Who should Georgia’s closest economic partners be?

Reports on Georgia’s shifting public opinion of Russia and the West have been widely discussed on this blog and elsewhere. Focusing specifically on economic aspects, the Georgian population thinks both Russia and the EU have a greater influence on the Georgian economy than they should, although this perception is not necessarily based on the country’s actual economic relations with either Russia or the EU. More diverse economic partnerships and the population’s awareness of these partnerships could decrease this perceived influence. Notably, there are signs that many regional economic powers are happy to increase their trade with Georgia: with Iran looking to triple or quadruple trade with Georgia and China investing in Georgia as part of the new Silk Road initiative, new players are stepping into the Georgian economy. Iran and China aside, Turkey has long seen Georgia as a market for Turkish goods and a transit corridor to trade partners in Central Asia, especially now that diplomatic and trade ties between Russia and Turkey have deteriorated. This blog post looks at the Georgian population’s attitudes towards economic relations with several countries, using CRRC-Georgia’s survey on Knowledge and Attitudes towards the EU in Georgia (EU survey), which was carried out for Europe Foundation in 2015.

When asked to choose which countries or unions Georgia should have the closest economic cooperation with, people most often name Russia, the EU, and Turkey. The answers are, however, rather different by settlement type, as well as between ethnic minority and majority populations.

Note: While answering this question, respondents were asked to choose three countries/unions from a list of 14 provided on a show card. 

The choice of Russia for preferred economic partner is notable considering Georgia’s current level of trade with the country. While the share of exports to Russia has increased over the last three years, since Russia lifted the 2006 embargo on Georgian exports in 2013 and 2014, it still only accounts for 7% of exports from Georgia, and 8% of Georgia’s imports come from Russia. As expected, younger, urban dwellers tend to mention the EU as Georgia’s preferred economic partner more often, while older rural dwellers tend to mention Russia. Ethnic minorities mention Russia or Turkey more often than the EU. Compared to the population of the rest of the country, those living in Tbilisi are more likely to mention the EU and new economic partners like China.

The EU and Turkey, Georgia’s largest economic partners, are far more involved in the Georgian market, yet overall, fewer answered they would prefer them as the closest economic partner compared to Russia. While trade with the EU has doubled since 2009, fewer people mentioned the EU as a partner that Georgia should have the closest economic cooperation with in 2015 (47%) than in 2013 (60%). Ironically, the drop in 2015 coincides with the introduction of the Deep and Comprehensive Free Trade Agreement (DCFTA) in 2014, which aims at increasing trade between the EU and Georgia.

In the same survey, a similar question was asked about countries or unions that Georgia should have closest political cooperation with. There is a strong statistical correlation between the answers to questions about political and economic cooperation, with Spearman’s correlation coefficients ranging from .623 to .754 when tested for Russia, the EU, Turkey, China, and Iran.

The majority of Georgia’s population still prefers Russia as an economic partner regardless of Georgia’s growing trade ties elsewhere. There may be a number of possible explanations for this finding, two of which seem quite reasonable. On the one hand, the population is likely not entirely aware of the diversity of Georgia’s trade relations and concomitant economic interests. On the other hand, attitudes towards economic partnership may be influenced by political attitudes.

To explore the data more, take a look at our Online Data Analysis platform.

In the South Caucasus, the Enemy of my Enemy is my Friend

The three countries of the South Caucasus (Armenia, Azerbaijan and Georgia) are geographically, historically and politically bound closely together. Nevertheless, these countries often find themselves in disagreement when faced with broader geopolitical questions regarding alliances, threats and visions about the future of the region. These countries are often divided on a variety of issues, such as whether or not to join the Eurasian Union, to sign the EU association agreements, or how to vote on the legality of the independence referendum in Crimea. While the South Caucasus is certainly a region in a geographic sense, there is little evidence of a regional identity that could point towards a future of increased cooperation or cohesion. Instead, a case of ‘the enemy of my enemy is my friend’ prevails, splitting the region into supporters and adversaries of the countries across their borders, which has consequences for both trade and foreign policy.

