Isa Bisayev: “We should use opportunities for cooperation with close neighbors”

Interview by the editor-in-chief of Vestnik Kavkaza Maria Sidelnikova, Grozny-Moscow

Right after launching Western sanctions against Russia, Moscow began to discuss import displacement. The North Caucasus is in its focus, as it could play a key role in implementation of road maps on the issue, increase its economic abilities, and create extra jobs in the industrial and agricultural sectors. Recently in the Chechen village of Viduchi the Russian Minister of Finances, Anton Siluanov, conducted a session of a regular working group, where issues of inter-budgetary relations and organization of the budget process in Russian regions were discussed.

Isa Bisayev, the deputy Minister of Economy of Chechnya, told Vestnik Kavkaza about the prospects for the development of the Chechen economy.

-          What are the results of Anton Siluanov’s visit to Chechnya?

-          The Minister of Finances of the Chechen Republic, Usman Rassukhanov, spoke about significant extension of the tax base in the republic, about increase of revenues in the republic's budget, prospects of development of separate branches of the economy, about all-round mobilization of internal resources for growth of the republic's economy.

However, Anton Siluanov didn't come for discussion of purely Chechen problems. It was a session of finance ministers of the North Caucasus and South Federal Districts. Issues of regional importance were discussed, including the development of Chechnya. Guests had an opportunity to learn about the achievements of the republic. We told them about current problems in economy and the social sphere of the republic.

According information of inform-agencies, there were only rave reviews. Everybody was glad to see changes in the republic. They are really impressive, especially for those who visited the destroyed Grozny several years ago. Today both Grozny and the most distant places of the republic have changed for the best. I believe our guests were sincere in their statements. It is notable that the session took place not in Grozny, but in the mountains where we plan to build a big tourist complex – a mountain-skiing resort, a sporting and health-promoting recreation center. The session was held there, so the guests could see beauty of the place, where and what we plan to build there, and a stage of working on the project. Full-scale works will start on the place at the end of the year or in early 2015. Development of all necessary documents on internal infrastructure comes to an end, geological exploration has been held, as well as other arrangements.

Yesterday we received the plan of development of the territory, which was signed by the Ministry of Economic Development of Russia. The Resorts of the North Caucasus will be an executive company and will build internal infrastructure. Earlier we approved a project of the resort’s layout.

-          Recently a session of the Commission for Socio-Economic Development of the NCFD took place. Issues of import displacement were discussed there. How can Chechnya help its country in settlement of the problem?

-          First of all, Chechnya should help itself and then its country. Import displacement for us means food products. We are able to provide ourselves with many products and export them to other regions of Russia, like it used to be in Soviet times. Chechen-Ingushetia produced 250-300 thousand tons of vegetables and fruits annually. Most of them were exported to other regions of the country as fresh or canned goods. We produced 100-120 thousand tons of grape annually; it was processed in local wineries. Fresh grapes were also exported to neighboring regions – North Ossetia, Kabardino-Balkaria, I don’t even mention the northern regions of the country. As for meat and milk import displacement, the republic has great potential, including development of mountain alpine meadows. It is not something new, but a revival of animal breeding – sheep breeding, horse breeding, cattle breeding of meat and milk directions. We used to have all of them in a developed form; and now we should revive them on a new technological base with use of modern technologies.

However, the revival is taking place not as intensively as we want it to. However, we received a blessing in disguise. The launched sanctions will give extra impetus to revival of the sector.

After the session of the Commission for Socio-Economic Development of the NCFD, we received a protocol of orders by the Prime-Minister. Great attention is paid to development of the agricultural sector for quick import displacement in the sphere of food products. First of all, food security is what is meant. If I’m not mistaken, Russia imports 13% of its chicken meat, more than 60% of beef, more than 30% of pork, and about 50% of its meat. As for import of milk products, it is about 60%.

