Abkhazian political economy

Sukhumi is ready for economic cooperation without recognition of its independence, but would prefer to get both

At the beginning of this week the head of the Turkish Foreign Ministry's South Caucasus department and the Turkish Ambassador  to Georgia arrived in Sukhumi. However, the announced meeting with the Abkhazian president didn’t take place. Cancellation of the negotiations with Sergei Bagapsh was probably caused by the lack of progress in the course of the meetings of Turkish spokesmen with somewhat lower-ranking Abkhaz officials.

According to Apsnypress, during the negotiations with the Abkhaz Prime Minister, Turkish Ambassador to Georgia Levent Murat Burhan announced Ankara’s intention to discuss the establishment of direct trade relations between Turkey and Abkhazia. However, Sergei Shamba preferred to speak with the head of a Turkish Foreign Ministry department, explaining his decision thus: "While there is no Turkish recognition of Abkhazia, while there is no Turkish Embassy in Abkhazia, we will talk not with the diplomats accredited in Georgia, but with members of the Foreign Ministry."


Neither was the conversation with the Department’s head a success. When Nurdan Bayraktar Golder announced Ankara’s intention to assist the Abkhaz and Georgian sides in finding common ground for solving existing problems, Shamba made it understood that he was not going to discuss Georgian-Abkhazian relations with any outside states: "We are ready to discuss relations between Abkhazia and Turkey with you.”


The meeting between Turkish representatives and the head of the Abkhazian Foreign Ministry, Maxim Gvindzhiya, who recently replaced Shamba, was no less tense. "The Turkish delegation has voiced proposals mostly prepared by Georgia, e.g. the strategy of Timur Yakobashvili. I have nothing to say on it", Gvindzhiya  expressed his discontent after the meetings’ termination.


Despite the fact that sides were dissatisfied with each other to each other, there is not a complete lack of understanding between Sukhumi and Ankara. Both sides acknowledge that development of trade and economic relations is possible without Turkey recognizing Abkhazia's independence. As Shamba admitted: "The Turkish authorities meet Abkhazia halfway in many fields, particularly in the field of communications, and are not breaking off talks, despite Georgia’s protests." At the same time the Prime Minister expressed discontent with the fact that the Turkish side started demanding Abkhazian ship's documents should be registered as Georgian.

Perhaps the categorical position of the Abkhazian side shown at the meetings with the Turkish spokesmen is to some extent caused by the prospect of obtaining a peculiar kind of energy independence. A few days before the Turkish representative’s visit to Abkhazia, a ceremony was conducted in Sukhumi to lay the foundation stone of the first filling-station complex of the joint Rosneft-Abkhazia enterprise. The stone was laid by Bagapsh, together with the head of Rosneft, Sergei Bogdanchikov, who specified that it was not Rosneft’s property, but an enterprise run jointly with the Abkhaz state company 'Abkhaztop'. "A year has not yet passed since we first started, and in that time we have already sold 12 thousand tons of oil products in the country and some other products also," Bogdanchikov said. The first three filling-stations will have been opened by November, and over the next two years eight or nine more will be placed in operation. After the first three filling stations in Abkhazia are launched, Rosneft cards  will become valid. Customers possessing it join the system both in Abkhazian and Russian territories.


Answering a question asked by Apsnypress concerning the economic benefits of building the filling-station complex, Bagapsh said: "The more gas stations that appear in Abkhazia, the more gasoline is consumed, the more circulating capital there is and the more tax revenue our budget receives."

However, the most important thing expected by the Abkhazians of ”Rosneft" is that its experts will assist the country in producing its own oil. In December 2009, the Abkhaz government concluded an agreement with Rosneft on a geological study of the Abkhazian shelf in the Black Sea. The aim of the study is to search for and estimate the hydrocarbon deposits within the Gudauty sector. Commenting upon the prospects of this project Bogdanchikov said: "At the moment, planning costing a substantial sum of money is being conducted. This year’s budget amounts to 1.2 billion rubles. Seismic prospecting will be the next stage, folowed by the drilling planning stage. The drilling stage itself will begin only after that."

The total volume of investment in the Abkhaz economy by Rosneft will amount to approximately 15 billion rubles. 12 billion will be allocated for the study of the shelf, all the rest of the money will be allocated for construction of filling stations, laboratories and a petroleum storage depot. Negotiations over the preparations for the construction of a petroleum storage depot at Sukhumi airport are being conducted. " It is very difficult to raise the economy of any state without substantial investment and serious partners, especially our one",  President Bagapsh said.


Pavel Martynov, exclusively for VC