The importance of remittances for Georgian households

Note: This article first appeared on the Caucasus Data Blog, a joint effort of CRRC Georgia and OC Media. It was written by Anano Kipiani, a Policy Analyst at CRRC-Georgia. The views presented in the article are of the author alone, and do not necessarily reflect the views of CRRC Georgia, or any related entity.

Immigration from Georgia is common, with a prime motivator being the difficult economic situation in the country. Indeed, about three-quarters of Georgians have a close relative living abroad, and most send remittances to their relatives in Georgia. In turn, remittances made up 12.9%  of the country’s GDP in 2019. By comparison, agriculture’s contribution to GDP was about half of this number, at 6.5%. 

The study compared households that receive remittances to: similar households without remittances; similar households with migrants but who do not receive remittances; and similar households without migrants. 

Additionally, households that have migrants, but do not receive remittances were compared to the other three groups of households. This was done using a process called matching, which identifies similar groups of individuals.

Who gets remittances?

Overall, 19% of households reported receiving remittances from abroad in 2019. While looking at the types of households that receive remittances, a regression analysis suggests that households with one adult household member are 21 percentage points more likely to get remittances than households with five adult members. Households with children are six percentage points more likely to get remittances than households without children.

What are the impacts of remittances?

Households which receive remittances report their economic conditions are relatively positive compared to similar households that do not receive remittances. They are five percentage points more likely to assess their economic condition as relatively good, and nine percentage points less likely to believe they have relatively poor economic conditions. 

In contrast, migrant households that do not receive remittances are slightly more likely to assess their economic condition negatively (by six percentage points) compared with households that do not have migrants. 

Note: Answer options 'good' and 'very good' are recoded as 'relatively good', while 'poor' and 'very poor' are recoded as 'relatively poor'. Due to their small number, 'don’t know' and 'refuse to answer' were dropped from the analysis. In some cases, figures in this post may not sum up to 100% due to rounding errors.

Households that receive remittances compared with all other households were nine percentage points more likely to be able to afford enough food and clothes, five percentage points more likely to be able to afford to buy expensive durables, and eight percentage points less likely to not have enough money for food compared with other similar households. 

Remittances also appear to be associated with higher monthly incomes. Households with remittances are seven percentage points slightly less likely to report they earn less than $100 a month compared with all other households and migrant households without remittances. However, households with remittances are slightly more likely to respond ‘don’t know’ or refuse to answer, which is often associated with higher levels of asset ownership and in turn, likely income, in Georgia. 

Households that receive remittances also have more durable goods than others. From a list of 10 different goods asked about on the survey, migrant households owned nearly one additional good on average. At the same time, households with migrants that do not receive remittances had slightly fewer durable goods than households without migrants.

Overall, the data suggests that people benefit from receiving remittances, at least in economic terms. In contrast, households that have migrants but do not receive remittances do relatively poorly on some measures, though by no means all. Despite these positive economic impacts, the results do not speak to any effects, social, psychological, or otherwise, which may be tied to migration.

The data used in this post as well as replication code for the analysis is available here. A full policy brief on this issue is available here. The views expressed in this article are the author’s alone, and do not necessarily reflect the views of CRRC Georgia.

New OECD/CRRC-Georgia report calls for more coherent migration management in Georgia

From 2013 to 2016, the OECD Development Centre coordinated a EU-funded project on Interrelations between Public Policies, Migration and Development (IPPMD) in ten developing countries including Armenia, Burkina Faso, Cambodia, Costa Rica, Côte d’Ivoire, Dominican Republic, Georgia, Haiti, Morocco and the Philippines. The project collected empirical data to assess the development potential of migration in these countries and develop policy recommendations that would help make the most of this potential. Project findings for Georgia were presented during the launch of the report in Tbilisi on March 28, 2017.

(1)Opening remarks by Mr. Kaido Sirel, Deputy Head of Cooperation, EU Delegation to Georgia.
(2)OECD's Jason Gagnon presenting major findings of the project in Georgia
(3) CRRC Researcher Mariam Kobaladze and conference participants during a break out session.

In Georgia, IPPMD project’s key partners were the State Commission on Migration Issues of Georgia and CRRC-Georgia. The focus of the project was the impact of emigration, remittances and return migration, on agriculture, the labour market, education and investment/financial services. Within the project, a total of 2260 households were interviewed nationwide, including 972 households with migrant members (current or return international migrants) and 1288 households without such members. In addition, 71 comminity interviews were conducted with representatives of local authorities and community leaders, and 27 semi-structured interviews with stakeholders representing civil society, international organizations and academic institutions.

