Moo-moo

For the first time since the soviet period, the Abkhazian Chamber of Control has decided to find out the number enterprises that are still on balance. Three-month audit has revealed that the total number of available plans or factories amounts to 24. None of them is operating. As head of the Chamber of Control, Robert Arshba stated, “the enterprises have been leased out.

Commenting on the leasing, Arshba said that “it has not always been effective. As it has turned out, huge warehouses of the soviet plants and factories are rented out at the price of a single-bedroom apartment in Sukhum/i suburbs – RUB 3-10 thousand (approx.US $40-150). Thus, the auditor’s phrase “has not always been effective sounds more than merciful.

A list of audited enterprises includes Sukhum/i garment and tobacco factories, a meat-processing plant, a chemical plant, some tea factories, located in different districts, and several enterprises that Abkhazia has inherited from the soviet system. They practically do not function according to their initial profile.

In the soviet time all these plans and factories were prosperous, they over-executed plans, were awarded with red challenge banners of winners of the soviet competitions. The Soviet Union’s huge market did not get stuck on the products’ quality and absorbed everything that the enterprises produced. The previous strength of Abkhazian plants and factories turned out into the dust after the super state had disintegrated. Possibly, it would not have happened and a part of the enterprises would have been running if their management had changed its activity in conformity with the new market’s game rules. Regrettably, it did not happen so (except for Sukhum/i wine factory and brewery).

It is noteworthy that plants, where rather substantial sums had been invested, turned out to be among neglected enterprises, inherited by Abkhazia from the soviet industry. For example, Sukhum/i dairy plant.

In 2012, RUB118 million (approx. US$4 million against RUB rate in 2012) were invested at expense of Russia’s financial assistance. The dairy plant worked only for a year after the complete overhaul, it closed, having lost a competition with the dairy products importers.

In the opinion of Adgur Ardzinba, the Minister of Economy, a lack of the local raw materials was the main problem that the plant was facing. The plant had to purchase raw materials abroad and that, naturally, increased the production prime cost.

At present, the plant, that is equipped with advanced technologies, is standing idle and its repaired premises have been rented out for warehouses.

At the end of September, Tatarstan President, Rustam Minnikhanov visited Abkhazia. He manifested particular interest in the milk plant. According to the official reports, negotiations with Tatarstan on putting the plant into operation are underway. Having taken on lease the enterprise, Tatarstan is supposed to deliver raw materials and products will be sold at the local market.

Economy Minister, Adgur Ardzinba pledged to carry out comprehensive changes after shocking results of the audit had been publicized. At the same time he says directors of the enterprises seriously oppose these changes.

Most directors have been heading the enterprises for over ten years. The managers have got used to consider these enterprises to be their property; though, officially, the plants and factories are state-owned. At some enterprises directorship is transferred from a father to a son, a son-in-law, to a brother and the state has not resisted it until recently.

These objects transference to private possession may become a way out from this situation, but the law does not allow privatizing such huge enterprises. However, each rule has exclusion. Having passed a separate law, a concrete object may be sold to a private entrepreneur.

Enterprise managers try to use a political factor to defend themselves in paper, they claim, they are sacked because they are the present opposition’s supporters.

For example, dismissal of director of the unitary enterprise “Abkhazberegozashita (Abkhaz coast protection), Maxim Kharchilava, caused a great resonance. The enterprise builds bridges and strengthens river banks.

The opposition has tied this decision with Kharchilava’s political points of view as he is a member of the oppositional Amtsakhara party.

According to Economy Minister, Adgur Ardzinba, despite the managers’ discontent, dismissals continue, “We will not allow anyone to use the state-owned property this way. If each ineffective manager claims for a political dissident’s status after he is sacked, we would hardly build a state, he said.

The opinions, expressed in the article, reproduce the author’s terminology and views and not necessarily reflect the position of the editorial staff