Publication:  N8 / Review period:  November 1-30, 2021/ Author: Salome Abramishvili

Review 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

• The de facto government of Abkhazia hosted a delegation of the Russian Federal Tax Service. The meeting took place within the framework of an agreement on alliance and strategic partnership between Russia and the “Republic of Abkhazia.” The agreement which is aimed at creating a common social and economic space was signed on November 24, 2014. During the meeting, the Abkhaz “ministers” introduced the work of the Tax Department to the members of the delegation.
• The de facto Prime Minister of Abkhazia, Alexander Ankvab, held a working meeting with representatives of the Russian ministries of Economic Development and Transport. Problematic issues of the current investment program and ways to solve them were discussed in detail, as well as the draft investment program for 2022-2025 promoting the socio-economic development of Abkhazia and the prospects for the reconstruction of road and transport infrastructure in the Kodori gorge. The investment program is financed by Russia.

Visit of the Russian Delegation to Abkhazia. Source:  Web-page of the De Facto Government

Monitoring the Implementation of the Investment Program

The de facto President of Abkhazia, Aslan Bzhania, paid an inspection visit to Ochamchire where he familiarized himself with the construction of facilities under the 2020-2022 investment program promoting the socio-economic development of the region. Later, Mr. Bzhania visited the Kyndyg-Agro greenhouse complex in the village of Kyndyg. The investment program allocated RUB 450 million for the construction of the facility which was completed in 2017; however, the complex suspended operation. According to the Director of the greenhouse complex, Alik Kogonia, an Israeli company installed the wrong equipment and therefore the work was suspended. Now, the installation of new equipment is being underway in the greenhouse complex and as soon as the installation is completed, the enterprise will resume its work. In Ochamchire, Mr. Bzhania also visited the Adzykh kindergarten. The construction of the facility was completed in 2020, although it is still not operational due to the problem with water supply.

Cooperation with the Customs Service

Members of the de facto parliament of Abkhazia ratified an agreement on Mutual Recognition of the Seniority in the Customs Authorities of the Republic of Abkhazia and the Russian Federation. The document was signed remotely by the Abkhaz side on February 18, 2021, and Russia - on April 5, 2021. The agreement provides for the mutual recognition of the seniority of the employees of the customs authorities of the parties and the payment of allowances taking into account the length of their service. The contract was signed for a period of 5 years with the possibility of its further extension.

Tourism

• As part of his working visit to Moscow, the “Minister of Tourism” of Abkhazia, Teimuraz Khishba, met with the Head of the Russian Federal Tourism Agency (Rostourism), Zarina Doguzova. The parties signed a memorandum on cooperation in the field of tourism. On November 17, the Abkhaz “Minister” held a meeting with members of the Russian State Duma. The deputies noted that the tourist season passed without any serious incidents and no cases of poisoning were reported in Abkhazia this year. During the meeting, the Minister of Tourism of Abkhazia and the Chairman of the Russian Tourist Association, Dmitry Davydenko, signed an agreement on the establishment of a bilateral agency in the field of tourism industry. On November 19, Mr. Khishba attended a meeting of the Tourism Committee of the Russian State Duma.

Signing of the Memorandum on Cooperation in the Field of Tourism. Source: sputnik-abkhazia

• The Chairwoman of the Abkhazian Chamber of Trade and Industry, Tamila Mertskhulava, paid a working visit to St. Petersburg. Mrs. Mertskhulava attended an event dedicated to the 100th anniversary of the Russian Chamber of Trade and Industry. At the meeting, she made a presentation - Industrial tourism as a factor in increasing the tourist attractiveness of Abkhazia.

