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How Western Goods Reach Russia: A Long Line of Trucks Through Georgia


KAZBEGI CHECKPOINT, Georgia — Every day, a convoy of trucks stretches for miles along a mountainous highway in Georgia, near the border with Russia. Every day, the line seemed to grow longer.

The trucks wait days with their cargo – auto parts, industrial materials, chemicals, even tea bag paper – to cross the border on a journey that usually begins in Turkey and ends up in Russian towns and cities, where Western goods are in high demand. .

The war in Ukraine abruptly severed many of Russia’s trade links with Europe, but its economy quickly adjusted, looking for alternative import routes. Over the past 10 months, Georgia – a former Soviet republic of 3.6 million people that went through a painful war with Moscow in 2008 – has emerged as a convenient logistical route between Russia and the world. outside.

The increase in trade means an unexpected boon for truckers like Murman Nakashidze, a 48-year-old Georgian who owns a small trucking company of four trucks that delivers goods from Turkey to Russia – every Everything from electronics to building materials. After many European companies stopped trading with Moscow, either to protest the war or comply with Western sanctions, his business flourished.

His cell phone now beeps continuously with the request that he ship goods to Russia, with increasingly high fees. “It’s a war for many, but others are making a profit,” said Mr. Nakashidze. “It’s good for us, for the economy, but it’s bad for everyone else.”

Purchasing goods through Georgia and neighboring countries such as Armenia and Azerbaijan helped Russia weather the economic storm caused by the invasion of Ukraine. Although some goods are scarce and many Western companies have closed operations, the government says the Russian economy contract only about 3 percent last year.

While the outlook for growth remains dim, the total collapse that some economists have guess in the face of Western sanctions did not happen.

Located in the Caucasus at the southeastern tip of Europe, Georgia offers the fastest overland route to Turkey, which has become one of Russia’s main trade links with the West. In the first six months of 2022, the volume of goods transported between Turkey and Russia has tripled, and most of it is transported on Georgian roads, according to the report. research made by TBC Capital, Georgia’s leading investment bank.

According to the Russian Federal Customs Service, on average, the flow of trucks backing up to cross the border, zigzaating through the picturesque slopes of northern Georgia, was more than twice as long in December as it was a year ago. there. The traffic is much larger than the border checkpoint can handle.

Alik Oganesyan, 60, repairing his truck while queuing, said: “Now everyone is here, Belarusians, Kazakhs, Uzbeks, they have never been here before. Sometimes drivers have to wait so long, he said, that the goods are perishable.

The Russian customs service is working on expanding the number of processing lanes, while Georgia is building a 5.5-mile route. tunnel through the most difficult part of the highway that is occasionally blocked by avalanches.

Long lines sometimes stretch as far as Georgia’s capital, Tbilisi, about 100 miles from the border, with special parking lots along the loop where truckers can rest and sleep while they wait. . (The flow of people is not constant. Police patrols regulate traffic, and due to the mountainous terrain there are sections of trucks that are prohibited from idling. When truckers approach the border, they will receive a Tickets have numbers to secure their spot.)

Long wait times have forced many drivers to detour and enter Russia via neighboring Azerbaijan, adding several days to the journey.

It is impossible to say how many European goods passing through Georgia are subject to European Union sanctions. But the country’s emergence as a key link in trade with Russia highlights a potential flaw in the EU’s sanctions policy.

Georgian government Has emphasized that they strictly enforce Western sanctions and many shipments have been refused. But opponents of the ruling party in Congress say goods and money are flowing largely unhindered.

Maria Shagina, a senior research fellow at the International Institute for Strategic Studies, said the Georgia case highlights how third countries have allowed sanctioned countries to circumvent trade restrictions.

“Georgia is striking a balance between its official pro-Western orientation and economic dependence on Russia,” Shagina said in a phone interview, adding that the volume of trade rapid growth could overwhelm Georgia’s ability to enforce sanctions. “It’s a very narrow space that Georgia finds herself in.”

Ivan Fedyakov, who runs InfoLine, a Russian market consulting firm that advises companies, said that while Russia produces most of its food and receives consumer goods from Asia, the Georgia route has helping Russia solve the problem of serious shortages of parts and raw materials for factories in Europe. how to survive under current restrictions.

“The main problem is with industrial goods,” he said.

For example, Russia produces a lot of tea, but imports filter paper used to make tea bags, Mr. Fedyakov said. In April, the European Union banned the export of such paper to Russia, forcing Russian mills to look for alternatives from China and Turkey. Fedyakov said that the route through Georgia has helped to transport products to Russia, help factories maintain operations and maintain jobs for workers.

Since May, Russia has received more than $20 billion worth of goods, through the so-called parallel import process – when something is brought to a country without the consent of the public. trademark owner – head of Russian customs speak in an interview with state television. The majority of goods include automobiles and equipment for factories.

In general, by the end of 2022, Russia has almost recovered Its pre-war levels of imports, according to the country’s Central Bank – also add to a major source of income: the customs duties it collects on goods entering the country.

Aleksandre Davitidze, head of the Georgia Association of Freight Forwarders, says that his team members will not be handling any embargoed cargo for Russia, but smaller companies may be willing. do that.

Mr. Davitidze said that shortly after the invasion, he began receiving emails from Russian companies and individuals seeking help in shipping a variety of goods to Russia.

“I barely get them now,” he said in an interview. “That means they have either established their own company or set up their own.”

Economic cooperation with Russia, which gained control of one-fifth of Georgia’s territory after a war in 2008, has angered many Georgians.

“Our government has chosen to stand in the middle,” said Giorgi Oniani, deputy executive director of the Tbilisi branch of Transparency International, the global anti-corruption group. “But at least some of them personally feel closer to Russia and the Kremlin.”

Economists say boosting Georgia’s economy can be overwhelming for businesses and the government.

“When you don’t have a strong political stance, in most cases, business does,” said Giorgi Mzhavanadze, senior associate at TBC Capital, the investment banking arm of Georgia’s largest bank. Always looking for profit. Turkish and Russian businesses “use Georgia as a transit country and we do not punish them”.

Georgia’s largest seaport, Poti on the Black Sea, is working on an ambitious expansion plan to double capacity and allow for larger vessels. Iain Rawlinson, Commercial Director of APM Terminals, the Dutch-based operator of the Poti port, said the project, which was started before the war, is now “even better than before.” this”. “Volume through Georgia has increased dramatically.”

After the invasion of Ukraine, APM Terminals severed business ties with Russia, but once the cargo was unloaded in Georgia, the company had no idea or no control over where the cargo was going, Mr.

“What happens to the cargo after it leaves us — we can’t see that,” he said. He says most of the trade his port handles is for Central Asia, not Russia.

As for Mr. Nakashidze, a Georgian truck owner, said he wants to expand the company but cannot hire more drivers, who are in high demand.

“They just want more money,” he said.

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