Vnesheconombank to work with Abkhazia

Russian Premier Vladimir Putin recently signed a decree establishing a
commercial agency to help solve the foreign economic problems of
Russian companies in Abkhazia. "There is no commodity circulation
between Russia and Abkhazia so far, for understandable reasons. We're
not dealing with big numbers yet, but the plans that already exist and
are being implemented show that the volume of trade and economic
co-operation may become high", Russian Ambassador in Sukhumi Semen
Grigoriev explained. The efficiency of commercial agencies is
determined, first of all, by the volume of trade and economic
co-operation. Russian commercial agencies work in every CIS republic
and in all large countries of the world. Establishing a banking system
may help Abkhazia become one such country.

Last Sunday a delegation from Vnesheconombank's (the Bank for
Development and External Economic Activities) headed by Vladimir
Dmitriev visited Sukhumi. At the meeting were discussed the
top-priority economic courses in the republic which Vnesheconombank
may finance. The Russian bankers were welcomed by President Sergey
Bagapsh, Premier Sergey Shamba, Vice-Premier Daur Tarba, Minister for
the Economy Christina Ozgan, Deputy Finance Minister Vladimir Delba,
Minister of Agriculture Yuri Acaba, Deputy Chairman of the National
Bank Emma Tania and the President of the commercial bank Universal
Bank Beslan Eshba.

Vnesheconombank signed a general agreement of co-operation with
Universal Bank in February this year. The document signed by Dmitriev
and Eshba says that financial institutions will expand commercial and
economic co-operation between Russia and Abkhazia, by providing
banking services, mainly to organizations and branches of the economy,
aimed at external economy, joint production and development of the two
countries' infrastructures. This means expanding financial services
and accounts within the programme of export finances and investment
project financing.

Moscow and Sukhumi are firstly considering infrastructure development
projects, tourism, communications and energy, and development of small
and medium businesses. Financial institutions will develop programmes
of commercial, primarily pre-export, financing to expand commercial
and economic co-operation.

On his visit to Sukhumi in April, Dmitriev recalled that
Vnesheconombank was helping Abkhazia before the February agreement. He said that possible spheres of co-operation are financing non-metal
material supplying, mainly chip stone, for the construction of Olympic
facilities in Sochi, support for Russian investment in Abkhazia's
infrastructure, the development of fishing and the restoration and
development of resort facilities.

 "But in order to develop the resort and recreational spheres it is
important to take into account the corresponding spheres of the
national economy, such as construction, transport communications,
energy, agriculture, banks and so forth", Sergey Bagapsh noted.

A VK summary:

Today Abkhazia's banking system consists of the National Bank and 15
commercial banks. The commercial bank "Universal Bank" is a
joint-stock bank, authorized to organize the proposed programme of
restoring and developing Abkhazia's economy. In September 2007 its
registered capital exceeded 17 million roubles, 45% of which was
foreign. It is unclear what connects Abkhazian Universal Bank with
like-named banks in the CIS territory, particularly in Uzbekistan and
Ukraine. However, it is known that Ukraine's "Universal Bank" is part
of Eurobank EFG, which is part of EFG Group, the world's third largest
financial group in Switzerland. EFG Group's main fund amounts to 79.4
billion euros and it has offices in more than 30 countries.

Vnesheconombank, with it's almost half-century history, has been
working with CIS countries' credits for over 10 years. In 1998 it
signed interbank agreements with Armenia, Belarus, Kirgizstan and
Tajikistan. In 2002 the bank's role in state programmes, with
reduction of commercial operations at the same time, was scaled up.
The bank's main priority was aiding the government in its structural
reforms. Vnesheconombank made agreements, aiding national exports with
leading financial institutions of 5 G8 countries, as well as Finland,
Hungary, Turkey, China, India, Brazil and Mexico.

Pavel Martinov exclusively for VK