Opinion: Abkhazia’s investment deal with Russia risks heavy losses

Abkhazia risks land losses to Russia

The Russian-Abkhazian investment agreement signed last week has caused widespread public outcry in Abkhazia. Not only the opposition but also local entrepreneurs, who usually prefer not to get involved in politics, claim that this agreement—which grants unprecedented benefits to large Russian businesses—is extremely unfavorable for Abkhazia.

For instance, Alkhaz Argun, CEO of Aquafon, Abkhazia’s largest company and mobile operator, slammed the agreement and the way it was signed as nothing short of a scam.

Earlier, Abkhazia’s Minister of Economy, Kristina Ozgan, signed the agreement without awaiting formal parliamentary approval.

A controversial agreement on Russian investments in Abkhazia was signed without parliamentary approval

The parliament prepared 20 amendments to the draft agreement, but the authorities insisted that it remain unchanged.

Argun warned that the agreement poses numerous risks for local businesses and the republic as a whole, and, if ratified, could lead to devastating consequences.

The businessman expressed skepticism over Abkhazia’s ability to gain any significant profit from the investment projects, which could instead result in severe losses.

“If the investor faces issues, for instance, with repaying the loan, the Russian bank will receive Abkhaz land and everything on it as payment. I wouldn’t rule out that this might be done intentionally, specifically with this aim in mind.

The investor will obtain a large loan, the bank will claim the land and all structures on it as payment, a Russian court will make a ruling, and it will be up to the Abkhaz side to enforce it and bear the financial burden…

In this scheme, I see only one party that suffers—Abkhazia,” Alkhas Argun concluded grimly.

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Argun also emphasized that Abkhazia does not need just any money or investment; it needs responsible investors. He cited his own company, Aquafon, as an example of “healthy and proper investments in the republic’s economy,” noting that since 2008, the controlling stake in Aquafon has been held by the Russian operator MegaFon.

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Abkhazia risks land losses to Russia