The FINANCIAL — The total volume of remittances to Georgia continued to grow during the first ten months of the current year in comparison with the same period of the previous year. Individual transfers to Georgia amounted to USD 1,220,391.4 thousand, up from USD 1,198,064.9 thousand from the figure of January-October 2013. The EU and USA sanctions over Russia have brought consequences for the Georgian market however, as remittances from Russia have declined by USD 36 million during the first ten months of 2014. Together with Russia, Ukraine and the UK have also shown a trend of reduction.
Individual transfers from the Russian Federation, which is the second most common destination for migrants, have been slumping to Ukraine, Armenia and Central Asian nations, except Kazakhstan. Currently Georgia is among the list of those countries which have suffered due to the weakened Russian economy. Meanwhile Russia still remains the top country by money transfers to Georgia, making up 51% of total flow.
In total, USD 616,481.8 thousand has been transferred from Russia to Georgia during the first ten months of the current year. The figure was USD 653,119,000 during the same period of the previous year.
The Russian-Ukrainian conflict that started in November 2013 has shown its first impact on the Georgian economy from the Ukrainian side. Remittances, like trade with Ukraine, have been characterized by a decreasing trend from the very beginning of the current year. Currently, individual transfers from Ukraine are valued at USD 25,850,000, down from the USD 32,822,200 of the year before.
According to the November 2014 report of the International Monetary Fund (IMF), economic developments in Russia significantly affect the growth prospects of the CCA region through a number of channels, mainly trade, remittances and investments. A protracted period of slower growth in other trading partners, particularly Europe or China, could also have a negative impact over a longer time horizon, the report cautioned.
The IMF report suggests the implementation of a new economic model.
Despite two decades of solid economic performance, inequality in the CCA remains high, along with youth unemployment and emigration. Moreover, the region’s past growth was mainly driven by volatile sources such as commodity exports and remittance flows, the report noted. Structural reforms in several areas are required to overcome the long-lasting impediments to sustainable and inclusive growth.
To move to a fairer, more viable development model, the report recommends that the region’s policymakers give priority to the following: Carrying out bold structural reforms to develop worker talent, increase competitiveness, and create an environment conducive to private sector-led growth; Promoting inclusive growth through better access to finance for small and medium-sized enterprises and a deeper, more stable financial system; Creating a diverse and dynamic non-oil tradable sector to diversify the region’s economies and reduce their dependence on oil and gas; and, Pursuing broad-based, balanced trade integration at both the regional and multilateral levels.
Following Russia, Greece is the second leader of remittances to Georgia. USD 171,977,900 has been sent from Greece this year; the sum was USD 161,529,000 in the same period of the previous year. Inflow from Italy amounted to USD 101,340,600, which is over USD 10 million more than in 2013. The volume of transfers from the USA totalled USD 66,493,500, up from the USD 61,449,500 in January-October 2013.
The International Centre for Migration Policy Development (ICMPD) has studied Georgian migrants. According to the information collected, authors have drawn a profile of the typical Georgian migrant in Greece. However, it does not reflect all possible features of Georgian migrants in Greece. “The typical Georgian migrant in Greece is a woman aged 35 or above, has received higher education (usually, pedagogical or medical), is working in domestic service and is sending money back to Georgia to support her family. Although she planned to come to Greece for a very limited time only, to earn some money for her children’s education, for example, she stayed longer or prolonged her stay as after years spent abroad she does not expect to get a job back in Georgia which could provide her and her family with decent living conditions,” the report noted.
USD 51,947,300 has been transferred from Turkey this year, while the same figure totalled USD 33,532,100 in 2013. Money transfers from Spain increased by over USD 3 million during the current period and reached USD 23,116,800. Inflow from Germany amounted to USD 19,530,100 or USD 5 million more. USD 18,952,500 has been transferred from Israel this year, up from USD 16,354,800. Money transfers from Azerbaijan increased by over USD 3 million in 2014 and amounted to USD 14,091,900. USD 14,064,400 has been transferred from Kazakhstan this year. The sum was USD 12,642,000 during the first ten months of 2013.
Together with the Russian Federation and Ukraine, remittances inflow to Georgia has slumped from the UK as well. Money transfers from the UK amounted to USD 12,583,600 in 2014, down from the USD 15,588,400 from January-October of 2013.
There are over 1 million Georgians residing abroad. The data is less than accurate as many of them are living illegally.
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