American Statistics Against Georgia
21 June, 2012
American Statistics Against Georgia

Counting Paradox or Gross Crime?

How much of Georgian-American Trade is shadowed, how much is accordingly lost in unaccounted tax payments to the budget and who benefits from it? These questions have been answered by the recent study by Shalva Mekvabishvili, Doctor of Technical Sciences and former high-ranking official of the Control Chamber and Revenue Service. His findings are extremely worrying and attracts the interest of the American Embassy and Diplomatic corps.

The study reveals that the GeoStat data do

not fit into the corresponding data of American Statistical Agency. Notably, there is a great difference. For example, according to the American accounts, American export to Georgia for the period of 2004-2012 was estimated at 3.0087 billion US dollars. However, corresponding Georgian data quotes only 1.6624 billion US dollars for the same indicator. The mismatch – 1.3463 bln USD - is away beyond the imaginable.
For the year of 2011, 98.6% of the trade in oil products turns out to have been a part of the shadow economy. Namely, the American data indicate that Georgia imported oil products worth 56.685 million US dollars. In contrast, the Georgian data registered only 0.771 million US dollars, i.e. 74 times less. “It means 98.6% of oil products imported from America to Georgia in 2011 was not registered by the Georgian side and corresponded to smuggled goods!” – reads the study. In the same way, 89.2% of alcoholic commodities are unaccounted for.
By American statistics, the American export to Georgia in 2011 amounted to 538 million US dollars as opposed to the comparatively smaller Georgian export to America worth of 176 million US dollars. So the trade balance was negative for Georgia by 362 million US dollars. In contrast, the data obtained by us, indicates the trade deficit of only 102.3 million dollars.
Shalva Mekvabishvili, author of the study: “About three months ago I was reading the foreign press on the Internet when I came upon the article by Thomas De Vaal, a well-known researcher of the Carnegie Institute. In the article, he was noting that last year Georgia imported goods from America worth of 534 million US Dollars. By the way, the figure has climbed to 579.3 million by now. Of course, the figure given by the article stunned me (I easily remember figures and such a huge sum would not escape my attention) because the Georgian statistics claimed a 2.4 times lower rate for the American import – 245 million US Dollars. Initially I thought of arms import that could have been classified by Georgia. I searched further on and came across the data by the American Statistical Bureau published on its web site that covers all the groups of goods for the period from 1992 to 2012 (1st quarter). The local statistics mainly pivots on the data from Finance Ministry and Statistics Department. In Georgia, it is somewhat hard to collect information on specific indicators. Country-by-country import data is not available. Yet, this is not an insurmountable problem.
The study concludes that the discrepancy between the American and Georgian data on the size of the American import for the last eight years and four months is huge - 1.4 billion US Dollars. The most surprising for me was a similarly huge difference between the export figures as well. Whereas the Georgian side registers 700 million US dollar worth in exports to America, the American side comes up with 1.212 billion US dollars of goods exported from Georgia, i.e. the discrepancy is whopping 512 million US Dollars. No doubt it all goes down to the illegal profit mongering of some people. No less than 1 billion and something Lari has been lost by the State budget. It’s a massive amount for our country. Clearly, what we face is the rampant shadow economy.
Indeed, some supposed the difference might be stemming from a mere technicality of different methodologies used in various countries for counting such data. Yet, even in such circumstances, discrepancies between the data of the two countries could be no more than 5%, surely not 98% as is the case.”

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