Federal authorities to continue to provide financial aid to Caucasus

The developments in Ukraine have caused two serious problems. Firstly, Russia is forced to find substitutes for foreign products due to Western sanctions imposed on the country. Secondly, many regions of Russia, as well as Abkhazia and South Ossetia, are now afraid that Moscow will decrease the financial aid provided to them, as the main resources are now being spent on Crimea.

These issues were touched upon by Prime Minister Dmitry Medvedev during yesterday's meeting of the Governmental Commission for Social and Economic Development of the North Caucasus Federal District.

According to the head of the Russian cabinet, the necessity to substitute foreign products will encourage technological improvement of industry and establishment of modern production. It would be unwise to miss this opportunity, the prime minister said. The North Caucasus may be one of the main centres for such projects, as there are a number of enterprises united in a single production chain, such as the defense industry and others.

Last year the growth of industrial production in the region slowed down, as well as in other Russian regions. "However industrial growth in the region is still higher than the average figure in Russia, as it constitutes 4.5 percent," Medvedev said. "This tendency is quite positive. We have to maintain it using the region's great potential such as the energy industry, machinery production, metallurgy, the chemical and defense industries."

There are several investment projects suggested for the region in such spheres as metallurgy, the chemical industry and high technology. However without state support would be difficult to implement these projects. The federal authorities have launched five state programmes. According to Prime Minister Medvedev, the authorities are not going to suspend these programmes. "We are not going to change anything. All rumours, according to which some state programme will be stopped because a new region has joined the Russian Federation, are baseless. The development of the North Caucasus should continue in accordance with the decision made so far," he said.

The prime minister also believes that the region is facing a lack of high-qualified specialists. "There are a lot of young people in the Caucasus, but these people should have a chance to receive a proper education and earn money in the region. Moreover, this education should be diverse," he said.

In the last few years 14 professional educational institutions have been established in the region. They will focus on educating specialists for major sectors of the economy. These institutions mainly use funds provided by regional budgets and entrepreneurs. Businessmen are actively cooperating with them.

All in all, the establishment of successful cooperation between the state and private enterprises is the most important task for the North Caucasus and Russia in general, the head of the cabinet believes. According to Medvedev, in order to achieve this goal the state programmes should be connected to educational programmes and industrial projects. In addition to that regional authorities should cooperate with industrial companies and other regions. Such cooperation is essential for the successful development of industry, Medvedev believes. Of course, the results will depend on coordination of different centres of power.