Beka Natsvlishvili: “We are not a poor country. We are the most unequal country. Our country has one of the largest gaps between rich and poor.”

Beka Natsvlishvili: “We are not a poor country. We are the most unequal country. Our country has one of the largest gaps between rich and poor.”

Beka Natsvlishvili: “We are not a poor country. We are the most unequal country. Our country has one of the largest gaps between rich and poor.”

The FINANCIAL -- Verdict: FactCheck concludes that Beka Natsvlishvili’s statement is MOSTLY FALSE.

Resume: The context of Beka Natsvlishvili’s statement can be understood as follows: “Georgia is not a poor country but high incomes are not distributed among the population and go to a small group of rich people.”

A country’s poverty is a relative category and there is no universal system which would categorise different countries into those poor and rich. However, in accordance with the World Bank’s methodology, Georgia is pooled with the lower-middle income group countries with nations such as India, Pakistan, Vietnam, Mongolia, Uzbekistan, etc. Therefore, we can conclude that the part of Beka Natsvlishvili’s statement, where he does not consider Georgia to be a poor country, is inaccurate.

The Gini Coefficient is used to measure income inequality. The Gini Coefficient fluctuates from 0 to 1 where 0 is the most equal and 1 is unequal. For instance, if a country’s population is 1,000 persons and everyone has exactly the same income, the Gini Coefficient will be 0 whilst if only one person has an income, the Gini Coefficient becomes 1; that is, 100%. The Gini Coefficient fluctuates from 0 to 1 whilst as an index it is given in percentage figures; that is, multiplied by 100. For instance, the corresponding Gini Index to Georgia’s 0.405 Gini Coefficient is 40.5%.

It is possible to compare different countries in terms of the Gini Coefficient which is one of the ranking components in the World Bank’s Inclusive Development Index. There are 106 countries in the aforementioned ranking. In accordance with the Gini Index, Georgia is ranked 33rd of 106 countries in terms of inequality with a 40.5 index figure for income inequality. The top five countries are as follows: South Africa (57.7), Namibia (55), Sri Lanka (51.4), China (51) and Zambia (49). Therefore, Beka Natsvlishvili’s assertion that the income redistribution inequality is extremely high in Georgia and that the country has one of the highest inequality figures in the world does not correspond to the truth. However, Georgia’s inequality figure is objectively high, especially in the group of Europe and Central Asia countries where we belong. In accordance with the available data, only Russia has a higher distribution of inequality in the region than Georgia. The MP’s statement would have been more correct if he had referred to the region only.

Analysis
On 19 March 2019, Beka Natsvlishvili, who is currently an independent MP of the Parliament of Georgia, stated in his speech: “We are not a poor country, we are the most unequal country. The gap between income groups and the gap between rich and poor is one of the highest in our country.”

FactCheck took interest in the accuracy of Beka Natsvlishvili’s statement. The context of the statement could be understood as follows: “Georgia is not a poor country, but there are high incomes which are not distributed among the population and go to a small group of rich people.”

It is necessary to define to what extent is it possible to call Georgia a poor country and how extreme the inequality of income distribution among the population is. A country’s poverty is more or less a relative category and there is no universal system which could categorise countries as poor or rich. In this analysis, it is appropriate to use the World Bank’s categorisation which is given in Table 1. According to this methodology, Georgia is pooled in the lower-middle income country group because the GNI per capita was USD 3,780 in 2017. Of note is that the group also includes such countries as India, Djibouti, Pakistan, Bangladesh, Zambia, Vietnam, Mongolia, Uzbekistan, etc. Therefore, we can conclude that the part of the MP’s statement, where he does not consider Georgia as a poor country, is inaccurate.

The National Statistics Office of Georgia publishes absolute and relative poverty figures. Absolute poverty shows what part of the population lives below the subsistence minimum. As of 2017, 22.9% of Georgia’s population lives below the absolute poverty line. Relative poverty shows the adequacy of the population’s incomes to its expenses. Persons who consume less than 60% of the median (average) consumption are regarded as poor. As of 2017, 22.3% of Georgia’s population consumes less than 60% of the median consumption. In accordance with UNICEF’s latest data published in 2017, 5% of the population lived in extreme poverty.

The so called Gini Coefficient is used to measure income inequality. The Gini Coefficient fluctuates from 0 to 1 where 0 is the most equal and 1 (or 100) is unequal. For instance, if a country’s population hypothetically is 1,000 persons and everyone has exactly the same income, the Gini Coefficient will be 0 whilst if only one person has an income, the Gini Coefficient becomes 1; that is, 100%.


It is possible to compare different countries in terms of the Gini Coefficient which is one of the ranking components in the World Bank’s Inclusive Development Index. There are 106 countries in the aforementioned ranking. In accordance with the Gini Index, Georgia is ranked 33rd of 106 countries in terms of inequality with a 40.5 index figure for income inequality. The top five countries are as follows: South Africa (57.7), Namibia (55), Sri Lanka (51.4), China (51) and Zambia (49). Therefore, Beka Natsvlishvili’s assertion that income redistribution inequality is extremely high in Georgia and that there is one of the highest inequality figures in the country does not correspond to the truth. However, Georgia’s inequality figure is objectively high, especially in the group of Europe and Central Asia countries where we belong. In accordance with the available data, only Russia has a higher distribution inequality in the region than Georgia. The MP’s statement would have been more correct if he had referred to the region only.

Given the context, Beka Natsvilishvili’s statement does contain elements of truth in terms of the unequal distribution part but in its entirety, the statement is inaccurate.

Author - Vakhtang Demuria