Georgia should not rush with sanctions against Russia
10 April, 2014
Georgia should not rush with sanctions against Russia
Georgia should join sanctions against Russia only if the international community requires this, an overwhelming part of Georgian economic analysts believe. While some active Georgian Facebook users call on boycotting Russian products at Georgian retail networks, following the Ukrainian example that banned the import of confectionery and canned fish as well as some dairy products from Russia as of 4 April, economic analysts recommend Georgia not to rush any kind of adverse economic activity against Russia ahead of the West.
Georgia is a little country with immediate borders and long-lasting political tension to Russia which brings in “the jungle rules against the rules of the law,” as German Chancellor Angela Merkel worded Russia’s policy after incursion to Crimea recently. And it remembers very well the Russian provocations leading to the August War in 2008 which put 20% of Georgian territory under Russian occupation. Georgia does not have the luxury of making mistakes again, analysts say and it should make moves only after and in compliance with its big strategic partners of the US and the EU this time.
“This is a fight between big countries like the US and Russia over political influence in the world and we should not forerun the actions and decisions of the US and EU. The Georgian economy is just fledgling and it cannot survive such strikes. Unlike Ukraine, Georgia has no industry developed. It is an import-dependent country. 80% of goods are imported in Georgia and the country that lives on import cannot afford joining economic sanctions against one of its key trade partners,” Lia Eliava, a financial market analyst says. “Even the West does not impose any really strict sanctions as of yet.”
Washington and Brussels imposed targeted economic sanctions just on several Russian officials, including visa bans and asset freezes. The EU has not announced a final decision on further sanctions, but has threatened to impose them if the situation around Ukraine escalates further. However, even international payment systems Visa and MasterCard, which blocked services to seven Russian lenders including SMP Bank and Investcapitalbank on 21 March, resumed their service after a couple of days. The losses were too big and besides, it did not have a desirable effect because Russia took the challenge and announced the start of its own nation-wide payment system soon. The German association of businessmen opposes the sanction idea as it may put 6200 German companies which run business in Russia on bankruptcy. Sergei Glazyev, an adviser to Russian President Vladimir Putin, said on 7 April in an interview on the Russian RT TV channel that if broad economic sanctions are imposed against Russia, the EU’s financial losses may reach trillions of Euros. And that if Russian financial transactions are blocked, European banks will suffer as “hundreds of billions in payment obligations will be suspended,” and such a destabilization of the entire European financial system could risk another world war.
And as nobody in the West hurries with decisions so far, analysts believe Georgia should keep quiet and join economic sanctions only after the international community requires this. In the trade war with Russia Georgia is an apparent loser. Georgia’ share in Russian trade is insignificant while Russia is the number three trade partner to Georgia and a top two export market today. Russia was just number six-seven within 2006-2012 of the trade ban years to Georgian product. However, since the summer of 2013 when the Russian market reopened it took the third position. The Russian share in import is less important, but in export Russia takes almost 10% and comes after 16.9% of Azerbaijan and 10.5% of Ukraine. And although the trade with the EU is expected to be unfettered starting this June, it will take much longer until Georgia streamlines its standards with the EU and becomes able to export there. Keeping the Russian market in the meantime is crucial to Georgia, while Russia will hardly notice if Georgia disappears from its trade map. Moreover, as Soso Archvadze, an economic analyst fears, Georgia may lose almost 68% of money transfers making up USD 800 million in 2013 coming from Russia if Russia activates some internal regulations and deports thousands of Georgians working in Russia.

Print
Other Stories
The most wanted fruits from Georgia
The fruit exportation has decreased in Georgia. According to Geostat (National Statistics Office of Georgia), this year, up until May Georgia exported 25 939 300 USD worth of fruit – 6 771 300 USD less than in 2018.
Investment Plan for Europe – Additional EUR 800 million for SMEs as EIF and ProCredit double support for innovative companies
The European Investment Fund (EIF) and ProCredit Group are providing an additional EUR 800 million to innovative small and medium-sized companies (SMEs),
Everything of comfortable life in one space – Second part of construction of one of the largest apartment complexes finished in Tbilisi
Apartment in ecologically clean environment, thousands of square meters of green yard, swimming pools, places for various sports activities, treks for walking and running, commercial spaces – all these available in one space is not a fantasy.
