Publication: N27 / Review period: June 1-30, 2023 / Author: Arsen Araqelov
Overview of Russia’s Economic Relations with Abkhazia and the 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
Alexander Novak's Visit
On June 9, a Russian delegation headed by Alexander Novak, the Deputy Prime Minister of the Russian Federation, who supervises the occupied regions of Georgia, visited the de facto republic of Abkhazia. Dmitry Volvach, the Deputy Minister of Economic Development of Russia, was among members of the delegation.
During the visit, Novak met with the de facto president of the republic, Aslan Bzhania. At the meeting, Novak noted that the de facto republic is Russia’s strategic partner and paid attention to the assessment of trade and economic cooperation prospects. According to Novak, the rate of trade relations between Russia and the de facto republic has increased by 73% compared to last year. In addition, the issue of restoring air traffic between the occupied Abkhazia and Russia was also mentioned, on which Bzhania commented that “the restoration of air traffic is so important for the Abkhaz people that each person involved in this process is perceived as a saint.”
On the same day, Novak together with the Minister of Economy of the de facto Republic, Kristina Ozgan, visited the Sokhumi airport the restoration of which is planned. In addition, Alexander Novak inspected the area surrounding the Moskva Resort hotel in Bichvinta which is under construction with the involvement of a Russian businessman and a former Governor of Krasnodar Krai. Novak also visited the Pitsunda Resort boarding house.
An “intergovernmental” meeting was held on June 10. An Abkhaz delegation was headed by the de facto Prime Minister, Alexander Ankvab. The meeting focused on uninterrupted supply of electricity and petroleum products to the occupied Abkhazia and the acceleration of the process of “legislations” harmonization.
Alexander Novak at the Sokhumi Airport
The 26th St. Petersburg International Economic Forum
The St. Petersburg International Economic Forum has been held since 1997. The platform gathers politicians, business representatives and authors of technological startups. Since 2007, the forum has been held under the patronage of the President of Russia, Vladimir Putin. Russian high-ranking officials also often attend the forum. This year's forum was held on June 14-17 and its title was “Sovereign development is the basis of a just world, let's join forces for the sake of future generations.”
Delegations of the de facto republics of Abkhazia and the Tskhinvali region also attended the forum. Members of the Abkhaz delegation were the Speaker of the de facto parliament, Lasha Ashuba, the de facto Minister of Foreign Affairs, Inal Ardzinba, the de facto Deputy Prime Minister and the Minister of Economy, Kristina Ozgan, the de facto Minister of Finance, Vladimir Delba, and deputies of the “parliament.”
At the economic forum, Ozgan met with the Minister of Economy of Russia, Maxim Reshetnikov. As a result of the meeting, the parties signed an investment program for the restoration and further operation of the Sokhumi airport. The airport will be restored with Russian investments.
„Bashkir-Abkhaz Longevity”
On June 3, a meeting of the Administration Council of the Head of the Republic of Bashkirostan, Radiy Khabirov, discussed the „Bashkir-Abkhaz Longevity” program which provides for organizing regular tours for citizens of Bashkirostan from the country to the occupied Abkhazia. Previously, there was a similar program – “Bashkir-Belarusian Longevity” which, according to the Minister of Tourism of the Republic, Rustem Afzalov, was well received and currently the organization of preferential tours for the elderly citizens of Bashkirostan to the occupied Abkhazia is being considered.
At the Council meeting, Khabirov asked Afzalov to send a pilot group of tourists, 44-46 people, to the de facto republic in the near future and get feedback from them. According to Khabirov, if the tourists come satisfied from the occupied Abkhazia, the project will be implemented.
High-Speed Electric Train “Lastochka”
On June 8, the high-speed electric train “Lastochka” made its first route from Sochi to the occupied Gagra and brought 60 passengers to the de facto republic. The train was ceremonially greeted by the de facto Deputy Minister of Economy, Teimuraz Mikvabia, and the Deputy General Director of the Abkhaz Railway, Oktai Khaziri. A concert was also held for the guests.
According to Mikvabia, the launch of a train in the direction was the result of almost a year's collaboration between the Abkhaz Railway and the Russian Railway. According to him, it will be much more comfortable for tourists to cross the border on a modern air-conditioned train.
In addition, Mikvabia noted that negotiations are underway with the Russian side for a longer route. Meanwhile the Abkhaz Railway is to resolve several technical aspects.
As per the train table, “Lastochka” arrives from Sochi to Gagra in 3 hours and 6 minutes, from the Sochi airport to Gagra - in 2 hours and 48 minutes. The ticket price ranges from RUB 755 to RUB 1005.