While, according to the United Nations Department of Economic and Social Affairs (UN DESA), total migrant stock from Georgia decreased through the 2000s, according to the latest census data, 24% of those born in Georgia currently live abroad. As the IPPMD report claims, “[e]migration … can … benefit the country by relieving a congested labour market, providing opportunities for women to increase their economic independence and generating incentives to upgrade skills. However, realising these positive impacts depends on the right conditions being in place,” i.e. efficient evidence-based policies.

The IPPMD survey collected impressive empirical data that allows us to compare emigrant and non-emigrant households in Georgia. Accodring to the IPPMD data, emigrants from Georgia are younger compared to the average age of household members remaining in Georgia – respectively, 42 and 47 years old. Unsurprisingly, 80% of current emigrants are reported to have left in search of work.

IPPMD data also provides interesting and up to date insights about the role of international remittances for households in Georgia. According to the World Bank, remittances constitute 12% of Georgian GDP. About USD 2 billion was estimated to be remitted to Georgia in 2014, up from about USD 300 million in 2004. The development potential of remittances is, however, not fully used, since the remittances are mostly used on consumption or real estate for the households’ personal use. A very small share of remittances is allocated for productive investments. They do, however, tend to increase expenditures on household members’ education.

The IPPMD report argues that the development potential of remittances can be increased if relevant policies are in place. According to the IPPMD findings, households that report receiving remittances are more likely to also have a bank account in urban settlements, but not in rural settlements. This finding calls for the development of the formal banking sector in rural settlements, and also for offering cheaper and faster formal money transfer channels. The report further argues that “[t]raining those who receive remittances in using money transfer operators and financial services more effectively may help to lower the costs and to use remittances in a more productive way. The IPPMD data show that very few households … (1%) have participated in a financial training programme in the past five years.” The so-called social remittances of migration, i.e. knowledge and experiences that the migrants bring back to the country, are no less important, and their role could also be crucial for the country’s development.

The State Commission on Migration Issues of Georgia has been coordinating migration management since 2010. Continuing to integrate migration-related issues into major policy documents, including the national development strategy, and thus developing a more coherent policy framework, will help to use the development potential of migration more effectively.

The report this blog is based on is available here.

Emigration, Language, and Remittances in Georgia

As discussed in a recent blog post, household incomes in Georgia have risen steadily since 2008. The percentage of Georgians who have family or close relatives living abroad has also significantly increased from 37% in 2009 to 53% in 2013. 14% of Georgian households currently receive money from family members, relatives, or friends living in another country as an income source. This blog examines changes in interest in emigrating from Georgia over the last five years, while controlling for certain variables.

Since 2008, though the percentage of Georgians who have family living abroad has increased, interest in emigrating from Georgia, both temporarily and permanently, has barely changed. In 2008, 48% of Georgians expressed interest in emigrating temporarily, while 44% felt the same in 2013. Interest in permanently emigrating from Georgia has remained extremely low, at 8% in 2008 and at 7% in 2013.

In CB 2013, respondents were asked to describe their ability in English and Russian. Today in Georgia, 63% of Georgians say they have no basic knowledge of English, 15% say they have intermediate knowledge, and 6% feel that they have advanced knowledge. As might be expected, knowledge of English among younger Georgians is higher than among older Georgians. 41% of Georgians aged 18-35 years old say they have intermediate or advanced knowledge of English, while only 14% of Georgian aged 36-55 feel the same. Knowledge of Russian is more widespread among Georgians, with 70% of Georgians saying they have intermediate or advanced knowledge of Russian. Among 18-35 year old Georgians, 65% say they have intermediate or advanced knowledge of Russian, while 80% of 36-55 year old Georgians say the same. As a general trend, Georgians with more advanced language skills in English or Russian tend to express a higher level of interest in temporarily emigrating from Georgia. This trend is more pronounced among English speakers.

Similarly, more frequent users of the Internet are also more interested in temporarily emigrating. However, there is no discernible pattern between the desire to permanently emigrate and knowledge of English or Russian, or frequency of internet usage. Both Georgian men and women are equally disinterested in permanently emigrating (only 7% are interested), while slightly more Georgian men are interested in temporary emigration (49% of men and 39% of women).

In conclusion, though there has been no visible increase in interest among Georgians in emigrating over time, it is possible that this interest will eventually grow as more Georgians learn foreign languages and use the internet more frequently.

