Teimuraz Janashia: “In 2022, revenues from export, tourism and remittances [from/to Russia] trebled to USD 3.6 billion.”

Verdict: FactCheck concludes that Teimuraz Janashia’s statement is TRUE.

Resume: In 2021, the value of Georgian exports to Russia was USD 610 million and remittances from Russia reached USD 411 million whilst tourism revenues amounted to USD 152 million which was USD 1.172 billion in total. In 2022, export revenues increased by 6.8% to USD 652 million and remittances surged by 403% to USD 2.067 billion whilst tourism revenues rose by 487% to reach USD 891 million. This means that revenues from Russia increased 3.1 times as compared to 2021 and amounted to USD 3.610 billion.

Analysis:

On 16 June 2023, during the Minister’s Hour (Ilia Darchiashvili was testifying in the Parliament), MP from the United National Movement Parliamentary Faction, Teimuraz Janashia, speaking about the increased economic dependency on Russia, stated (from 1:25): “In 2022, Georgia earned nearly USD 3.6 billion in revenues from remittances [from Russia], tourism and exports of goods which is three times bigger as compared to same revenues in 2021.”

The MP did not specify the country vis-à-vis his statistical data but as he continued his speech by talking about the problems of the growing economic dependence on Russia, his reference became clear. Teimuraz Janashia also did not name the currency; however, since exports, income from tourism and remittances are usually measured in USD, FactCheck verified the MP's statement with this assumption.

All three of the aforementioned indicators have indeed increased in 2022 as compared to 2021. The growth rate was the lowest for exports. Total exports increased by 31.8% from USD 4.243 billion to USD 5.593 billion and to Russia specifically by 6.8% from USD 610 million to USD 652 million. In terms of share, Russia's share in exports decreased from 14.4% to 11.7%. In 2021, Russia occupied the second place in exports after China. In 2022, Azerbaijan overtook it and Russia is now ranked in third place.

Of the top five export products, the export of wine to Russia increased by 23% from USD 131 million to USD 161 million, the export of ferroalloys decreased by 37% from USD 172 million to USD 109 million, the re-export of small cars grew by 337% from USD 17.3 million to USD 75.6 million and increased by 117% in terms of units from 2,483 to 5,395. The export of spirits increased by 39% from USD 41 million to USD 57 million and the export of mineral waters shrunk by 16% from USD 61 million to USD 51 million.

Export is the only area where Russia's share decreased in 2022 due to the higher growth of Georgia’s export to other countries. This situation has changed in 2023. In the first five months of the year, the total amount of exports increased by 18.6% from USD 2.111 billion to USD 2.503 billion and exports to Russia grew by 33.8% from USD 210 million to USD 281 million.

The structure has changed the most in terms of remittances. Until 2014, Russia's share in remittances exceeded 50%, although the trend was decreasing. In 2016, Russia's share decreased to 34%, in 2018 to 29%, in 2021 to 18% and in the first quarter of 2022 further to 13% moving Russia to the second place after Italy. The dynamics have changed drastically since April 2022. In 2022, the volume of remittances from Russia increased by 403%, from USD 411 million to USD 2.067 billion as compared to 2021. If we calculate figures from only the last three quarters – growth would be 505%. Remittances peaked in the fourth quarter of 2022. The amount of remittances in the last three months of 2022 exceeded the total amount of money transferred from Russia in 2021 by 2.3 times.

Massive growth continued in 2023, but only in the first quarter. In January-March 2023, USD 679 million was transferred from Russia to Georgia which is 851% more as compared to the same period of the previous year. In April, the growth rate decreased to 20% and it halved in May.

Before Russia’s war with Ukraine, remittances were mostly from Georgian citizens. After February 24, 2022, the recipients of remittances from Russian citizens are Russians who have temporarily or permanently moved to Georgia.

In the post-pandemic period of 2022, the number of tourists in Georgia from almost all countries increased, although with different percentages.

As compared to 2021, the total number of visitors in 2022 increased by 173% from 1.721 million to 4.704 million and from Russia by 411% from 213,000 to 1.087 million. As compared to 2019, the number of visitors from the whole world in 2022 grew by 61%, from Russia by 74% and recovery was 80% from the whole world and by 101% from Russia in the first quarter of 2023. Some visitors from Russia never left Georgia and became migrants. According to the National Statistics Office of Georgia, the number of Russian migrants increased by 56,000 in 2022 (62,304 migrants and 5,935 emigrants)

Migration and tourism have also contributed to the growth of tourism revenues along with remittances. As compared to 2021, the tourism revenue in 2022 increased by a total of 182% from USD 1.245 billion to USD 3.517 billion and from Russia alone it increased by 467% from USD 157 million to USD 891 million. The trend continued in the first quarter of 2023 when the total revenues from this sector increased by 102% from USD 394 million to USD 795 million and from Russia alone, they increased by 293% from USD 68 million to USD 266 million.

Russia’s share in Georgia’s tourism revenues was 23.7% in 2019. It increased to 25.3% in 2022 and to 33.3% in the first quarter of 2023.

Teimuraz Janashia’s figures are accurate. As compared to 2021, remittances from Russia, tourism revenues and export to Russia in 2022 increased by 3.08 times (by 208%) from USD 1.172 billion to USD 3.610 billion

Graph 1: Revenues (USD Million)

Source: National Bank of Georgia and National Statistics Office of Georgia

In the same period, analogous indicators vis-à-vis the rest of the world increased by merely 72% from USD 7.838 billion to USD 13.482 billion. If we calculate all three indicators together, Russia’s share in 2021 was 15% - USD 1.172 billion of USD 7.838 billion whilst in 2022 it reached USD 26.8% - USD 3.610 billion of USD 13.482 billion.

The growth of the cash flow from Russia significantly affected the currency exchange rate and real estate prices in Georgia. GEL gained ground and the prices of real estate for sale and, particularly, for rent have surged.

Speaking about some additional consequences and making a forecast is a part of this assessment which goes beyond the boundaries of factual verification. However, it is assumed that all things being equal, growing economic dependency on one particular country is risky. Given the historical experience with Russia, there are political as well as economic risks.