Trade as a confidence-building measure in protracted conflicts: the cases of Georgia and Moldova compared

Academic and policy literature on the post-Soviet region’s protracted conflicts frequently assumes that trade is an effective confidence-building measure (CBM) and as such also has the potential to facilitate progress toward conflict settlement. We probe these assertions through a detailed empirical comparison of the effects that regulated and unregulated forms of trade have had in the cases of Abkhazia, South Ossetia, and Transnistria. Relying on a wealth of primary and secondary sources, including 29 semi-structured interviews, as well as direct and participant observation, we find that, absent political will by authorities on the ground and their respective international partners, trade remains by-and-large unregulated and has limited and generally not sustainable confidence-building and stabilizing effects, as evidenced by the cases of Abkhazia and South Ossetia. Where local and geopolitical conditions are more conducive, trade becomes more regulated and significantly contributes to confidence building and stabilization and has some positive spill-over effects into non-economic areas of confidence building, as is evident from Transnistria. This finding has potentially important implications for other cases in which governments and relevant regional and international actors are faced with difficult choices over whether and how to engage with unrecognized entities, such as in Ukraine.