Agriculture

• In November, feijoa was collected in Gulripsh. The feijoa plantation was cultivated under the investment program and its area totals 13 hectares. According to Rafik Grigorian, the head of agricultural department of the Gulripsh region, it is planned to harvest 200 tons this year. Feijoa is one of the main export products for Abkhazia. Last year, 907 tons of feijoa were exported from Abkhazia to Russia.
• The export of mandarins from Abkhazia to Russia started at the end of October and 2,000 tons of citrus have been exported until now. By the end of 2021, a total of 27 thousand tons of exports are planned; however, the figure is halved compared to last year when 68 tons of mandarins were exported to Russia. In addition to citrus, feijoa, lemon and persimmon are also exported. Up to 100 trucks loaded with agricultural products cross the Adler checkpoint daily.

Transport Ties

The bus service between Abkhazia and Kabardino-Balkaria was resumed on November 14. The service is carried out by the Nalchiksky Transport municipal unitary enterprise. The ticket price is RUB 2 475. The frequency of bus routes will be increased from December.

Economic Relations Between Russia and the Tskhinvali Region

Visit of Government Officials

The de facto President of the Tskhinvali region, Anatoly Bibilov, and the Head of the Directorate for Interregional Relations and Cultural Contacts with Foreign Countries, Igor Maslov, held a working meeting on socio-economic cooperation in Tskhinvali.

Monitoring the Implementation of the Investment Program

• The de facto Prime Minister of the Tskhinvali region, Gennady Bekoev inspected the construction of a children's camp in the village of Mzivi. It should be noted that a tourist base of international importance operated in this area during the Soviet times. The construction of the new facility under the 2020-2022 investment program began in May this year. Over RUB 240 million was allocated for its repair.
• The “Prime Minister” also visited the Dvals gorge, where repair and construction works are underway in the field of road infrastructure. Three bridges have already been built under the project, and it is planned to build well-maintained roads in the direction of the villages - Zghubiri, Edisa, Ermani, as well as to reconstruct water supply facilities.
• Two 18-apartment residential buildings were built in Java as part of the 2020-2022 investment program. The construction of the buildings began last spring. The buildings will be a home to those families which were left homeless after the devastating earthquake in 1991. They have been living in trailers or dilapidated houses for decades.

Opening Ceremony of the Residential Building. Source:  Web-page of the De Facto President

• As part of the investment program, another residential building was built on the site of a five-storey building destroyed during the 2008 war in Tskhinvali. Anatoly Bibilov and the Russian “Ambassador” to the region, Marat Kulakhmetov, attended the opening ceremony. The building will accommodate up to 30 families two of which were solemnly handed over keys to the apartments.

Tourism

• A presentation of the Guide to South Ossetia was held in Moscow. The event was attended by Anatoly Bibilov and the Head of the Republic of North Ossetia – Alania, Sergey Menyaylo. The AJAX-PRESS Moscow publishing house published the guide which includes maps, routes, history, culture, cuisine and other useful information about “South Ossetia” for tourists.
• During his working visit to Moscow, Gennady Bekoev, met with the Head of the Russian Federal Tourism Agency (Rostourism), Zarina Doguzova. The topic of the meeting was the prospects for the development of the tourism industry in “South Ossetia.”

Agriculture

Wine exports from Russia to “South Ossetia” increased by an average of 30% in 2021 compared to last year. LLC Winery Ironsan is the only winery in the Tskhinvali region, which was established in 2018 on the basis of a cannery plant with the involvement of Russian investors. The company produces wine lines:  Old Tskhinvali, Tskhinvali Valley, Saperavi, Mtsvane, Lomiauri, etc. In addition, the enterprise produces cognacs of different aging degrees (from 3 to 12 years), which are also exported to the Russian Federation. The first batch (32 thousand bottles) was bottled in December last year, and in early February this year, the first batch of wine - 14 thousand bottles - was exported to Russia. Currently, 300 thousand bottles of wine are sent to Russia monthly, while last year an average of 200-230 thousand bottles were only shipped. Accordingly, wine supply increased by 30% this year. “South Ossetian” wine is presented in all major cities of Russia; The products are also sold in large supermarket chains such as Magnit and Pyaterochka.