Moscow's Money Mislaid in Abkhazia

Russian audit chief finds no wrongdoing in Abkhazia’s use of development funds, but notes millions of dollars have yet to be accounted for.
  • Sergei Stepashin, head of Russia's audit chamber (left) with Nugzar Ashuba, speaker of the Abkhazian parliament. (Photo: Anaid Gogoryan)

Russia’s top audit official has approved the way Abkhazia has spent the funds Moscow sent it to improve roads and other infrastructure, but opposition leaders say the probe was a whitewash.

Shortly after defeating Georgia in a brief war in 2008, Russia recognised Abkhazia and South Ossetia as independent states.

Last spring, the Abkhazian and Russian authorities drew up a development plan that provided for the injection of over 10 billion roubles, worth around 330 million US dollars, and set up a joint commission to check how the cash was spent.

Russia’s audit chamber, headed by Sergei Stepashin, published the results of its probe into how the first tranche had been used on January 20.

At a press conference, Stepashin said he had found no cases of embezzlement by Abkhazian officials, and construction projects funded with Russian money had been carried out “economically and efficiently”.

Stepashin did note that that some 350 million roubles, or almost 12 million dollars, were unaccounted for. He also said problems with the budgeting process in Abkhazia had inflated construction costs.

Nevertheless, Abkhazia was still a young country, he said, and would create the mechanisms needed to control budgeting. “In Russia, we took more than ten years to get there,” he added.

Stepashin said the Russian audit chamber had no concerns that the sums still unaccounted for had been misappropriated. But that was not enough satisfy opposition politicians in Abkhazia.

On January 21, Jakub Lakoba, head of the People’s Party of Abkhazia, published an article in which he attacked Stepashin’s assessment and also his character. This led to him being detained for two days on a libel charge.

That did not prevent other opposition leaders like Raul Khadjimba, formerly vice president but now leader of the Forum of National Unity, from querying Stepashin’s approach to the 350 million rouble gap.

Pro-government figures in Abkhazia brushed off such criticisms.

Zaur Adleyba, a member of parliament who headed the Abkhazian side of the joint commission monitoring expenditure, said that Stepashin had pointed out areas where the government could have done better, but had not accused it of wrongdoing.

Some believe the Russian audit chief was astutely dropping heavy hints.

“Stepashin said there was no theft, but then named a figure of 347 million roubles,” Inal Khashig, an journalist and member of the Civil Chamber of Abkhazia, said. “He was letting us know that the money had been stolen, and that Russia was aware [it] had vanished.”

Khashig said Moscow was prepared to overlook the discrepancy as it had more important interests in Abkhazia.

“Russia is very satisfied with the current authorities, and it isn’t going to make a fuss about this small change,” he said.

Other analysts said that if Russian audit officials did not issue stern warnings about probity, that might act as a green light for funds to go astray in future.

Beslan Baratelia, dean of economics at the Abkhazian State University, noted that to date, only a third of the total funds pledged by Moscow had been delivered.

“Everything depends on the reaction. If there are specific consequences… such as improved mechanisms and tighter discipline, then the next tranche will be spent more effectively,” he said, adding that if Russian statements were not acted upon, “the impulse will be not to change things and to carry on the same way”.

In Abkhazia, some are keeping a close eye on how the Russian money is spent.

Arda Inal-Ipa, head of the Centre for Humanitarian Programmes, wants to see the Stepashin report debated in Abkhazia’s parliament.

“There was a public expectation that the authorities would move rapidly to demand an investigation into the irregularities identified in the report, and an explanation of what it uncovered,” a statement from Inal-Ipa’s centre said. “Yet this [response] has not come.”

Anaid Gogoryan works for the Chegemskaya Pravda newspaper in Abkhazia.


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Russian audit chief finds no wrongdoing in Abkhazia’s use of development funds, but notes millions of dollars have yet to be accounted for.