On September 1, Russia suspended financial assistance to Abkhazia due to the republic’s failure to fulfill several of its obligations on time.
As the Ministry of Finance of Abkhazia clarified, we are currently discussing the suspension of the transfer of financial assistance to co-finance the increase in salaries of the main categories of employees of government institutions of the Republic of Abkhazia in the field of healthcare, education, science, culture, sports and social services to citizens.
The Abkhaz-Russian Agreement on the procedure and conditions for co-financing from the funds of the Russian Federation an increase in salaries for the main categories of employees of government institutions of the Republic of Armenia in the field of healthcare, education, science, culture, sports and social services for citizens, signed on April 14, 2015 and entered into force in 2016, establishes a procedure for increasing salaries of these categories of workers at the expense of Russian financial assistance.
Since 2016, the Abkhaz side, at its own expense, pays social workers salaries based on the 2014 salaries. All stages of further increase are carried out through co-financing.
In 2022, the Agreement establishing the amount of co-financing for the increase in wages of the Abkhaz side in 2022 (15%), in 2023 (35%), in 2024 (70%) and in 2025 (85%) was amended. At the same time, the basic indicator remains the volume of Russian financial assistance allocated for these purposes until 2021, in the amount of 1.3 billion rubles. The subsequent increase is determined in specific percentages as the difference between the wage fund of employees between the corresponding years: 2022, 2023, 2024 and 2025 until 2021. Thus, co-financing is carried out in the established percentage only for the amount of the wage increase, and not for the entire wage fund, the Ministry of Finance of Abkhazia clarified.
The Agreement between the Republic of Abkhazia and the Russian Federation on strategic alliance and partnership of November 24, 2014 establishes the obligation of the Russian side to co-finance, at the expense of the Russian Federation, the salaries of certain categories of social workers. In this case, the provisions for co-financing in accordance with the provisions of the Agreement shall be determined by a separate agreement.
On August 4, 2022, an Agreement was signed between the Republic of Armenia and the Russian Federation, the aim of which is to provide assistance to Abkhazia by Russia in the implementation of the State Program for the Socio-Economic Development of the Republic of Armenia for 2022-2025, including by providing gratuitous financial assistance to co-finance its activities and ensure the fulfillment of individual expenditure obligations of the Russian Federation under the Treaty.
“Clause 5.1 of this agreement states that the Russian side has the right to fully or partially suspend the transfer of financial assistance funds in case of non-fulfillment of its obligations, including the implementation of the harmonization program. We are currently discussing the suspension of the transfer of financial assistance to co-finance the salary increase of the main categories of employees of government institutions of the Republic of Abkhazia in the areas of health care, education, science, culture, sports and social services for citizens,” – the Ministry of Finance reported.
The Cabinet of Ministers of Abkhazia, in turn, published information from the Ministry of Economy on the harmonization of Abkhazian legislation with Russian legislation.
According to Article 3 of the Grand Treaty between countries, the main directions for the development of strategic alliances and partnerships are:
- implement a coordinated foreign policy;
- creation of a common defence and security space;
- formation of a common social and economic space;
- promoting the socio-economic development of the Republic of Abkhazia;
- creating conditions for the full participation of the Republic of Abkhazia in the integration processes in the post-Soviet space, implemented on the initiative and/or with the assistance of the Russian Federation;
- preservation of the common cultural, spiritual and humanitarian space.
Articles 11, 17, 18, 19 and 21 of the Treaty establish the obligations of the Republic of Abkhazia, no later than three years after the date of its entry into force, to implement a set of measures to harmonize its legislation in the areas of customs, budgetary legislation, healthcare and education.
