On 20 October 2014, Minister of Economy of Georgia, Giorgi Kvirikashvili, stated on Imedi TV that there is a big difference between the cities and the regions in terms of the turnover of enterprises. Namely, the turnover of enterprises per capita is much higher in cities and in Tbilisi, specifically, than it is in the country’s regions.

FactCheck

took interest in this statement and verified its accuracy.

The turnover of an enterprise is the amount of income received by selling production or service during the reporting year. According to the data of the National Statistics Office of Georgia, a total of 52,985 active enterprises were registered in Georgia and their turnover amounted to GEL 21.1 billion in the first six months of 2014 which is 14.2% more than in the same period of the previous year.

It should be noted that calculated by regions, Tbilisi constituted 72.6% (GEL 15.3 billion) of the total turnover whilst the remaining 27.4% was distributed between the regions. Among the regions, Ajara and Lower Kartli had the highest shares in the total turnover (about 6%). The diagram below depicts the share of the regions in the total turnover.

Diagram 1: Turnover of Enterprises by Region (2014^*)

Source: National Statistics Office of Georgia^[1]

This difference between the capital city and the regions is due to the distribution of enterprises. The majority of the enterprises are situated in Tbilisi which causes a disproportion of turnover between the regions and the capital city.

Over 33,000 enterprises were operating in Georgia in 2007 and 33% of these enterprises were situated in Tbilisi. The number of enterprises has grown 1.6 times to 53,000 in 2014 as compared to 2007. A total of 91% (17,896) of the new enterprises are in Tbilisi whilst the remaining 9% (1,816) were distributed between ten regions of Georgia. As of today, 55% of the active enterprises are situated in Tbilisi.

This kind of difference between the capital city and the regions is due to the number of the population and the distribution of income as well. The population of Tbilisi constitutes 26% of the total population of Georgia whilst the population of the regions is 10% of the total or less. Only the Imereti region is an exception where the number of the population constitutes 15% of the total population. In addition, the income in the capital city is much higher which results in a higher consumer demand. Unsurprisingly, the majority of enterprises are situated in a place with a more qualified labour force and a bigger market.

Table 1:

 Turnover Per Capita in Tbilisi and the Regions (2014)

2014*	Turnover Per Capita	Difference from the Capital City
Tbilisi	13,024
Imereti	1,416	9
Lower Kartli	2,542	5
Samegrelo-Upper Svaneti	1,360	10
Kakheti	1,036	13
Ajara	3,253	4
Inner Kartli	1,296	10
Samtskhe-Javakheti	1,287	10
Guria	647	20
Mtskheta-Mtianeti	2,801	5
Racha-Lechkhumi-Lower Svaneti	362	36

Source: National Statistics Office of Georgia^[2]

The total turnover of enterprises was 1.5% more in 2013 than that of 2003. The share of Tbilisi in the overall turnover of enterprises increased from 60% to 72% from 2003 to date. Based upon the data of the National Statistics Office of Georgia, we calculated the total turnover per capita in Tbilisi and the regions of Georgia. On average, the total turnover per capita was seven or eight times higher in Tbilisi than in the regions.

Chart 1:

Turnover Per Capita in Tbilisi and the Regions of Georgia (2007 to 2014)

Source: National Statistics Office of Georgia

Conclusion

There were a total of 52,985 active enterprises in Georgia in 2014, 55% of which operated in Tbilisi whilst the remaining 45% were dispersed through ten regions of the country. As for the turnover, Tbilisi constitutes 72.6% of the total turnover whilst the rest is distributed between the regions. The average turnover per capita equalled GEL 13,024 in the capital city which was 7.5 times higher than that of the regions (GEL 1,741).

Such a disproportion between Tbilisi and the regions is due to the distribution of the enterprises. Higher consumer demand and the concentration of a qualified labour force make the capital city more attractive for businesses. As of today, about half of Georgia’s active enterprises are situated in Tbilisi.

Hence, Giorgi Kvirikashvili’s statement: “We have a very big disproportion between the cities and the regions in terms of the turnover of enterprises. The total turnover per capita is 12 or 13 times higher in the cities than in all of the regions of Georgia,” is MOSTLY TRUE.