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Insurgency In Daghestan Extorts Funding From State Budget, Businessmen


The site of the deadly bomb blast in Makhachkala on May 1

The site of the deadly bomb blast in Makhachkala on May 1

On May 1, an improvised explosive device went off outside a store in Makhachkala, killing two high school students and injuring two other men. Daghestan’s security services believe that the bomb was intended as a warning to the owner of the store, who had refused to pay “zakyat” – the percentage of one’s income that the North Caucasus insurgency seeks to extort to fund its activities.

The leader of the Daghestan insurgency wing, Abu Mukhammad, and his namesake, who is qadi (supreme religious authority) of the Caucasus Emirate proclaimed in the fall of 2007 by Doku Umarov, explained with reference to the Koran why it is incumbent on all Muslims to pay that tax in a video clip posted last fall on insurgency websites. It has since been removed from YouTube.

That businessmen in Daghestan and elsewhere in the North Caucasus pay zakyat to the insurgency is no secret. Former Republic of Daghestan President Magomedsalam Magomedov admitted as much during a meeting in Pyatigorsk in October 2012 chaired by Russian Security Council secretary Nikolai Patrushev. Magomedov told that meeting that extortion from businessmen is the insurgency’s primary source of funding and that the Daghestani authorities are resolutely seeking to curtail it.

Magomedov did not estimate the sums of money involved. But North Caucasus Federal District head Aleksandr Khloponin claimed two years ago that businessmen across the North Caucasus pay the militants billions of rubles.

Then Daghestan Prosecutor-General Andrei Nazarov reported late last year that militants who had been apprehended had identified and provided their interrogators with detailed information about persons engaged in preparing video addresses that are downloaded onto a USB memory stick and sent to businessmen. He said that group alone had extorted more than 7 million rubles ($233,715), without specifying the time frame.

In October 2011, Daghestan’s Interior Ministry rounded up one such group numbering more than 30 people that operated in the northwest of the republic. A second group operating in three districts south and west of Makhachkala was broken up a year later.

An analysis last fall quoted a senior Daghestani Interior Ministry official as saying that criminal groups claiming to represent the insurgency have also begun demanding zakyat from entrepreneurs. The report suggested that the volume of cash the insurgency extorts from the business community is one of the primary reasons for Daghestan’s economic stagnation. It also quoted a former manufacturer of furniture in the southern town of Derbent whose workshop was subjected to an arson attack after he ignored a demand from the insurgency for 2 million rubles. He paid off the sum in installments, then sold his business and emigrated to Azerbaijan.

Yet local businessmen are not the insurgency’s only source of ready cash. They also tap into budget funds by threatening government officials with reprisals. Magomedov admitted that the use of budget funds by local councils is carefully monitored in light of suspicions that some of those officials channel money to the insurgency. The analysis cited above named one local council head who was shot dead after refusing to pay zakyat and a second injured in an attack the author believed was similarly motivated.

The independent weekly “Nastoyashchee vremya” was fined 10,000 rubles for reporting last year without revealing its source that Magomedov himself had received a threatening “flashka” from the insurgency. The paper did not speculate whether or how much he had paid them.

Then Daghestan Minister for Nationality Policy Bekmurza Bekmurzayev said a year ago that the insurgency in Daghestan receives 70 percent of its funding from “Daghestanis from whom the bandits extract tribute.” He did not clarify what proportion of those “Daghestanis” are businessmen, not bureaucrats.

About This Blog

This blog presents analyst Liz Fuller's personal take on events in the region, following on from her work in the "RFE/RL Caucasus Report." It also aims, to borrow a metaphor from Tom de Waal, to act as a smoke detector, focusing attention on potential conflict situations and crises throughout the region. The views are the author's own and do not represent those of RFE/RL.

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