According to the report published by Transparency International Georgia, compared to previous years, Georgia's economic dependence on Russia is increasing, which is mainly due to the increase in remittances.
Georgia's Economic dependency on Russia is increasing, Transparency International Georgia says
By Liza Mchedlidze
Thursday, August 4, 2022
Transparency International Georgia has published a new report titled "Georgia's economic dependence on Russia; the impact of the Russia-Ukraine war".
According to the report, in January-June 2022, Georgia received about 1.2 billion US dollars in income from Russia through remittances, tourism and export of goods. Which is 2.5 times more than the income received from the same sources from Russia in January June 2021.
"Significantly increased imports of Russian goods, remittances and establishment of companies in Georgia by Russian citizens increase the risk that Georgia will be used to circumvent the sanctions imposed on Russia. Transparency International Georgia studied the existing data of issues of Georgia's economic dependence on Russia, because it poses a threat to the country. In particular, it analyzed the trade between Georgia and Russia, tourists coming from Russia, remittances, foreign direct investments and registration of Russian companies in Georgia by the end of June 2022.
In January-June 2022, Georgia received about 1.2 billion USD in income from Russia through remittances, tourism and goods export, which is 2.5 times more than the income received from Russia in January-June 2021 from the same sources. Before the pandemic, it exceeded the income received from Russia in January-June 2019 by 36%.
This means that compared to previous years, Georgia's economic dependence on Russia is increasing. This growth is mainly due to the jump-like increase in remittances.
Transparency Georgia has offered recommendations to help, saying that the goal of the Georgian government should be to minimize economic dependence on Russia.
"With the participation of TI, in April of this year, we already made public the recommendations on what should be done to reduce economic dependence on Russia: in order to reduce trade with Russia, the Georgian government should start working more actively and quickly to sign free trade agreements with all strategic partners with which we do not yet have such an agreement. Although the real positive effect of such agreements is long-term, based on the current situation, Georgia can more actively request the acceleration of the free trade agreement from its strategic partners; subsidies from the state budget (grant, preferential credit and others) should not be given to such businesses that increase economic dependence on Russia."
According to TI, The implementation of the mentioned rule will play an important role in reducing the dependence of the Georgian economy on Russia, which will increase the economic and political security of Georgia.