“Regarding the speculations that this [moratorium on agricultural land] is impeding the flow of investments and economic growth, [they are false, as] no agricultural investments are being made in Georgia.”
which presented the viewpoints of the presidential candidates with regard to the alienation of agricultural land to foreign citizens. They expressed their opinions on the moratorium, approved by the Parliament, and on the assertion voiced by the Prime Minister at the meeting with experts claiming that the moratorium had unfavourably affected the growth of the state economy.
In his interview with Rezonansi,the presidential candidate of the Christian-Democratic Movement Giorgi Targamadze stated: “Regarding the speculations that this is impeding the flow of investments and economic growth, no agricultural investments are being made in Georgia.”
FactChecktook interest in the statement of the presidential candidate and set out to check its accuracy.
We examined the data provided by the National Statistics Office of Georgia in which foreign direct investments made in Georgia are broken down by sectors. GeoStat calculates foreign direct investment according to the following sectors: energy, manufacturing, transport and communication, construction, finance, mining, real estate, agriculture, fishing, health insurance and social aid, hotels and restaurants, and others.
Preliminary data of 2013 provided by GeoStat reveals that in the first quarter of the current year foreign direct investments in agriculture and fishing amounted to USD 3.7 million and went up to USD 3.8 million in the following quarter.
Aiming to get a broader picture of the matter, FactCheckstudied statistical data of previous years.
The table below presents figures of foreign direct investments made in the fields of agriculture and fishing (data is given in USD thousand).
In our query about the correlation between land privatisation and investments, we contacted the Property Management Agency. Statistical data provided by the Agency reveals that approximately 20 thousand hectares of agricultural land have been alienated in 2010-2013 through electronic auctioning. Consequently, over GEL 21.6 million have been channelled to the budget. Over the same period, 10,925 hectares of agricultural land have been alienated through direct procurement channelling an additional GEL 8.1 million into the budget.
According to the letter received from the Agency, the monitoring of the LEPL State Property Management Agency registered the following investments made on agricultural land which was privatised in 2010-2013:
2010– EUR 4,000,000
2011– GEL 4,100,000 and EUR 2,500,000
2012– GEL 28,245,000 and EUR 8,669,000
2013– GEL 5,185,000 and EUR 2,000,000
Of these, a total investment of GEL 785,000 has been made in the form of foreign direct investment since the beginning of 2013. At this point, the data of the third quarter still has not been calculated and so the moratorium’s impact upon the amount of agricultural investments in the country cannot be discussed with precise numbers.
Conclusion
In accordance with the data of GeoStat, agricultural and fishing investments were certainly being made in Georgia in the period between 2007 and 2013. As reported by the LEPL State Property Management Agency, investments in the amounts of GEL 41.5 million and EUR 13.2 million have been made in 2010-2013 on the agricultural land which was privatised in the same period. In 2010-2012 the volume of agricultural investments made into the Georgian economy was increasing; in the fourth quarter of 2012, however, the indices saw a decline. In the first two quarters of 2013 the investments marked an upturn again but the figures were still dropping in comparison with the same quarters of 2012. The decline could have been linked to the initiated discussions about the moratorium on the alienation of agricultural land.
Contrary to Giorgi Targamadze’s assertions, GeoStat’s statistical data reaffirmed the existence of investments in the agricultural sector throughout the last five years. Moreover, the statistics of 2010-2013 provided by the Property Management Agency demonstrates that the privatisation of lands reinforced the growth of investments in the agricultural sector whereas the initiation of discussions regarding the moratorium on the alienation of agricultural land to foreigners prompted a drop in the amount of investments. This fact once again denotes that the moratorium on the privatisation of agricultural lands negatively influenced the process of investment in the sector of agriculture. Statistical data on the investments in the field of agriculture represents public information and, therefore, could have been easily available to Giorgi Targamadze. Bearing in mind all of the aforementioned we conclude that Giorgi Targamadze’s statement: “Regarding the speculations that this is impeding the flow of investments and economic growth, no agricultural investments are being made in Georgia,” is a LIE.
