The once famous Ergneti swap meet, where otherwise antagonized Georgians and South Ossetians used to trade everything from bolts to refrigerators, may make a comeback. The possibility of the market’s return is already sparking hopes that Georgians and South Ossetians can smuggle their way to peace.  

In 2004, the Georgian authorities closed down Ergneti, on the border between separatist South Ossetia and the neighboring region of Shida Kartli, to clamp down on the shadow economy. The closure ended rampant smuggling and led to a spike in tax revenues, but it also did away with the only major venue for peaceful interaction between people on either side of the conflict divide.

Cash-strapped separatist South Ossetia’s newly elected de-facto President Leonid Tibiliov recently called for the market's reopening.

The first reaction from Tbilisi was chilly. “Tibilov is a person, who does not have any official status and, therefore, I cannot comment on his initiatives,” Georgian Deputy Foreign Minister Nino Kalandadze said last week.

But there are signs that Tbilisi may be warming up to the idea. The topic was reportedly broached at an April 30 European-Union-facilitated meeting in the actual village of Ergneti. between Tbilisi and de-facto South Ossetian officials  After the meeting, the Georgian delegation chief, Shota Utiashvili, head of the Interior Ministry’s Information and Analysis Department, said that there is room for negotiations on Ergneti, but added that discussions about its actual reopening are premature. Arguably, Tbilisi may be thinking to sell its consent for a good diplomatic price, and the choice could be between the market's confidence-building pros and its potential shadow-economy cons.