Publication: N13 / Review period: April 1-30, 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
Fight for Overcoming the Economic Crisis
After the international sanctions were imposed on Russia, the main supporter of the de facto republic of Abkhazia, over the war in Ukraine, the de facto government is looking for ways to overcome the impending crisis.
In order to stabilize the consumer market and prevent unreasonable increase in prices, a special decree of the de facto government approved a list of the main food products and set the maximum amount of trade preferences for the main types of food products.
In the face of new economic challenges, resolutions in support of entrepreneurs were also adopted. Imports of products that are not produced in Abkhazia are no longer subject to taxation and are exempt from tax.
Until July 1, import tariffs on products that are not produced in Abkhazia were lifted. The list of products includes: oil, butter, sugar, salt, tea, cereals, baby food, etc.
A decree was also issued on the temporary support measure for entrepreneurial entities. The de facto Deputy Prime Minister and the Economy Minister, Kristina Ozgan, said that “there is a significant rise in prices due to the developments in the world and in the Russian Federation, especially when Abkhazia imports almost all products from Russia. That’s why the government made a number of necessary decisions.”
CIS Congress
In Moscow, the Exhibition Center (ВДНХ) hosted the CIS countries. The countries participated in the activities of the Congress of the CIS member states and in the annual meeting of the Interstate Council for Exhibition-Market Cooperation. A delegation of the de facto Republic of Abkhazia, the Trade Representative of the Republic of Abkhazia in the Russian Federation, Oleg Bartsits, also took part in the event at the invitation of the organizers.
Abkhazian Wine Competition
Sokhumi summarized the results of the first national competition of Abkhazian wine. In total, the organizers selected 100 samples of products in the regions of Abkhazia. The tasting commission also revealed the winners winemakers who were awarded a cash prize and a special prize by the Ministry of Agriculture and the Achba family.
Economic Relations Between Russia and the Tskhinvali Region
New subsistence level
The de facto republic of the Tskhinvali region approved a new subsistence level for the first quarter of 2022, which amounted to RUB 14,497. The increase in the subsistence level is due to the increase in average prices for food products.
The subsistence level per capita was RUB 14,497 for the first quarter of 2022. The subsistence level per capita increased by RUB 1,177 compared to the fourth quarter of 2021.
Results of the 2021 Social Fund
As the 2021 report of the Social Fund states, the number of pensioners in the Tskhinvali region increased by 351 people compared to 2020, and totaled 5388.
From January 1, 2022, all pensions are indexed at 7.7 percent. Thus, the average pension equals to RUB 8,262. The de facto Minister of Health and Social Development, Soslan Naniyev, said that more than RUB 546 million (99.9 percent of the planned amount) were spent on pensions during the year.
Budget Bill
At the April 13 sitting, the de facto government approved a draft law on the implementation of the “budget” of the Tskhinvali region. Tax and non-tax revenues amounted to RUB 1,541,598 thousand, which is 97.1% of the annual budget.
The issuance of salaries and pensions in the Tskhinvali region, as well as the region’s “budget,” is practically fully financed by Russia.