The majority of Armenian respondents to the 2013 Caucasus Barometer (CB) questionnaire named Russia as Armenia’s biggest ally (83%), while just under half of Georgian respondents named Russia as an enemy (44%), and 7% in Azerbaijan noted Russia as the main enemy of their country. A split can be seen in the case of Turkey, as most Azerbaijanis view Turkey as an ally (91%) and just over a quarter of Armenians view Turkey as an enemy of their country (28%).

The tension that characterizes cross-border perceptions in the region makes the borders themselves highly securitized spaces. Far from a free flow of people or goods, cross-border trade and travel is restricted between Georgia and Russia, Armenia and Azerbaijan, and Armenia and Turkey following a series of wars over disputed territories.

Nevertheless, perceptions of borders can ebb and flow throughout history. Administrative boundaries can become state borders, as in the case of the South Caucasus in the early 1990s, and state borders can become as open as administrative ones, such as in the European Union. Similarly, perceptions of neighbors can vary across different issue areas. While opinions and alliances in the South Caucasus are largely polarized, the will (if not the actual ability) to trade and interact on a commercial level yields a slightly less tense picture. Countries with a strong negative perception of other countries can be extremely reluctant to engage economically with that country. However, when positions are less polarized, the approval to do business is much stronger.

The 2013 CB asked whether people approved of doing business with a range of different ethnicities. The percentage of Armenians, Azerbaijanis and Georgians who approved of doing business with the titular groups of the countries they highlighted as their main enemies is shown below.

In 2013, Azerbaijanis overwhelming felt that Armenia was the main enemy of Azerbaijan, and only 1% said they approve of doing business with Armenians. However, although 66% of Armenians said the main enemy of Armenia was Azerbaijan, a significantly higher amount said they approve of doing business with Azerbaijanis (22%). For Georgians—who have the least polarized views—although 44% said Russia was the main enemy of Georgia, the majority said they approve of doing business with Russians (80%). Economic dependence and economic hardship certainly have a role to play in this pattern, with all three countries naming economic concerns (along with territorial claims) as core problems facing their populations.

However, even though Georgian export dependence on Russia is relatively low at 7%, cross-border trade would almost certainly increase if trade were to become more feasible. While it is not clear from this data whether openness to trade is driving reductions in hostility or vice versa, it is an important reminder that the practical need to coexist has the potential to ease relations between hostile countries. In a region such as the South Caucasus where perceptions of others across borders are so polarized, seeking common ground such as the need for economic development could be a potential arena for cooperation. To explore more aspects of cross-border relations, visit the CRRC’s Online Data Analysis tool.

Friends and Enemies in the South Caucasus

On 1 April, 2014 the International School of Economics at Tbilisi State University (ISET) published a blog which described a future Transcaucasian Confederation agreement signed by the three South Caucasian states. Despite the fact that the blog was an April Fool’s Day joke, it provoked significant interest and reader response. Many political scientists who study alliances (such as Gärtner, Reiter and Rothstein) claim that a common foreign policy view is the primary motivation for countries (especially for small countries) to form alliances. Often, this view may be expressed in having a common enemy or having a common friend. If we look at the recent history of the South Caucasus, a union was formed in 1918 as the Transcaucasian Democratic Federative Republic (Transcaucasian Federation), which according to Geukjian (2012), dissolved after several weeks due to a lack of consensus on fighting a common enemy. Additionally, the idea of making a union in the Caucasus was has been expressed by different former leaders in the South Caucasus: Zviad Gamsakhurdia, Eduard Shevardnadze and Heydar Aliev, and Mikheil Saakashvili. Yet, no viable steps were taken in this direction.

The purpose of this blog is to examine whether there is a common enemy or friend by which any type of union, confederation or political alliance in the South Caucasus could be formed, or if it is merely a topic of humor. Of course, theoretically there could be other political, social or economic motivations for creating a union. However, this blog looks at data from the 2013 Caucasus Barometer (CB) on who citizens of the three South Caucasian countries think is their countries’ biggest friend and enemy.

