Dependence on Russia – statistically critical goods

Abstract

Georgia's highest economic dependence on Russia and a high concentration of the market is threatening, as Russia has repeatedly used economic leverage against Georgia and other countries since the collapse of the Soviet Union. As historical tendency of Georgia’s trade shows that Russian market is extremely attractive for Georgian exporters and importers with the view of prices of products and logistical issues. But at the same time it’s highly risky from the perspective of sustainability of partnerships. For example, in 2006 Russia first cut off natural gas and electricity supplies to Georgia, then virtually banned the export of products from Georgia to Russia. In this abstract two critical goods are analyzed for Georgia’s exports and imports such as wine and wheat by reviewing the top producers and consumers of the given products in the world. According to the official statistics, at the end of 2021 Russia ranked 1st place in export of Georgian wine with the share of 54.7% in total export of wine, while The share of the top 10 countries amounted to 92.6% of the total wine export. Observing the dynamics of imports of wheat from Russia to Georgia throughout the last year (2021) reveals that imports of wheat from Russia (93.7%) has been the main source of imported wheat by a considerable margin. Therefore, it is extremely important to know the level of dependence of the Georgian economy on Russia and the tendency to strengthen resilience in the face of possible threats.