Publication:  N12 / Review period:  March 1-31, 2022/ Author:  Tamta Kapanadze

Overview of Russia’s Economic Relations with Abkhazia and Tskhinvali Region is being prepared within the framework of the project - Roadmap to Kremlin's Policy in Abkhazia and the Tskhinvali Region. The purpose of the publication is to provide an overview of economic relations between Russia and Abkhazia and the Tskhinvali region. The review is a monthly publication and will be useful for everyone – decision-makers, public employees, media representatives and other people who are interested in the Kremlin policy in the occupied regions of Georgia.

Economic Relations Between Russia and Abkhazia

International Tourism Exhibition

A delegation of the Chamber of Commerce and Industry of Abkhazia chaired by the “President” of the Chamber, Tamila Mirtskhulava, together with the Ministry of Tourism participated in the MITT-2022 international tourism exhibition which was held in Moscow, on March 15-17.

Despite the Russian invasion of Ukraine, the exhibition was held as scheduled. Abkhazia was presented in a separate pavilion. The exhibition included a raffle in which anyone could participate and receive prizes - a set of Abkhazian wine and other Abkhazian products.

According to Mirtskhulava, the exhibition platform is a good way to develop the tourism industry, which contributes to sales growth and brand promotion.

Export of Mimosa

Over 124 tons of mimosa have been sent from Abkhazia to Russia since the beginning of February. Mimosa, or silver acacia, is especially popular on the eve of March 8. Every year bouquets are delivered from Abkhazia to all regions of Russia. Florists actively use mimosas to make spring bouquets. In 2021, more than 200 tons of yellow flowers were exported from Abkhazia.

Investment Program

As the official web-page of de facto President, Aslan Bzhania, reports, the de facto leadership of Abkhazia identified the areas which will be included in the new 2023-2025 investment program promoting the social and economic development of the republic.

During a meeting with members of the de facto government, Bzhania also spoke about the results of a working visit of the Russian Deputy Minister of Economic Development, Dmitry Volvach. Volvach was in Sokhumi in early March and during this visit he also discussed the issue of the reduction of funding from Russia in the coming years.

The 2023-2025 investment program includes:

• Increase in salaries for civil servants.
• Implementation of budget investments within the investment program and support of investment activities.
• Support for small business and credit system.
• Support for projects in the field of agriculture and industry.
• Implementation of preferential credit program, creation of tax administration system.
• Establish a tax administration system using cadastral valuation.

As planned, the development of a new investment program will consider the approaches developed in cooperation with the Russian Ministry of Economic Development.

Mir Cards

The National Bank of Abkhazia recommends residents and guests of the de facto republic to use the National Payment System (APPA) and Mir payment system cards during their stay in Abkhazia.

This recommendation followed the suspension of Visa and MasterCard bank card services in Russia due to the Russian aggression in Ukraine.

In addition to the de facto republics of Abkhazia and the Tskhinvali region, Mir cards can be used in Turkey, Vietnam, Armenia, Uzbekistan, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan. The APRA and Mir systems are integrated, therefore, Abkhazian “bank” cards operate in all the above countries.

Economic Relations Between Russia and the Tskhinvali Region

Cooperation in the Field of Agriculture

“The 2022-2025 program promoting the social and economic development of the Tskhinvali region will contribute to the development of the republic's agriculture,” de facto President Anatoly Babilov said at a meeting with a delegation of the Ministry of Agriculture and Food of North Ossetia.

Bibilov thanked the Russian Ministry of Agriculture for handing over six units of equipment to the Tskhinvali region last year.

Meeting with Bibilov. Source:  cominf.org

Mining Industry Revival Plan

The de facto Ministry of Economic Development and the Russian National Committee for Economic Cooperation in the Black Sea (РНК ЧЭС) signed a memorandum in Tskhinvali. The document was signed by the de facto Minister of Economy of the Tskhinvali region, Dzambolat Tadtaev, and the Cchairman of the Committee, Viktor Archipov.

The memorandum is aimed at reviving the mining industry in Tskhinvali. It is planned to reconstruct and modernize the mining plant at the Kvaisa deposit.