1991–1992 South Ossetia War place around the city in the nearby villages and along the road to North Ossetia. In spring 1992 the fighting escalated again, with sporadic Russian involvement. However, in March 1992, Gamsakhurdia was ousted and replaced by Eduard Shevardnadze. Soon after, Gamsakhurdia loyalists staged an armed rebellion. Furthermore, the conflict with Georgia's other, bigger, separatist region Abkhazia, escalated into a war in 1992. As a result, Shevardnadze had an interest in ending the conflict in South Ossetia and signed the Russian-brokered Sochi agreement. The ceasefire agreement left South Ossetia divided into areas controlled by Georgia and areas controlled by the unrecognised
South Ossetia third of its budget by levying customs duties on freight traffic before the war President Eduard Kokoity has admitted that his country is seriously dependent on Russian economic assistance. South Ossetia's poverty threshold stood at 3,062 rubles a month in the fourth quarter of 2007, or 23.5 percent below Russia's average, while South Ossetians have incomparably smaller incomes. Before the 2008 South Ossetia war, South Ossetia's industry consisted of 22 small factories, with a total production of 61.6 million rubles in 2006. In 2007, only 7 factories were functioning. In March, 2009, it was reported that most of the production