Publication: N6 / Review Period:  September 1-30, 2021 / Author: Nika Kratsashvili

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

Visit of Government Officials

• On September 2, a delegation of the Russian Ministries of Economy and Energy visited Abkhazia and met with the de facto Minister of Economy of Abkhazia, Kristina Ozgan. The delegation comprised of the Russian Deputy Minister of Economic Development, Dmitry Volvach, the Deputy Minister of Energy, Evgeny Grabchak, the Director of the Department for Special Programs and Projects of the Ministry of Economic Development, Vitaly Gudin, who oversees the directions of Abkhazia and the Tskhinvali region,  and his deputy, Anton Melnik. The officials inspected the ongoing projects under the Russian investment program. The delegation positively assessed the results of the investment program during a meeting with de facto President, Aslan Bzhania. According to Mr. Volvach, Russian-Abkhazian trade amounted to more than RUB 143 million in the first half of the year.
• On September 13, another delegation, members of which were Vitaly Gudin and Anton Melnik,  arrived in Abkhazia. The delegation was to inspect the ongoing projects under the investment program. Abkhazia and the Tskhinvali region, each receives RUB 1.5 billion annually under the Russian investment program.

Visit to Moscow

• In the second half of the month, in Moscow, the Minister of Economy of Abkhazia, Kristina Ozgan, held meetings in the Russian Presidential Administration, the Ministry of Economic Development, the Ministry of Energy, and the Russian state company Gazprom. The talks in the Russian agencies focused on the socio-economic development of Abkhazia, the energy security, gasification, the restoration of the Sokhumi airport, and the investment program for 2023-2025.

Cooperation with Regions of Russia

• On September 3, the de facto President of Abkhazia, Aslan Bzhania, hosted a delegation from the Arkhangelsk region. The delegation was chaired by the First Deputy Governor of the region, Vahe Petrosyan. The meeting discussed the development of different directions of cooperation between the parties. Arkhangelsk and Sokhumi signed a twin city agreement in 2011.

Delegation from the Arkhangelsk Region in Sokhumi. Source:  apsadgil.info

• On September 15, the de facto Prime Minister of Abkhazia, Alexander Ankvab, and the de facto Foreign Minister, Daur Kove, met with the First Deputy Governor of Krasnodar Krai, Andrei Alekseenko. Cooperation in the fields of construction, architecture, civil defense and emergency situations were discussed at the meeting.
• On September 16, Mr. Ankvab hosted Georg Muradov, the Deputy Chairman of the Council of Ministers of the Russia-annexed Crimean and the Co-Chair of the Abkhaz-Crimean Intergovernmental Commission on Trade, Economic, Scientific, Technical and Humanitarian Cooperation. The parties discussed the progress of joint projects, the activities of the Commission and the issue of holding next session in 2022.
• At the end of the month, on the 28th anniversary of the Abkhaz war, Nikolai Zolotnikov, the Head of the Yaroslavl region of the Yaroslavl District, and a group of businessmen visited Gudauta.

Fishery

• On September 16, the seventh meeting of the Abkhazian-Russian Commission on Fisheries was held in Sokhumi. The Commission discussed the issues of fishing in the Black Sea, volumes of aquaculture products in 2020-2021, as well as scientific and technical cooperation. In addition, the parties discussed the size of the total allowable catch of anchovy in the autumn-winter season of 2021-2022 in the sea waters of Abkhazia.

Oil Imports

• On September 21, in Moscow, a protocol on the supply of oil products was signed between Russia and Abkhazia. The agreement envisages an increase in the volume of oil products imported from Russia to Abkhazia without exports customs duties. According to de facto President, Aslan Bzhania, additional supplies would prevent a further increase in prices. Bzhania said that the depletion of stocks in August-September and the increase in prices were caused by increased consumption of oil products.

Tourism

• According to the Russian Association of Tour Operators, a total of 800,000 tourists have visited Abkhazia since the beginning of 2021, out of which 700,000 arrived during the summer season.
• The swimming season was closed on September 28 in Abkhazia, although swimming is not banned despite curtailed work of rescue posts and removal of protective buoys. The season was opened on June 5.
• According to the Tvil.ru Russian booking agency, New Athos took the first place in in the top ten for the cheapest vacation during the so-called “velvet season.” It is followed by Pyatigorsk, Eisk and Kaliningrad

Economic Relations Between Russia and the Tskhinvali Region

Investment program

• The Tskhinvali N3 public school, construction of which was financed under the Russian investment program, was opened for 25 first-graders this year. The opening ceremony was attended by the de facto President of the Tskhinvali region, Anatoly Bibilov, the Russian “Ambassador,” Marat Kulakhmetov, and others.
• Renovation works of the 3 km Java-Buzala road started with the financing of the Russian investment program. In parallel with the asphalting, sidewalks are being repaired, underground works are underway and gas pipelines are being connected. As expected, asphalt paving will be completed by the end of the year and the reconstruction of Mirnaia Street in Tskhinvali will be completed in October. It should be noted that the renovation of Shavlokhova Street, financed by the investment program, is practically completed.

Opening of the Tskhinvali N3 Public School. Source:  Cominform

Meeting with a Government Official

On September 11, a meeting was held between Anatoly Bibilov, the de facto President of the Tskhinvali region, and Dimitry Kozak, the Deputy Head of the Russian Presidential Administration who oversees the directions of the Tskhinvali region and Abkhazia. The meeting discussed the economic development of the Tskhinvali region and the salary increase for military servicemen in the region.

Cooperation with Regions of Russia

As part of events related to the day of the city of Samara, the de facto President of the Tskhinvali region met with the Governor of the Samara region, Dimitri Azarov. The meeting voiced the readiness to strengthen cultural and economic ties and import products produced in the Tskhinvali region. Azarov said that trade turnover between the regions is quadrupled at this stage.

Salary Increase

As a result of an agreement with Russia, the salaries of public sector employees were at least doubled in Tskhinvali. Payment of salaries, which will start later, will be calculated from January 1. The last salary increase took place on January 1, 2014 and totaled an average RUB 10,740.

Joint Project of the Tskhinvali Region and Abkhazia

The first joint project of the Tskhinvali region and Abkhazia was launched in the Gali district which involves the cultivation and reproduction of trout. The project is implemented by the Eko-Fish company (registered in the Tskhinvali region) with the support of the Chambers of Commerce of both “parties.” Currently, 500 thousand fries are in the Ochamchire district. Once fully grown they will be transferred to the Gali reservoir. As planned, a thousand tons of trout will be received which will be sold in local and foreign markets.

Joint Project of the Tskhinvali Region and Abkhazia. Source: Cominf