Monthly Review

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

2022 / 12 / 01

Publication:  N20 / Review period:  November 1-30, 2022 / Author:  Arsen Araqelov

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

Energy Crisis

A large part of the occupied Abkhazia remained without electricity on November 1, 2022. The outrage was related to the ongoing repair work on the high-voltage overhead line Achguara-220 (in Georgian - Achigvara). Russia failed to fulfill the agreement on redistribution of its own electricity before the reconstruction of the Achigvara line and prematurely cut off the electricity supply to the occupied Abkhazia.

Subsequently, the Minister of Economy of the de facto Republic of Abkhazia, Kristina Ozgan, announced that the de facto republic and Russia reached an agreement which provides for a schedule and terms of  electricity flow from Russia to the occupied Abkhazia. According to Ozgan, the occupied Abkhazia will receive 280 million kWh of electricity from Russia; however, the volume is not enough since the de facto republic will consume 340 million kWh by the end of the year.

Against a backdrop of the crisis, the de facto Cabinet of Ministers extended the duration of a decree which forbids the use of electricity for the production of cryptocurrency and the import of any goods that contribute to the production of cryptocurrency into the territory of the occupied Abkhazia. The decree was extended until December 31, 2023

Russia Will Help Abkhazia with RUB 22 Billion

On November 10, 2022, the Russian government supported the ratification of an agreement between Russia and the de facto republic of Abkhazia which provides for the implementation of the state program promoting the socio-economic development of the de facto republic of Abkhazia in 2022-2025. The Minister of Economic Development of Russia, Maxim Reshetnikov, presented the federal law on the ratification of the agreement to the government.

In total, the 3-year program includes more than RUB 22 billion (approx. USD 365 million). Part of the funds, in the amount of RUB 15.4 billion (approx. USD 225 million) will be allocated from the Russian budget, the remaining RUB 6.7 billion (approx. USD 111 million) – from the reserve fund.

A total of RUB 9 billion (approx. USD 150 million) was allocated for the current investment program which provided for the support to the occupied Abkhazia and the Tskhinvali region for 2020-2022. Compared to the future investment this number is quite small.

Zalina Kobesova Meets with the De Facto Minister of Agriculture of Abkhazia

The First Deputy Prime Minister and the Minister of Agriculture of the de facto republic of Abkhazia, Beslan Jopua met with the Head of the Russian Trade Mission in the de facto republic of Abkhazia, Zalina Kobesova. The meeting discussed the current socio-economic processes between the “countries” and the trade turnover of agricultural products. Jopua paid particular attention to the export of citrus and honey from the occupied Abkhazia to the Russian market.

Export of Agricultural Products

According to the November 23 data of the Russian Customs Committee, since the beginning of the citrus season, a total of 3.2 tons of tangerines were exported from the occupied Abkhazia in Russia while the number totaled 3.6 tons in the same period of the previous year.

There is a decreasing trend in the case of persimmons and feijoa. In 2021, a total of 698 tons of persimmons were exported, and only 77 tons in 2022. As for feijoa: 1.6 tons were exported in 2021, and 737 tons - in 2022.

Meeting with the Head of the Russian Transport Control Service

The Prime Minister of the de facto republic of Abkhazia, Alexander Ankvab, and the de facto Minister of Economy, Kristina Ozgan, met with Victor Basargin, the Head of the Russian Federal Transport Control Service, who was visiting the occupied Abkhazia. The “parties” discussed the Abkhaz-Russian mutual cooperation in light of transport policy.

In 2008-2012, Basargin held the post of the Minister of Regional Development of Russia and chaired the creation and implementation of the Russian-funded state program promoting the socio-economic development of the de facto republic of Abkhazia.

Economic Relations Between Russia and the Tskhinvali Region

Visit to the Economic Forum

Representatives of the “State University of South Ossetia” participated in the 7th International Forum of the University of Finance “Economic fights without rules: recipes for victory.” The forum was held in Moscow. 

Progress of Projects was Discussed at a Session of the De Facto Government

The Chairman of the de facto government of the Tskhinvali region, Konstantine Jusoev, held a meeting with members of the de facto government on November 24. The meeting discussed the progress of the Russia-funded state program promoting the socio-economic development of the region in 2020-2022. He noted that to consider that the program completed it is important to increase the work pace and timely complete the relevant documentation. 

Visit of the Chairman of the Government and the Minister of Economy to St. Petersburg

The Chairman of the de facto government of the Tskhinvali region, Konstantine Jusoev, and his deputy, the de facto Minister of Economic Development, Dzambolat Tadtaev, participated in the Russian Industrialist forum which was held in St. Petersburg from November 29 to December 1.