Wednesday, August 24, 2016

Caucasus Report

Russian Government Slashes Funding For North Caucasus

Chechen leader Ramzan Kadyrov (right) confers with Russian Prime Minister Dmitry Medvedev during a meeting in the provincial capital, Grozny, on June 19.
Chechen leader Ramzan Kadyrov (right) confers with Russian Prime Minister Dmitry Medvedev during a meeting in the provincial capital, Grozny, on June 19.
Russian Prime Minister Dmitry Medvedev has finally clarified the ongoing confusion surrounding the planned grandiose federal program for the socioeconomic development of the North Caucasus between now and 2025.

Speaking on June 19 in Grozny at a session of the specially created government commission for the development of the North Caucasus Federal District, Medvedev said the program will be finalized this year.

At the same time, Regional Development Minister Oleg Govorun divulged that the total funding for the program will amount to just 1.7 trillion rubles ($52.2 billion). That is less than half the 3.89 trillion rubles envisaged when the first draft of the program was unveiled in July 2011. It is not clear whether that drastic reduction in spending constitutes a victory for the federal Finance Ministry, which has consistently opposed the program in light of the astronomical cost, or whether other factors may have played a role.

The socioeconomic development program is the brainchild of Vladimir Putin, who in January 2011 in his capacity as then prime minister tasked the Ministry for Regional Development with drafting it. It was intended to subsume and continue three existing federal development programs -- for southern Russia, Chechnya, and Ingushetia, respectively -- that were due to end by 2016.

When the new draft program was unveiled in July 2011, the cost was estimated at 3.89 trillion rubles, of which 2.6 trillion would come from the federal budget, while the North Caucasus republics would contribute 195 billion rubles between them. Deputy Finance Minister Tatiana Nesterenko immediately made clear that the ministry would not allocate that sum, which, she pointed out, far exceeded planned budget funding for the region. had pointed out in October that the program envisaged spending $12 billion over the period 2012-14, while the amount allocated in the state budget for the North Caucasus over that period was only $4 billion.

Notwithstanding the Finance Ministry’s categorical refusal, then Regional Development Minister Sergei Vereshchagin announced in late September that the overall cost of the program had been upped to 5.5 trillion rubles thanks to pledges of additional extra-budgetary funding from various large Russian monopolies, including Gazprom and Rosgidro.

Work on finalizing the details of the program ground to a halt, however. And last week the daily “Izvestia” reported that drafting of both the North Caucasus program and an analogous one for the Russian Far East had been suspended due to disagreements between the Finance Ministry and the Ministry for Economic Development. The Ministry for Economic Development argued that the two federal programs should be adopted first, and then the federal budget. The Finance Ministry for its part insisted the budget for 2013-15 should be adopted first, and then a wide-ranging strategy document of which the two regional programs would be a part.

“Izvestia” further quoted an unnamed government source as  saying the North Caucasus program was seen as “having no future” because of the huge sums of money involved.

Within days, the Finance Ministry denied work on the two programs had been suspended. It said the program for the North Caucasus “may” be adopted next year. Medvedev, however, said the program must be submitted to the government by December 1, and “there will be no further postponements.”

To judge by the published summaries of Medvedev’s address to the commission session in Grozny, the program will focus on basic infrastructure projects – construction of schools, hospitals, and housing – and on creating new jobs in order to reduce unemployment regionwide from 16 percent to 5 percent of the able-bodied population. The unemployment rate varies across the North Caucasus and is highest in Ingushetia (48 percent) and Chechnya (34 percent).

How the reduction in funding for the program as a whole will impact individual republics is not immediately clear. Daghestan, the largest republic in terms of geographical area and with the largest population (almost 3 million), was to have received 1.2 trillion rubles, almost one-third of the initial estimated cost of 3.89 trillion rubles. Daghestan’s share of the reduced funds available may be reduced in light of its success in attracting foreign investment, which increased last year by more than 6 percent to reach 35 billion rubles ($4.2 billion).

Chechnya was hoping to receive 498 billion rubles over the next 14 years (38 billion annually, compared with 18.4 billion in 2011). Of that total, 156 billion rubles was earmarked as compensation for persons whose homes and property were destroyed during the 1994-96 and 1999-2000 wars.

Likewise unclear is whether the decision to reduce funding for the North Caucasus was motivated by purely financial considerations or whether it constitutes the Kremlin’s response to increasingly vociferous demands by Russian nationalists  to “stop feeding the Caucasus.”
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Comment Sorting
by: Jack from: US
June 20, 2012 14:47
Muslim republics within Russia are the most poor and backward. Islam keeps them in the dark. Russia should encourage Muslims to convert to Christianity and see the light. Only that will get those people out of poverty, corruption, backwardness. No amount of money will do that, as corruption is endemic to Muslim culture.
In Response

by: jack's teacher from: İQ gainer School
June 21, 2012 10:12
Muslim countries were the richest, before the barbarian Christian Russians attacked and killed their ancestors. İslam will show his nobilitiy, but poeple must see WWIII, and must understand only İslam can save the weak people's rights.

Hey Jacki Chen :) i believe you will be a good Muslim. And you will leave writing opinions, without any informations. İslam is the noble. Russian serfs can not understand İslam. Free your spirit from the Anti-Christ Putin's prison.
In Response

by: Anonymous
June 21, 2012 13:40
anony-Russian with low IQ quit posing as a Muslim.
In Response

by: Frank
June 22, 2012 10:05
At its zenith, Rus was one of the most advanced areas in Europe.

The oppressive Tatar Khanate in Crimea enslaved Slavs and others.

So much for revisionist crap.

