Bidzina Ivanishvili: “We have a lack of professionals in every field. We are poor and ten-times behind Europe. Even if we grow the economy by 5% or 10%, look at how much time that will take.”
Verdict: FactCheck concludes that Bidzina Ivanishvili’s statement is MOSTLY TRUE.
Resume: A relevant indicator would be the real GDP per capita [1] as measured by purchasing power parity (PPP) in order to make an assessment of the comparison made in Bidzina Ivanishvili’s statement. According to the World Bank’s latest data, Georgia’s real GDP per capita PPP is 14,900 international dollars as of 2019 whilst the EU’s figure is 44,4000 international dollars which is three times larger than Georgia’s. With the annual 5% growth of the real GDP (PPP) per capita, Georgia will reach the EU’s 2019 level in 2042. With a 10% growth, it will reach this level in 2031.
In accordance with the latest surveys of the World Economic Forum, Bidzina Ivanishvili’s claim of a lack of professionals is also true. An inadequately educated workforce was named as a major problematic factor for doing business in Georgia.
The part of Bidzina Ivanishvili’s statement where he indicates problems in regard to workforce skills is true. However, his assessment in regard to a comparison with Europe is an exaggeration. However, it will take at least a decade even under a 10% economic growth (two-digit growth is a rear exception for Georgia) to close the gap. Therefore, FactCheck concludes that Bidzina Ivanishvili’s statement is MOSTLY TRUE.
Analysis:
Bidzina Ivanishvili, in his interview with the Georgian Public Broadcaster, highlighted Georgia’s poverty and lack of professionals in the country. Mr Ivanishvili stated: “We have a lack of professionals in every field. This is our biggest tragedy. We are poor. It is easy to calculate that we are ten times behind Europe in terms of the economy - we are lagging behind, roughly saying. Even if we grow the economy by 5% or 10%, look at how much time that will take.”
Countries have their own national currencies and the measurement of their annual GDPs is made in the respective national currencies. At the same time, changes in price levels vary across countries. Statistical approaches and methods for measuring GDPs are also different to a certain extent and it is nearly impossible to make accurate comparisons. However, the best indicator would be the real GDP per capita measured in PPP in order to compare the economies of different countries. According to the World Bank’s latest data, Georgia’s real GDP (PPP) per capita is 14,992 international dollars as of 2019 whilst the EU’s figure is 44,436 international dollars which is three times larger than Georgia’s. Therefore, with the annual 5% growth of the real GDP (PPP) per capita, Georgia will reach the EU’s 2019 level in 2042. With a 10% growth, it will reach this level in 2031.
Graph 1: EU and Georgia’s Real GDP (PPP) Per Capita in 2010-2019 - Projections of EU 2019 Real GDP (PPP) Per Capita and Georgia’s Real GDP Per Capita with 10% Annual Growth (International Dollars)
Source: World Bank, author’s calculations
Of additional note is a lack of professionals in the country. The World Economic Forum’s Global Competitiveness Index aims to provide as neutral and impartial comparison of the competitiveness of different economies as possible and identify their main problems. According to the aforementioned Index, an inadequately educated workforce was a major problematic factor for doing business in Georgia in 2013-2017.
Table 1: Problematic Factors for Doing Business in Georgia in 2007-2017
Source: World Economic Forum
The data above illustrate that the lack of professionals in the Georgian workforce remains one of the most important challenges. In addition, the country’s economy significantly lags behind Europe and even with a 10% growth, Georgia will need more than a decade to catch up to the EU’s current level of the real GDP (PPP) per capita. However, based on this indicator (used for comparison of level of economies), Georgia is only three times behind Europe instead of ten times as claimed by Mr Ivanishvili.
[1]Naturally, population changes in countries will alter the GDP per capita to some extent, although it will not significantly affect the figures for analysis which are tentatively used in the article.
