The Rouble Crisis in Abkhazia's Bazaar
Dusty boxes of preservatives, tea and Russian-imported cigarettes can be found next to crumbling walls sprinkled with bullet holes. Under the brilliant sunshine above the Sukhumi market, women sell carrots, tomatoes and potatoes as they wipe the sweat off their foreheads. Merchants from Armenia, Syria, Russia, and Turkey, among others, all gather in the Sukhumi bazaar. However the ruble has depreciated by about 43 percent against the dollar in the past 12 months, the worst performance globally, according to Bloomberg data.
In November 2014, Russia’s Vladimir Putin signed a treaty with of the de facto president of Georgia's breakaway region of Abkhazia, Raul Khajimba, to strengthen security ties and provide additional economic support.
Putin promised subsidies worth more than 270 million USD over the next three years.
Food prices in the bazaars of Abkhazia continue to rise. People have responded to the ruble’s rapid decline by turning their savings into more stable currencies or consumer goods.
Abkhazia must import staples like grain, oil and other essential commodities. With the border to the rest of Georgia closed, the de facto republic is completely reliant on aid and subsidies from Moscow.
A women struggles to make a daily wage in the Sukhumi Bazaar. The majority of bazaar merchants are women who are supporting their family's livelihoods.
Some economists argue that locally-produced items in the bazaar should become more competitive, as a result of the currency devaluation.
The economic situation in Russia is unlikely to rebound oil prices remain low, and the initial shock has turned into long term insecurity.
Abkhaz media outlets report that food prices are up to 20 percent higher in the territory than in neighboring Russia; alternatives to Russian products are basically limited to goods imported from Turkey.
Sources say that cheese, meat, sugar, cereals and vegetables have all seen some inflation.
“We have seen a flurry of activity in the markets and in the shops as people try to get rid of their ruble savings in order to preserve their purchasing power,” Beslan Baratelia, chairman of the National Bank of Abkhazia, told IWPR.
Quote from: https://iwpr.net/global-voices/abkhazia-hit-russian-crisis
Smoked Fish in the Bazaar of Gagra. The quarter-mile-long bazaar sells everything from fresh herbs to fish and wine.
A young man at the bazaar expressed the contrast, “Here in Abkhazia, you have Russian money and Russian system. In Georgia, they have USD and GEL. The difference in every part of life is striking.”
The only source of optimism for Abkhazia is that the hard economic times could prompt an increase in tourism for Abkhazia: the attractive black sea coastline could attract a number of Russian tourists, who otherwise would be inclined to vacation in Europe
A women sits in the Sukhumi Bazaar after a long day of work.
For now, businesses will have to wait out the currency crisis.