An increasing number of observers have been pointing to a rise in instability and a growing crisis of authority in the North Caucasus. Perhaps the most important of these observers is none other than Dmitry Kozak, the presidential envoy to the Southern Federal District. On June 26, Moskovsky komsomlets published an article by investigative journalist Aleksandr Khinshtein, who is also a State Duma deputy, which included citations from a report written by Kozak on the situation in the Southern Federal District. The report, as Khinshtein put it, could “easily rival any opposition manifesto.” Kozak wrote that the “corporate communities” that have emerged within the power structures of the republics of the North Caucasus “have monopolized political and economic resources.” The top posts in the governments and main economic entities of these republics “are held by people connected by family relations,” Kozak wrote, which has “ruined the system of checks and balances.” The dominant “clan-corporate associations” are closed entities that “are not interested in feedback mechanisms that enable an open dialog with citizens,” he wrote. Official arbitrariness, he added, “breeds social apathy among most of the population,” so that the top officials in six of the twelve regions of the Southern Federal District are rated negatively by their citizens.
According to Khinshtein, Kozak noted that federal budget assistance in the Southern Federal District has increased 3.4 times and regional consolidated budgets have gone up 2.6 times, yet gross domestic product has remained flat at half the national average. Meanwhile unemployment has increased 1.6 times. Twenty-six percent of the Southern Federal District’s economy is in the “shadow, criminal sector,” with that number rising to a whopping 44 percent in Dagestan (the overall Russian average is 14 percent). Some 54-90% of the federal district’s businessmen believe they have no chance of upholding their rights against regional authorities in court, while 40-88% of the entrepreneurs say they constantly encounter police lawlessness. Opinion polls show that businessmen in the Southern Federal District consider official extortion and arbitrariness the worst obstacle to their businesses, but fear criminal turf wars twice as much. According to Khinshtein, Kozak predicted in his report that there would be a sharp growth in radicalism and extremism and a widening gap “between constitutional democratic principles and the processes that take place in reality.”