Cruise Ship Knyaz Vladimir
On June 23, the cruise ship Knyaz Vladimir arrived in the Sokhumi port. Under the test flight, the ship hosted only tourism companies.
In 2017, Rossmorport established “Black Sea Cruises” with Alexander Tkachenko as its general director, to comply with an order of the Russian President, Vladimir Putin, and restore regular cruise traffic in the Black Sea region.
After the test flight, Tkachenko noted that long work preceded the arrival of the ship in the Sokhumi port, and finally, after the approval of the governments of Russia and the de facto republic, the flight took place. According to Tkachenko, the ship can carry 600 passengers and further development depends on the desire of citizens and marketing policy. On June 30, the ship brought its first passengers, a total of 81, in the Sokhumi port where the de facto president, Aslan Bzhania, met and visited the ship. A total of nine more cruises are planned until September 11.
Aslan Bzhania on the Knyaz Vladimir Deck
Strawberries Export
According to the de facto Customs Committee, a total of 48.7 tons of strawberries were exported from the occupied Abkhazia in 2023. For comparison, previous year accounted for 113.1 tons of strawberries export and this number equaled to 352 tons in 2021. The so-called Customs Committee attributes the downward trend to unfavorable spring weather for the crop.
Economic Relations Between Russia and the Tskhinvali Region
The 26th St. Petersburg International Economic Forum
Members of the de facto government of the occupied Tskhinvali region, as well as of the de facto republic of Abkhazia, visited the June 14-17 international economic forum.
At the forum, the occupied region was presented by the de facto president himself, Alan Gagloyev. He met with the Governor of the Leningrad region, Alexander Drozdenko, and the parties signed a cooperation document. The memorandum envisages the cooperation between the occupied Tskhinvali region and the Leningrad region in trade-economic, scientific-technical and socio-cultural fields.
At the forum, Gagloyev also met with the Acting Governor of the Omsk region, Vitaly Khotsenko. Gagloyev expressed his gratitude to Khotsenko for the assistance provided to the de facto republic from the Omsk region in 2008.
The parties discussed the prospects of future cooperation and signed an “intergovernmental” agreement which envisages mutual cooperation in trade and scientific-technical fields.
Gagloyev also met with the Minister of Transport of Russia, Vitaly Saveliev. The parties discussed an expansion plan of the Kvemo Zaramagi border crossing checkpoint between Russia and the occupied region.
Meeting Between Alan Gagloyev and Vitaly Saveliev
Reconstruction of Kvemo Zaramagi
According to the de facto Minister of Economy of the region, Dzambolat Tadtaev, a new and modern checkpoint will be built on the so-called border between the occupied region and Russia. The new crossing checkpoint throughput capacity will be up to 958 thousand cars per year. As he stated, the “state expertise” has already approved the project.
Ossetian Beer in Russia
According to Alan Albort, the Head of the Chamber of Commerce and Industry of the de facto republic, the Highland Kelly Brewery company sent a total of 26 thousand bottles of beer on June 21 for export to Russia for the first time. According to Albort, after the start of the Russian aggression in Ukraine, many companies left the Russian market which “allows Kelly Brewery to take its rightful place in the Russian market.”
Progress of the Investment Program
Russia has developed an investment program to promote the socio-economic development of the Russian-occupied regions of Georgia - Abkhazia and the Tskhinvali region. Representatives of the Russian government periodically visit the occupied regions to monitor the progress of the program.
On June 29, a Russian delegation chaired by Igor Maslov, the Head of the Directorate for Interregional Relations and Cultural Contacts with Foreign Countries, arrived in the de facto republic. In addition to Maslov, who supervises of the occupied regions in the Presidential Administration, members of the delegation were representatives of the Russian Ministry of Economy and Energy.
The delegation visited the construction of the Mziugomi camp which will accommodate 150 children. The camp is being constructed on the territory of the former tourist base in the Java region. The camp will start operation in 2024. In addition, the delegation checked the process of rehabilitation of a bridge over the Liakhvi River and visited the Znauri (in Georgian - Kornisi) and Akhalgori regions.
Rehabilitation works are actively underway in the occupied region. According to the Dorexpostroy state organization, landscaping of streets has started in Tskhinvali and a total of nine streets will be completed by the end of October. Among are streets named after Putin, Medvedev, Caucasus, Gagarin and Stalin.
Russian Delegation in the Occupied Tskhinvali Region