Caucasus Press Review (March 14-20)

In Dagestan work continues on the identification and reduction of inefficient budget spending, optimizing the network of the state and municipal institutions, increasing the revenue base of the consolidated budget, the newspaper ‘Dagestani Pravda’ informs. The appropriate interagency commission was established to meet this purpose, on the results of work of which certain results were achieved and the general budget spending was 3.1 billion rubles in 2015. Measures have been taken to reduce inefficient spending of the executive authorities and local self-government by optimizing network costs and state government and municipal institutions, the order has been restored on the use of state and municipal property. Thus, violations of anybody's rights and infringement of interests have not been observed. A set of measures has been carried out, conducive to economic growth, implementation of the social obligations to the population for the payment of wages to state employees, allowances, benefits, construction of kindergartens and schools, implementation of the May decrees of the President of Russia.

As a result of the activities of the commission, cases of inefficient use of the existing assets in the region have also been identified. It was found that premises owned by the republic were rented by individuals ‘for pennies’, while rents for state needs were of a significant amount. Due to steps made to restore order in this matter, and the work on optimization of the republican budget for the rental of premises for the needs of the executive bodies and subordinate state institutions, the 2016 expenditures for the rent of premises have been decreased in comparison with 2015 to 63.5 million rubles. The cost of rent for accommodation of eight units of ministries and departments have been reduced and completely eliminated, as well as five public institutions in the social sphere. The agencies of another 6 ministries and agencies could eliminate the cost of rent in connection with the placement of them in the facilities owned by the Republic. In the current year the implementation of the tasks will be continued related to the reduction of inefficient budget spending, as well as with the definition of the perspective ways of replenishment of the regional budget revenues from its own sources and reserves. In particular, it is necessary to increase the intake of the non-tax revenue through the effective use of the state and municipal property. It is necessary to raise the level of revenues from the tax on incomes of the individuals, including through the legalization of informal employment, business profits and property taxes.

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increase of the level and quality of life is an important aspect of the social policy of the KBR. This idea permeates in an interview with the head of the republic Yury Kokov in the newspaper ‘Kabardino-Balkaria's truth’. He described the past 2015 for the country as "fairly difficult", but in spite difficulties it was managed to keep the forward vector of development. Thus, the volume of gross regional product in 2015 amounted to 132 billion rubles, which is 3.3% more than in 2014. The index of industrial production - 105%. The agricultural output grew by 4.4%. More than 375 thousand square meters of housing were put into operation, which is 14.2% more than in 2014. The income taxes, fees and other mandatory payments to the budgets of all levels increased by 23.5%.

According to Kokov, currently in the country 40 investment projects are being implemented in various fields. Among them are the construction of the Zaragizhskoy HPP, the completion of which is scheduled for 2016. The commissioning of the hydropower plant will increase electricity production by 40% of the total consumption. Earlier this year, between the plan of clean polymers ‘Ethan’ and the public corporations of China, a contract was signed, opening up new opportunities for the region, increasing the revenue base of the federal and republican budgets. Requests were directed to the Russian export hub for the provision of services in support of national exports and proposals on more than 20 kinds of groups of goods and equipment for the needs of Gazprom, Norilsk Nickel, Rostec, Rosneft, Russian Railways, Rosgeologiya, which local enterprises are able to produce today, or are ready to organize the production in the near future.

According to the list of the import-substituting goods produced in agriculture, particularly in vegetables and fruits, seeds of corn, poultry and canned fruits and vegetables, the republic has reached the level of complete self-sufficiency, and already supplies significant amounts of goods beyond the borders of the republic. It is necessary  to bring the supply of fruit production in other regions up to 300 thousand tons, vegetables, to 350 thousand tons by 2020. Among the most important projects carried out in this area are the сommissioning of the Prokhladnensky district complex for growing, storing, processing, packing and sale of fresh vegetables with capacity of 75 thousand tons per year. The commissioning  of an enterprise for deep processing of poultry capacity of 3 tons.; a feed mill with the production of pelleted feed capacity of 50 thousand metric tons. The completion of a canning factory for the production of green peas, sweet corn, beans with a capacity of 120 mln. cans per year and a number of other projects. The investment project of fisheries for sturgeon cultivation with an annual capacity of over 50 tons of fish and more than three tons of caviar is also interesting for the country. The construction of the agro-industrial park in the Baksan district, on the basis of which a unique modern agro-business incubator training ground will be created.

Talking about the social sphere, the head of the region noted the results in the implementation of the modernization of the health and education programs. To date, the need for medical and obstetric centers and medical clinics is almost completely covered. The number of patients treated with high-tech medical care is increasing. In 2015 there were 3,250 people, which is 520 people more than in 2014. This year the Republican Perinatal Center will be put into operation, the construction of the Oncology Center will be completed, reconstruction and modernization of other facilities.

