Business Development
Abkhazia seeks greater participation in the global economy. Georgia's embargo on business with Abkhazia, which is supported by the West, has impeded this effort. However, the government and the private sector are working hard to build trade and diplomatic ties directly with their neighbors and other members of the European Union. Russia is Abkhazia's main trading and investment partner and many Russian entrepreneurs and some Russian municipalities have invested in Abkhazia. The Mayor of Moscow, Yury Luzhkov, has contributed substantially to economic cooperation between Moscow and Abkhazia. Total foreign investment in Abkhazia amounts to about $50 million per year.
Abkhaz and Russian officials have announced plans to build up Abkhazia's facilities and resources for the 2014 Winter Olympics in Sochi, close to the Abkhaz border.
The European Union has allocated more than $20 million in humanitarian assistance to Abkhazia since 1997. This funding goes to support Abkhaz civil society, economic rehabilitation, aid to the indigent and confidence building measures. The single largest EU-funded project is the repair and reconstruction of the Inguri power station.
Abkhazia's forward-looking law on private investment offers tax benefits to foreign investors. More than 40 registered enterprises in the Republic of Abkhazia have foreign investment, and the nation is developing joint ventures in the mining and processing industries. There is also substantial foreign investment in the country's resorts and tourist destinations.
Abkhazia emphasizes foreign investment that promotes the process of privatization and expands investment in state-owned enterprises.
The strategic objective of the government is to improve living standards and enhance services for all citizens of Abkhazia.
