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Georgia’s Economic Dependence On Russia Increased In 2021, TI Says

By Khatia Bzhalava
Thursday, March 3, 2022
According to a report issued by Transparency International Georgia, Georgia’s economic dependence on Russia increased in 2021 following the COVID-19 pandemic-related drop of 2020. However, the report reads that the dependency has not reached the 2019 pre-pandemic level due to the decline in tourism. Regardless, TI stresses that Georgia’s links with Russia including in trade, tourism, and remittances are ‘threatening’ to the country.

According to TI, in 2021, compared to 2020, exports of Georgian products to Russia increased by 38% and reached USD 610 million, with Russia becoming the second biggest importer of Georgian goods after China. It is also noted that Russia was the biggest exporter to Georgia after Turkey in 2021. Georgia imported from Russia products valued at over USD 1 billion, exceeding the pre-pandemic (2019) figure by $ 51 million.

According to the report, there are more than 7,000 companies registered in Georgia, all or part of the shares of which are owned by companies and citizens of the Russian Federation. Out of these companies, 1,230 were registered from 1995 to 2012, and up to 5,500 - in 2013-2020. A record number of new companies - around 1,200 - were registered in 2018. The report reads that large Russian companies are represented in all sectors of the Georgian economy, including energy, industry, transport infrastructure, financial sector, communications, gambling business, and restaurants and hotels.

According to TI, the country’s economic dependence on Russia carries risks as Russia has repeatedly used economic leverage against Georgia, Ukraine, Moldova, and other countries since the collapse of the Soviet Union. The report cites Russia banning gas and electricity export to Georgia as well as banning the import of Georgian products to Russia in 2006.