Op-ed: how will anti-Russian sanctions affect Abkhazia
Impact of anti-Russian sanctions on Abkhazia
Abkhazia recognized the LNR and the DNR, republics in eastern Ukraine. Against the background of the military conflict between Russia and Ukraine in Sukhum, they are trying to predict how the sanctions imposed against Russia will affect Abkhazia. The editor of JAMnews in Abkhazia, Inal Khashig, believes that with a certain development of events, they can even bring benefits to Abkhazia.
On February 25, in the evening, President Aslan Bzhaniya signed a decree recognizing the independence of the LPR and DPR by Abkhazia. This was a completely predictable decision, given the degree of allied relations between the republic and Russia, and the understanding that in this ever-deepening crisis between the collective West and Russia, the choice can only be unequivocal.
Now that the West has introduced a large package of restrictive measures against Russia, this will directly or indirectly affect Abkhazia as well. Although, considering that since the moment Russia recognized its independence in 2008, Abkhazia has been subject to tough political and economic sanctions imposed by the European Union at the suggestion of Georgia, at first glance, it seems like nothing will change. However, this is not the case.
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Blocked from the rest of the world, the Abkhazian economy over all these years has turned out to be oriented mainly towards the Russian market.
The official currency of the republic is the Russian ruble. More than 80% of the trade turnover falls on Russia. Local banks carry out their international settlements on payments exclusively through correspondent accounts opened with Russian banks.
The basic segment of the Abkhaz economy – resorts and tourism – exists mainly because of Russians who come to spend their vacation in Abkhazia. In addition, almost half of the revenues of the Abkhazian budget are gratuitous subsidies from Moscow.
It is natural that the sharp deterioration of the economic situation in Russia will in any case hit Abkhazia as well, at least this situation will surely affect all these segments.
However, not everything is so unambiguously bad. Every story has its pros and cons.
In a specific case, certain prospects open up for Abkhazia, which may even contribute to the growth of its economic indicators.
For example, the Russian banking sector most affected by the current sanctions will most likely use any previously unused niches for its own survival and development. Of course, they will not compensate for the losses in any way, but it may, nevertheless, suffice.
Previously, fearing sanctions from the West, large Russian banks not only did not enter Abkhazia and South Ossetia, but even avoided opening their branches in Crimea. Now there are no restraining factors for such an “expansion”.
Such complexes now seem to be devoid of any major Russian campaign. They are already under sanctions, which means that now they can openly operate on any territory that Russia recognizes, but does not perceive the West.
The current situation may help speed up the opening of the Sukhum airport, which has been inactive since the end of the Georgian-Abkhazian war of 1992-93. Now President Aslan Bzhania does not even need to create an Abkhazian carrier company from scratch. This can easily be done by Aeroflot or some other Russian carrier.
If earlier the profitability of opening the airport was called into question, amid insufficient flow of tourists, then due to the current circumstances, the situation is changing dramatically. The introduction of significant restrictions for Russians on visiting European countries is a plus for Abkhazian resorts.
In some part, they can compensate for the needs of Russians for recreation. And this means that not only the resort and tourism sector will develop rapidly, but also logistics channels will expand. Now a Russian tourist can enter Abkhazia only through the Psou border post. Its throughput capabilities are already working at the limit. And if the flow of Russian tourists increases at least by half, then the opening of the airport, more intensive traffic of passenger trains and maritime traffic will become inevitable.
However, only time will show how all this will actually happen, how much the forecasts will coincide with reality.
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