The results below show that attitudes are noticeably different between the three countries. The majority of Armenians consider Russia to be their country’s main friend (83%), while the majority of Azerbaijanis say Turkey is Azerbaijan’s main friend (91%). Georgians views are yet again different as they most commonly name the United States (31%).

Note: In this graph the option “no one” was grouped to “other.” The “other” option also includes Ukraine, Armenia, Iran, Georgia, Poland, Germany, Israel, Lithuania, Europe, Italy, China, Belarus, Baltic countries, Czech Republic, the Netherlands, Nagorno-Karabakh, Northern Cyprus, Spain, Great Britain, Greece, Latvia, Abkhazia and Pakistan.

As for enemies, Georgians perceived Russia, Azerbaijanis named Armenia, and Armenians considered Azerbaijan as the main enemy of their countries. Both figures show that the opinions of Georgians are not as well defined as in Azerbaijan and Armenia; nearly a third of Georgians said they “don’t know” or “refuse to answer”. Thus, these are quite diverse preferences for countries in this small region.

Note: In this graph, option “no one” was grouped to “other”. The “other” option also includes USA, Iran, Georgia, Everyone, Israel, Great Britain, Czech Republic, Abkhazia, China, South Ossetia, Ourselves and Germany.

Differences in opinions regarding the European Union, in particular, are not as stark as in the cases of the perceived main friend or enemy. CB results shown below indicate that support for the EU is stronger in Georgia, but that there are stable attitudes towards the EU, although much lower, in Armenia and Azerbaijan. This could reveal a potential common foreign policy in the future.

Note: In this graph “support” is a combination of the responses “rather support” and “fully support”, and “don’t support” is a combination of the responses “rather not support” and “don’t support at all”. Question text: “To what extent would you support country’s membership in the EU?”

This blog has discussed the possibility of creating an alliance based on a commonly-perceived enemy or friend in the South Caucasus and come to the conclusion that it is not realistic in the near future. To explore similar issues, we recommend using our ODA tool here or reading this blog post detailing how the three countries perceive doing business with and getting married to one another.

By Edisher Baghaturia

Exploring Neighbourhoods in Georgia: Promises and Challenges for Collaboration

In 2011 CRRC conducted a survey on Volunteering and Civic Participation in Georgia. A part of this survey aimed at exploring relationships between neighbours. The results indicate that the relationships between neighbours in Georgia can be a promising starting point for building social capital and achieving improved housing conditions through collaboration. The data show that just over a third of adults in Georgia are familiar with more than ten families in their neighbourhoods and most Georgians interact with their neighbours every day. A considerable amount of Georgians also report being involved in organized activities in which the person who takes on the role of mobilizer is usually respected by others. One challenge identified by this research is a lack of communication between neighbours regarding common problems and concerns. 

The data from the civic participation and volunteerism survey suggest that Georgians not only know many families in their neighbourhood but also maintain frequent contact with them; half of Georgians know all families in their neighbourhood and 37% know more than ten families. Only 12% of Georgians say they know less than 10 families in their neighbourhood. CRRC also asked Georgians about how often they talk to their neighbours. As it turned out, 78% talk to their neighbours every day and 18% at least once a week. However, in spite of frequent conversations, common problems are less discussed among neighbours which may prevent collaboration to fix important problems in their neighbourhood. The data show that only 15% always discuss common problems with their neighbours and 29% never do so. 

CRRC data also show that there is some degree of collaboration between neighbours in terms of cleaning common space. 71% of Georgians say that common space in their neighbourhood gets regularly cleaned and 78% say this is done by neighbours either collectively or on a rotating basis. This collaboration is a promising practice that has the potential to expand into other aspects of housing, such as improving the appearance of houses and yards in Georgia.  

Note: This question was asked to 71% of respondents who said that common space in their neighbourhood gets regularly cleaned.

