Kavkaz Files ISSN 2975-0474 Volume Issue 18 Issue 4
Author: Giuliano Bifolchi
The recent business mission conducted by Stavropol-based companies to Abkhazia signified a noteworthy advancement with extensive ramifications for both Sukhum and Pyatigorsk. This exchange demonstrates considerable progress in economic collaboration among the parties involved and highlights a wider approach adopted by Pyatigorsk to actively participate in promoting foreign business ventures for the Russian Federation.
To grasp the full geopolitical context surrounding the Abkhazia-Stavropol business cooperation, it is imperative to take into consideration the recent Stavropol business mission, and furthermore, to discern the underlying principles of Russia’s policy in the Caucasus.
This report seeks to dissect this multifaceted landscape in order to provide a comprehensive understanding of the intricate dynamics at play.
Stavropol SMEs’ Business Mission to Abkhazia
On September 13th, 2023, the head of the Chamber of Commerce and Industry of Abkhazia, Tamila Mertskhulava, met with representatives of small and medium enterprises (SMEs) of the Stavropol Territory, who arrived in Abkhazia on a two-day working visit.
Fond podderzhki predprinimatel’stva v Stavropol’skom krae (Fund to Support Entrepreneurship in the Stavropol territory) and the Palat biznesa Severnogo Kavkaza (Business Chamber of the North Caucasus) supported the business mission in Abkhazia.
Tamila Mertskhulava emphasised that Stavropol SMEs’ business mission confirmed good neighbourly and business relations between Abkhazia and the regions of the Russian Federation. In this regard, the main Abkhaz goal is to attract entrepreneurs and investors in the local market. Indeed, in the recent years the state policy regarding business cooperation has changed and opened the country to foreign investors and companies.
In the two-days visit to Abkhazia, Stavropol entrepreneurs held several B2B negotiations with Abkhaz colleagues, visited representatives of specialised enterprises, held round tables and meetings with the business community.
The Stavropol delegation evaluated over 20 prospective organisations for future collaborative ventures, from which export agreements and mutual undertakings will be established.
Minister of Economic Development of the Stavropol Territory Denis Polyubin accentuated Pyatigorsk’s commitment in supporting infrastructure services for export-oriented enterprises and searching foreign partners to improve local companies’ cooperation and joint projects.
In 2022, the Stavropol Territory exported goods to Abkhazia totalling more than $5 million. Products of the agro-industrial complex, food and processing industries accounted for the main share of Stavropol exports. The business mission carried out last year brought three concluded export contracts to the regional economy.
After the Russo-Georgian War in August 2008, the Republic of Abkhazia became independent thanks to Moscow’s military and political support. Although the Georgian government considers Abkhazia as part of its territory under the Russian occupation, Sukhum has always underlined its independence since the Abkhaz-Georgian War in 1992-1993.
Because of the semi-international isolation, considering that only a few countries recognise the independence of Abkhazia, Sukhum has become heavily dependent on the Russian Federation in several sectors, especially in economy and business.
As Abkhaz Deputy Foreign Affairs Minister, Irakli Tuzhba, highlighted during the meeting occurred in Sukhum last August 2023 with SpecialEurasia, Russia is Abkhazia’s strategic partner which has guaranteed national stability, economic development and military security.
Since the beginning of the Ukraine conflict, after several Kyiv’s official has exhorted Tbilisi to open a ‘second front’ against Russia by military attacking the Abkhaz territory, the situation and stability of the Republic of Abkhazia has become strategically important for Moscow.
Therefore, in the last year, the Kremlin has several times confirmed its cooperation with Sukhum and Abkhazia’s importance in the Caucasian geopolitical chessboard. For instance, in December 2022, Vyacheslav Volodin, Speaker of the Lower House of the Russian Parliament, headed a delegation to pay an official visit to Sukhum to remark Moscow’s commitment in supporting Abkhaz sovereign territory and the positive trend of Russo-Abkhaz relations.
Recently, the decision to modernise and open the Sukhum airport thanks to Russian investments confirmed Moscow’s interests and allegiance towards Abkhazia and represents an opportunity for Sukhum to attract more investors and tourists from the Russian Federation.
Looking at the Stavropol Territory, this administrative region of the Russian Federation has an important geopolitical role in the South of Russia. Indeed, this region is part of the North Caucasus Federal District and occupies a central position in the south of Russia between the Black and Caspian seas.
As Stavropol Governor Vladimir Vladimirov highlighted to the local media, the region is participating in the task’s implementation set by the President of the Russian Federation to expand promising foreign economic relations of Russia.
In the past five years, the region’s trade turnover with other countries has increased 1.7 times and amounted to $2.7 billion. Last year alone, despite sanctions, the region exported 21% more products than in 2021.
Therefore, looking at the Caucasus region, the Stavropol Territory might become strategic in strengthening relations with Abkhazia and supporting Sukhum in its economic development by investing in local projects and promoting joint venture between Stavropol and Abkhaz SMEs.
The inception of the Ukraine conflict prompted speculation that Russia’s engagement in Caucasian affairs might wane. However, owing to entities like Stavropol within the North Caucasus, the Kremlin’s commitment to advancing its strategic interests in the region remains steadfast.
The recent Stavropol business mission to Abkhazia serves as a tangible affirmation of the pivotal role North Caucasian subjects can play in fostering cooperation and fortifying ties with other Caucasian republics.
This initiative effectively addressed Sukhum’s pressing need to bolster its national economy and attract foreign investments, aligning with its priorities in trade and entrepreneurship. Concurrently, it underscored the burgeoning influence wielded by Stavropol in advancing Russian economic interests both proximately and internationally.
This was exemplified by the first Caucasian Investment Exhibition organised in May 2023 in Mineralnye Vody and other local events, strategically designed to forge connections between Stavropol, the Middle East, and Central Asia, such as the the forum Severnyj Kavkaz v menjajushhemsja mire (The North Caucasus in a Changing World) organised in the city of Zheleznovodsk.
In this context, we might expect an increased level of involvement and activity from Stavropol Territory, with Pyatigorsk taking a leading role in the facilitation of B2B meetings and the creation of fresh business prospects in the Caucasus and in the Middle East.
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