Publication:  N31 / Review period:  November 1 – 30, 2023 / Author:  Arsen Araqelov 

Review 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

Propane Imports 

On November 2, the de facto parliament of the occupied Abkhazia ratified the changes to the trade agreement signed with Russia. The amendment abolishes the export customs duty on the export of propane from Russia to Abkhazia. The Russian Federation Council adopted the said decision on October 25. The decision is temporary and is related to the energy crisis. Propane is considered a commodity of primary consumption, and according to the agreement, in conditions of energy shortages, Russia is obliged to supply two thousand tons of liquefied petroleum gas to the occupied region annually.

Pension Debt

On November 2, the de facto parliament approved changes to the “law” on the pension fund. The mentioned change provides for the reimbursement of RUB 25 million (approx. USD 275 thousand) to the Russian pension fund, as the mentioned amount was illegally received by relatives of the deceased pensioners.

The said cases are quite frequent in the occupied Abkhazia and are related to the existence of so-called “dead souls.” A number of facts have been confirmed when the pension of a deceased Russian citizen was nevertheless allocated from the Russian budget, and another person received it. As a result, in March 2023, the Russian Federation Council ratified a protocol which obliges the de facto government of Abkhazia to return the pensions issued to dead Russian citizens in Abkhazia in the amount of over RUB 24.3 million.

“Tambov Apples” in Gali

Tambov apple trees will be planted in the occupied Gali region. The Petrovsky municipal district of the Tambov region donated a total of 100 saplings of four types of apple trees to the Gali district. In October, the so-called administration of the Gali district was on a working visit to the Petrovsky district. During the visit the parties signed a memorandum of cooperation in various fields.

“Tambov Apples” in Gali

Summing Up the Holiday Season

The de facto Ministry of Tourism of Abkhazia summarized results of the 2023 holiday season. According to the published data, a total of one million 300 thousand tourists visited occupied Abkhazia, 460 guides received the relevant license, the number of beds in accommodation facilities exceeded 46 thousand, and 20 accidents were registered among tourists. Also, in June-October 2023, the Lastochka electric train carried 48,309 passengers from Sochi to Gagra. Lastochka has been operating in Sochi-Gagra direction since June 8, 2023.

Citrus Season

As of November 15, after the start of the “citrus season,” Abkhazia exported 2,844,409 kg of tangerines, 571,657 kg of feijoa, 123,399 kg of persimmons and 139,438 kg of lemons. In the same period last year, 1,559,792 kg of tangerines, 588,843 kg of feijoa, 53,714 kg of persimmons and 190,917 kg of lemons were exported.

According to the Ministry of Agriculture of the de facto Republic of Abkhazia, the citrus harvest will be 30 thousand tons this year. Basically, 95% of the citrus harvest in Abkhazia is exported to Russia.

Economic Relations Between Russia and the Tskhinvali Region

Alexander Novak's Visit and an “Intergovernmental” Meeting

On November 17, the Deputy Chairman of the Russian government, Alexander Novak, visited the occupied Tskhinvali region. Novak oversees the direction of the occupied regions of Georgia. This was his first visit to the region where he participated in the 22nd meeting of the “Intergovernmental Commission on socio-economic cooperation” between Russia and the de facto republic. Novak also checked the progress of Russian-funded projects. Before that, the de facto President, Alan Gagloyev, personally met with Novak. The parties discussed the issues of economic cooperation between the de facto republic and Russia.

After the meeting, together with Gagloyev, Novak attended a ceremony of opening three residential buildings. The houses were built under the Russian-financed investment program promoting the socio-economic development of the region. Each building consists of 75 residential apartments.

Ceremonial Opening of the Residential Buildings

Before the 22nd meeting of the Intergovernmental Commission on socio-economic cooperation which was held on November 17, the parties held consultations in a “narrow” format.

Monitoring of Projects

Together with Novak, Igor Maslov, the Head of the Directorate for Interregional Relations and Cultural Contacts with Foreign Countries of the Russian Presidential Administration, visited the occupied region and inspected the ongoing construction works under the “investment program.” First, the delegation visited the Vibromashina factory. As planned, the factory will process marble and other stones and use them as building materials from 2025. According to preliminary information, the factory will employ 148 people.

Igor Maslov Checks the Progress of the Projects

The Russian delegation also visited the Ir Basalt construction company which was built with Russian funding, although the factory has not started production yet. The delegation also visited the canned food factory under construction, which is located in the village of Frisi, the Tskhinvali region.  As its director noted, the factory will produce various canned goods and employ 220-250 people from 2024.

Fuel Smuggling

On November 15, five persons were arrested in the occupied Tskhinvali region, who pumped 50 tons of fuel into the territory controlled by the central government of Georgia. According to the de facto Security Committee, the culprits installed a pipe and pumped fuel using a non-functional amelioration system. The so-called Committee assessed this action as “illegally supplying a potential enemy with fuel and lubricants which could be used for military purposes.”

The mentioned news was resonated widely among the residents and the law enforcement agency of the de facto republic, as well as in the Federal Security Service of Russia. On November 21, the “Committee” announced that they are investigating the case together with their Russian counterparts. According to the statement, the gravity of the crime is even greater considering that the Russian government restricted the export of fuel from September 21, and there is a fuel and lubricant crisis in the “Republic.” The ”Committee” states that more people might be involved in the case, and the investigation is ongoing.

Delays at the “Border”

On November 23, Alan Gagloyev met with the Counselor of the Russian “Embassy” in the region, Alexander Zhurov, and a representative of the Russian Customs Service in the region, Alexei Popov. At the meeting, Gagloyev noted that local manufacturers are frightened by the fact that Russian border guards several times stopped loaded trucks at the Kvemo Zaramagi crossing checkpoint connecting the region with Russia, and did not let them into the de facto republic. Popov said that he would relay the mentioned problems to heads of the Russian Federal Customs Service.

Alan Gagloyev Meets with Alexei Popov