Georgia: Hunting For Gold In All That Glitters

By Molly Corso

A couple of weeks ago, a 75-year-old Georgian villager, Hayastan Shakarian, became an overnight media sensation because she allegedly severed Internet connections in Georgia and Armenia while using a shovel to scavenge for copper. But the real story has less to do with the interruption in Internet service than with the decidedly low-tech, low-glamor topic of scrap metal.

Little known to outsiders, Georgia’s scrap metal industry — advertised by roadside signs displaying the single, handwritten word “jarti” (“scrap”) – has become one of its most lucrative economic sectors. Ranked in 2010 as the country’s third largest export sector ($151.03 million), scrap metal easily outstrips the better-known wine and mineral water sectors ($69.4 million).

While Shakarian denies that she severed fiber-optic cables in her hunt for copper, the scrap metal business in her neighborhood, as in much of rural Georgia, is hard to miss. Two scrap metal collection centers, one offering 360 laris ($215.71) per ton of metal, stand on the road leading to her village, Armazi, some 29 kilometers to the north of Tbilisi.

Eager to cash in, thousands of Georgians, sometimes using hand-made metal detectors, routinely scavenge for wiring and metal from derelict factories and construction sites, or haul out old heaters and kitchen appliances to sell to metal peddlers and dealers in Tbilisi, Kutaisi and other cities.

The scrap copper Shakarian was allegedly trying to harvest commands the highest prices: dealers pay scavengers as much as 11 lari per kilogram (about $4 per pound) for it. The price means that markers often used to tag underground fiber-optic cables, such as the ones Shakarian allegedly uncovered, act like magnets for scavengers.

Extreme poverty is the engine that drives the scrap market in Georgia. Officially, the unemployment rate in Georgia is just over 16 percent, but unofficial estimates suggest that over half the working-age population of 1.99 million is jobless or underemployed. Meanwhile, many older Georgians like Shakarian, usually living with their children or close relatives, need to augment their meager 80-lari ($48.78) monthly government pensions.

Shakarian’s son, Sergo, conceded to EurasiaNet.org that his elderly mother regularly scavenges for metal to contribute to the family budget, but claimed that she does not have the strength to unearth buried cables or chop them with a shovel.

The pensioner, who reportedly faces up to three years in prison and unspecified fines for allegedly damaging the Internet cables on March 28, is not in custody, but was not available to speak with journalists. The criminal case against her shows no sign of having discouraged other Georgian scrap metal scavengers.

One scrap metal dealer in the Tbilisi suburbs who gave his name as Tamazi recounted how poor people “come from everywhere, even the regions” to sell their finds in his makeshift collection center. “People have two pots at home; they will leave one to make dinner and bring the second so they have money to buy paskha [Easter cake] and eggs so they [can celebrate] at home,” Tamazi continued, before accepting a plastic bag of rusty-looking copper-lined piping from one young man. In less than a minute, the man hurried off with a little over 20 lari ($12).

But scrap metal not only benefits individuals.

Georgian dealers pass on the scrap they buy to large collection centers, which usually sell the metals to factories in Turkey, India and Bangladesh, said economist Giorgi Gaganidze the deputy dean of Tbilisi State University’s Department of Economics and Business. Those sales, in turn, help increase Georgia’s export revenues and decrease its trade deficit.

The remains of Soviet-era factories, built with “an abnormal amount of metals,” furnish the bulk of this trade, Gaganidze said.

In Rustavi, a rusting former metallurgical center, locals still remember the time an enterprising ex-construction worker tried to cash in on a factory’s reserve stash of electrical wires. By mistake, he hit a live wire, and shut down the entire factory’s power supply.

Most metal scavengers are acting out of desperation, dealer Tamazi underlined. “These are people who live in poverty,” he said. “If they had a job, they would be sitting in an office and receiving a salary. Who wants to go digging in the dirt?”

Molly Corso is a freelance reporter based in Tbilisi and editor of the American Chamber of Commerce’s Investor.ge magazine.