“The export has increased significantly… There was a trend of decreasing export in the last years.”
On 20 October, the Minister of Economy and Sustainable Development, Giorgi Kvirikashvili, stated on TV Imedi: "The export has increased significantly, as there was a trend of decreasing export in the last years. This [increase in export] was caused by the efforts of the government to develop local industries… The Russian market had a serious influence as well [on the increase in export]."
FactChecktook interest in the following questions: To what extent has export increased? Did the trend of a decrease in export exist in the last years? What type of influence did the Russian market have on the increase in export? We verified the factual accuracy of the statement made by the Minister of Economy and Sustainable Development.
In the last years, Georgian export decreased only in 2009 and by nearly 24% (2009 was the year following the 2008 Russian-Georgian war and the period of the world economic crisis both of which negatively affected the country’s economy. A negative -3.8% increase rate was recorded in 2009). Since 2010, export has been increasing and according to 2010-2014 data, it has been on the increase every year although the export growth percentage rate in 2011 and 2012 was less than the previous years’ data (Graph 1). The same picture is in 2014. According to January-September dataexport has increased by 6.7% as compared to the same period of the last year and amounted to USD 2,153 million. However, it is noteworthy that the export increased in January-September 2013 by 14% as compared to the same data of the previous year. In addition, the export decreased by 6.2% in the third quarter of 2014 as compared to the same quarter of the last year.
statistics include nine months of data (January-September).
We also analysed to what extent the Russian market contributes to the country’s export. In 2012, products worth USD 45.8 million were exported to Russia, drawing up nearly 2% of the gross export. In 2013, production worth USD 190 million was exported to Russia which constitutes 6.5% of the gross export. According to the nine-month data
of 2014, production worth USD 212 million was exported to Russia which comprises 10% of the gross export. Apparently, export to the Russian market has significantly increased; therefore, the share of the Russian market in the gross export has increased as well.
The 6.7% increase in the first three quarters of 2014 is mainly due to the increase of export to Russia. In the first nine months, the export to Russia doubled from USD 104 million to USD 2,012 million as compared to the same data of the last year. More importantly, the export rate of the first three quarters would have increased only by 1.3% if not for the export increase to the Russian market. In 2014, the export decreased in many countries such as: Azerbaijan – by USD 102 million, Ukraine – USD 8 million, Iran – USD 10 million, Canada – USD 30 million, Belgium – USD 8 million, Moldova – USD 7 million and Kazakhstan – USD 5 million.
The share of Russia in Georgia’s foreign trade is constantly on the increase. Moreover, the Government of Georgia assumes that there is a constant risk of Russia closing down its market for Georgian production because of political reasons. Hence, the increasing share of Russia at the expense of decreasing the geographical diversity of the foreign trade embraces risks for economic development and makes our economy increasingly vulnerable to Russian policy.
Conclusion
Export increased in 2013 by 22.4% as compared to the previous year and amounted to USD 2,908 million. In January-September 2013, export increased by 6.7% as compared to the same period of the last year and equalled USD 2,153 million, although the percentage rate decreased by 7.3% as compared to the same period of the previous year.
The Minister of Economy and Sustainable Development is correct when he speaks of a significant export increase. Nevertheless, the context of his statement according to which there was a decreasing export trend in the last years is incorrect. There was no export decrease recorded in the data of 2010-2012. Only the growth percentage rate decreased in 2011 and 2012. There is an analogous situation in 2014. Moreover, the export decreased by 6.2% in the third quarter of the current year as compared to the same period of the last year.
As for the Russian market, based upon the 2014 nine-month data, the export to Russia increased as compared to the same period of the last year and makes up roughly 10% of the gross export.
FactCheck concludes that Mr Kvirikashvili’s statement: “The export has increased significantly… There was a trend of decreasing export in the last years,” is MOSTLY FALSE.
