Trade with, or Build Walls Around, Frozen Conflict Areas? That is The Question!

Trade with, or Build Walls Around, Frozen Conflict Areas? That is The Question!

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The temptation to engage in isolationism – as a means of scoring political points and punish people on both sides of new artificial divides – should be resisted by all means. As Europe’s inspiring example shows, the 21st century is a time to make trade, not war; connect rather than divide.

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With Russia creating or helping sustain so many “frozen conflicts” on its periphery, it is crucially important for countries and nations finding themselves in this predicament to work a sound strategy of dealing with the situation. The military option has been taken off the table ever since the August 2008 attempt by Georgia to forcefully bring South Ossetia back into its fold. Thus, countries such as Moldova, Georgia and now also Ukraine, don’t have too many good alternatives to choose from. One possibility is to isolate and punish in the hope of eroding political support behind the “criminal regimes” of the seceding regions. Another (yet to be tried in most cases) is to win the hearts and minds of former compatriots, be it Abkhazians and South Ossetians, or the Russian-speaking Ukrainians and Moldovans in Crimea, Donbass and Transdniestria.

At least in the short-run, the psychological difficulty of forgiving and forgetting is, of course, pushing nations towards embracing the “isolation” and “punishment” scenario. For instance, just a few days ago, some media quoted President Poroshenko’s advisor Yuri Lutsenko arguing that “the areas of Lugandon [Kyiv’s derogatory shorthand for the self-proclaimed Lugansk and Donetsk republics] have to be isolated and taken under control, for instance, with the help of engineering structures… we should invite them to compete not only in weapons but also in our lifestyles".

While perhaps music to voters’ ears, just how effective is such a strategy in managing “frozen conflicts”?


LEARNING FROM THE GEORGIAN EXPERIENCE

With two frozen conflicts on its hands for over 20 years, Georgia’s rather diverse experience in handling Abkhazia and South Ossetia secessions carries useful lessons for anybody willing to learn, Georgia itself included...

The Sochi ceasefire agreement signed on 24 June 1992 by Shevardnadze and the South Ossetian government included obligations not only to avoid the use of force, but also a pledge by Georgia not to impose sanctions against South Ossetia. The Georgian government retained control over substantial portions of South Ossetia, including the town of Akhalgori, andGeorgian troops participated in a joint peacekeeping force along with Russian and Ossetian units. The peacekeeping operation was monitored by the Organization for Security and Cooperation in Europe (OSCE), creating the conditions for “security and cooperation” to, indeed, prevail until 2004.

Highlighted in a 2014 documentary ‘’Divided”, the complicated relationship between Georgia and South Ossetia during this period included a very interesting social and economic bridge over the new border: the Ergneti market. The market sprawled over 50 ha, with roughly half of its territory on the Georgian side and the other in South Ossetia. Functioning as a de facto “free economic zone”, Ergneti served as a convenient hub for North-South Caucasus trade, a place where Russian, Georgian and Ossetian traders could exchange fuel, alcohol, cigarettes and agricultural products without any government paperwork, taxes or custom duties.

Existing outside any formal legal and political framework, Ergneti was nothing like the economics textbook “market” in which “faceless buyers and sellers meet… for an instant to exchange standardized goods at equilibrium prices” (Yoram Ben-Porath). Instead, Ergneti was a market in which transactions were frequently repeated and hence very personal. Any differences were ironed out on the basis of an informal but very powerful code of ethics.

Thus, though widely recognized to be the smugglers’ paradise (one of many “black holes” in the Georgian economy prior to 2004), the kind of trust-based, self-regulated environment created in Ergneti inadvertently served the purpose of bringing the two divided people together. A confidence building lab of sorts.

All this came to an abrupt end in summer 2004, when, encouraged by its success in Adjara, Georgia’s new government began a massive anti-smuggling campaign against breakaway South Ossetia with the ultimate goal of returning it under Georgia’s central control. Ergneti was shut down in June 2004. What followed was a series of skirmishes involving Georgian units stationed in South Ossetia, Russian peacekeeping forces, and South Ossetian militias, effectively unfreezing the conflict and turning it into a “problem between Georgia and Russia”, in the words of President Saakashvili. The 2008 Russo-Georgian war over South Ossetia was but a logical final accord in the drama. Until today, that it.


MAKE TRADE NOT WAR

Interestingly, Ergneti market became a subject of political debate in the course of Georgia’s 2012 parliamentary elections, which ended an era of exuberant liberal reforms and cavalier unification efforts. When campaigning in Gori, only 34km away from South Ossetia’s administrative center Tskhinvali, Bidzina Ivanishvili used Ergneti’s example to drive home his argument that “business and common interests link people to each other”. Reflecting this line of reasoning, the idea of restoring the market in some sort of civilized form – as a “free economic zone” – has been on the Georgian government’s agenda since 2012. Similar plans are being developed with respect to Abkhazia (apparently they are to be soon unveiled by the Partnership Fund).

The change in tone and policies towards the breakaway Abkhazia is evident in another very significant speech made by Bidzina Ivanisvhili on the 2012 campaign trail. This time, his focus was on restoring the railway and highway connection from Georgia to Abkhazia and, through it, to Russia – connecting markets, fostering Georgia’s economic development and giving “Abkhaz businessmen the possibility to develop their businesses and encourage their participation in Georgia’s economy.” While yet to be realized, Mr. Ivanishvili’s pragmatic vision of using mutual economic interests in order to bridge over ethnic divides and overcome the trauma of recent bloodshed, is worthy of the highest praise.

Indeed, walls, barbed wire and other “engineering structures”, as perhaps envisaged by Yuri Lutsenko, are a terrible anachronism, contradicting the logic of economic integration, free movement of goods, people and ideas. And as Georgia’s experience demonstrates, they are totally counterproductive as far as the goal of bringing people together is concerned. The temptation to engage in isolationism – as a means of scoring political points and punish people on both sides of new artificial divides should be resisted by all means. As Europe’s inspiring example shows, the 21st century is a time to make trade, not war, connect rather than divide.

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