The level of accessibility of the pre-school education for children in the country between the ages of three to seven years has reached almost 100%. Due to the overhaul and reconstruction, 3245 additional pre-school places on the basis of 80 educational institutions were created. A school for 550 seats and 9 kindergartens for 1240 places were built. At the end of the last year a modern multifunctional educational complex ‘Children's Academy of Creativity Sun City’ was put into operation, which aims to unite the organizations implementing the program of additional education of different directions. Reconstruction and renovation of 58 schools would have been implemented in the framework of the federal program by 2025. Work is being done to improve the business climate, employment, development of physical culture and sports, municipal services, tourism and recreation sphere, the resorts of Elbrus. In the last year in the framework of the program ‘Accessible Environment’ 10 of the 11 indicators were approved by the government of the ‘road map’ to improve the accessibility of facilities and services for  disabled persons. A special place in his interview the head of the republic paid to the issue of law and order and security of citizens, counteracting of  penetration and dissemination of the extremist ideology. According to him, during the year in the country no terrorist attacks were allowed. The number of terrorism-related crimes declined from 143 in 2010 to two in 2015. The  numbers, resources and material basis of the bandit underground suffered significant damage, its organizational structure was destroyed.

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The Newspaper ‘Free Georgia’ and the publication ‘Satellite-Georgia’ reported that the chairman of the ruling parliamentary faction ‘Georgian Dream’ Gia Volsky did not rule out the possibility of amending the law ‘On the occupied territories’. "If it is in the interests of Georgia and at the same time there are the international interests, we consider it permissible to initiate a bill amending as an exception for the members of the Russian delegation. Perhaps these changes of the law will become necessary and appropriate.", Volsky said. Earlier on Wednesday, Russian Deputy Foreign Minister Grigory Karasin in Prague after the meeting with the Special Representative of the Prime Minister of Georgia for the settlement of relations with Russia Zurab Abashidze said that the Russian MPs are considering the possibility to come to a meeting of the OSCE Parliamentary Assembly to be held in Tbilisi in July, but they need to have a guarantee of security and  that the existing law ‘On the occupation’ will not create problems to the deputies. Karasin said that it would be good if the Georgian authorities would abolishe the law.

Recall, Abkhazia and South Ossetia were recognized by Georgia as the occupied territories  in response to Russia's recognition of their independence after the war in August 2008. According to the law ‘On the occupied territories’ to visit them without permission from Tbilisi is illegal and punishable by a large fine or imprisonment of up to four years. Georgian Minister for Reintegration Paata Zakareishvili  also expressed hope  that the Georgian parliamentarians will make amendments to the law ‘On the occupied territories’ and the punishment for its violation will be mitigated. He said that his ministry had initiated amendments to the law ‘On the occupation’ and if these changes have been implemented, this question would not have stood before the OSCE Parliamentary Assembly in Tbilisi. Georgia's Minister of Justice Thea Tsulukiani said earlier that the Georgian leadership is not considering the abolition of the law ‘On occupied territories.’ The Chairman of the Georgian Parliament David Usupashvili called a session of the Parliamentary Assembly in Tbilisi, the biggest in the 25-year old  history of the country and the most important political and international event, which will be attended by 57 parliamentary delegations of the OSCE.

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The newspaper ‘Free Georgia’ and the publication ‘Satellite-Georgia’ reported that the chairman of the ruling parliamentary faction ‘Georgian Dream’, Gia Volsky, did not rule out the possibility of amending the law ‘On the occupied territories’. "If it is in the interests of Georgia and at the same time there are international interests, we consider it permissible to initiate a bill amending as an exception for the members of the Russian delegation. Perhaps these changes to the law will become necessary and appropriate," Volsky said. Earlier on Wednesday, Russian Deputy Foreign Minister Grigory Karasin in Prague after the meeting with the Special Representative of the Prime Minister of Georgia for the settlement of relations with Russia Zurab Abashidze said that Russian MPs are considering the possibility of going to a meeting of the OSCE Parliamentary Assembly to be held in Tbilisi in July, but they need to have a guarantee of security and that the existing law ‘On the occupation’ will not create problems for the deputies. Karasin said that it would be good if the Georgian authorities would abolish the law.

Recall, Abkhazia and South Ossetia were recognized by Georgia as occupied territories in response to Russia's recognition of their independence after the war in August 2008. According to the law ‘On the occupied territories’, to visit them without permission from Tbilisi is illegal and punishable by a large fine or imprisonment of up to four years. Georgian Minister for Reintegration Paata Zakareishvili also expressed hope that the Georgian parliamentarians will make amendments to the law ‘On the occupied territories’ and the punishment for its violation will be mitigated. He said that his ministry had initiated amendments to the law ‘On the occupation’, and if these changes have been implemented, this question would not have stood before the OSCE Parliamentary Assembly in Tbilisi. Georgia's Minister of Justice Tea Tsulukiani said earlier that the Georgian leadership is not considering the abolition of the law ‘On the occupied territories.’ The chairman of the Georgian Parliament David Usupashvili called a session of the Parliamentary Assembly in Tbilisi, the biggest in the 25-year old  history of the country and the most important political and international event, which will be attended by 57 parliamentary delegations of the OSCE.

