Monthly Review

Overview of Russia's Economic Relations with Abkhazia and the Tskhinvali Region

2022 / 11 / 01

Publication:  N19 / Review period:  October 1-31, 2022/ Author:  Arsen Araqelov

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

Adler Crossing Point Was Expanded

Two additional traffic lanes were added to the Adler crossing point which is located on the territory of Russia. The decision was made due to traffic jams at the so-called border between Abkhazia and Russia during the holiday season. The existing infrastructure could not timely serve the flow of vehicles. During busy traffic, over 10,000 vehicles and 68,000 people cross the so-called border daily. In addition, the Ministry of Economic Development of Russia plans to modernize the Adler crossing point by 2025, as a result of which its throughput capacity will increase and will be able to serve 18-20 thousand vehicles and 80-100 thousand people per day, which, taking into account the growing traffic, will ensure the point’s normal functioning.

Adler Crossing Point. Source:  apsny.ru

Russia Agrees on the Restructuring of the Loan to Abkhazia

The Russian State Duma ratified a protocol which provides for the restructuring of the December 24, 2010 “state export credit” of Abkhazia until 2034. The amount of the main credit totals RUB 1.2 billion (approximately USD 19 million). In 2017, the debt repayment period was extended to 2029.

Meeting with Representatives of the Russian Ministry of Economic Development

The Prime Minister of the de facto Republic of Abkhazia, Alexander Ankvab, the Deputy Prime Ministers, Kristina Ozgan and Vladimir Delba, and the Head of Capital Construction Department, Timur Agrba, met with representatives of the Russian Ministry of Economic Development: the Director of the Department for Special Programs and Projects, Vitaly Gudin, his deputy, Anton Melnik, and the Assistant to the Minister, Mikhail Mukhortov. The Russian “Ambassador” to Abkhazia, Mikhail Shurgalin, also took part in the meeting which discussed ongoing projects within the investment program funded by Russia, harmonization of Abkhazian “legislation” with Russian legislation, the field of energy and other issues.

Visit to the Kemerovo Region

The President of the Chamber of Commerce and Industry of the de facto Republic of Abkhazia, Tamila Mertskhulava, was on a working visit to the Kemerov region. The purpose of the visit was to promote future economic relations. According to Mertskhulava, business structures of the Kemerovo region are interested in cooperation with Abkhaz entrepreneurs.

Increase in Salaries in the De Facto Republic

The Minister of Finance of the de facto Republic of Abkhazia, Vladimir Delba, said that in 2022, the average salary of teachers in the occupied Abkhazia will total a maximum of RUB 25,186 (approx. USD 400). According to him, compared to 2021, the salary of preschool teachers were increased by 13.1%, and that of teachers of general educational institutions - by 19.6%.

This is due to an agreement signed between the de facto republic and Russia, according to which the salary increase process for people working in the field of healthcare, education, culture, science, sports and social services should continue until 2025. In 2022, total of 15% of the salary increase will be financed from the “budget” of the de facto republic, 85% - from Russia. In 2023, 35% will be financed from the “budget” of the occupied Abkhazia, and 65% - from Russia; in 2024, the “budget” of Abkhazia will finance - 70%, Russia - 30%, and in 2025, the budget of the de facto republic will have to cope with the salary increase itself. At the moment, an average salary of representatives of the listed fields should be close to the salary level in the Southern Federal District of Russia.

Export of Agricultural Products

According to October data, a total of 107 tons of tangerines, 20 tons of feijoa, 2.5 tons of lemons and 1.5 tons of persimmons were exported from the de facto Republic of Abkhazia to Russia.

Economic Relations Between Russia and the Tskhinvali Region

“Ambassador’s” Visit to Moscow

The so-called Ambassador of the Tskhinvali region to Russia, Znaur Gassiev, at the invitation of the Russian Presidential Administration, took part in the Russian Energy Week international energy forum which was held in Moscow. The President of Russia, Vladimir Putin, also took part in the forum.

Code of the Eurasian Economic Union

MPs of the de facto parliament of the Tskhinvali region discussed a draft law which envisages joining the customs code of the Eurasian Economic Union. As a result of the adoption of the mentioned legislative change, the legislation of the Union and Russia will operate in the field of customs regulation in the Tskhinvali region.

Discussion of the Investment Program

The Chairman of the de facto government of the Tskhinvali region, Konstantine Jusoev, held a meeting with representatives of various agencies to discuss the ongoing works under the investment program financed by Russia. According to statements made at the meeting, the construction works are not lagging the established schedule.

Konstantin Jusoev's Meeting with Agencies’ Representatives. Source: cominf.org

Investment Program and Financial Violation

The de facto General Prosecutor's Office of the Tskhinvali region will check the violations revealed during the audit of the activities of Dorexpostroy. In particular, the audit identified violations in the purchase of bitumen by Dorexpostroy within the framework of the Russian investment program. Earlier, it was reported that the former general director of Dorexpostroy, Semyon Makiev, is on the international wanted list.