Chirikba Appointed Foreign Minister

Today, Viacheslav Chirikba was appointed Foreign Minister of the Republic of Abkhazia by President Aleksandr Ankvab.  Mr. Chirikba is well-known inside and outside of Abkhazia and is both a diplomat and a linguistics scholar. The appointment was made in Abkhazia's capital, Sukhum

A short time ago, I spoke to Mr. Chirikba and offered my congratulations.  In keeping with Abkhaz traditions of a free press, he mentioned that the Abkhazia government is open and transparent and he is prepared for interviews with western media. 

Election Tomorrow In Abkhazia

Tomorrow sees the Republic of Abkhazia going to the polls in an election to replace President Sergey Bagpash who died unexpectedly May 29.  The three candidates are Vice President Aleksandr Ankvab, Prime Minister Sergey Shamba and former Vice President Raul Khajimba.  Several polls were done early in August, but the outcome seems far from certain. 

The border crossing with Russia was busy all week with buses of tourists from Krasnodar, Rostov, Stavropol and as far as Moscow keeping the lines long.  The border is now busy around the clock.  Along with tourists, many election observers were crossing the border from Russia.  The Republic of Abkhazia looks to see observers from as many as 80 nations.  People here expect a free and fair election.

This week in Abkhazia saw warm, but pleasant days and nights.  Daytime highs of about 25 were prevalent in coastal areas.  The election was on people's minds, being a common topic of conversation.  However, it was far from the only issue being discussed.  Fresh fruit is ripening and the stalls and markets are full of fresh peaches, grapes,watermelons and apples.

Investor Tour to Abkhazia

Last week several investors, Mitch Hancock of Canada and an American representing several deep pocket and institutional investors, joined me on a tour of Abkhazia.  We met with officials from the government, including Prime Minister Shamba.  

First, we spent a few days in Moscow before heading to Sochi and Abkhazia.  Moscow was full of people for the Victory Day holiday weekend.  The streets in the center were blocked off to vehicular traffic on May 9 and with warm and sunny weather, millions of people were out to enjoy the day.  My guests were really impressed with the parades and the spectacle of Moscow on Victory Day.

May 10, we flew to Sochi and traveled to Abkhazia.  We drove down to Sukhum from the border. Both visitors were impressed with the beautiful coastline northwest of Gagra.  We stopped several times to take photos. On the way, we stopped at Pitsunda where I showed them the resort.  We spent about an hour walkng the grounds and beach of the resort.  The comments were very positive about the prospects for development at Pitsunda and nearby.  We had a long talk about how to draw in large investors for what appears to be mutliple resorts at the grounds of the current resort. 

After we arrived in Sukhum, we had dinner at Aqvafurta and talked about what we had seen in Abkhazia.  The next afternoon, I showed Novy Afon Monastery and Stalin's dacha to my guests.  The views from the dacha of the central coastline are very dramatic and both of my guests remarked on the beauty and development potential of the location.  

Later that day, we met with Prime Minister Shamba and his advisors in his office.  Tim Post traveled from Krasnodar for the meeting and he and I spoke about the English language tourist application that we have developed for Abkhazia.  Then the American investor spoke about the lack of credit and debit card processing and potential solutions in Abkhazia.  He also said that there was a dearth of English language information on the investment projects in the Republic of Abkhazia.  Then Mitch Hancock made a presentation on Canadian playground equipment.  Earlier, he read about President Bagapsh's interest in acquiring quality playground equipment for Abkhazia's children.  Mr. Hancock believes there are multiple opportunities to pursue in Abkhazia and said that if the government was prepared, he would put together proposals for modernizing the port facility.  Mr. Hancock has a long international track record working with transportation and shipping.

We planned on a helicopter trip to see Abkhazia's coastline and mountains, but weather did not permit. Still we spent several days in Abkhazia and everyone was impressed with the opportunities there.  Both of my North American guests felt that there is tremendous potential for development in Abkhazia.  There were favorable comments about the leadership "They plainly understand the issues and want their country to develop" and about individual projects "this is a winner" (on Pitsunda).  The spectacular beauty also impressed both visitors. After we visited Novy Afon, favorable comparisons to the southern California coastline were made.  All three of us believe there was the potential for a 5 star resort there.

I have spoken to both parties since they departed several days ago.  Mr. Hancock is interested in pursuing opportunities in import/export,shipping, port redevelopment and air service.  His American counterpart is talking to  investors in the US about real estate development projects in Abkhazia.

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.

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.