Irakli Kobakhidze: “When you speak about the growth of trade with Russia, this is simply a lie.”

Verdict: FactCheck concludes that Irakli Kobakhidze’s statement is FALSE.

Resume: As compared to 2021, foreign trade turnover with Russia in 2022 increased sharply by 52% (export increased by 6.8% and import increased by 79%). This trend was maintained in 2023 as well and the trade turnover with Russia increased by a further 32% in the first six months as compared to the same period of the previous year (Georgia’s export to Russia increased by 34% whilst import increased by 31.2%).

In terms of monetary value, the turnover of foreign trade with Russia in January-June 2021 amounted to USD 730 million, in January-June 2022 it reached USD 964 million and in the first half of 2023 it rose to a further USD 1.271 billion. This cannot be considered as an insignificant growth.

Trade turnover with Russia increased not only in terms of money but also in terms of share. In 2021, Russia's share in foreign trade was 11.4% and it increased to 13.1% in 2022.

Analysis

The Chairperson of the Georgian Dream, Irakli Kobakhidze, spoke about the volume of foreign trade turnover with Russia. As stated by Mr Kobakhidze, there has been no growth in trade statistics. In particular, he claimed: “In regard to figures, the share of foreign trade with Russia is merely 8%. I could be wrong in a half of a percent. When you speak about the growth of trade with Russia, this is simply a lie”… In addition, EU member states’ trade with Russia is worth of hundreds of billions during a year.”

From 1995 until the 2006 embargo, Russia occupied the first place in Georgia's export market in nine of 11 cases (Turkey overtook it in 2000 and 2004). Similar to export, it was in the leading positions in import and Russia's share in the total trade turnover steadily exceeded 15% which decreased to 5% in the aftermath of the embargo imposed by Russia itself.

Since 2013, the embargo has been lifted and Russia's share has increased again, although it has not returned to the old level. Before the invasion of Ukraine, Russia's share in foreign trade reached a maximum of 11.7% in 2020.

Graph 1: Russia’s Share in Foreign Trade

Source: National Statistics Office of Georgia

In 2022, Georgia’s trade turnover with Russia leapt by 52% and reached USD 2.5 billion, largely owing to the growth of import. The import structure itself was mostly affected by cheap Russian fuel. In 2021, Georgia purchased USD 135 million in Russian fuel whilst it was 361% more - USD 623 million in 2022.

Graph 2: Trade Turnover with Russia (USD Million)

Source: National Statistics Office of Georgia

In 2023, Russia's share in the foreign trade turnover decreased slightly but the reason for this was not a decrease in the monetary value of trade turnover. The reduction of Russia's share was caused by an even faster growth of trade turnover with other CIS member states.

Graph 3: Trade Turnover with Russia (USD Million)

Source: National Statistics Office of Georgia

As compared to the first six months of 2022, trade turnover with Russia increased by 32% in the first six months of 2023 whilst growth would be 74% as compared to the first six months of 2021. The only 3% decrease in the first half of 2022 occurred in exports, although this small decrease was also covered by growth in the second half of the year.

Irakli Kobakhidze also noted that "EU countries’ trade with Russians worth hundreds of billions during a year." A similar statement made by the Prime Minister Irakli Gharibashvili in May was assessed by FactCheck as manipulation. According to the data of 2022, the total trade turnover of the European Union with Russia is about 467 times higher than that of Georgia’s whilst the EU’s economy is 675 times larger and so naturally it will trade more with Russia in terms of volume. However, unlike Georgia, the European Union decreases foreign trade turnover with Russia instead of increasing it. In January-May 2021, the volume of foreign trade between the EU and Russia exceeded EUR 90 billion whilst it decreased to EUR 43.6 billion in the same period of 2023 (USD 48 billion at the exchange rate of July 26).

In order to measure dependency, of note is that the EU’s share of Russia in its total foreign trade turnover is merely 1.26%; that is, ten times less as compared to what Russia’s share is for Georgia (in January-May Russia’s share in Georgia’s trade turnover was 12.7% whilst Eurostat has not yet published data for June as of 26 July 2023).

Graph 4: Change in Trade Turnover with Russia (January-May 2023 As Compared to January-May 2021).

Source: National Statistics Office of Georgia and the Statistical Office of the European Union (Eurostat)

In the last two years (January-May 2023 as compared to January-May 2021), Georgia increased its trade turnover with Russia sharply by 78% whilst in the same period of time, the EU decreased its trade turnover with Russia by 52%. Therefore, the claim that “speaking about the growth of trade with Russia is a lie” is itself false. It is also false that Russia’s share in Georgia’s total trade turnover is 8% because in fact it is over 12% and in 2022 exceeded even 13%. The EU’s example is also irrelevant because apart from the EU halving its trade turnover with Russia, the latter’s share in the EU’s total foreign trade turnover is merely 1.26% which is ten times less as compared to that of Georgia’s. Given these factual circumstances, FactCheck concludes that Irakli Kobakhidze’s statement is FALSE