Nika Melia, Tbilisi’s mayoral candidate from the United National Movement, stated the following at the rally of his party on 8 May 2014: “New jobs are not being created today and due to the feebleness of the government, what we have is also being lost. Undeveloped infrastructure and this suspended economy are creating problems for the population. The government is weak. We should make Tbilisi work and create jobs. We have a concrete plan for this.”
FactChecktook interest in the current economic situation of the country and verified the statement by the mayoral candidate.
According to GeoStat, 495,713 people are employed in the business sector based upon the data from the first quarter of 2014 while the number of employed people in the first quarter of 2013 is equal to 485,745. Accordingly, the number of employed people in the business sector in the first quarter of 2014 increased by approximately 10,000 or 2%. This information does not comply with Nika Melia’s statement regarding the loss of jobs.
As for the statement about the suspension of the economy, according to GeoStat, it is true that there was 3.2% real growth in the economy in 2013, however, a real GDP growth of 7.4% was recorded in the first quarter of 2014 which implies a growth in the economy. The export indicator for the first quarter of 2014 is 23.1% higher and the import indicator is 16% higher than the same indicators from the corresponding period in the previous year. Accordingly, the number of Georgian products exported abroad in the first quarter of 2014 increased more than the volume of imported products. The turnout of VAT payer enterprises also increased by 16.1% in January, 12.4% in February and 19.6% in March.
Graph 1: Dynamics of the Indicators of Tax Revenues in the First Quarter
Signs of business sector recovery were reflected in the budget’s tax revenues. As is shown in Graph 1, the tax revenues in the first quarter of 2014 were equal to GEL 1,639,300 which is 5.5% more than the indicator from the previous year. Since 2010, the tax revenues have been increasing and the only exception is 2012 (the period of the Parliamentary elections) which showed a failure.
As for unemployment, GeoStat only publishes the annual unemployment rate. The unemployment rate for 2013 was published only on 27 May 2014; that is, 19 days after the mayoral candidate made his statement. As for the unemployment rate for 2014, this will only be published in 2015.
Graph 2: Unemployment and Real GDP Growth Rates
According to the data from GeoStat, the unemployment rate for 2013 was equal to 14.6% which is less by 0.4% (15%) as compared to the unemployment rate in 2012.
Despite the fact that the National Statistics Office of Georgia records unemployment based upon the methodology of the International Labour Organisation, the majority of experts consider that this figure does not correspond to reality and the unemployment rate is much higher than the figure from GeoStat (14.6%).
It should be noted here that the aforementioned level of unemployment in Georgia is a result of the large number of self-employed people. More citizens are trying to self-employ than in any other countries. This is influenced by the absence of a labour market and an unemployment insurance fund. It should be noted that the unemployment rate in cities and villages is significantly different from one other. According to GeoStat, the unemployment rate in cities in the previous year was equal to 30% while the figure was equal to 6.5% in villages. The reason for this kind of difference is that there are more employment opportunities in the villages due to the abundance of agricultural land. Everyone is considered self-employed if they have land or cattle and if they use agricultural products for sale or personal consumption regardless of what kind of income they have. According to the data from 2013, 63% of the population is employed in agriculture while this sector has 9.3% in GDP. This implies that agriculture is characterized by low productivity and 63% of employed population has quite low income.
As for the previous years as it is illustrated in the Graph 2, we can see from the GeoStat data that since 2006 unemployment rate was decreasing until 2008, while since 2008 until 2009 (the unemployment rate reached its maximum level in 2009 with 16.9%). Since 2009 the unemployment has started to decrease again and this trend is still the same until now.
Conclusion
According to the data from the first quarter of 2014, 495,713 people are employed in the business sector while the number of employed people in the first quarter of 2013 was equal to 485,745. Accordingly, the number of employed people in the business sector in the first quarter of 2014 was increase by 10.000 (2%). This implies that jobs have increased, even though in small quantities.
Real GDP growth rate in the first quarter of 2014 was equal to 7.4%. The export rate from the same period is 23.1% more and the import figure is 16% more than the indicators from the similar period in the previous year. Accordingly, the number of Georgian products exported abroad in the first quarter of 2014 has increased more than the volume of imported products. The turnout of VAT payer enterprises has also increased by: 16.1% in January, 12.4% in February and 19.6% in March.
Tax revenues in the first quarter of 2014 was equal to GEL 1.639.300 which is 5.5.% more than the indicator from the previous year. As for the unemployment, the GeoStat is only publishing an annual unemployment rate and the statistics for 2014 have not been published yet. The unemployment rate in 2013 was equal to 14.6% which is 0.4 less than the unemployment indicator from 2012. At this point, FactCheckis unable to conclude whether the jobs have been decreased in the first half of 2014.
Accordingly, FactCheck concludes that Nika Melia’s statement: “New jobs are not being created today, but what we have is also being lost and suspended economy is creating problems for the population”, is FALSE.
