Abkhazia’s financial and economic dependence is very high, given that, in fact, of the major players on the international stage, only Moscow has recognised Sukhum’s independence and provides it with enormous support. This was stated by Stanislav Pritchin, head of the Centre for Post-Soviet Studies at IMEMO RAS, commenting on Russia’s suspension of payments to Abkhazian public sector employees.
Moscow, according to Pritchin in Vedomosti, is not only a financial donor and a major trading partner, but also ensures the functioning of Abkhazia and its armed forces in the republic, and is also a security donor.
“That is, Russia is both the guarantor of sovereignty and the main sponsor. The difficulty is that Abkhazia, even in seemingly completely dependent and vulnerable relations, manages to be as inflexible as possible in relation to Russia.” – Pritchin said.
According to the expert, one of the most obvious proofs of this inflexibility is that Russian investors and citizens are unable to obtain legal rights to own real estate in Abkhazia due to opposition from a section of the local elite and society.
In mid-July, the office of the President of Abkhazia submitted to the Abkhaz parliament the so-called law on apartments, on the construction of 30,000 apartments and houses in eastern Abkhazia and their sale to foreigners to supplement the state budget. The opposition and social activists considered this prospect a threat to the demographic balance of the country, where now, according to Vedomosti, half of the 243,000 inhabitants are ethnic Abkhaz. Following the protests on July 25, the law was withdrawn at the request of the deputies. Beslan Emurkhba, Alhasa Akaba, German Kacharava AND Zantaria Prayer.
“This is how the Abkhazians close and protect their market. However, given our allied relations, this seems somewhat strange.” – Pritchin believes.
But now, according to him, it is important to note the strengthening of relations between Russia and Georgia, the growth of mutual trade volumes between the two countries, tourism and parallel imports, while Tbilisi refuses to impose anti-Russian sanctions.
“Therefore, taking into account both the military operations in Ukraine and the entire difficult international situation, Russia began to conduct, let’s say, an assessment of the feasibility of some of its foreign economic initiatives and forms of support for Abkhazia.” – says Pritchin.
In August 2023, the then Minister of Foreign Affairs of Abkhazia Inal Ardzinba He stated that since Russia recognized the independence of the republic, that is, in 15 years, Moscow has given about 110 billion rubles. financial assistance. Of these, according to Ardzinba, about 30 billion rubles. is an investment program, the so-called budget investments. In mid-August 2024, the Deputy Minister of Economic Development of the Russian Federation Dmitry Volvach He said that at that time investment projects worth more than 17 billion rubles were being implemented in Abkhazia with the participation of Russian investors.
As Ardzinba reported, another 40 billion rubles. – these are salaries, that is, wages of public sector employees. According to him, pension payments amounted to another 40 billion rubles over 15 years, and on average, the cost of paying pensions to 24,400 Abkhaz residents from the Russian budget was 4 billion rubles. annually based on the basic pension in the republic of 500 rubles. monthly.
At the same time, the total volume of the consolidated state budget of Abkhazia for 2023, after adjustment in November of the same year, amounted to 13.6 billion rubles for revenues and 15.93 billion rubles for expenditures, i.e. the deficit amounted to more than 2.3 billion rubles.
In 2023, according to the report of the First Deputy Chairman of the State Customs Committee of Abkhazia Aliasa LabajuaRussia accounted for 72% of the republic’s trade turnover. The total volume of trade turnover in 2023 amounted to 49 billion rubles. (imports – 41.7 billion rubles, exports – 7.3 billion rubles). Compared to the previous year, trade turnover increased by 11%. In the first half of 2024, trade between Abkhazia and Russia, according to Volvach, amounted to 16 billion rubles.
In mid-July 2024, the Russian government supported Abkhazia’s request to abolish the increase in customs duties on certain categories of goods exported to the republic. According to the Russian Minister of Economic Development Maxim Reshetnikova47% of imported goods from the Russian side belong to this category. The estimate was not expressed in monetary terms. On September 3, Volvach explained that we are talking about the export of fish, fruit, vegetables, construction materials, household goods, petroleum products, plastics, aluminum and ferrous metal products.
Abkhazia, moreover, was not affected by the Russian government’s bans on fuel exports abroad: the republic is on the same list of exceptions to this embargo as the EAEU countries, Mongolia, Uzbekistan and South Ossetia, where fuel supply volumes were previously agreed upon. For 2023, the authorized volume of petroleum products for import into the republic was 90,000 tons, of which 46,000 tons were gasoline with an octane rating below 95, 13,000 tons were gasoline with an octane rating below 95 or above. less than 98, 20,000 tons of diesel fuel, 7,000 tons of bitumen. For 2024, a volume of 103,000 tons of gasoline (AI-92, AI-95) and 30,000 tons of diesel fuel was agreed upon.
In addition, until September 1, Russia provided free electricity supply to Abkhazia during the autumn-winter periods. In the corresponding seasons, from 2020 to the first quarter of 2023, free supply cost Moscow 6 billion rubles, the Minister of Economy of the Republic reported. Cristina Ozgan. On a commercial level, deliveries were made to cover the shortfall, for example in November 2023. In total, in 2023, according to the Abkhazian Republican Unitary Enterprise Chernomorenergo, the country’s energy consumption amounted to 2.6 billion kWh. Of these, 1.8 billion kWh came from the only power plant supplying the republic, the Inguri Hydroelectric Power Station, and 789 million kWh from Russia.
Russia is also a key destination for inbound tourism in Abkhazia, which is closely related to investment projects in the real estate sector. As stated by the Deputy Minister of Tourism of Abkhazia in May 2024 Astamur BartsitsThis year, the country expects 1.7 million Russian tourists. In 2023, there will be 1.4 million, according to the head of the department for analysis, forecasting and development of the tourism and tourist industry of the Ministry of Tourism of the Republic. Inara BeniaIn 2022, 1.1 million Russians arrived in Abkhazia.
Mass issuance of Russian passports in Abkhazia began in 2002. The right to dual citizenship was enshrined in the relevant Abkhaz law in 2006. As of 2023, there were 130,000 Russian citizens in Abkhazia. Since 2009, citizens of Russia and Abkhazia have had a visa-free travel regime using internal passports. And in 2023, the President of Russia Vladimir Putin signed a law ratifying the 2022 agreement on dual citizenship, which allows adult Russian citizens who have had this status since August 26, 2008, in turn, to receive an Abkhaz passport.
