Abkhazian Economic Indicators Discussed at Cabinet Meeting

SUKHUM / AQW'A — In a recent gathering of the Cabinet of Ministers of Abkhazia, a key topic of discussion was the Indicative Plan for the Socio-Economic Development of the Republic for 2024. An additional significant decision involved the elevation of the maximum permissible prices for bread.

During this assembly, the Abkhazian Cabinet of Ministers engaged with ten primary and eleven supplementary agenda items.

One of the significant approvals during the meeting was for the Indicative Plan for Socio-Economic Development for the Republic of Abkhazia for the year 2024. Kristina Ozgan, Deputy Prime Minister and Minister of Economy, presented the document and shared insights from her report:

"The projected total production volume of goods, services, and work for 2024 is anticipated to be around 149.7 billion rubles (~ $1.6 billion). This projection includes 11 billion rubles (~ $121 million) allocated for agriculture, and foreign economic activity is expected to reach 46.3 billion rubles (~ $509 million). Compared to the actual figures for 2022, this represents a 34% growth rate and an 18% growth relative to the planned figures for 2023... Trade accounts for the largest share of the total volume (59%), followed by industry (10%), and resorts and tourism (11%)... The credit-financial sector is projected to have the highest average salary at 36.9 thousand rubles (~ $405) per month. This is followed by trade - 26 thousand rubles (~ $286), tourism - 24.5 thousand rubles (~ $269), construction and energy - 22 thousand rubles (~ $241), industry - 20 thousand rubles (~ $219), and communications - 18 thousand rubles (~ $198). The lowest average salary levels are projected to be in transportation at 13.9 thousand rubles (~ $150) and the scientific-production sphere at 14.6 thousand rubles (~ $160)."

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Ozgan further highlighted the disparities in the total volume of goods, work, and services production between the capital of Abkhazia and its districts. These disparities are significantly more pronounced than their population differences. In terms of their contribution to the republic's volume in the forthcoming Indicative Plan, she indicated:

"The city of Sukhum contributes 56.3%, Gagra District - 27%, Gudauta District - 5.5%, Sukhum District - 4.9%, Gulripsh District - 2.8%, Ochamchira District - 2.9%, Gal District - 0.5%, and Tquarchal District - 0.1%."

Sukhum, the capital of Abkhazia, generates over half of the republic's total volume of production, while Tquarchal District contributes a mere thousandth. This significant disparity was highlighted and deemed in urgent need of rectification.

Concluding her report, Deputy Prime Minister Ozgan noted that the proposed plan does not account for social sector services, such as healthcare and education, which impacts salary indicators. She advised the heads of pertinent ministries to maintain vigilant oversight, especially considering certain healthcare institutions that render paid services and state medical institutions that operate on a de facto financial basis.

During the discourse on this report, the issue of motor vehicle service drew significant attention, particularly regarding unlicensed participants, tax evasion, and operations within the informal economy. Prime Minister Alexander Ankvab, who presided over the meeting, addressed the Minister of Economy saying, "This is a missed opportunity. If we're witnessing salaries of five thousand rubles (~ $55) in the forestry sector, do we actually believe this? We need to address this situation. There's considerable passenger and freight flow, evident at the Psou border where we visited yesterday, and where the president convened a meeting. It's not a lack of passengers that's the issue; it's a lack of proper accounting."

Sukhum, the capital of Abkhazia, generates over half of the republic's total volume of production.

A new resolution titled "On State Regulation of Prices for Bread and Wheat Flour" was adopted by the Cabinet of Ministers, permitting manufacturers to hike bread prices. Revised maximum wholesale and retail prices were established for loaf bread made from high and second-grade wheat flour. The cost ceiling for 1 kg of bread from high-grade flour has been set at 50 rubles (~ $0.55), and for 0.6 kg, no more than 30 rubles (~ $0.33). Bread from second-grade flour is capped at 47 rubles (~ $0.52) for 1 kg and 28 rubles (~ $0.31) for 0.6 kg. Furthermore, a maximum wholesale trade markup for wheat flour, relative to its custom cost upon import into Abkhazian territory, has been fixed at 15%.

The Consultation Plan project for 2024-2025 between the Ministry of Foreign Affairs of Abkhazia and the Russian Federation received approval. The plan outlines various topics for consultation, including current issues of bilateral relations, the evolution of the bilateral legal framework, informational support for the foreign policy activities of both the Republic of Abkhazia and the Russian Federation, the organisation of joint scientific-practical seminars, conferences, roundtables, and aid in conducting cultural and sporting events.

Beslan Kubrava, Chairman of the State Property Committee, brought a number of issues to the table. Among these was the inclusion of buildings and facilities on Beigua Street, 16, in Sukhum, in the list of assets designated for privatisation. The criteria for such privatisations were also ratified, emphasising a competitive process.

Beslan Kubrava

Significantly, an unfinished administrative building from the Soviet era in the urban settlement of Gulrypsh has now been transferred to the district at the request of the Gulrypsh District Administration. An amendment was made to the RA Government Resolution of March 1, 2018, regarding the partial privatisation of the property complex of the "Gagripsh" sanatorium (upper part). Under the purchase and sale agreement, the owner was required to invest 100 million rubles in the property and restore it within a three-year period. However, the contract terms were not met, leading to court proceedings. The owner is now requesting an extension of the restoration period by another three years. The property, spanning 7100 square metres, is scheduled for operation in 2026.

During the meeting, Kubrava presented an overview of the objects privatised over the past three years, revealing that "From July 2020 to the present, 15 significant objects have been privatised by the decision of the Cabinet of Ministers, averaging five objects per year, and from 2014 to 2020 - 54 major objects." Among the 15 recently privatised assets, notable ones include the "Caucasus" sanatorium in Gagra, the "Abkhazia" sanatorium in New Athos, the "Apsny" hotel in Gudauta, and a fishing farm in Sukhum. The remaining privatised properties comprise residential buildings and other facilities such as hangars.