Consumer Crisis in the Tskhinvali Region: Food for Thought
Valeri Chechelashvili, Senior Fellow at Rondeli Foundation
On February 19, 2020, the occupied Tskhinvali region discovered itself at the verge of a consumer crisis with the most painful components being manifested in providing the population with food and medicine. This fact is not surprising. The region’s economy is in a deep crisis, completely dependent on the Russian Federation. With the Russian ruble in circulation, a financial resource flowing in from Moscow is returning back to Russia as payment for critical import. Now it turns out that there are problems with the transfer of goods on the "South Ossetian" segment of the Georgian-Russian border.
In addition to bureaucracy and corruption, well-known characterizing features of the Russian public service; in particular, the customs administration, there are additional reasons that create problems for the transfer of goods from the Russian Federation to occupied South Ossetia, Georgia. For instance, the region’s market is very small and it is necessary to combine goods of different categories in one load which creates procedural problems of customs clearance. This argument is valid for the trade of the Russian Federation with occupied Abkhazia as well.
However, the general situation that has developed in regional trade after the establishing of the Eurasian Union is more interesting for analysis. The fact is that with the signing of the Eurasian Union documents; in particular, its Customs Code, the situation in regional trade has radically changed.
The Agreement on the Eurasian Economic Union Customs Code was signed in Moscow on April 11, 2017. The Code is very serious document consisting of 1,169 pages, two annexes and exhaustingly covering the whole field of customs matters and regulating all spheres of the signatory countries’ customs activities. It contains references to the Eurasian Economic Commission as an institution entrusted to rule the process of the implementation of the Code’s provisions. It is worth mentioning that according to the Eurasian Economic Union’s regulations, the Commission is a supranational institution responsible for many areas of international cooperation and equipped with an impressive variety of instruments. The Commission has many areas of responsibility such as macroeconomic, competition and energy policies, etc. Among others, and this fact is of particular interest for our case, the establishment of trade regimes with anу third countries belongs to the Commission’s areas of activities.
This means that the foreign trade of the Russian Federation with occupied "South Ossetia" is in fact an integral component of a broader subject - trade of the Eurasian Union with Georgia. This reality has already affected the volume of our trade. For example, this year Georgia’s exports to Armenia will suffer from the decisions of the Eurasian Union; in particular, as a result of restrictions on the re-export of vehicles. It turns out that the bilateral Free Trade Agreement between Georgia and Armenia does not work in this part.
But if we get back to the trade relations of the Russian Federation with the occupied Tskhinvali region, the documents of the Eurasian Union (having in mind its responsibility and legal competence to establish a foreign trade regime with the third countries) create additional space for Georgia for diplomatic maneuvering. Together with Russia, members of the Eurasian Union are four Georgia-friendly states: Belarus, Armenia, Kazakhstan and Kyrgyzstan. It would be quite expedient to initiate consultations with our partners in order to bring to their attention the following messages:
- Russia's trade with the occupied Tskhinvali region is in fact foreign trade of the Eurasian Union with Georgia;
- Trade of the Eurasian Union with the occupied Tskhinvali region, as an integral part of Georgia, is illegal without the appropriate consent of Georgia and is incompatible with the friendly nature of relations between Georgia and the four member states of the Eurasian Union;
- In the case that the Russian Federation annexes the already occupied Tskhinvali region, the Eurasian Union will face the responsibility for the consequences of such an act at least in the field of trade relations.
In addition to bilateral meetings with the member states of the Eurasian Union, these theses could also become the topic for consultations of the representative of the Georgian Government (for example, the State Minister for Reconciliation and Civic Equality) with the Chairman of the Board of the Eurasian Economic Commission, Mikhail Myasnikovich. He often travels from Moscow to the capitals of the member states. Such a meeting could take place either in his native Minsk or in Yerevan ...
It is clear that the arguments provided in this article fully apply to the trade relations of the Eurasian Union with Abkhazia, Georgia as well as with Crimea, Ukraine, some districts of the Donetsk and Luhansk regions of Ukraine, Transnistria, Moldova, etc. This creates a capacity for the states that have signed Association Agreements with the European Union (including the Deep and Comprehensive Free Trade Area) to elaborate a common strategy vis-à-vis the Eurasian Union.
As a general conclusion, it is worth re-emphasizing that the existing situation is one more vivid demonstration of the well-known fact that the economy of the Tskhinvali region cannot keep sustainability when isolated from the Georgian market. Its perspective lies in the development of transit and tourism - two priority sectors of the Georgian economy. This compatibility is the recipe for the well-being of the Tskhinvali region’s population. There is no such interoperability with the Russian Federation, especially under occupation conditions, for the simple reason that the region captured by Russian aggressors has become a dead-end, with all of the respective consequences. Therefore, the current crisis in the Tskhinvali region is not the last one.
- In line for the candidate status, Georgia will get a European perspective. What are we worried about?
- The War and Georgia
- Ukraine will soon embark on a path of practical integration into the European Union. What about Georgia?
