Georgian-US Trade Statistics Is Missing One Billion
21 June, 2012

Approximately 54% trade difference exceeding one billion dollars was disclosed in Georgian-US trade statistics in 2004-2012. The missing amount is on Georgian side, which arises the contraband and elite corruption suspicions in the country. Georgian government ascribes the alleged loss to the incorrect calculation method. 

Georgian state budget missed more than USD 1 billion in the trade with its strategic partner the US in 2004-2012, Shalva Mekvabishvili, an independent economic analyst, assures in his researched aired on June 13, 2012.

He compared trade data of Georgian-American export-import put on official web-pages of the US State Census Bureau and Geostat, national statistics body of Georgia, and disclosed approximately 54% loss in Georgian data amounting to USD 1.858 billion.  Mekvabishvili believes the missing goods in Georgia bespeak of a shadow economy and elite corruption.
According to the research, the US data indicate that trade with Georgia accounted for USD 4. 276 million in 2004-2012. Georgian statistics put USD 2.418 million for the similar reported period of trade that translates into the USD 1.858 million loss cutting the US data down by 54.5%. As a consequence, Georgian state budget lost at least billion through unpaid customs tolls.
“56.7% of the trade between the US and Georgia was ‘shadowed’ in Georgia in 2004 compared with the US data,” the research reads. “The shadow figures break down as following: 57.5% - in 2005, 49% - in 2006, 38.8% - 2007, 38% - in 2009, 27.2%-2010, 45.5% - in 2011, and 45.6% in January-March of 2012.”
Mekvabishvili accentuates that difference in figures mainly come on those product import of which are monopolized in Georgia like oil product, meat, rice, and alcohol drinks [except wine] that indicates on elite corruption enabling elite importers to hide taxes.
“Pet food for example shows almost no difference while sectors that are monopolized show huge difference,” Mekvabishvili explained to Georgian Journal.
Based on the research, 98.6% of oil product sent from the US in 2011, as well as 89.2% of alcohol drinks [except the wine], 87% of rice, and 66.5% were not registered in Georgia. As a result of only meat contraband Georgian state budget faced at least GEL 12 million through unpaid Value Added Tax (VAT), Mekvabishvili elaborated.
Lili Begiashvili, Deputy Head of Revenue Service of Georgia, ascribes the allegedly missing trade to inadequate calculation made by Mekvabishvili who did not envisage specifics of sea transportation that makes price difference in any foreign trade globe over.
“The method of calculation most probably does not envisage either sea transportation specifics that always make price difference between the cargo’s start and destination countries, or insurance and logistics costs. Statistics calculation should be based on its special method if you calculate figures without this method you always can make different figures,” Begiahsvili said in the interview with GJ.
Moreover, she assures that ship owners been commercial entities bear no obligation to deliver cargos to the place of their destination.
“If they on their way will stop at some other ports and find more profitable to sell the cargo there they have full right to do this and we cannot control that, nobody has a right to prohibit this. That explains the difference,” she elaborated.
Mekvabishvili counters that freight insurance and transportation costs could make only about 5% difference not as big as he disclosed in fact.
“Besides, why only the monopolized goods show the difference and others are OK?” he asks.
Independent customs experts think the research cannot be taken for granted and an in-depth analysis should follow. They assure such data errors are quite frequent in trade statistics and partly the reason is defects in some countries’ customs statistics. Quite often customs of exporting countries in the destination country indicate not the final point but the port country. Therefore cargos exported by the US to Azerbaijan and Armenia or Afghanistan through Georgia  may indicate Georgia as the destination country while it is re-export to Georgia in fact.
However, they do not rule out contraband and corruption schemes. Therefore suspicious economic crime cases should be researched on the state level as far as it is beyond independent experts’ competence.
Mekvabishvili together with other independent Georgian experts, asked the US Embassy in Georgia to set up a bilateral working group to find out the reason of the questioned trade difference.
“Both American and Georgian authorities should give an answer where these differences came from,” Soso Tsiskarishvili, an economic analyst, said.  
Begiashvili rules out contraband fears and does not think the issue is worth of any in-depth research as far as all data are transparent. 
“We have our data open at our web-sites; the US also has data available on its web-site. Let everybody compare them in due manner, what else are we supposed to do?” Begiahsvili argued.
The US embassy in Georgia says it is aware of the difference between the US and Georgian trade statistics and refrains from making conclusions before further analysis is made.
“It is not uncommon for there to be differences in statistics between trading partners, which can be attributable to a variety of factors.  Before reaching any conclusions about the reasons for the discrepancy between current U.S. and Georgian trade statistics, further study and analysis are required,” The US embassy commented to GJ.

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