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The newspaper ‘Voice of Armenia’ comments on the proposal by the Russian Federation’s Ministry of Economic Development to start import substitution in public procurement, with which it addressed the EAEC Member States. "In Russia there are already restrictions on the government purchases of products of light industry, mechanical engineering, medical devices and drugs. The same restrictions in other countries of the Union will contribute to the development of their economies. Now suppliers from other countries of EAEC benefit in the public procurement in Russia, and the Russian products in these countries do not,’’ a letter of the Russian Ministry reads.

The newspaper reminds that now the situation in Russia is such that engineering products bought by the state must be made on the territory of the EAEC, foreign products of the light industry (textiles, garments, plastic products) are not allowed to be purchased by state order, if there are domestic counterparts, and medical devices and medicines – if at least there are two counterparts. The author also cites the opinion of Russian Deputy Minister Yevgeni Yelin, who said that the prices of the government contracts have grown by 40% due to the import substitution, and, over time, protectionist measures will lead also to a decrease in product quality.

The publication calls on the Armenian authorities not to lose on the integration path the advantages in terms of economy of freedom, because, as he said, all sorts of restrictions and prohibitions, including the use of the state budget funds for the public procurement of the foreign enterprises goods (not from the EAEC countries) is a departure from the principles of the free trade and liberal economic model, in which, in his opinion, the country succeeded in the Eurasian space more than any other country for the past quarter of a century.

Rejection of the products of modern engineering, the journalist is confident, will throw Armenia back a generation in terms of technology,  because it will be forced to focus on the more backward technology from the same Russia. When import substitution is promoted artificially, by introducing administrative measures of a restrictive nature, the following short-term benefits for the local producers, who will occupy certain niche markets vacated from foreign analogues, the economy may suffer long-term damage in the form of loss of competition in the international market. In short, the artificial creation of import substitution and greenhouse conditions for the national producers may not be in the interests of consumers or the state as a whole, the author points out.

The publication believes that another reason for concern is that by agreeing to the proposal of the Russian ministries, the other countries of the EAEC, more likely, will not establish their own high-quality production, and will be forced to replace imports from the West with Russian analogues, so that Russia clearly will benefit, which cannot be said about the other members of the Union integration. In addition, the conditions for participation of companies from the countries of EAEC – primarily from Russia – should be clearly defined in competitions for public procurement from the state budget of Armenia, as the same Russian company for its financial capacity can simply crush local suppliers of goods and services. And how the Armenian companies will be able to use open access to the Russian market of public procurement and how they will be able to compete with local organizations is still a big question.

Thus, for all the visual appeal of the import substitution in the framework of the EAEC idea, building restrictive barriers for goods and services from third countries should be seriously calculated by Armenian specialists in terms of all the consequences and costs of such a step, the author concludes. After all, if with such measures Russia solves its geopolitical objectives, simply responding to a sanctions war on the West, what will the other countries of the Union do with this? Not to mention the fact that such actions could cause Armenia opposition from the WTO.

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Crimea is interested in supplies of fruits, soft drinks and inert materials from Abkhazia, which in turn is able to satisfy the proposal, the publication ‘Sputnik-Abkhazia’, it was reported by the Ministry of Economy of the Republic. According to the Ministry’s representative, it is not the first day Abkhazia has discussed turnover with the Crimean side. This question was also in the program of the official visit of the Prime Minister of Abkhazia, Artur Mikvabiya, to the Republic of Crimea in December 2015. At the moment there is a preliminary agreement on this issue, as well as on the issue of opening sea links between the republics, which have to be filled with real content. ‘’The Republic of Crimea presented us with a list of products that can be supplied to the local market. This is a fairly comprehensive list, the Ministry of Economy is studying it,’’  he added. At present it is important to define the conditions under which the trade will occur, and how exactly the transportation of goods will be executed between the republics.

The same publication writes that the Varyag ferry, which used to sail to the Turkish port of Zonguldak from Sevastopol, will now operate between Sevastopol and Abkhazia. However, Abkhaz officials have refused to talk about the specific dates of the establishment of the sea route."l cannot yet speak about specific arrangements, but certainly the establishment of sea cruise services between the resorts of Crimea, Krasnodar Territory and Abkhazia will meet the interests of our economy," the head of the Abkhazian Foreign Minister Vyacheslav Chirikba said. According to the head of the energy and transport management of the republic, Zurab Khajimba, the only port in the republic that is ready to take the vessel is the port in Sukhumi, but even here there are some limitations. It cannot berth large ships, they can just run aground. We need to clear the waters. There is also a dock in Gagra, but it is currently closed for renovation and, will probably only be ready by the summer."