The start of the war in Ukraine has changed many things around the world, including Georgia. Due to the war, the rate of immigration has increased significantly in the countries bordering Russia, in which many Russian residents have taken refuge after the start of mobilization in Russia. According to the statistics, in Georgia, 931.8 thousand new visitors have come since the beginning of 2022. More than one-fifth of this number is Russian citizens. Many people think that this can have both positive and negative effects on Georgia, including in terms of the tech landscape. In this article, we’ll cover how is immigration changing the tech landscape of Georgia.
Tech landscape and immigration in the country
The inflow of Russian people into Georgia was met with conflicting and contradictory reactions. While Georgia’s governing political elite sees the movement of Russian people as a chance to better the country’s socioeconomic status, a sizable portion of the Georgian public sees the scenario as posing additional hazards to the country. There is an assumption in society that the large migration of Russians on Georgian territory will not go ignored, and that this process will have an influence on political-economic, cultural, and security-related concerns both in the short and long term.
The arrival of Russian citizens to South Caucasus and Central Asian countries has increased significantly – the influx of migrants has had a positive effect on the economy of Georgia, though this is a one-time effect, according to Liaziza Sabirova, Director of Regional Cooperation and Operations Coordination of the Department of Central and Western Asia, at the Asian Development Bank’s 55th annual meeting.
It is too early to speculate on the consequences, but one thing is certain: the initial wave of Russian migrants had a favorable impact on Georgia’s economy, although this will not persist forever and is most likely a one-time effect. Georgia’s tourist industry and immigration rate have seen tremendous growth. During the spring-summer season, as written on this site, tens of thousands of people visited the nation, greatly increasing the flow of net foreign currency inflows. In particular, more than 300 million US dollars entered the nation in one month in 2022, representing a 60% increase over 2021.
During the initial wave of migration, the Russians who migrated to the nations were mostly IT experts; they arrived with enough finances and established new firms, which benefited the economies of the South Caucasus, Georgia, and Armenia. As a result, the Asian Development Bank almost doubled its economic growth projection for these nations, raising it to 7%, but this is likely a one-time benefit, with much depending on Russia’s economic status in the future. As a result of this, it can be said that the migration, at some point, had a positive effect on the Georgian tech landscape. In addition to that, as shown on this website, the migration had a significant effect on the strengthening of the Georgian national currency with a ticker symbol of GEL, which started to increase in value. Because many tourists have started in Georgia to spend their money and exchange mostly the U.S. Dollars against Georgian Lari, this led the country’s economy to expand. Following the start of the Russia-Ukraine war, the rate of Russian residents’ deposits in commercial banks surged dramatically as a consequence of their active entrance into Georgia and the establishment of bank accounts.
More things to know
Deposits made by Russian nationals in Georgian commercial banks totaled 1.88 billion GEL as of August 2022, 1.18 billion GEL more than the pre-war (January 2022) indication, and 1.2 billion GEL more than the same August month the previous year. As a result, the balance of funds deposited by Russian citizens in Georgian commercial banks increased by approximately 170% in August compared to the pre-war period.
The Director of Regional Cooperation and Coordination of Operations in Central and Western Asia also stated that the second wave of migrants differs from the first in many ways, including demographics and status, and that the future impact of these processes on the economy will be determined by a variety of factors, which Georgian economists should keep an eye on. As a result of this, the tech landscape in Georgia is going to change as well. We’ve mentioned that a big number of IT specialists have arrived in Georgia, which means that the market can become more competitive and at first sight this might have a positive effect on the tech landscape. However, it’s not clear nowadays what will happen in the future.