Publication:  N21 / Review period:  December 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

Abkhazia to Pay its “Pension Debt” to Russia

The de facto parliament of Abkhazia approved an amendment to the pension agreement between Russia and the de facto republic. The agreement concerns Russian citizens permanently residing in the occupied Abkhazia.

According to Natela Lomia, a representative of the de facto President in the “parliament” many cases were revealed when another person received pensions of already deceased Russian citizen which was paid from the Russian budget. According to the amendment, in such a case, the Abkhaz side will be obliged to return the amount to Russia.

Currently, the accumulated pension debt of the de facto republic to Russia for 2015-2020 amounts to RUB 24 million Russian (approx. USD 370 thousand).

Russia Will Continue to Finance Salaries of Abkhaz “Public” Officials

As a result of the ratification of a protocol by the de facto parliament of Abkhazia, Russia will continue to co-finance salaries of “public” officials.

The protocol was signed on April 14, 2015 when the “parties” agreed to co-finance and gradual increase salaries of “public” officials of the de facto republic of Abkhazia.

The change provides for co-financing and increase in salaries until 2025.

Demand for Abkhazian Citrus Decreased in Russia

According to Beslan Jopua, the Minister of Agriculture of the de facto Republic of Abkhazia, the demand for Abkhazian citrus in Russia decreased, which is due to the excess amount of Chinese and Turkish tangerines on the market.

According to Jopua, taking into account the pandemic and closed borders, the demand for Abkhaz tangerines was high in the last 2 years, and in 2022, the price for mandarin totaled RUB 15-20 (GEL 0.50-0.70).

Bzhania's Visit to Moscow

The President of the de facto Republic of Abkhazia, Aslan Bzhania, was in Moscow. At the “Embassy” of Abkhazia in Russia, Bzhania met with Abkhaz entrepreneurs to whom he introduced the economic situation of the de facto republic as well as discussed various issues, including the energy crisis, investments, etc. At the end of the meeting, it was decided that a similar meeting will be held again on the territory of occupied Abkhazia.

Humanitarian Aid of Abkhazia to the Occupied Regions of Ukraine

As a humanitarian aid, a total of 100 tons of tangerines were sent from Abkhazia to the the population of the Ukrainian regions temporarily occupied by Russia: Kherson, Donetsk, Luhansk and Zaporizhzhia.

Economic Relations Between Russia and the Tskhinvali Region

Megaphone-South Ossetia Cable Internet in the Tskhinvali Region

According to Nikolai Firsov, the General Director of the Megaphone-South Ossetia company, the company plans to introduce cable internet in the de facto republic in 2023. For this purpose, a test project has already been launched which will provide a certain number of users with cable internet.

Russia-Funded Investment Program for 2020-2022 is Being Completed in the Tskhinvali Region

According to Eduard Dzagoev, the Minister of Construction, Architecture and Housing and Communal Affairs of the de facto Republic of the Tskhinvali region, the restoration/construction of five objects in the Tskhinvali region, planned under the Russia-funded investment program for 2020-2022, will be implemented in 2023.

Russian Investments in the Tskhinvali Region

According to the trade representative of the de facto republic of the Tskhinvali region in Russia, Teimuraz Goginov, Russian investments to the occupied Tskhinvali region exceeded RUB 100 million (approx. USD 1 million 584 thousand). According to Goginov, the agencies of the de facto republic are working to attract more investors from Russia and create favourable conditions for them and, on the other hand, export local products to the Russian market which is open to the de facto republic.

Budget for 2023 of the De Facto Republic of the Tskhinvali Region

The parliament of the de facto republic of the Tskhinvali region approved the 2023 budget. The revenue part of the 2023 budget totals RUB 8 billion 780 million (approx. USD 122 million 117 thousand), it includes the Russian financial support in the amount of RUB 7 billion 87 million (approx. USD 109 million 510 thousand). A total of RUB 5 billion 872 million (approx. USD 81 million 708 thousand) of this assistance is intended for the socio-economic development of the so-called republic, and RUB 1 billion 215 billion (approx. USD 16 million 900 thousand) financial assistance to support budgetary investments and investment activities. The expenditure part of the budget amounts to RUB 8 billion 864 million (approx. USD 123 million 330 thousand).