The FINANCIAL -- The total volume of remittances to Georgia continued to grow during the first eight months of the current year in comparison with the same period of the previous year. Individual transfers to Georgia amounted to USD 964,402,100, up from USD 934,406,300 from the figure of January-August 2014. The EU and USA sanctions over Russia have brought consequences for the Georgian market however, as remittances from Russia have declined by USD 20 million during the first eight months of 2014.
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 countries which have suffered due to the weakened Russian economy.
In total, USD 487,483,700 has been transferred from Russia to Georgia during the first eight months of the current year. The figure was USD 507,670,500 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 20,900,700, down from the USD 25,726,900 of the year before.
The Georgian Diaspora in the Russian Federation is engaged in both small and large business. Small businesses are mainly involved in trade and food services, according to the Economic Policy Research Institute which investigated the businesses of ethnic Georgians abroad.
The list of the most significant Georgian Diaspora entrepreneurs doing business in Russia includes: Merab Elashvili - involved in a restaurant chain and distribution; Mindia Gulua - restaurant chains, services, real estate; Mikheil Khubutia - restaurant chain, real estate, chain of gun stores; Soso Orjonikidze - road construction, oil; Gia Gvichia - beer factories; Aleksandre Ebralidze - gambling, construction, manufacturing, development, trade, banking, transport; Valeri Meladze - involved in banking, entertainment; Levan Vasadze - running finance and insurance; Konstantine Mirilashvili - meat and sugar; Badri Kakabadze - food processing; Lev Partskhaladze - construction; Aleksandre Japaridze - running an oil business; and Shalva Chigirinski - involved in oil and gas.
Despite the reduction of transfers from Russia, this country still remains the leader in terms of remittances.
The Russian Federation is followed by Greece. USD 138,256,900 has been sent from Greece this year; the sum was USD 125,508,000 in the same period of the previous year. Inflow from Italy amounted to USD 81,705,100, which is over USD 10 million more than in 2013. The volume of transfers from the USA totalled USD 51,836,200, up from the USD 48,703,000 in January-August 2013.
USD 40,157,600 has been transferred from Turkey this year, while the same figure totalled USD 26,111,800 in 2013. Money transfers from Spain increased by over USD 3 million during the current period and reached USD 18,679,000. Inflow from Germany amounted to USD 15,173,300 or USD 4 million more. USD 14,430,900 has been transferred from Israel this year, up from USD 13,009,000. Money transfers from Azerbaijan increased by USD 1.7 million in 2014 and amounted to USD 10,865,200. USD 10,610,800 has been transferred from Kazakhstan this year. The sum was USD 9,760,000 during the first eight 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 10,099,000 in 2014, down from the USD 12,594,000 from the first eight months of 2013.
There are over 1 million Georgians residing abroad. The data is less than accurate as many of them are living illegally.
An economic downturn in Russia and Ukraine would hit many Georgian citizens, often pensioners and elderly people, who depend on the remittances of their children and other family members sent from these countries. This may aggravate a trend that already exists,” Florian Biermann, Professor, and Giorgi Tsutskiridze, Research Fellow at ISET, predicted in their research at The Forum for Research on Eastern Europe and Emerging Economies (FREE).
“Georgia can do little to bolster the short-term effects that are transmitted through the trade and capital flow channels. Political decision-makers should be aware of problems that might arise for particularly vulnerable groups in the population, like pensioners who will lose income in the event that remittances from Russia and Ukraine run dry, and help out with social support if necessary,” reported Biermann and Tsutskiridze.