THE NEXUS BETWEEN SOCIAL UNREST AND MIGRANT REMITTANCES: EMPIRICAL EVIDENCE FROM GEORGIA

The paper examines the social unrest and migrant remittances relationship for Georgia using monthly time series data covering January 2007- July 2019. The Granger Causality Test was employed in the application of the econometric technique. Frequency domain causality test was also used in order to empower the findings of the study. The empirical findings showed that there is a bidirectional causality between the reported social unrest index (RSUI) and the remittance inflow to Georgia. Besides, frequency domain causality test results indicated that RSUI was the Granger cause of remittance inflow in the medium term (7-10 months), while remittance inflow was the Granger cause of RSUI in the short term (2-6 months). Social unrest comprises protests based on basic economic needs such as food, gas, electricity etc. Therefore, social unrest can be a supportive factor of remittances inflow to Georgia. This is in line with the view that remittances sent by Georgian immigrants to their families in Georgia are used for consumption rather than investments. On the other hand, remittances can be a determinant of social unrest for Georgia because the existence of separatist movements in Abkhazia and former South Ossetia can be interpreted as remittances can be an important source to fund these movements.