In Response

by: Thomas Lund from: Norway
June 21, 2012 11:12
Bad argument Jack. It's perfectly ok to wish for more adherents to ones own religion. That seems to be an inherent part of religious life and faith. But to claim that a society's econimic state is based on religion is misleading. Take a look at The United Arab Emirates, Indonesia and Turkey. All muslim countrys with strong and growing economies (3% - 8%). If we take a look at western Europe and North America it does not look that good even though they are christian countries. As to corruption, I know that bhuddist China and ortodox Russia has a fear amount of corruption. On our own turf we have an economic crisis brought on by The Lehman Brothers and the and the recent corruption scandal in the vatican state.You are partly right about that no amount of money will get people out of poverty, corruption and what you called backwardness. Money chanelled correctly would contribute to alleviate poverty notwithstanding religious affiliations. Do yourself a favour and be honest about your missionary intentions of converting moore people to christianity. This in my view should not be mixed up with economic issues.
In Response

by: Anonymous
June 21, 2012 13:49
Thomas do not comment and get involved into the Russian FSB playground. One of the nicknames poses as Jack and the other as Jack's teacher. One of them bashing Islam and the other one "defending" it by bashing Christians. Their objective is to bring any reasonable conversation about the Caucasus into Islam vs. Christianity battle. Since they cannot defeat Muslim Caucasians they hope by psy game to get the moral support away from the resistance fighters.

by: Anonymous
June 20, 2012 22:13
That's a smart move for Russia. Since Russians leave not only the Caucasus but Rostov oblast as well it is a wise decision to cut the aid. Russian population went down from 50% to less than 10% in the Caucasus. Russian proverb says "holy place can't be empty". Someone else will increase the spending in the Caucasus like in the past year China, France, England, and Germany did. Caucasus is a very important strategic point.
In Response

by: Eugenio from: Vienna
June 22, 2012 04:52
"Someone else will increase the spending in the Caucasus" and I even know who it will be: Mischa Saakashwili. After his successes in restauring law and order in Osetia and Abkhazia in 2008, he will now further expand his sphere of influence and in the next few years we will see the Geogrian banner stream proudly in Dagestan, Chechnya and elsewhere in the Caucasus :-)).
In Response

by: Manny from: US
June 26, 2012 18:30
HAHAHA! Misha is a joke even to his own people!

by: Jack from: US
June 21, 2012 12:24
read the Muslim posters (even those hiding under Norwegean-sounding names) and you even better understand how much of a retarded cult Islam is.

by: Anonymous
June 21, 2012 13:53
Jack by any chance are you the one who leaves the "muslim" posts which bashes Christians? Is your hacked computer located in Turkey? Are you lost in your accounts and that is the reason why you cannot leave the comment right under the opponent's reply?
In Response

by: Alexander Rasputin from: St.Petersburg
June 21, 2012 21:02
be easy :) we are talking about politics and love here. friendship is good between caucasians and russians. Russia has a good plan for you !
Gush gush ! chen chen ! Georgin !
Holy chosen leader is Puuuutinn ! :) lets say together ! be my friend. drink vodka, be happy. World is going better.

by: Vakhtang from: Moscow
June 22, 2012 07:52
A significant role in reducing the financial aid to the North Caucasus is the fact that Putin sends large amounts of money to аbkhaz bandits and racists.
Currently аbkhaz gunmen began to destroy the Georgian cemeteries and temples, they started to bring the Аrab terrorists and their families from Syria and settling them on land that were owned by Georgians
Аlso Georgian land allocated to Turkish lumpens who wished to get away from their problems in Turkey and to live in Abkhazia, with permission of аbkhaz bandits .

Obama !!....where are you??...why are you silent??
They created an enclave- where the resurrected racism and apartheid, and like Obama there is defective people by abkhaz law.
Now you, Mr. Obama met with Putin, рerhaps it was difficult to ask:" Mr Putin!!.you're a racist!! Why do you build a racism and apartheid on the bones of Georgian women and children killed by Abkhaz savages?"..
Obama has no right to be in the White House,he must learn courage and honor and not to grow vegetables on the lawn..

In Response

by: Frank
June 22, 2012 10:08

Your uber Georgian nationalism shines again. Russia can't be too bad, seeing how you say that you're in Moscow.

The Russian government has allocated a large amount of aid to Chechnya. In turn, some other parts of Russia are a bit irked, if not jealous of this.
In Response

by: Vakhtang from: Moscow
June 22, 2012 13:26
Where have I said that Russia is a bad country?
Russia sends to abkhaz bandits money or Mr Putin?
Russia threw Pussy Riot in a prison or Putin?...and so you can to list it to infinity...
Putin is not Russia, he usurped power, he violated the constitution and falsified elections,even cockroaches spiders and beetles are aware of this...How about you, Frank?

Even we can not say that the Russian government is doing something because without order of Putin it is can not do anything...
Putin is not ashamed to give money to racists and murderers he could start a war with his manic ideas....
In Response

by: Anonymous
June 22, 2012 16:30
Russian government is paying contributions to Chechnya. Be brave my ruski friend and stop paying the Chechens.

by: Aibek
June 22, 2012 17:35
This is why I say that Putin does not want to re-invent the Soviet Union: he does not want to subsidize "non-Russian" areas. Here we see not even parts of Russian Federation are getting subsidized. People in former republics would love to see Soviet Union come back because they remember all the money that Moscow poured into those places to keep factories working. Of course those factories made products nobody wanted so it had to come to end sometime.
In Response

by: Anonymous
June 22, 2012 22:17
Oh quit lying you bastard. The USSR illegally occupied many countries and dried their banks. When the Soviets finished the business they gave them independence. What is Russia famous for? Selling its natural resources.

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.