December 4, 2014 by the President of Abkhazia Raul Khajimba The relevant ministries and departments were instructed to develop agreements and action plans for the implementation of the norms provided for by the Treaty. The coordination of activities to fulfill the obligations of the Abkhaz side was entrusted to the RA Ministry of Foreign Affairs. By resolution of the Cabinet of Ministers, the authorized bodies of the republic to implement the provisions of the Treaty were designated (State Security Service, Ministry of Defense, Ministry of Internal Affairs, Ministry of Foreign Affairs, Ministry of Finance, Ministry of Health, Ministry of Education, Ministry of Labor, Employment and Social Policy).
On December 9, 2019, the Ministry of North Caucasus Affairs of the Russian Federation sent the Prime Minister of the Republic of Armenia Valeria Bganba Draft Program for the formation of a common socio-economic space, consisting of 46 points with an implementation period of 2020-2021.
The Programme’s activities included topics related to the development and adoption of:
- amendments to the Law of the Republic of Abkhazia dated August 11, 2017 No. 4478-c-VI “On the electric power industry” regarding the abolition of provisions stipulating that transmission networks in the Republic of Abkhazia are state property of the Republic of Abkhazia and are not subject to privatization;
- regulatory acts of the Republic of Abkhazia, which provide Russian creditor banks with the opportunity to collect debts under loan agreements (credit contracts) and foreclose on mortgaged property in the Republic of Abkhazia;
- legislation of the Republic of Abkhazia to lift the ban on the sale of residential real estate to Russian citizens.
By the Protocol of the 18th meeting of the Intergovernmental Commission of December 18, 2019, the Abkhaz side accepted the obligation to organize work on forming a common socio-economic space.
On July 23, 2020, in response to a letter from the Ministry of North Caucasus Affairs dated December 9, 2019, the Prime Minister of Abkhazia Alexander Ankvab sent a letter to the Department of the Presidential Administration of the Russian Federation for cross-border cooperation on the need for additional approvals of certain points of the Program and, in particular, on issues of changes in legislation in the energy sector, the sale of residential real estate, debt collection under loan agreements, etc.
On August 12, 2020, the Administration of the President of the Republic of Armenia sent to the People’s Assembly – Parliament of the Republic of Armenia the draft Harmonization Program submitted by the Russian side.
On October 14, 2020, the Ministry of Economic Development of the Russian Federation sent to the President of the Republic of Abkhazia a draft Harmonization Program consisting of 46 points, which also includes issues of energy, residential real estate, and debt collection under loan agreements.
“Based on the results of internal approvals and procedures, the Harmonization Program for 2021 – 2023 is being developed. It was formed from 45 points. The clause on the sale of residential real estate was excluded, and the clause on energy was drafted in a different wording and provided for the development and adoption of laws of the Republic of Abkhazia regulating the attraction of investments from Russian power grid companies and the modernization of the power grid infrastructure and ensuring energy security,” — the Abkhaz government clarified.
Based on the results of the work carried out, the Harmonization Program was signed on November 12, 2020 and approved in December 2020 by the decision of the Intergovernmental Commission. On November 23, 2020, the Harmonization Program was submitted by the President of Abkhazia to the parliament.
As part of the implementation of the Program for the formation of a common social and economic space between the Russian Federation and the Republic of Abkhazia based on the harmonization of the legislation of the Republic of Abkhazia with the legislation of the Russian Federation until 2023, 26 points out of the 45 planned were fully implemented.
In February 2024, the Harmonization Program (stage 2) for 2024-2025 was approved, which included unfulfilled points, as well as the event of signing and ratifying the Agreement between the governments of the countries on the implementation of investment projects by Russian legal entities in the territory of the Republic of Abkhazia.
Of the measures approved by the two Programs, the following points were not completed on time:
- ratification of the Agreement between the Russian Federation and the Republic of Abkhazia on the recognition and enforcement of court and arbitration decisions in economic cases dated June 29, 2022;
- signing and ratification of the Agreement between the Government of the Russian Federation and the Government of the Republic of Abkhazia on the implementation by Russian legal entities of investment projects in the territory of the Republic of Abkhazia.
