Transcript of the beginning of the meeting:

Vladimir Putin: Mr Bagapsh, colleagues. I am very pleased to see you in Moscow. We have done a great deal of work to strengthen our legal and contractual relations recently.

We signed 34 documents during your last visit in February and are currently working on further 30 documents. This is the legal basis that we need for efficient cooperation in economic, political and military issues. One of the most important documents that we have signed is the agreement regarding a Russian military base. The agreement is already being implemented. Now we need to try our best to establish a reliable legal basis for developing economic relations.

You know that we have decided to earmark over ten billion roubles for supporting Abkhazia in 2010-2012. In addition, we have almost finished preparing a 700-million-rouble loan for the Abkhazian Central Bank to increase its capitalisation. Our specialists will soon finalise all the technical details. This will be a loan for ten years with a four year deferred payment schedule and a preferential interest rate.

We face many infrastructure development issues. We need to ensure stable operation of transport, including railways, buses and sea transport. We need to launch a regular ship service between the Russian ports on the Black Sea and Abkhazia's Gagra and Sukhumi. All in all, there is much work to do for us.

Furthermore, there is also an issue I have not expected to arise. I am referring to applied physics. The sphere has potential for cooperation, particularly in solar energy. And the funds allocated for it are rather substantial - 1.5 billion roubles. We need to discuss this and other issues in detail. I am very glad to see you and welcome.

Sergei Bagapsh: Thank you very much. Mr Putin, colleagues. Thank you for finding the time for this meeting.

I fully agree with you that we are advancing well in developing the legal basis for our relations and that we have signed a number of very important agreements.

Why did I ask for this meeting? We need to pay more attention to our economic cooperation. The agreements we have signed, including those on military bases and the border service, are all working.

The main thing is to make sure that the agreements we sign are executed without any delays. We do not have all the time in the world and we are aware of our problems. So we need to discuss and resolve arising issues as soon as possible.

Our goal is clear. On behalf of my country and colleagues I would like to express my gratitude for your understanding and support. What we need most is to make a good start, create an infrastructure and economic sectors that will bring dividends in the future.

It would not be enough to invest, for example, in social issues alone. We need to establish production facilities and real economy to be able to sustain our budget and foster a stable functioning of our state. We are a small country and can accomplish it fast, provided we have Russia's support. We are very grateful to you for it.

Thank you very much.