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Russia Wants Occupied Abkhazia and Tskhinvali Regions ‘Less Dependent’ on Moscow’s Aid

By Natalia Kochiashvili
Friday, March 11, 2022
The Russia-backed leaders of occupied Abkhazia and Tskhinvali Region, Bzhania and Anatoly Bibilov promptly welcomed Vladimir Putin’s decision to recognize the independence of occupied Ukrainian regions of Donetsk and Luhansk. Recall that, Tskhinvali Region had recognized the two entities even before Russia, back in 2014.

In return, on Thursday Russian-backed authority of occupied Luhansk recognized Abkhazia’s independence from Georgia. Sokhumi set up ‘diplomatic ties’ with Ukraine’s Kremlin-backed regions.

As Bzhania announced, Sokhumi also acknowledged the independence of Ukraine's Russian-occupied Donetsk and Luhansk "republics" on February 26 and took in evacuees from Donbas.

Amid the sanctions imposed on Russia because of intervention and war in Ukraine, on March 9, Russian Deputy Economy Minister Dmitry Volvach met with Bzhania in Sokhumi, promising to maintain Russia's social and economic cooperation with the area at the meeting, yet during his visit Volvach hinted that occupied territories will soon be left without Russian Aid.

“Under current circumstances, the relationship between our governments takes on new significance and importance,” Volvach said, referring to Russia's aggression in Ukraine and corresponding Western sanctions against Russia.

The Russian official thanked Bzhania for his efforts in the establishment of ‘diplomatic contacts’ with seized Donetsk on March 9. Bzhania, on his part, promised to ‘give the Russian people with every conceivable assistance’.

In the interview with Russian-owned news agency TASS Volvach said that Russia wants Abkhazia and Tskhinvali Region to be less dependent on Moscow’s finances and the goal is to reduce the dependence on Russian aid within the next three years.

“For example, the share of Russia’s co-financing in terms of wage increases for public sector employees in the republics will gradually decrease – from 85% in 2022 to 15% by 2025.”

Deputy Economy Minister claimed that as a result of Russian aid, share of regions’ budgetary income increased in Abkhazia and Tskhinvali from 41.5% to 52%, and 7% t o18%, respectively, and now it’s time for the occupied regions to attract investments and create investment-friendly environment through simplifying regulations and improving investment climate, ‘following Russian experience of guaranteeing the investors’ rights’.

“The First stage of assistance, when we can simply give money there, develop infrastructure, has already ended,” he said, adding ‘we got everything that we could get from this stage in terms of economic growth’. Volvach also noted that Moscow would assist in preparation of legal frameworks and subsidize interest on loans for select agriculture, tourism and industrial projects.

The Deputy Minister also claimed that the GDP of Abkhazia, the region of less than quarter million people, stands at $ 270 million, while Russia’s 2021 aid amounts to over $ 42.2 million.

Meanwhile, the GDP of Tskhinvali Region, with 50 000 inhabitants (unverified data), stands at $ 51.6 million, while it receives Russian aid amounting to $ 60.7 million.