North Caucasus Financing Takes Back Seat to Putin’s Political Agenda

Publication: Eurasia Daily Monitor Volume: 8 Issue: 202

Vladimir Putin and Dagestani President Magomedsalam Magomedov meeting in Moscow, October 31 (Source:

On October 31, Russian Prime Minister Vladimir Putin met with the head of Dagestan, Magomedsalam Magomedov, in Moscow. Discussed in the meeting was the grand Russian program to spend nearly $200 billion to modernize the North Caucasus over the period 2012-2025. “If adopting the North Caucasian program is delayed until 2015, we would still like to ask you to have a special program for our republic to overhaul the social sphere,” Magomedov told Putin in the meeting, The Russian prime minister did not reassure the Dagestani leader (, October 31). followed up on the news and discovered that the North Caucasus development program requires Moscow to spend $12 billion from 2012-2014, but the projected national budget under consideration in the Russian State Duma allocates less than $4 billion for the same period. A source in the administration of the Russian envoy to the North Caucasus, Aleksandr Khloponin, confirmed that the North Caucasus program would not be approved in 2011. The source claimed there were several problems with the program, including its financing. Currently, there are only two regions in the North Caucasus that receive extra funds from Moscow for developmental purposes – Chechnya and Ingushetia. The program for Chechnya, worth $4 billion, is coming to an end this year (, October 31). The program for Ingushetia envisaged spending $500 million on the republic’s development in 2012-2014, but only $100 million is currently allocated in the projected Russian budget for this program (

The source in Khloponin’s administration stated that a new version of the North Caucasus development program would be ready sometime in November. According to the source, the program would replicate previous government spending patterns (, October 31). This essentially means that Moscow is abandoning plans for a rapid government-propelled modernization of the region, since only routine expenditures, isolated economic projects and minor infrastructural project will be supported.

Putin’s government has traditionally endorsed paternalistic rhetoric, so it may appear puzzling that the Russian government would want to announce plans to cut financing the North Caucasus on the eve of the December 2011 parliamentary elections and March 2012 presidential elections. Even though few people believe free, fair and unrigged elections can take place in Putin’s Russia, the government still seems to be cognizant of public perceptions. Vladimir Putin has regularly personally announced increases in pensions and salaries of government employees. So it would have made sense for the Russian government to pretend to retain plans for large investments in the North Caucasus at least until the presidential elections.

Still, Moscow’s move to scrap a significant part of its promises for North Caucasus modernization has another explanation. The Russian government must have calculated that unwavering support of the pro-Moscow North Caucasus elites is much less important than appeasing the Russian public, which is increasingly angry with governmental spending on what is seen as an alien and even hostile non-Russian region of Russia.

In October, Russian nationalists launched a campaign dubbed “Stop Feeding the Caucasus.” Some leading Russian pro-democracy activists like the lawyer and popular blogger Aleksei Navalny joined in condemning the government for diverting valuable resources to the North Caucasus while leaving the rest of Russia underfunded. Unlike previous xenophobic outbursts by Russian nationalists, the new emerging consensus among these nationalist groups and Russian pro-democracy groups is that the North Caucasus issue can successfully be used to target the Kremlin and its United Russia party. This trend certainly alarms the Russian government, even though some of the nationalist groups are rumored to have ties to the Russian security services. The rise of Russian nationalism also provokes the rise of other nationalisms in the Russian Federation. In October, an estimated 200 Tatar nationalists rallied in Kazan under the slogan Freedom for Tatarstan. Some experts, such as Sergei Peredery from Pyatigorsk, are already saying that “the mechanism of the dismantling of Russia is gaining momentum,” calling the North Caucasus Russia’s Kosovo (, October 24).

November 4, the Day of National Unity in Russia, has become a traditional day of celebration for Russian nationalists, who organize so-called Russian marches each year. This year, the Russian marches across the country are expected to be especially large. Observers point out that the Russian government is sending unclear signals about the future of the country – about whether Russia should be an ethnic Russian state, a civil society-based federation or an empire (, October 28).

Khloponin has already had to revert to defending the government’s spending in the North Caucasus. He said Moscow spent more on some Russian Far East or Siberian regions per capita than on the North Caucasus. He also pledged the government had no intention of “showering the North Caucasus with money” (, October 14). The North Caucasus may have prospects without Russian government investment, but in order to attract private investment, a number of reforms would need to be implemented that are hardly thinkable in the current Russian political environment.

Meanwhile, surveys find the Russian public is very skeptical about both the current situation in the North Caucasus and its future. In a poll conducted by the reputable Levada Center in September, 75 percent of those surveyed described the situation in the North Caucasus as “tense” or “critical.” Only 15 percent of the respondents said the situation in the region would improve within the next year, six percent thought that the second war in Chechnya had achieved all of its goals, while 34 percent said the military subjugation of this region had been partially successful. Thirty-nine percent of those polled agreed with the statement that the war was “useless” and that “the [North] Caucasus will still secede from Russia sooner or later.” In 2007, 46 percent of those polled had expressed that belief, but in the 2011 poll, the number of “don’t knows” increased by 10 percent – from 11 percent in 2007 to 21 percent in 2011. This may very well indicate a declining level of interest on the part of Russians in the North Caucasus (

Rising Russian nationalism seems to have prompted the government to accommodate nationalist views on the North Caucasus to some degree. Thus the region and Moscow’s policies toward it are becoming a serious issue in the upcoming electoral campaign, which both the government and opposition will try to exploit in the coming months.