 35 per cent) of the Georgian labour force (as is the case in other transition economies). Therefore, it is critical to consider them as the primary subjects of social policy. It is argued here that this issue has been historically overlooked as these countries, since gaining independence, have adopted social security policies by taking models from well-developed Western economies. The pandemic has brought this oversight to the fore as the informal sector workers, who have been most affected by the crisis, have received the least support. The chapter concludes that the pandemic should be used by transition economies as a turning point to rethink the design of their social security programmes, and to move away from contributory schemes in favour of other policy alternatives better suited to the needs of informal and atypical workers in such economies.