On January 21, the first meeting of the Russian governmental commission on socio-economic development of the North Caucasus took place in Moscow. The chair of the commission, Prime Minister Vladimir Putin stated that the government and major Russian companies would invest significant resources into the development of the region in 2011, including the financing of 37 large projects, worth $13.3 billion. Putin called on the government agencies to aim for a “drastic shift in the North Caucasus.” The Russian prime minister provided the reason for investments into the region: “We need to uproot everything that feeds terrorism and extremism. Primarily these [causes of terrorism and extremism] are poverty, unemployment, low standards of education, corruption and lawlessness.” Putin reiterated the government’s earlier promise to create 400,000 jobs in the North Caucasus in the next ten years, saying that the unemployment numbers were reduced by 86,700 in the region, but was still high at 381,000 (www.premier.gov.ru, January 21).
Due to the continual threat of terrorism and separatism, the North Caucasus still occupies an important position in the internal politics of Russia. Putin’s populist rhetoric about development of the North Caucasus appears to be informed by the forthcoming parliamentary and presidential elections in Russia. In fact, Putin himself obliquely admitted in the same speech that planned investments in the North Caucasus may not come about. According to the prime minister, within the framework of the main federal program for the development of the North Caucasus, Yug Rossii (Southern Russia) in 2008, the incoming private investments comprised 44 percent of the planned total percentage of investment, in 2009 only 2 percent and in 2010 only 34 percent (www.premier.gov.ru, January 21).
Meanwhile, Moscow’s grandiose project to develop five ski resort areas in the North Caucasus began to take on a peculiar shape. Building the necessary infrastructure for ski resorts in the mountainous areas of Dagestan, North Ossetia, Kabardino-Balkaria, Karachay-Cherkessia and Adygea is expected to cost $15 billion, according to government estimates. About 800 kilometers of ski trails and over 100,000 hotel spaces will be built in these republics. At the end of December, 2010, Akhmed Bilalov, the vice-president of the Russian Olympic committee and vice-speaker of Krasnodar region’s parliament was appointed as the director of the state owned company “Resorts of the North Caucasus” which is managing the project. The company has $2 billion in Russian governmental money and is expected to attract more resources from private investors. Bilalov reportedly conceived this project and subsequently took it over as its leader. So far Credit Swiss and an Arab investment firm, Invest AD, have signed protocols of intention with the Russian government. Akhmed Bilalov’s brother, Magomed, happens to be a shareholder of Invest AD investment firm. The company “Resorts of the North Caucasus” is expected to advertise the project to potential investors at the upcoming World Economic Forum in Davos at the end of January (Kommersant, January 21).
The Russian government officially unveiled its strategy for the socio-economic development of the North Caucasus on September 6, 2010. Conflicting information followed this announcement. For example, Moscow’s envoy to the North Caucasus, Alexander Khloponin, stated at one point that at an initial stage, the project would be limited to building ski resorts only in Karachay-Cherkessia and North Ossetia, the quietest areas in the North Caucasus at the moment. At a high-level governmental meeting on January 21, 2011, Russia’s Minister for Regional Development Viktor Basargin promised to deliver a detailed plan on how the government intends to implement this strategy in April 2011.
Perhaps one of the greatest challenges for the project to build the ski resorts is its deliberate detachment from the local population and the republics’ leaderships. In particular, it is unclear how the republics may benefit from the successful creation of the ski resorts, apart from mitigating local unemployment. The resorts are bound to be owned and managed by Moscow either directly or via Kremlin-friendly Russian oligarchs. So, the republican governments will have few incentives to defend these construction sites from the insurgents, while the latter will gain additional political sway for attacking “the infidel aliens.”
Meanwhile, relations between Moscow and the North Caucasian republics’ leaders suddenly have soured over incendiary statements recently made by the outspoken leader of the Liberal-Democratic Party (LDP) of Russia, deputy chairman of the Russian parliament, Vladimir Zhirinovsky. On January 20, speaking on a talk-show on Russian TV about the Russian nationalists uprising in Moscow last December, Zhirinovsky scorned the North Caucasians, especially targeting Dagestanis, Chechens and Ingush as unruly people. According to the party leader, the North Caucasians do not want to work and honestly earn their own living, but live at the expense of the [ethnic] Russians, abuse Russian laws and [ethnic] Russian people. Zhirinovsky appeared to target specifically the republican status for the North Caucasians, offering to end this “privilege” in order to deal with Russia’s problems (http://poedinok.net/vladimir-zhirinovskij-i-leonid-gozman).
The Liberal Democratic Party traditionally is the most nationalistic force in the Russian parliament and is also believed to be an arm of the country’s government. Even though Zhirinovsky is known for his xenophobic statements, this time Chechen and Dagestani leaders’ reaction was unexpectedly harsh, while grumblings from the other republics’ were muted, but also conspicuous. On January 22 Chechnya’s parliament gathered for an extraordinary meeting that demanded the Liberal Democratic Party be outlawed in Russia and its leader removed from his position. Members of the LDP’s branch in Chechnya all left the party and the branch ceased to function in the republic (www.rbc.ru, January 22; Chechnya.gov.ru, January 21). “Zhirinovsky’s statements about changing the federal make up of Russia, in essence undermine the foundations of its constitution, set citizens of our country against each other according to the ethnic origin and provoke clashes between peoples. This is a way to a national catastrophe,” read an official Dagestani statement on the issue (Kavkaz-uzel.ru, January 22).
Chechen and Dagestani officials reacted angrily to Zhirinovsky’s statements partly because the public now appears to be especially sensitive to ethnicity-related news, following the massive attacks against the North Caucasians in Moscow in December 2010. But also republican officials certainly want to guard their present relative autonomy, warding off attacks from Russian officials at the early stages.
The timing for vast investments into the North Caucasus, proposed by the Russian government could hardly be worse. On the one hand, Russian nationalists will resent the government’s extra expenditure in the North Caucasus, given the poor state of many inner Russian territories. On the other hand, the North Caucasians feel increasingly discriminated against in Russia and partly alienated even from the developmental projects Moscow is trying to impose on them.