Roman Gotsiridze: “Our top export partner is Armenia, Russia is the second.”

Verdict: FactCheck concludes that Roman Gotsiridze’s statement is MOSTLY TRUE.

Resume: As of January-May 2023, Armenia is Georgia’s top export partner with USD 360 million, followed by Azerbaijan with USD 337 million and Russia in the third position with USD 281 million. The rest of Georgia’s top ten export partners are as follows: Kazakhstan, Kyrgyzstan, China, Turkey, Bulgaria, Spain and Ukraine.

In the same period of 2022, China was in the first position, Azerbaijan was in second, Russia and Armenia were in the third and sixth positions, respectively. Earlier, in January-May 2021 – prior to Russia’s invasion of Ukraine – China was again in the first position, Russia was second, Azerbaijan was third and Armenia was seventh.

China’s share in export of January-May 2021 was 17.1% whilst it has contracted and is now at 7.7%. Armenia’s share increased from 5.1% to 14.4%. Two years ago, Kazakhstan and Kyrgyzstan were not at all among Georgia’s top ten export partners. The share of CIS countries in Georgia’s exports was 44.9% in January-May 2021 whilst it was 37.7% in January-May 2022 and 61.8% in the same period of 2023.

Analysis

On 4 July 2023, on air on the PalitraNews talk show, Politikuri Sivrtse, speaking on foreign trade, Roman Gotsiridze made the following statement: “Our main trade partners, in terms of exports, were Turkey, China and Russia as well. China has disappeared, Turkey has also disappeared. Who is our top partner? Our number-one export partner is Armenia and number-two is Russia, Kazakhstan, Kyrgyzstan, Tajikistan.”

After the declaration of Georgia’s independence and until Russia’s trade ban, Russia as a familiar market was Georgia’s top export partner except for 2000 and 2004. After the embargo, Russia was replaced by Turkey. In 2010-2015, Azerbaijan gained ground owing to auto export. In 2016-2017, Russia regained the lead and in 2018-2019, Azerbaijan again became Georgia’s top export partner. In 2020-222, Georgia’s top trade partner was China whilst Armenia has never been in the first position until 2023.

Graph 1: Georgia’s Top Export Partners (USD Million)

Source: National Statistics Office of Georgia

Russia, Azerbaijan and Turkey are Georgia’s neighbour countries and their share in Georgia’s exports were always high (in the case of Russia, the exception was the period of the embargo). China was barely visible until 2010 and the value of total export to China was only USD 50 million in 1995-2009 which is 20 times less as compared to the value of exports to Russia and 30 times less as compared to the value of exports to Turkey in the same period. In 2010, Georgia’s export to China increased to USD 27 million, in 2014 it grew to USD 90 million, in 2017 it reached USD 200 million and in 2020 and 2022 it increased further to USD 477 million and USD 737 million, respectively. Georgia’s main export item to China is copper ores.

Armenia was never Georgia’s top export partner until 2023, although it was often among the top five and sometimes among the top three export partners.

At the beginning of the 2010s, the value of re-export of cars to Armenia exceeded USD 100 million. Since 2015, Armenia officially joined the Eurasian Economic Union which made the import of non-Russian-made (officially not produced in a Eurasian Economic Union member state) cars more expensive. In the same year, Georgia’s total export to Armenia decreased by USD 108 million as compared to 2014 and dropped to USD 180 million, including a decrease in auto-export from USD 129 million to USD 42 million.

In 2019, the market is slightly revitalised and exports increase to USD 432 million. However, it decreased again in 2021-2022. In 2022, it reached USD 584 million which is the highest figure in terms of money. This result is largely because of the second half of 2022. In January-May 2022, export to Armenia was USD 149 million which meant 7% of Georgia’s total exports, although its share increased to 10.5% by the end of 2022. At the same time, Armenia was sixth among Georgia’s top export partners in the first five months of 2022 and gained two positions by the end of the year, outperforming Bulgaria and Turkey. Armenia’s share of Georgia’s exports further increased to 14.4% in January-May 2023 which allowed it to become Georgia’s top export partner.

Graph 2: Export to Armenia in January-May 2023 (USD Million)

Source: National Statistics Office of Georgia

In January-May 2023, passenger cars accounted for 41% of Georgia’s exports to Armenia. An additional 11% included trucks, bulldozers or vehicles intended to transport ten or more passengers.

As of the first five months of 2023, Azerbaijan is second among Georgia’s top export partners with USD 337 million. In the case of Azerbaijan, the share of passenger vehicles is 56%. Passenger cars accounted for the same share in Georgia’s export to Azerbaijan in 2013 until Baku decided to block the import of vehicles produced before 2005. In January-May 2022, Azerbaijan was also Georgia’s second major export partner after China.

According to the data of the first five months of 2023, Russia is Georgia’s third major export partner with USD 281 million similar to the previous year. However, Russia’s share has increased from 10% to 11.2%. Of the USD 281 million, wine accounts for USD 69 million, ferro-alloys for USD 45 million, passenger cars for USD 41 million and mineral waters for additional USD 28 million. Although passenger cars are third in the list, this item had the biggest growth in percentage as it increased by 459% from USD 7.4 million to USD 41.4 million.

As compared to the same period of the previous year, export to Armenia has increased by 142%, to Azerbaijan by 50% and to Russia by 33.8%. Georgia’s export growth rate to Kazakhstan, which is in the fourth place, reached 279%. In the first five months of 2023, the value of Georgia’s export to Kazakhstan was USD 242 million and passenger vehicles accounted for 78% of share with USD 187 million.

Georgia’s export to Kyrgyzstan increased by 1,432% to USD 210 million. In the case of Kyrgyzstan as well, the share of passenger vehicles is close to 87% with USD 182 million.

Virtually in every case, Georgia’s export growth happened because of passenger vehicles. Total auto export has increased by 361% from USD 191 million to USD 795 million. In January-May 2022, the share of passenger vehicles in Georgia’s total export was 9.1% and in January-May 2023 it increased to 31.8%.

If we consider the statistics alone, Roman Gotsiridze’s statement is mostly true. Armenia is indeed Georgia’s top export partner whilst Kazakhstan and Kyrgyzstan are also in the top five. At the same time, however, Russia is third and not second whilst Tajikistan is in the 21st position and is not at all among Georgia’s top export partners.

The second part of the statement is context. As claimed by Mr Gotsiridze, Georgia, together with Turkey, Armenia, Kazakhstan and the United Arab Emirates, is involved in circumventing sanctions against Russia and carries out transit function for sanctioned goods. Such allegations are not confirmed by specific facts. Sanctioned goods cannot be found among the items of export that are sent to Russia. David O’Sullivan, the EU’s Special Envoy for the Implementation of EU sanctions; Jim O’Brien, the Head of the US Office of Sanctions Coordination, and Kumar Iyer, the Director General for Economics, Science and Technology at the United Kingdom Foreign Office, stated whilst visiting Georgia that sanctions are being implemented. However, sanctions are a separate issue and FactCheck has written about this in the past (article 1, article 2) whilst that part of the statement where the MP speaks about the ranking of Georgia’s export partners is MOSTLY TRUE.


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