On 20 September 2016, the Minister of Economy and Sustainable Development of Georgia, Dimitri Kumsishvili, spoke about foreign direct investments made in 2016. According to Mr Kumsishvili’s statement, in the first two quarters of 2016, the amount of foreign direct investments exceeded USD 811 million which is 11% more as compared to the same period of the previous year. The Minister also stated that of note is the fact that this was the first case when foreign direct investments rose during an election year.

took interest in the accuracy of the statement.

information about the volume of foreign direct investments. According to the data of the National Statistics Office of Georgia, USD 388 million was invested in Georgia in the first quarter of 2016 whilst USD 445 million was invested in the second quarter. In total, USD 884 million was invested in Georgia in the period of January to June 2016. In the same period of the previous year, the amount of investments made in Georgia was USD 754 million. Therefore, as compared to the previous year, the volume of foreign direct investments increased by 10.5% in 2016.

Foreign Direct Investments, USD million

The second part of Dimitri Kumsishvili’s statement concerns investments made during election years. Considering the fact that Mr Kumsishvili’s statement in regard to investments made in pre-election periods was based upon data for the first two quarters of 2016, we have to use the data for the first two quarters of 2012 for comparison. In the first quarter of 2012, USD 261 million was invested whilst USD 217 million was invested in the second quarter. The total sum of investments in the first and second quarters of 2012 amounted to USD 479 million. In the first two quarters of 2011, USD 458 million in investment was made in Georgia. This means that investments increased by 4.5% in the first half of 2012.

In 2012, investments dropped sharply in the last three months of the year before the elections. Because of this, investments decreased approximately by 6% in the first three quarters of 2012. At this moment, the amount of investments in the third quarter of 2016 is still unknown. Therefore, we cannot say whether or not investments have increased or decreased in the first three quarters of this year.

In order to completely verify the statement of the Minister of Economy and Sustainable Development, it is necessary to look at the dynamics of other elections years as well. Both Parliamentary and Presidential elections were held in 2008. The Presidential elections were held on 5 January and the Parliamentary elections were held on 21 May. Before the Presidential elections, a record amount of investment, USD 2 billion, was invested in Georgia in 2007. In total, the amount of investments in 2008 was less as compared to 2007 but this was due to a sharp drop in investments in the second, third and fourth quarters of 2008. In the third quarter of 2007, before the Presidential elections, there was a record amount of investment, USD 489 million. The same can be said about the last quarter of 2007. Large-scale rallies and the resignation of the President notwithstanding, USD 702 million was invested in Georgia in the last quarter of 2007. USD 702 million has never before been invested in the country in the space of one specific quarter. The trend of a rising amount of investments was kept in 2008 as well in the period before the Parliamentary elections. In the first two quarters (January-June) of 2008, USD 1.14 billion was invested in Georgia which was 38% more as compared to the same period of the previous year. Beginning from the third quarter of 2008, investments decreased significantly which was caused by the August War and the world financial crisis.

The statement of the Minister of Economy and Sustainable Development concerning the fact that investments are rising this year is true. According to the data of the first two quarters of 2016, investments have increased by 10.5%. In regard to his assertion that this is the first time when the volume of investments is greater in an election year as compared to the previous year, however, is incorrect. Investments increased in the first two quarters of 2012 even though the amount of investments dropped before elections if we take the first three quarters of 2012 together. Thus far, the data for the third quarter of 2016 is unknown and we cannot conclude whether or not the amount of investment for the first three quarters of 2016 has increased or decreased. In 2008, the amount of investment was less than that in 2007, however a record amount of investments was made in the pre-election period of 2008.