North Caucasus – start from scratch?

Mr Putin’s address to the “United Russia” North Caucasus regional congress, devoted to the new socio-economic development of the North Caucasian federal district up to 2020, is symbolic of the new economic policy in the region.
It is obvious that social welfare issues are coming into the picture, parallel with security concerns. Vladimir Putin has stressed that chronic unemployment is the most severe social and psychological problem of the North Caucasus.

Indeed, if we take into account that 50% of the Ingush Republic’s population is unemployed, we can understand why security and social concerns are so closely connected to each other there. The social mobility indicator is extremely low, so young men, exhausted by the constant search for work, don’t have any real motivations and easily fall into the hands of various extremist groups.

We should also bear in mind that Russian President Dmitry Medvedev and Prime Minister Vladimir Putin have tried to deal with this problem more than once: the theme of North Caucasian social security was already brought up in 2007 and 2009. However, things haven't moved forward an inch. There is no lack of ambitious projects (there’s plenty of them), but the governmental structures responsible for their realization have been less than efficient, although considerable funds have been allocated to their needs. The government executive had to admit this fact and a present a new development strategy for the North Caucasus.

More than 400,000 workplaces in the North Caucasus should constitute the basis of this new governmental program. To this end 6 billion rubles will be specially allocated towards funding development of the social sphere.

However, many experts remain sceptical about the possibility of a quick solution. The problem is that the Ingush and Chechen economies are still dependent on federal subsidies, leaving construction as the only sphere for job creation. This opportunity has already been exploited by the government of the Chechen Republic, in the Ingush Republic the process is facing more severe bureaucratic difficulties. The North Caucasus is not rich enough in resources to rapidly compensate investments or redirect funds and employment to other branches of the economy.

The construction and service industries and private business still remain the likeliest spheres of possible employment for young people.

In addition, the President and the political executive repeatedly emphasized the issue of emigration from the North Caucasus to the Central Russian regions: this indicator is growing with a threatening speed. Stopping this population haemorrhage is the main goal of the special sub-programs due to be launched in 2011.

To be continued

Alexei Vlasov, exclusively to VK