Publication: Monitor Volume: 3 Issue: 132

The Russian government has revoked the status of free economic zone which it granted to Ingushetia on an experimental basis in 1993. The government explained its decision by saying that free economic zones deprive the federal budget of sorely needed revenue and that their existence should therefore not be tolerated in the future either in Ingushetia or elsewhere. (Itar-Tass, July 7)

The decision will come as a bitter blow to Ingushetia, which is not only Russia’s youngest republic but one of its poorest. With virtually no industrial infrastructure, Ingushetia has the highest unemployment of any region in Russia. It is also a home for thousands of refugees and forced migrants from neighboring north Caucasus regions. During the Chechen war, refugees outnumbered local inhabitants.

Until 1991, Ingushetia was bundled together with Chechnya in a single "autonomous republic." The Ingush won their own republic when Chechnya declared itself independent. The Russian government’s 1992 recognition of Ingushetia as a separate republic, and its 1993 granting of tax-free status, were seen as concessions to persuade the Ingush to remain within the Russian Federation at a time when Chechnya was defiantly insisting on its right to secede. But so many companies registered in Ingushetia in order to take advantage of tax breaks that it was not long before the Russian government was expressing concern about the drain on federal revenues. Moscow was reported as long ago as 1995 to be considering repeal of the republic’s special status. (Segodnya, July 21, 1995)

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