- NATO’s possible expansion in Northern Europe and its significance for Georgia and Ukraine
- Abkhazia in 2021: Energy Crisis, New “Minister” and Political Controversy
- What are the Prospects of the Eastern Partnership Summit Set on 15 December?
- What Lies Behind the Growing Cooperation of the Georgian and Hungarian Governments
- Vaccination: “To Be, or not to Be”…
- Can Georgia use China to balance Russia?
- Belarus’ exit from the Eastern Partnership and what to expect next
- Pacta Sunt Servanda: Agreements must be kept
- Associated Trio, What is Next?
- What Should Georgia Expect from the NATO Summit
- The Issue of Abkhazia and the Tskhinvali Region in the Context of NATO and European Union Membership
- USA, Liberal International Order, Challenges of 2021, and Georgia
- Georgia's transit opportunities, novelties and challenges against the backdrop of the pandemic
- Georgia’s Application for European Union Membership
- A New Dawn for Transatlantic Relations under Biden’s Presidency: What Are the Hopes for Georgia?
- COVID 19 Pandemic Economic Crisis and Reducing the Instability of Georgia’s National Currency
- Escalation of the Karabakh Conflict: Threats and Challenges for Georgia
- Georgia’s European Way During the Period of Pandemic Deglobalization
- The Pragmatism and Idealism of the Georgian-American Partnership
- Independence of Georgia and the Historic Responsibility of Our Generation
- Complications Caused by the Coronavirus in Turkey and Their Influence on Georgia
- “Elections” in Abkhazia: New “President’s” Revanche and Challenges
- Georgians Fighting the Same Battle 99 Years Later
- Georgian Defense – Political Paradox and the Vicious Circle of Not Having a System
- Why It Matters: Georgia’s 'Troll Scandal' Explained
- What Will the New Dialogue Format with Russia Bring for Georgia?
- On the “Russian Culture Center” in Georgia
- Whither Economic Policy?
- Massive Cyberattacks On Georgia Calls For Defense And Resilience
- What do we know about the meeting of the Foreign Ministers of the Russian Federation and Georgia?
- What is the Connection between NATO and Reclaiming Abkhazia?
- Georgia's Problems are not Addressed at G7 Meetings: Who is to Blame?
- Vladimir Putin’s Main Messages in his Interview with the Financial Times
- Dugin has Come Out as a Supporter of Georgia – How Did This Happen?
- The Outcome of the European Parliament Elections - What Does it Mean for Georgia?
- Deterring Russia
- Why Local Elections of March 31, 2019 in Turkey are Important?
- Does the Principle of Strategic Partnership Work in Ukraine-Georgia Relations?
- A New Chance for Circular Labor Migration between Georgia and the EU
- Georgia’s Trade with Electricity: The Influence of Bitcoin
- Georgia’s External Trade: How to Strengthen Positive Trends
- The Risk of the Renewal of the Karabakh Conflict after the Velvet Revolution in Armenia
- Why It Is Necessary to Know the Day the Russo-Georgian War of 2008 Started
- Georgia’s Position in the Westernization Index 2018
- Why Did the Results of the G7 Summit in Charlevoix not Meet Our Expectations?
- The Ben Hodges Model – a Real Way for Georgia’s Membership in NATO
- Why did the Foreign Ministers of G7 not remember Georgia during their 23 April 2018 Toronto Meeting?
- Georgia and the American Strategy
- Putin’s Pre-Election Economic Promises: Myth and Reality
- Trade of Electricity: Successes of 2016, Reality of 2017 and Future Prospects– the Impact of Bitcoin (Part Two)
- Let Geneva Stay the Way it is
- Trade of Electricity: Successes of 2016, Reality of 2017 and Future Prospects – the Impact of Bitcoin (Part One)
- Kremlin New Appointments and the Occupied Regions of Georgia
- Geopolitical Vision of the Russian Opposition
- Dangers Originating from Russia and Georgia’s Security System
- Eurasian Custom Union and problems of Russian – Georgian FTA
- What Awaits the People of Gali?
- Disrupt and Distract: Russia’s Methodology of Dealing with the West
- Trojan Horse Model IL- 76 or Why Would Russia Want to Fight Georgia’s Forest Fires
- Russian Diplomats in Georgia – who are they, how many of them are there and what are they up to
- Is it Acceptable for Georgia to Declare Neutrality?
- Georgia’s European Perspective in the Context of EU’s Future Evolution
- Brexit Negotiations between the European Union and the United Kingdom have been re-launched: What will be their Influence on Georgia?
- Kremlin’s Policy in the Occupied Regions of Georgia Moves to a New Stage
- Turkey’s Domestic and Foreign Policy in the Context of Regional Security
- Post-Soviet States – Struggle for the Legitimation of Power
- Current Foreign Policy of Georgia: How Effective is it in Dealing with the Existing Challenges?
- Military Resilience - a Needed Factor for NATO-Partners
- Observations on the Agreement Reached with Gazprom
- New Russian Weaponry in the Caucasus and Its Impact on Georgia’s NATO Aspiration