“Manna from heaven” fell on Georgia. Financial increase within the Caucasus republic. What’s going on?

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The battle in Ukraine, from which Georgia anticipated a collapse of the financial system and a recession, fairly unexpectedly become financial development, writes Haqqin from Azerbaijan. Cargo, Russian “nerds,” and {dollars} poured into the nation.

By Tengiz Ablotiyah

Whenever you say the phrases: “To whom conflict and mother-in-law are expensive,” they, as a rule, go away an disagreeable residue. As a result of instantly, there are associations with ethical lawlessness, looting, or one thing else unworthy.

Like somebody dies or turns into handicapped, and you utilize these troubles to line your pockets.

On the uncommon events when conflict introduced financial advantages to a state, its leaders had been embarrassed to confess it.

, “Manna from heaven” fell on Georgia. Economic boom in the Caucasus republic. What is going on?

However generally, a conflict with none unfavorable context is basically “mother-in-law” as a result of it will probably fairly unexpectedly convey tangible financial preferences.

It might appear that yesterday you watched the battle unfolding with horror, calculated the losses, and grabbed your head in anticipation of the financial system’s collapse.

After which, impulsively, it was as if somebody up there understood the explanation to your fears and determined to assist.

In such instances, skilled writers use the expression “divine probability”. That’s the case we’re speaking about.

When the battle in Ukraine started, Georgian economists and consultants sadly predicted an imminent, complete financial disaster for the nation.

In reality, it was troublesome to accuse them of extreme pessimism since Russia and Ukraine – each by way of exports and tourism – are Georgia’s two largest buying and selling companions.

It was nonetheless doable to bear the lack of certainly one of them.

However the simultaneous lack of the export markets of Russia and Ukraine, in addition to the entire and even partial cessation of the availability of air from the oxygen cushion referred to as “tourism”, threatened Georgia with the collapse of the nationwide financial system for a very long time.

As if anticipating the approaching scarcity of greenback money, the nationwide forex of the Georgians floated within the route of infinity, dropping in some two or three days from 2.8 to three.4 lari per greenback.

And since there was nothing to cease the free fall of the nationwide forex, clouds of hyperinflation started to thicken over the monetary system of Georgia.

Briefly, solely a miracle might save the Georgian monetary system and the nation’s financial system, which even kids don’t consider in in our pragmatic instances.

After which out of the blue, fairly unexpectedly for everybody, planes from completely different cities of Russia started to land one after one other on the Tbilisi airport, full of younger folks with the looks of basic “nerds” – matted glasses with buddies, with wives, typically with canines, much less typically with kids, and principally singles.

And if, at first, few folks understood what was really taking place, then after a number of days, the amazed Georgians realized with piercing obviousness: These “nerds” with Russian passports and laptops beneath their armpits are actually their new compatriots.

A minimum of for some time.

There could be no happiness, however misfortune would assist. Briefly, Georgia in a single day grew to become one of many facilities of mass Russian emigration.

, “Manna from heaven” fell on Georgia. Economic boom in the Caucasus republic. What is going on?

Georgians, shocked unexpectedly, silently watched as new expats lined up for financial institution accounts, ran searching for rented housing, turning into dearer each hour, searching for appropriate meals for his or her canines and cats …

After which a second shock adopted, which additionally collapsed on the heads of Georgians with none warning– alternating photos of multi-kilometer queues of freight transport lined up on the borders of Georgia out of the blue appeared on the airwaves of native and international tv firms.

And never that it immediately struck my compatriots – congestion on the borders has at all times been a well-known and even routine sight.

However what occurred after the sudden inflow of “nerds” was already buying an epic character, approaching the dimensions of a humanitarian disaster.

Not solely customs officers but additionally the heads of the Georgian ports, from Poti to Batumi, which had been packed to the restrict, spoke about border congestion, wherein cargo merely didn’t have time to be processed, and wagons with items stood unloaded on spare tracks for a number of weeks …

Because it turned out, a part of the transit from Central Asia and China went due to the sanctions towards Russia within the South Caucasus, that’s, by Azerbaijan and Georgia, which had been fully unprepared for this transport of “manna from heaven”.

Let’s be trustworthy: in lots of respects, this unpreparedness was of an goal nature – neither Baku nor Tbilisi, even in probably the most optimistic forecasts of their economists, anticipated such a speedy development in cargo site visitors.

And never stretched in time, because it normally occurs, however avalanche-like, which hit the Azerbaijan and Georgia transport programs in simply two or three weeks …

At first, the Georgian folks didn’t perceive something in any respect.

Not like its nationwide forex, which instantly started to strengthen.

And so shortly, nobody even had time to ask: “Hey, authorities and nationwide financial institution, will you at the very least clarify what is going on?!”

And what occurred was that in simply two or three weeks, the lari not solely returned from 3.4 to 2.7 per greenback but additionally crawled even decrease.

Sure, it strengthened so unequivocally that the Nationwide Financial institution of Georgia needed to urgently promote greater than US$100 million available on the market in order that the lari, God forbid, wouldn’t grow to be stronger than the nationwide forex of america.

Nicely, over time, got here an understanding of the dimensions of each phenomena.

From March to September this 12 months, 112,000 residents of the Russian Federation and about 30,000 residents of the Republic of Belarus moved to Georgia.

We’re silent about Ukrainians, most of them are refugees, so it could be ridiculous and unethical to count on any contribution to the Georgian financial system from them.

In just some months, Georgia’s inhabitants of three.7 million has grown by about 150,000, principally younger, energetic, educated, and artistic folks.

Most of them continued to work “remotely”, and their very massive salaries are actually spent not in Moscow and Novosibirsk however in Tbilisi and Batumi.

Furthermore, rich Russians open a enterprise in Georgia, purchase residences right here and switch their capital to Georgian banks.

TBC Bank, Tbilisi. (Photo internet reproduction)
TBC Financial institution, Tbilisi. (Photograph web copy)

In January-March 2022, a mean of US$24 million was transferred from Russia to Georgia each month, and since April, US$133 million has already been transferred.

Remittances from Russia to Georgia reached a document excessive in Could of $314 million. In whole, within the first 9 months of 2022, US$1.135 billion was despatched from Russia to Georgia.

In 2022, Russian residents bought greater than three thousand residences in Georgia, and within the interval from March to September, about 9,500 Russian firms had been registered in Georgia, which is ten instances greater than in the entire of 2021.

Thus, on the instance of easy and non-comment-free figures, it’s doable to grasp how the battle might grow to be a “native mom” for Georgian banks and its actual property market, tourism, eating places, and different providers.

As for the state of affairs with transit, all the pieces just isn’t so easy since we’re speaking about extra refined issues – modifications on this market are far more troublesome to trace.

For the time being, it’s only recognized that transit by the “Center Hall” territory has grown by 30 p.c, and that is solely the start.

If Azerbaijan and Georgia handle to resolve the infrastructural difficulties that inevitably come up with such a rush, the transit circulation will definitely develop.

The battle in Ukraine, from which Georgia anticipated an financial collapse and recession, fairly unexpectedly become an financial development of 10 p.c.

And now inform me: who on Feb. 24, 2022, might have predicted such a improvement of occasions?

Maybe somebody will say that I contradict myself and that rising financial development on the expense of deaths, mass destruction, and damaged existences accompanying any armed battle, together with the battle in Ukraine, is immoral.

To justify Georgia and Azerbaijan, I can say just one factor: the financial development of our nations is under no circumstances related both with Russia’s help in circumventing financial sanctions or with another actions that may assist Russia or hurt Ukraine.

After which, when this battle started, neither Azerbaijan nor Georgia requested about something.

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