Regulating trade across conflict divides

International Alert has published two reports on regulating economic relations across the Georgian–Abkhaz conflict divide.

The reports are part of ongoing work to assess the potential of mutual economic interest as a basis for conflict transformation in the region.

The first report presents the findings from a group of Abkhaz and Georgian economists into the scale and structure of trade across the Ingur/i river, a physical representation of the conflict divide. The report demonstrates a clear economic case for regulation.

The research focuses on two main tasks:

  1. To test the theory that, if the border between Russia and Abkhazia were to be closed during the Olympic and Paralympic Games in Sochi (including during the preparatory period), then the volume and variety of trans-Ingur/i trade would increase; and
  2. To identify individual, seasonal and more general characteristics of trans-Ingur/i trade, taking into account and building upon the results of the previous research, which attracted significant interest among Abkhaz and Georgian experts, civil society, authorities and business communities.

The results confirm the overall hypothesis that trans-Ingur/i trade is driven by market forces rather than political or security considerations. It is vulnerable to changes in the political environment, but even if restricted it remains an essentially market phenomenon.

The second report presents a unique collection of analysis of regulatory frameworks from other contexts where the borders and status of parties is contested, which have created an enabling environment for economic exchange. Carried out by a group of international experts from Belgrade, Cyprus, Kosovo and Taiwan, the research looks at the cases of Taiwan–China, Kosovo–Serbia and Cyprus (Republic of Cyprus and Northern Cyprus).

The report provides a foundation for developing a regulatory framework that would place existing trade across the Georgian–Abkhaz conflict divide into a more transparent and predictable context, which could in turn contribute to building relationships based on trust and mutual interest.

Alert has been working on understanding trans-Ingur/i economic relations since 2009, producing a series of groundbreaking research reports:

This work has been produced with the financial support of the European Union, the UK Conflict Pool and the Swiss Federal Department of Foreign Affairs.

Find out more about this project here.