At the crossroads of Europe and Eurasia - exploring public attitudes in the South Caucasus

Armenia's announcement in September that it would enter the Eurasian Customs Union led to some dissatisfaction regarding relations with Russia, especially since the announcement came months before the Armenian delegation’s visit to Vilnius to sign a DCFTA (Deep and Comprehensive Free Trade Agreement) with the EU. At the first public debate on the issue in Armenia, organised by the Konrad Adenauer Stiftung and Regional Studies Center, speakers addressed possible attitudes of Azerbaijan and Georgia to the Customs Union. The director of the Caucasus Institute, Dr. Alexander Iskandaryan, noted that Azerbaijan, with its significant energy resources and ability to export them to the EU, does not need to join the organisation for economic development. However, according to him Azerbaijan would not be able to sign a DCFTA given that the country is not a member of the WTO—a prerequisite for all signatories of the document. Georgian Prime Minister Ivanishvili has remained sceptical about the Customs Union, but has not ruled out some form of Georgian participation. While all three South Caucasian countries attempt to diversify their trade (particularly with the EU and Turkey), Russia remains a very important trading partner. Russian firms own critical assets in the Armenian telecommunications, transport, and energy sectors. Data from the Caucasus Barometer (CB) show largely positive attitudes towards conducting business with Russians – not only in Armenia, but in all three countries. In light of the ongoing debate in Armenia on the significance of joining the Customs Union, the CB's results are worth considering within the wider South Caucasian context.

Armenia has shown the most positive attitudes towards business with Russians from 2009 to 2012, but negative attitudes have slightly increased. The result for 2012 shows an approval rating of 84%, lower than the past four years, yet higher than any result in Azerbaijan during the same time period, and higher than results in Georgia for the prior 3 years.

Azerbaijanis’ approval of doing business with Russians has increased over time, and have shown the biggest change from negative to positive attitudes over the four years shown. The share of those who approve of doing business with Russians has increased from 62% in 2009 to 82% in 2012.

Georgians have continued to have positive attitudes about doing business with Russians over time. Even in 2009, one year after the Russian-Georgian War in 2008, 76% approved doing business with Russians.

There are several possible reasons for these positive attitudes in addition to intensive trade with Russia and strong social networks with Russians. According to an infographic from the World Bank in 2013, 4 of the top 10 countries receiving remittances by share of GDP are in the CIS (Armenia taking sixth place with 21%). Russia is the top destination for migrant workers across the Former Soviet Union, and it is the destination of choice for 61% of Armenia's potential emigrants. Considering that the amount of private remittances from Russia to Armenia in the first half of 2013 increased by 113%, Armenians' positive attitudes may not be surprising. The net amount of remittances sent from Russia to Azerbaijan in 2013 has been 234 million USD thus far, and 263 million USD to Armenia—remittances from abroad were less significant than in Armenia as a share of GDP. During a recent conference in Yerevan on demography, Dr. Alexander Grigorian noted that access to Russia for Armenian migrant labourers could become even easier following Armenia's accession to the Customs Union, and that this possibly lead to  quantitative (higher numbers of migrant labourers) and qualitative (a higher percentage of educated workers) changes in emigration from the country.

What other factors do you think could play a part in attitudes towards doing business with Russians?

If you want to explore these questions in more detail for yourself, we welcome you to download the 2012 and other Caucasus Barometer datasets.

New Policy Advice on Migration and Development in Georgia

Migration is a major factor in Georgia. Many Georgians live abroad, and by some estimates the money they send back accounts for nearly 10% of Georgia’s GDP. Did you know that households in rural areas who receive such aid are less likely to be poor, but that in Tbilisi, the opposite is true? Robert Tchaidze from the IMF and Karine Torosyan from CRRC’s partner institution ISET are about to reveal not only who in Georgia migrates, and when and where they go, but also how the country could take advantage of these migration flows in the future.

Their report “Measuring and Optimising the Economic and Social Impacts of Migration in Georgia” is not yet available online, but you can find an early summary. Robert and Karine’s work is part of the global project “Development on the Move” that was created by the Global Development Network and the Institute for Public Policy Research. It aims at analyzing the impact of migration on development around the world, and how these flows can be profited on with adapted public policy, as we had previously mentioned in our blog.

Georgia is one of six countries that have been selected for in-depth quantitative and qualitative studies. In this particular case, CRRC carried out the fieldwork, and we are happy to see our high-quality data used for valuable public policy advice.

Please let us know if you would like to receive the full document once it gets released publicly.

Remittances in the Caucasus: EBRD Releases Results

EBRD has released the results of its study on remittances in Azerbaijan, Georgia and Moldova. A
unique aspect of the study in Post-Soviet territory is that it not only surveys migrants in Georgia, Azerbaijan and Armenia, but it also carried out interviews with migrants themselves in Russia.
Many results, at first glance replicate findings from other studies as well as the Global Development Network study we are currently working on (stay tuned for more).

• Remittance money sent is generally only spent on basic needs.
• Migrants to Russia tend to be younger and male.
• Most migrants use the banking sector to transfer money (though many don’t have bank accounts) – but there is an extensive courier trade for remittances.
• Few migrants are interested in business or economic development in their countries of origin.
  