Batumi awarded Europe's Leading Emerging Tourism Destination 2019
World Travel Awards Europe Gala Ceremony 2019 took place on the 8th of June in Madeira, Portugal.
Coca Cola to open new factory in Georgia, will hire female drivers
Coca Cola is opening new factory in Georgia in December.
World's best party supply company now on the Georgian market
The largest party supply store in Georgia - MyDay is launching as the official distributor of AMSCAN from 2019.
Live as a marketing tool and an unprecedented live stream launched by Livetag
Sharing information has become smoother and more versatile in today’s technological world. Recently, live streaming, an online streaming media has become especially popular.
Theme and program of Caspian Energy Forum Tbilisi – 2019 changed
“The 8th International Caspian Energy Forum Tbilisi – 2019, scheduled for June 21, will focus on the development of the Azerbaijan-Georgia relations in the field of economy and energy”,
Misunderstanding over Poti deep sea ports
There was misunderstanding around deep sea ports in Georgia – in Poti.
High demand for dollars or the investment decline – Why Georgian Lari depreciates
$1 equals GEL 2,7470 in the official rate set by the National Bank of Georgia (NBG).
PSP Group confirms negotiations regarding purchasing of GEO Hospitals
PSP Group confirms negotiations regarding purchasing of GEO Hospitals.
New life to be given to Dashbashi Canyon
Georgia’s Agency of Protected Areas is planning to give new life to Dashbashi Canyon in Tsalka (southeastern Georgia).
Who is constructing “Khadori 3” Hydropower Plant in Pankisi Gorge?
Clashes broke out in Pankisi Gorge, Georgia’s northeastern region between special forces and residents
Business Positive – Successful radio program from Radio Positive
Starting point of radio program Business Positive is to meet interesting people, communicate with them and deliver information that is interesting for the audience.
A factory of electric vehicles to be built in Kutaisi
Prime Minister Mamuka Bakhtadze stated that a factory of electric vehicles will be built in Kutaisi at the presentation of the Aigroup business group.
Qvevri-shaped hotel complex to be built in Telavi
A Qvevri-shaped hotel complex is scheduled to be built in the village of Shalauri in Telavi, Kakheti (east part of Georgia).
Georgian designers presented at Fashion World Tokyo 2019
The products of 11 Georgian designers are showcased at Fashion World Tokyo 2019,
Silknet raises $200 million in Eurobond issue
27 March 2019 - JSC Silknet (“Silknet”), one of Georgia’s leading telecommunications operators, has successfully priced a debut $200 million 5-year 11% senior unsecured bonds issue (the “Notes”).
Pistachio trees will be planted in Georgia
Dozens of hectares of Pistachio are planned to be planted in Georgia this year.
Toyota Safety Sense and Hybrid Technology
Toyota Caucasus, has presented two new models the 5th generation RAV4 and the 12th generation Corolla at Rustavi International Motorpark, several days ago.
Bidzina Ivanishvili “became number one oppressor of businesses in Georgia” - ICC Georgia chairman Fady Asly
Mr. Ivanishvili promised the business community to protect them from harassment and pressure, unfortunately his words died with the sunset of that day
The best brands of Belarus will be exhibited on a large-scale exposition in Tbilisi
"The Belarusians like to come to Georgia to relax near the sea in Batumi as well as to stay in sunny Kakhetia."
Don’t treat business like a hooker! - Georgian businessman Vasil Soprpmadze addresses politicians
Businessman Vasil Sopromadze, founder of the company "Fresco", addresses politicians
RAV4 No Compromise and Corolla Set to Impress – Two New Cars Presented by Toyota
Toyota Caucasus, the company constantly aspiring to greatness, has presented two new models the 5th generation RAV4 and the 12th generation Corolla.
Mamuka Khazaradze quits TBC bank, does not sell the TBC Bank share
I made a decision to leave TBC bank where I spent 27 years of my life
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
20.07.2019
21.07.2019
USD
1
USD
2.8845
2.8845
EUR
1
EUR
3.2410
3.2410
GBP
1
GBP
3.6177
3.6177
RUB
100
RUB
4.5787
4.5787
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.8845
EUR
1
EUR
3.2410
GBP
1
GBP
3.6177
RUB
100
RUB
4.5787
July 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31