Abkhazia opposes the investment agreement with Russia

The Kremlin is once again raising the issue of benefits and preferences for large Russian capital in Abkhazia. The Abkhaz opposition, in turn, sees this as interference in the republic’s internal affairs.

In response, opposition groups issued a joint statement, prompted by an interview given by Russian Deputy Minister of Economic Development Dmitry Volvach to TASS. In the interview, Volvach again spoke about an investment agreement between Russia and Abkhazia, which he said should protect investors’ rights and capital.

The agreement in question is the same one whose attempted ratification in November 2024 led to a coup in Abkhazia and the early resignation of then-president Aslan Bzhania.

Local business owners, opposition figures, and civil society representatives strongly oppose the agreement, viewing it as exploitative and potentially dangerous not only for Abkhaz businesses but for Abkhazia as a whole.

• The agreement stipulates that Russian investors will be exempt from customs duties on imported construction materials and equipment for eight years, as well as from property tax and corporate income tax.
• The value-added tax (VAT) for investors will be just five percent—half the usual rate.
• The Abkhaz government is required to grant investors covered by the agreement and listed in a special registry priority access to energy supplies and connections to utility and infrastructure networks.
• Investors are also entitled to use land allocated by the Abkhaz government as collateral for bank loans. If the investor defaults, the bank may seize the land.

“We consider the statements regarding an investment agreement between the Republic of Abkhazia and the Russian Federation premature and hasty. Let us remind you that just a few months ago, this issue triggered a severe socio-political crisis in our country,” the opposition said in a joint statement.

They also noted that the draft agreement had previously received a negative assessment from Sergey Kiriyenko, the first deputy head of the Russian presidential administration, who now oversees the Kremlin’s Abkhazia policy.

The statement says that in the current situation, where the new Abkhaz government has yet to present a national development program, such initiatives appear too hasty and do not reflect the actual state of affairs in the republic:

“Attempts to once again raise the issue of benefits and privileges for large Russian capital — in the absence of systemic guarantees for all investors — are perceived as interference in the internal affairs of a sovereign state. This could lead to a new wave of destabilization and tension in Abkhaz society.”

The authors of the statement call on Russian partners not to rush the process and to build Abkhaz-Russian relations on the basis of mutual respect, equality, and consideration of the interests of all citizens, not just a narrow circle of major Russian business representatives.