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Red Bridge: Bent Mirror of the Georgian Economy

In Soviet times the Red Bridge, which divides Georgia from Azerbaijan, used to be called the Bridge of Friendship. Festivals of the peoples of the South Caucasus were held here. The bridge symbolized the unity of the South Caucasus nations with the Soviet Union. N!
owadays, the bridge is associated mostly with economics, as large numbers of merchants and smuggled goods cross over it daily.

When approaching the bridge, one sees an immense number of people and vehicles lined up in queues trying to cross the border. Long queues are among the most unpleasant features of the place, as they last for hours, making the passage a very unpleasant experience. The Georgian authorities justify the time-consuming border crossing procedures with the fact that a majority of the “shuttle” merchants usually do not have all the necessary documents for the goods that they are importing.

However, the merchants claim that the time is spent paying bribes to customs officers. Usually these talks look more like the process of bargaining at an oriental marketplace, accompanied by abundant gestures and loud quarrels.

The imported merchandise is sold at a nearby location where merchants come from neighboring Armenia as well. The tr!
aders use various currencies: Russian rubles, U.S. dollars an!
d even newly introduced and therefore unfamiliar Euros.

Generally, 30% of the total merchandise entering Georgia via the Red Bridge is imported by these “shuttle” merchants.

Most of the merchandise from Azerbaijan is transferred directly to the Georgian capital, Tbilisi. For example, many owners of small filling stations in Tbilisi prefer to rely on smugglers. Generally, machine oil in plastic bags  is imported to Georgia via passenger buses over the Red Bridge. One “Ikarus” bus can carry up to one ton of the contraband,  therefore making the price very cheap.

Tamaz, a Batumi resident, used to buy this oil at a “black” wholesale market in Varketili, a suburb of Tbilisi. Now, he purchases it differently: he arranges a meeting with a bus driver at the Red Bridge and then loads the oil into the trunk of his car and returns to Batumi. “Income from the oil covers all expenditures, including multiple bribes to!
traffic police along the road, leaving quite enough profit as well,” Tamaz says.

Due to high tax tariffs in Georgia, merchants prefer to deal with the costume officers rather than pay all the taxes. High taxes have an extremely negative impact on the Georgian economy. For example, after the latest increase in transit fees (currently they vary between USD 30 to USD 350 per vehicle), the flow of transit goods through Georgia has been reduced. According to data from the Turkish embassy in Georgia, 4-5 years ago there were up to 20 000 trucks entering Georgia from Turkey, but now this figure has decreased to 10 000. Corruption within the Georgian traffic police is yet another problem for both businessmen and truckers. 

Therefore, Turkish truckers prefer to go to Kazakhstan via Iran rather than the Turkey-Georgia-Azerbaijan route, because the route though Iran is much less costly, even though it is a bit longer. Hence, not only Georgia, but also Azerbaij!
an loses significant income that should go to the state budge!
t.
 
According to Georgian law, only goods with a total price exceeding USD 350 are subject to taxation. This provision has triggered a new type of business at the Red Bridge. The “shuttle” merchants at the Red Bridge offer a “rickshaw” service for the “bigger” businessmen across the border. The “shuttle” merchants carry their goods partially, in quantities that are virtually tax-exempt. Residents of the area adjacent to the border are mostly engaged in this kind of business because, according to the agreement between Georgian and Azerbaijan, they enjoy simplified border crossing procedures. However, these residents still have to pay bribes, regardless of the quantity of the goods they carry.

“The customs officers stop even those who carry a mere two or three bags, not even talking about those big trucks. I pay them [a bribe] regularly. Sometimes the amount even might depend on the mood of an officer. B!
ut I prefer to pay them [customs officers]. To pay the official tax is good neither for them nor for me,” says Avto, a resident of Gardabani village, who has only recently started up in the “shuttle” business.
 
The low salary of the customs officers, which is about USD 28 per month, increases their temptation to take bribes. Naturally, this sum is not enough to mitigate the temptations of a customs officer who deals with much bigger sums every day. 

The Red Bridge is more often mentioned in the reports of the Interior and Security Ministries in connection with drug smuggling. According to the Georgian National Anti-Drug Bureau, the Red Bridge is one of the major sources of narcotics entering the Georgian internal market, along with the breakaway regions of Abkhazia and South Ossetia, where drugs come from the Northern Caucasus.
 
Despite the many problems at the Red Bridge, it continues to be a “bridge of friendshi!
p of the Caucasus peoples”, like in Soviet times. Regar!
dless of their ethnicity, nobody talks about politics. Doing business at the Red Bridge involves a little bit of peace-making as well. Trading is much more profitable than fighting a war, as the local businessmen say.

If asked about changes, the majority of merchants say that it would be perfect to make those long queues disappear. However, people seem to be wary of other changes. “Our government can change things only for the worse. So let everything remains as it is,” says Malkhaz, who has been trading at the Red Bridge for several years already.

By Giga Chikhladze

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