For Abkhazia and South Ossetia, security with Russia equals economic problems

Russia’s brutal war on Ukraine expands Moscow’s “separatist empire”. But it also puts enormous pressure on the occupied Georgian territories of Abkhazia and South Ossetia. Prospects for economic development are bleak, while dependence on Moscow will only grow, leading to Russian demands for the sale of land and infrastructure in Abkhazia.

When a new Russian invasion against Ukraine began at the end of February, following the decision to recognize the independence of two separatist entities in Donbass, the prospects for Abkhazia and South Ossetia seemed favorable. The invasion plan was supposed to be a well-prepared campaign that would end in a devastating blow to Ukraine. Moreover, the expansion of the Russian separatist empire was also seen in Sukhumi and Tskhinvali as a positive sign. Russia was building a new order and the chances that Abkhazia and South Ossetia would gain greater recognition, for a while, seemed more realistic.

Despite these high hopes, the opposite happened. The Russian moves have proven that Moscow has no respect for separatist entities except to use them for military plans. Arguments, believed by many in the West, that the Russian movements in Georgia in 2008 and Ukraine in 2014 were (at least partially) motivated by fears that Russian-speakers would be oppressed have proven false. Moreover, claims that NATO was an instigator of the rivalry with Russia by drawing Georgia and Ukraine into the alliance have also been proven to be inaccurate.

The 2022 invasion showed that there was a different mentality that dominated the Russian elite when making a fatal decision. In Russia, the imperial vision has never faded. Shelved for a while after the Soviet collapse, it re-emerged with new force in the 2010s. It is now clear that the second war with Ukraine is nothing but a attempt to build a territorial empire.

Russia faced unexpected resistance. And not just of the Ukrainian people, but of the liberal order. Weakened and denigrated by many as a historical relic no longer applicable to the realities of the 2020s, the order has once again shown its vitality and ability to reemerge as a concept still dear to many. And this is where the hopes of Abkhazia and South Ossetia seem unrealistic. Russia’s sprawling separatist empire is increasingly difficult to govern. Too many actors and too many needs, both military and economic, put Moscow under financial pressure.

As of February 2022, there are simply too many Russian-backed separatist entities. This reduces the chances of Abkhazia and South Ossetia. Few, if any, particularly amid global condemnation of Russia, would support recognition of Abkhazia and South Ossetia, as well as the two entities of Donbass.

But arguably the biggest problem for the occupied territories of Georgia is the economic situation. Even before the invasion, the Covid-19 pandemic undermined the fragile balance on which Abkhazia and South Ossetia depended. The global recession coupled with a particularly poorly controlled pandemic in Russia has hit the separatist territories. Abkhazian and South Ossetian leaders often had difficulty extracting money from their superiors in the Kremlin. Russian politicians were also increasingly reluctant to commit funds to the ever-growing predatory elites in breakaway territories.

With the second invasion of Ukraine, Russia is now subject to an unprecedented series of Western sanctions. Its economy is expected to collapse by the end of the year, if not within the next few months. The apparent stability of the ruble is quite illusory.

Dependent on Russia, the economic situations in Abkhazia and South Ossetia will deteriorate. Russian tourists could visit Abkhazia this summer in far greater numbers, but whatever financial aid Sokhoumi receives will depend on meeting specific Russian demands. And these are high demands by Abkhazian standards. Moscow wants critical land and infrastructure in the region to be legally available for Russian purchase. Allowing it is tantamount to causing Abkhazia to lose the minimal semblance of autonomy it still enjoys vis-à-vis Moscow.

Moscow has already indicated that it would be less willing to finance Abkhazia and South Ossetia. In early March, in an interview with the state-affiliated news agency TASS, Russian Deputy Economy Minister Dmitry Volvach argued that it is time for the two regions to become more independent of aid from Moscow.

The situation with South Ossetia is different. It has a much smaller range of what it can offer Russia. In fact, its geographical position is the only asset of the region. From this came, in stark contrast to Abkhazia, Tskhinvali’s occasional attempts to seek unification with Russia.

So the long-term picture looks less promising. The two separatist regions which hope for economic development will be strongly impacted by the crisis unfolding in Russia. Perhaps in Abkhazia this will again lead to talks on some kind of economic rapprochement with Tbilisi. Abkhazian leader Aslan Bzhania has long argued that trade relations and some kind of political dialogue with Tbilisi would be helpful. The opposition opposes it by constantly threatening unrest and violence.

The fate of the two breakaway regions is closely tied to Russia. This is seen as a boon in terms of security, but also as a huge handicap when it comes to the economic stability of Abkhazia and South Ossetia. The ramifications will be far-reaching. Corruption and increasingly dilapidated infrastructure will hamper the development of both territories. In a way, for Tbilisi, this is an opportunity. In the longer term, some kind of talks could take place with Sokhoumi. Depending on Georgia’s internal economic development, Tbilisi might become more attractive for ordinary Abkhazians and Ossetians. There is already some experience in this regard. Before 2020 and especially following the pandemic, Georgian medical services attracted many residents from both territories. Likewise, the education sector with a wide range of state-sponsored incentives has also attracted a large pool of prospective students.

Author’s Note: First published in caucasian watch