How exactly does such collaboration work in Georgian neighbourhoods? Just over half of Georgians (52%) say there is a person in their neighbourhood who will organize people or solve a problem him/herself. Moreover, in about half of the cases (56%) this person is elected by other neighbours to handle neighbourhood problems. Most importantly, Georgians have a positive attitude towards these community organizers. Out of the 52% of Georgians who indicate that such a person exists, 81% of them say the majority of neighbours have a positive attitude towards this neighbour. 17% say that they have a neutral attitude towards this neighbour and only 1% thinks that the majority of neighbours have a negative attitude towards this person. 

The survey also asked Georgians about their attitude towards people who collect money in their neighbourhood to fix problems. 77% of Georgians respect these people because they spend energy to solve problems which concern everyone. In contrast, only 3% of Georgians say that they are suspicious of people who collect money in their neighbourhood because they make a profit out of it. 

Neighbours who collaborate are more likely to keep their houses and yards in good repair. This post has showed that many Georgian neighbourhoods have quite close-knit groups with a potential for improved collaboration. While lack of communication about problems that affect everyone remains a hindrance to collaboration, CRRC data suggest that those who take the initiative to organize and help in solving common problems are respected by others.

Polling Data on Turkish-Armenian Bilateral Relations

Recently, as a result of the football diplomacy between Armenia and Turkey, an opinion poll was conducted in both Turkey and Armenia to gauge the reaction to new gestures in the Turko-Armenian relationship. The poll was carried out by MetroPoll in Ankara (Turkish only website) and by the Armenian Center for National and International Studies -- run by Rafik Hovannisian an American Diaspora Armenian now resident in Yerevan and involved in Armenian politics.

Unfortunately, the original questions asked or the sample size are not available online. However, the findings are indicative of the opinions of countries that are winners and losers (Turkey -- winner, Armenia -- loser).

In Turkey, almost 70 percent of the population found the Turkish president Abdullah Gül's trip was successful and presumably supported the normalization of relations with Armenia. What would have been more interesting to ask, however, was Turks view of the importance of normalizing relations with Armenia. I would hypothesize that the majority of Turks, particularly those who live far from Eastern Anatolia do not see the current position as hurting their economic interests and do not see the issue as vital -- particularly if it would require any change of Turkey's stance on the genocide issue. With Armenia's limited purchasing power, Turkey stands little to gain economically from opening its border. Furthermore, Turkey already export to Armenia through Georgia, and it is presumably Armenia that pays the higher costs for goods, not Turkey.

Interest in Armenia may be more pronounced for those Turks who live in Kars and other settlements bordering Armenia. However, while these places stand to gain most from cross-border trade, they also may have much stronger feelings about how the opening of the border may affect their lives and have potential worries about attempts of Armenians to reclaim or purchase property in the area.

Given the deep and continuing melancholy that permeates much of Armenian society's consciousness as a result of the slaughter and expulsion of hundreds of thousands of Armenians from Eastern Turkey and the central role that genocide plays in Armenian political culture, the Armenians show much more skepticism towards normalized relations with Turkey -- though the news is not all bad. Only 11 percent of respondents said they were against all cooperation with Turkey -- albeit 76 percent were only willing to normalize relations after certain preconditions were met. Ostensibly, preconditions revolve around the recognition of the Armenian genocide.

However, we would expect that more thorough plumbing of Armenian citizens' perceptions may reveal a more nuanced understanding of the policy trade-offs involved in preconditions. Likely, many more Armenians may be willing to engage in some compromise, if it meant more sustainable economic growth. Unlike Turkey, Armenia stands to reap large economic benefits from the opening of the border with Turkey. Transport costs would drop significantly for the many Turkish products that already wend their way through Georgia to Armenia; moreover, Armenia would have a more ready export market for finished goods they produce -- particularly if the Caucasian Tiger becomes more of a reality than a simulacrum.

Whatever the future for relations between Turkey and Armenia may hold, it is important to continue to provide open and reliable data on the process.