Luka Pertenava
Aug 8, 2017 · 7 min read

Topic: Economy and Social Issues

REMITTANCES: THE DIVISION OF GEORGIAN SOCIAL CLASSES

Having lived in United States for over thirteen years it is valid to state that every Georgian immigrants living abroad send the necessary needs to their relatives. Those needs called remittances include financial support, materialistic needs etc. that has a great value and influence on the Georgian society. In this literary work I significantly focus on one major point that cannot be discarded, how society divides financially in Georgia when a large percentage of a countries economy is formed by remittances, to be exact, 10.4% in 2015 according The World Bank. That is more than 10% of Georgian GDP filled by remittances, which is the cause of the social class downfall and division for a country. If you compare that data to a developed country like the United States that has a percentage 0.0, it is clear to state that an issue appears in the Georgian economy. Broken down into three different parts, I will discuss how remittances lead to a cycle of a damaging formation of social classes eliminating the middle rank status of society; although to make my point clear I’m not stating that remittances are necessarily bad on a countries economy rather I’m arguing that it creates separation between social classes financially. Lastly, I will demonstrate the positive side of remittances since money flowing into a country is somewhat always beneficial for the economy. In every section of this work you’ll see points argued as well as contradictions made on the statements but the goal is to bring awareness on solving the issues that really matter. The statistics from National Statistics office of Georgia clearly shows validity to my argument as per capita income in Georgia in 2015 was 284.5 Gel and 1022.3 Gel per average household; this information proves the existence of low incoming families and shows why Georgian GDP heavily benefits from remittances.

Although it seems great to provide relatives with a source of financial support while living abroad, there is a subconscious problem that appears to happen to the Georgian population. That particular problem is that low-income families get poorer and high-income families get richer therefore such thing called middle-income or working class families tend to be eliminated from existing. My argument is that Georgian social status varying financially has only two social classes, poor and rich, higher percentage belongs to the poor status that remittances have a tremendous influence on. Many would wonder why or how could it be that money flowing into a country hurt the population and social status of the Georgian society. That is an understandable question to think about but a contradictory answer to that is does everyone in the Georgian population receive those benefits of support from abroad? The answer is simply no they do not therefore only the percentage of the population that receives remittances has a consistent value of income. However what happens to those individuals who do not have a support system living abroad? They depend on themselves and with the circumstances of the Georgian wages it is highly likely for them to be unemployed or working at a very low-income occupations, as I will elaborate below, and for such reason a cycle of two social classes form. In fact the unemployment rate was 12% in 2015 in Georgia, which is relatively normal but the issue lies in the consistency of unemployment percentage since the data of unemployment population has seen around the same rate in quantity over the past 10 years. Those who receive remittances have an income to depend on and have a high chance to lend a high-income occupation since there is no desperation need to survive; those who solely depend on themselves financially are desperate on having any occupation because they need to survive. The cycle that appears to happen over and over causes the social classes to divide into two, those who live well and those who struggle to survive.

PART I: Why Does the Cycle Keep Repeating?

One major factor to consider in order to answer the question is that Georgia is an underdeveloped country therefore a general answer to the question is solely that, but there is much more detailed and specific reason to why the cycle keeps occurring. To simplify, underdeveloped economies struggle to create opportunities for people, which causes people to leave their homeland in order to find higher paying jobs to support their families. Since the process of migration is constantly repeating, the process of incoming remittances keeps flowing to the underdeveloped countries, which in this case is happening in Georgia. With that being said, migration has a direct connection to the cycle remittances flow in addition to the lack of work wages and economical support with the country. Although growing from 156.6 Gel to 900.4 Gel from 2004 to 2015 it is clear to argue that the data from the National Statistics Office of Georgia shows that the income is still very low compared the financial need to live well in Georgia.

Although I’m arguing that wages need to be higher to limit people emigrating, a contradiction to my argument is that wages has been constantly increasing according to the data mentioned above therefore my argument is challenged. According to the data, I believe wages are not higher enough since the it shows that the net migration in thousands is -3.4, which means that more people left Georgia compared to the people that migrated to Georgia. Georgia has a negative flow of net migration therefore my argument has a solid back up to why the cycle keeps occurring. To efficiently prove my point we have to take a look at the expenditures per capita that is 279.6 Gel and household 1004.7 Gel compared to the income individuals and households have. The difference between per capita is 4.9 Gel and 17.7 Gel for household; this therefore shows that people individually dependant and families just get by on expenses based on the average income Georgian people have, for this reason it is valid to state that those groups can be categorized into low-income struggling class. This is where migration plays a role, people emigrate to help their families to live well and not just get by and that is why the flow of migration has been negative in Georgia.

PART II: What Options Do Georgian People Have

to Better the Situation?

The reason we as the Georgian population need to ask the question to better rather than solve the problem since there is a very slight chance solving the situation. As long as remittances flow into Georgia the issue of social classes will still appear therefore a step to better the issues we face will be a step in the right direction to minimize our problems, eventually hoping to solve them. Creating better wages compared to the expenses for the society is a necessary need to limit individuals leaving the native country; for example in my personal case it is my true dream to one day fully live in my country but lack of opportunities, wages, and the cost and expenses needed here makes me hesitate to what should I do for my future. Knowing so many Georgian immigrants living in United States including my family, they want to live in their country of origin but the circumstances in Georgia makes it difficult for them to move back to their homeland.

One contradiction to the point I’m arguing here is what if the flow of migration in thousands becomes a positive as it was before, for example in 2004 (5.5) instead of negative as it is now, what happens then? I can’t directly with statistics prove what would happen but from the arguments made throughout my work it is clear to state that it would largely benefit Georgia and it may be the best solution to better the problem; the stats show that the positive migration flow from 2000–2015 is not consistent and for that reason the particular solution has not significantly worked. The important question to think about is how can we make the migration flow consistently positive since I believe we can for sure better the situation.

PART III: The Positive Side of Remittances Flow

From outside looking in remittances are economic benefits for any country especially an underdeveloped nation. Although it can be generally beneficial for a country to have income flow through remittances couple of questions that derive from that statement is that where does the remittances go? And who has access to it? Those questions are explained in the previous paragraphs and it is shown how social classes are divided. Leaving all that behind, part three will discuss the bright side of remittances. If we think about tourism and how tourists are a great benefit to a country since the economy rises tremendously, remittances can be looked at in similar concept. The difference between tourists’ spending money and remittances relies in the two questions asked above for example: tourists provide increase of an economy through spending money in businesses, public services etc. therefore directly, which naturally increases an GDP of a country. In regards to remittances the money is more personally spread through the percentage of the population that receives it therefore it is more indirect since we don’t know when and exactly where it will be spent but also very beneficial to the economy. Although remittances provide somewhat of a negative influence on some people it is not even a question that it surely helps the underdeveloped countries GDP. By increasing an underdeveloped countries GDP for example in Georgia, many jobs would be created with higher wages therefore people will not look to emigrate in order to support their families, which is very beneficial to the struggling economy that exists. Also the cost of expenses would reduce since countries financial value drastically increases based on the process described and plays a positive role formed by remittances.

Luka Pertenava

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Live in a moment until it becomes a memory. City College of New York Grad! Passionate Writer. Topics: Economy, Social Issues, Culture, Traveling, Sports etc.