Christmas Summit, Krasnodar

Friday, December 10, 2010, I spoke at the Christmas Summit in Krasnodar.  The conference was sponsored by VTB Development and Delovaya Gazeta Yug, among others.  The main theme of the conference was on the results and trends in real estate development in Krasnodar Region during 2010.  I spoke to the attendees about the various methods of infrastructure finance in the United States and how that might be applied in Russia to address infrastructure needs in need developments and to solve the issue of urban blight in Krasnodar and other cities.  

Attendees at the conference included local officials, developers, bankers and journalists.  A video recording was made, also.  The master of ceremonies, Pavel Repin, gave awards to developers from the Krasnodar and Rostov Regions for quality of development in commercial and residential projects

Return to Sochi from Sukhum, December 3

I returned from Sukhum to Russia on Friday, December 3.  It takes between 1/12 and 2 hours to reach the border.  Fortunately, almost no one was at the border, so I quickly was over the bridge, through passport control and customs and on the Russian side.  

On the way from Sukhum to the border, I asked the taxi driver about the war in 1992-93 and if he had been in Abkhazia at the time.  He told me he had fought in the war, been wounded and evacuated to convalesce in a hospital for several months.  He also lost both his brother and father in the fighting.  In a country that lost about 4 % of its population in combat, almost no family was left untouched by tragedy.  

Despite this, Arsen was upbeat about the future in Abkhazia.  Like me, he believes that there are great changes coming to Abkhazia.  Like most Abkhaz, he is uncertain exactly what form it will take, but he believes that tourism is going to be the backbone of growth.  The day before in Sukhum, I explained at length to and accomplished local businessman about a contact I had with a well-known insurer of unusual risks.  I told him that if this firm would "rate" the political risk in Abkhazia and if the cost was economical, it would help draw investment capital at much lower cost.  Initially, he was unfamiliar because most Abkhaz have not been exposed to western capital market information.  However, he quickly grasped what this would mean.   Of course, this is not the only way forward and there are a lot of other scenarios for capital to enter the country. It is apparent that there are other investors who see what I see in Abkhazia.  I saw several foreign business groups and there are already Turkish entrepreneurs engaged in retail and restaurant businesses.  Tim Post, an American Krasnodar-based entrepreneur who has is becoming well-known in the Russian language internet and who developed BarCamp Krasnodar, toured Abkhazia with me the previous week.  Tim was very enthusiastic.  He said  "Abkhazia is what you get if Rancho Sante Fe "married" New Zealand."  and when talking about development possibilities Tim thought that Abkhazia "is analogous to discovering another Hawaii. If political events break favorably, this "middle earth" kingdom will be one of the most sought after in Europe."

When I got back across the border, I had to change my ticket for my return to the US at the airport before I went to the train station.  On the way, I was delayed by traffic due to Russian President Medvedev's arrival.  The Sochi/Adler Airport is an impressive and modern facility, by any standard.

I saw the new high speed rail connecting Sochi/Adler with Krasnaya Polayana, the site of the Alpine events.  I am often in the area, but even so I noticed a lot of progress since my last trip through in October.  Including event venues there ore than 200 new projects scheduled to be completed in time for 2014.  Watch for more information here on Sochi going forward.

National Library and Archives

Thursday evening I had dinner with Boris Cholaria and a cousin of his Yuri.  Boris is the director at the Abkhaz National Library and Archives, where Yuri assists.  I had a great time with both of them.  I heard a lot of interesting stories including that of a mutual relative who is said to have reached the age of 147 before his death in 1947.

The next day I met Boris and he and Yuri gave me a tour of the Library and Archives.  Before we entered the building Boris showed me the place where a Georgian tank had shot a hole in the wall.  I was also shown photographs of the pile of ash that resulted from the deliberate burning of irreplaceable books and documents by the Georgian Army during the 1992 -93 war.  Boris is directing the efforts at preserving and restoring the documents and books that remain.  It was difficult to see this sad consequence of the war and the opposition's efforts to forever destroy a nationality's cultural heritage.

The library is in need of funds to repair the building which was badly damaged by fire and water damage.  They are also fighting a battle against time to catalog, restore and preserve what remains.   This is a story that deserves attention in the west.  There are a lot of people working hard to rebuild Abkhazia and its future, but few are doing more important work than Boris and Yuri and in absolute anonymity.  They are doing this out of a love of books and their unique culture.

Photo Exhibition and Lakoba

Today, I was walking into a cafe in central Sukhum, but before I could enter a woman stopped me and directed me to follow her.  She spoke very quickly and said that I should come see an exhibition of photos nearby. When we arrived, the place was full and the walls were covered with late 19th and early 20th century photos of Abkhaz people and families.   The images were great and they came from the collections of several families.   As I was wondering how they had managed to survive the years of revolutionary upheaval and civil war, the purges and then the destruction during the war with Georgia, the woman again approached me and introduced me to Gennady Lakoba.  He is an artist and currently lives in Belarus.  Mr. Lakoba had travelled to Abkhazia to be at the exhibition.  

It was fascinating to talk to Mr. Lakoba because his distant relative, Nestor Lakoba, had been the party boss in Abkhazia during the Stalin era.  However, during the 1930's he had conflicts with Lavrentiy Beria, who was then the Transcaucasian party chief and later headed the NKVD.  Lakoba was popular in Abkhazia and stood up to Beri's brutality and for the Abkhaz people when he could.   At the time of his death, he was called to Tbilisi to meet with Beria.  Despite his apparent health, it was announced that he died of a heart attack.  Most historians believe he was poisoned on Beria's orders.  It was during this period that Beria settled large numbers of Georgians and Mingrelians into Abkhazia.  

 Discussion of photos by man in traditional Abkhaz garments.

 

Interviewed in Abkhazia

Tblisi-based American journalist Haley Sweetland Edwards traveled to Abkhazia last week to interview me.  We spent Tuesday, Wednesday and Thursday talking about Abkhazia and its development opportunities.  During a previous trip in August, Ms. Edwards saw  the scenic beauty and climate that draw large numbers of Russian tourists to Abkhazia.   I showed her projects that are beginning to attract interest from outside investors.  A western infrastructure group is interested in hydroelectric power and the renovation of the port for shipping and to attract cruise ships.  I told her that there is strong interest in the development of an airline to utilize Sukhum's runway, which is the longest in the Caucasus. This runway can accommodate the biggest jets, which nearby Sochi can not.  One western expert on airline formation told me that Sukhum's location and the length of the runway make it ideal as a hub in a system for flights not only to and from Russia, but also Central Asia, the Middle East and eventually Western Europe and the United States.  The terminal has recently been remodeled:

On Wednesday and Thursday we looked at some of the projects that are currently being developed in Abkhazia. I showed her several new hotels recently constructed or rebuilt in Gagra and the new mixed use building in Sukhum that the Moscow city government has nearly completed.  I also took her to Pitsunda where we looked at the Soviet-era Pitsunda Resort.  Pitsunda Resort has a great location and is well-known by Russian tourists. However, the aged Soviet-era buildings are not attractive and are not to the standard that one of the most attractive locations on the entire Black Sea deserves.  I told Haley this large project should be a primary target for development.