These findings have significant policy implications, not least because it shows that Caucasus migration varies from, say, Latin American patterns. Your comments on possible policy implications are welcome.

Bendixen & Associates, renowned for their polling of Latinos in the United States and the across Spanish-speaking world, carried out the study. Undoubtedly, B&A won the bid as the result of their expertise in carrying out remittance studies in Latin America. However, some facts of the study are curious and we would like to find out more than the scant information on methodology available online (particularly compared to EBRD’s amazingly documented Life in Transition Survey).

1. There is no mention of the sampling frame used in any of the countries. What strategy did B&A use to find households? Census lists are extremely outdated in both Georgia and Azerbaijan.
2. The report mentions a wide variety of interview languages employed for the study in Azerbaijan – including Tat and Farsi. B&A says, however, that all interviews were conducted in Georgian in Georgia. We find this surprising, since non-Russian speaking minorities in Azerbaijan are a very small percentage of the population and linguistically well integrated. This is not the case in Georgia were sizable ethnically homogeneous communities do not speak the titular language (Georgian). As the study specifically mentions the particular status of Armenian families in Samtskhe-Javekheti, it would be interesting to find out how the interviewers communicated with these households.
   
3. The Azerbaijan sample provides statistics based on regions. However, four regions out of eleven appear to be omitted. Guba-Khachmaz, which is in Northern Azerbaijan; Naxcivan, Azerbaijan’s exclave, which borders Turkey, and Kalbajar-Lachin and Dagliq Qarabag, which are both currently partially occupied – though there are regions under Azerbaijani control. If there was no sampling done in these regions, it should be stated, as the sample may then have certain biases in the national remitances picture. Naxcivan has distinct migration patterns with Turkey and many non-ethnic Azerbaijanis live in Guba-Khachmaz.
   
4. On the follow up study in Russia, B&A’s explanation of the sampling frame is also opaque. It states in one of the reports posted on the Internet that it got its information from the Federal State Statistics Service and that this information was updated. In another report, it claims that the data on households was gleaned from household surveys. Either way they report the following numbers: 903,000 Azerbaijanis, 344,000 Moldovans and 283,000 Georgians. There may be a confounding factors in these counterintutive numbers. Many migrants, as the study notes, are already citizens of Russia. Yet many of those who migrate to Russia and now have citizenship were ethnic Russians, who themselves may have been born in Russia and migrated to the Caucasus during Soviet times. Furthermore, many ethnic Armenians from Azerbaijan fled not to Armenia but to Russia after the Nagorno-Karabakh conflict. Many of these ethnic Russian and Armenian families may have fewer (or no) connections with their former country of residence and this may yield very different dynamics. Again, some information on this would also be interesting.

We hope that the EBRD will release more information soon and even the data. So stay tuned for further updates.

Migration from Georgia: capturing data

Migration is one of the major stories in the former Soviet Union. However, we know surprisingly little about the actual patterns, since they are difficult to measure. George Tsuladze has done some research, on the basis of the 2002 census.

His research shows that the official census data is not very good at capturing migration. By definition, a census cannot reach people that are no longer at home, and often entire families migrated. In this case, all they leave is a locked door (or another family living in there, talking about themselves).

Another reason is that respondents often don't like giving honest answers about members of the household being abroad. Women being left alone at home, with their children, typically won't really want to tell a stranger ("what's that, again? A census?") that their husband isn't likely to be back in the next few months. Voter lists, ownership, taxes, entitlements, extra income through remittances, general distrust of the state -- all sorts of reasons not to be upfront.

Moreover, migration is seasonal: sometimes people just go for the summer (especially if they work in construction, or other seasonal sectors). So any May and June, although a good time for going around the country, is a bad time for capturing migration.

Tsuladze does cite the data there is, with all the caveats:

• about 59% of immigrants are male, 41% female;
• of the female migrants, 34% are single when emigrating
  
• about 43% of male, and 36% of female migrants support families that have stayed at home (this is actually a fairly low number, and may reflect some reluctance to admit receiving remittances; or an insufficient clarification what "financial support" means)
• all of the nationalities living in Georgia have fairly high numbers of emigration, but the Greeks emigrate disproportionally (no news here, though)

I would still like to know:

• What exactly are the patterns?
• What are the percentages of migrating with the entire family?
• and: some studies of how families develop.
  

Tamara Zurabishvili is doing more research work on migration, on a CRRC-fellowship, doing an alternative census with an orientation towards comparing actual census data with her own work. She will survey 1200 households in Daba Tianeti, an area particularly affected by emigration.

At any rate, innovative techniques for capturing the real data are needed, not least for estimating demographic trends.

The UNHCR wanted to translate George Tsuladze's work, so it may become available in English.