First of all, we should speak about involvement of the North Caucasus in food product import displacement. From this point of view, the North Caucasus could be a great help, as natural and climate conditions, the way of life, and experience in the sector of the economy are everything that is needed for development of the agricultural sector. And our people are ready to work. There is a big demand for farming land. I control the investment direction, and 60-70% of requests on investments are connected with agriculture. It means that these kinds of economic activity are in demand, and people want to be involved in agricultural production. We shouldn’t forget that 64% of the republic’s population live in the countryside.

-          What are the economic ties between Chechnya and the South Caucasus states? Do investments come from there?

-          After the events of 2008 we have no direct contacts with Georgia. There are only private visits which are actually intensive. People visit the country for commercial purposes – buying and selling something there. They sell walnuts there and buy cars, fruit, food products, textile goods which are re-exports from Turkey and other countries, i.e. they are not made in Georgia.

As for Azerbaijan, along with shuttle trade we have official intergovernmental agreements. Our governmental delegations have many times visited Azerbaijan. But I cannot say that we have major joint projects. The simplest form of economic cooperation is trade. Azerbaijani goods are present in our internal market due to efforts of the Azerbaijanis themselves, as they bring their products to the republic for trading in local markets. Moreover, Azerbaijani builders construct certain facilities in the republic.

-          Are products made in Azerbaijan popular in Chechnya?

-          Yes, they are. First of all, these are subtropical fruits – lemons, tangerines, tea, and so on. Vegetables are widely sold in winter. At the moment our own greenhouse sector is not developed, but we have some enterprises. Several other major projects are being realized.

-          What about Armenia?

-          I cannot speak about some joint projects. There could be separate cases of business partnership, but there are no regular contacts with Armenia. In Soviet times we had very strong cooperation contacts with Armenian enterprises, they should be restored.

We should use opportunities and prospects of cooperation with close neighbors. It is economically beneficial and politically reasonable. Economic ties make cultures of peoples closer and mutually richer.

-          Recently an Iranian delegation has visited Chechnya. What was the aim of the visit? What agreements were reached?

-          It was a return visit of the Iranian delegation. Earlier a delegation of the Chechen Republic headed by the prime-minister of the republican government Abubakar Edelgeriyev visited Gilan Province. We discussed mutual product supplies and possible participation of Iranian companies in investment projects in the Chechen Republic in the future.

The delegation of the Iranian parliament undertook a return visit to Chechnya.

We have good business relations with Turkey. The deputy prime minister of Chechnya, Hassan Khakimov, who controls investment issues in the government, is an alumnus of one of the prestigious Turkish universities, he is very respected in the business and political circles of the country.

Turkish companies participated in mega-projects on the republic’s territory (Grozny City, Gudermes City). At the moment they are involved in agricultural projects. We negotiate with them on construction of a logistics center and building several residential areas of the economy class. Other projects are being considered.

This year we have very intensive business and political contacts with Arab countries. We had top visits from Jordan, countries of the Persian Gulf, participation of a Chechen delegation at international forums organized by Arab countries. At the moment Arab companies are participating in construction of a hotel in Grozny and a university campus.

Chinese companies began to use the investment potential of the republic actively. They work in the agricultural sphere, the construction sphere, they show interest in energy projects. An interregional automobile cluster is planned to be established with their participation in the special economic zone.

Thus, we can say that relations with far foreign countries are at a higher cooperation level than relations with the former Soviet republics.

Today such contacts are interesting and in demand; any business starts with an introduction. Real-life communication cannot be substituted by any correspondence. So, at the moment we communicate to introduce ourselves – there are economic potential evaluation, detection of main directions of possible cooperation, and so on.

Speaking about necessity to build relations with Georgia, it is necessary to finish construction of a road which passes through the Argun Gorge to Shatili. It should be finished and began to be used; and mutually beneficial cooperation with Georgia should be built. I think we have great prospects in cooperation with Georgia and the Middle East countries through it. Georgia is an associate member of the EU, and this is the closest “window to Europe” for us today.

So prospects of development of cooperation with the South Caucasus republics is very acute at this stage.