Abkhazia Projects

The Republic of Abkhazia needs investment to develop economically.  I am hearing that academics, journalists and foreign policy experts recognize that there shouldbe a dialogue with Abkhazia and that business and political ties need to be fostered.  Without this Abkhazia, remains isolated and this is does not promote peace, prosperity and stability in the region.  There is no question that Russia and Russian investors recognize what is obvious to me:  Abkhazia is ripe for development.  However, if the only outside investors are Russian, Abkhazia will not develop as quickly.  There needs to be money from a larger universe of investors and the Abkhaz authorities recognize this.

I see a number of great opportunities in Abkhazia.  A large, international infrastructure investment group contacted me last year.  They pointed out that the airport in Sukhum has an excellent geographic location and with the longest runway in the Caucasus it would be ideal for an international "hub and spoke" airport with flights on to Central Asia, the Persian Gulf and Russia.  

The port in Sukhum needs to be redeveloped also.  Currently, there are only Turkish merchant vessels docking there.  However, as Abkhazia grows ( reportedly the economy nearly doubled in 2009), there will be more trade and the small, out-dated facility needs to be rebuilt.

Abkhazia sits just across the border from the site of the 2014 Winter Olympics in Sochi, Russia.  Sochi will also host Formula 1 Racing starting in 2014 and World Cup football matches will be played there in 2018.  Sochi will be an international destination because of this and because of the appeal to beach-goers and skiers.  Because of its proximity to Sochi and the large number of Russian tourists who view it as the a subtropical vacation paradise, Abkhazia needs many hotels to replace the aged Soviet built structure on its beaches.   One of the most intriguing locations is Pitsunda, a few miles from Gagra.  The Soviet-era resort there sits on about 82 acres of beachfront property and with nearly 3,000 rooms is the largest resort in the country.  Views from the property include not only the beaches, but the spectacular snow-covered (even in hot summer) Caucasus Mountains.  

Abkhazia is also considering allowing Russian citizens the right to buy apartments.  When that happens, a lot of people will view it as an attractive place to own a vacation home.  There are good locations available to buy and build.

In the border zone, there are great locations available to build hotels.  Russia is planning to rebuild the border crossing to accommodate more cross border traffic and trade.  This will  make these locations that are only a few kilometers for the Olympic Village and the Formula ! course very attractive.

The mountains are a big draw for summertime tourism, but the winter potential of the Caucasus is even greater with skiing.  At this moment, there are no ski resorts in Abkhazia.  However, the mountains reach from the sea to altitudes of over 13,000 feet.  There are several potential ski resort locations close to the border with Russia and further down the coast.

Abkhazia shares the hydroelectric power station at Inguri with Georgia.  This provides the electricity for the country and about 40% of Georgia's electricity.  There is significant untapped potential in Abkhazia's rivers.  The Russian oil company, Rosneft,which recently sold a state to BP, is working on a site on Abkhazia's coastal shelft that is supposed to be significant.  The impact to Abkhazia s unknown, but probably significant.

This is only a small sample of the projects in the Republic of Abkhazia.

Abkhazia- Sochi

Over the last few days there has been an unusually strong storm in the region.  Typically winters are mild along the Russian Riviera and on Abkhazia's coast.  However, several days ago a Zanzibar flagged, Turkish owned ship broke apart off Sochi's beaches.  Last night an unusually substantial snowfall blanketed Abkhazia's coastal lowlands from Novy Afon to near Gagra.  Today was warmer and the snow will soon be gone,

Border Crossing

I have heard from several sources that the border crossing between Russia and Abkhazia will be rebuilt in the next several years.  This is welcome news to me and will be to the millions of tourists who are and will be crossing to enjoy Abkhazia's mountains and beaches.  The existing border crossing is swamped during the tourist season with waits of several hours for the tour buses and pedestrians crossing.  Last year, the passenger train between Adler, Russia and Gagra, Abkhazia reopened for service twice a day.  Ferry service will also ease the congestion.  But with more tourists coming to Abkhazia's, the improvements are necessary.

Sochi

The progress at the Olympic Village in Sochi has been very rapid.  The Village is near the beach, but a high speed rail is being built to connect it to the site of the Alpine events in Krasnaya Polyana.  When completed, it will take 25 minutes to travel between the two locations.  Krasnaya Polyana is also being constructed rapidly.  The entire valley is the site of many construction projects related to the Winter Olympics and tourism.  It is clear that Krasnaya Polyana will soon be a world class destination for winter sports enthusiasts.

Also, around the Olympic Village, Formula 1 Racing will be held starting in the summer of 2014.  At the same site, the Russians are building a new football stadium to accommodate the World Cup matches that will be held in Sochi.  There is a tremendous amount of activity and clearly the Russian government's efforts to bring major sporting events to Russia is spurring a lot of growth and development.

The Olympic Village is only a few kilometers from the border with Abkhazia.  As Tijuana and the beach zone south has developed due to its proximity to the American border, it is easy to foresee a similar pattern in Abkhazia,especially with its spectacular beauty.  It is very close to Sochi, which draws millions of Russian beach tourists and will soon host the Winter Olympics, Formula 1 Racing and World Cup Football.  

Media Attention

I recently was interviewed by a journalist who reports on the Caucasus.  The article about me and development in Abkhazia is to appear in a prestigious American magazine.  Yesterday I received another interview request and it appears there is growing international interest from journalists as well as investors.

Inside Abkhazia, I was interviewed on national television.  The program drew enough attention that it was aired several times.  Abkhazians are very interested in the new "languages" of finance and development.  Much of this is new information to them, but they can see the value in learning and integrating. I am to be interviewed again when I return next week to Abkhazia.

What exactly does this mean?  It is intriguing on two fronts.  First, I am finding journalistic interest in Abkhazia's potential is high.  Second, Abkhazia and the Abkhaz are clearly interested in the possibilities of development and how risk is assessed, managed and what forms investment may take.  The leaderships knows it has tremendous natural assets to leverage for the economic growth that will lift the country from the poverty many needlessly suffer in.