Tuesday, April 4, 2017

Moscow Won’t Be ‘Feeding the Caucasus’ Anymore, Kuznetsov Says

Paul Goble

            Staunton, April 4 – Lev Kuznetsov, the Russian minister for the North Caucasus, has told officials in that region that Moscow no longer has sufficient resources in its budget to continue to “feed the Caucasus” anymore and that the republics there will have to make their own way, a message that is sure to trigger problems in that region and more generally.

            Anton Chablin, a journalist for Svobodnaya pressa, says that Kuznetsov has told North Caucasus officials that 2016 was a good year for the region: investments, tourism and industrial production are up while unemployment has declined by 17 percent from the year before (from 168,000 to 144,000) (svpressa.ru/economy/article/169726/).

            The minister conceded that unemployment in the region nonetheless remains more than twice as high as for Russia as a whole, 11 percent as compared to 5.5 percent, a major driver in causing people from that region to seek work elsewhere.

            At the same time, Kuznetsov pointed out that “the North Caucasus today is the absolute leader in the country on a single indicator – demographic. Last year, infant and maternal mortality continued to fall, while the number of children born rose to 15.9 per 1000 and the natural growth rate to 8.1 per 1,000, figures far higher than for other parts of Russia.

            Given this “demographic explosion,” the minister said, it is now time to begin thinking about “where [these young people] will be able to find work” and the likelihood that it will be outside of the region if conditions continue as they are. But that must change, Kuznetsov told the regional officials.

            “In 2017,” Chablin reports his saying, “subsidies for the development of the Caucasus were reduced in a major way. Given that the situation in the Caucasus has so improved … this means that [the republics there] must begin to deal with the situation on their own” rather than waiting for money from Moscow.

            In the future, given the budgetary realities, Kuznetsov said, any such assistance from the center “will be sharply reduced.” That means the republics must work more on their own, attracting investment and developing workplaces for their burgeoning population, a serious challenge for them all.

            At the ministerial collegium meeting in Essentuki, only federal subject heads showed up to hear Kuznetsov’s words. The leaders of Chechnya, Daghestan and Kabardino-Balkaria sent more junior officials.  “Apparently,” Chablin says, they felt that they had “some other more important affairs.” But they may soon decide otherwise.

            Nikolay Silayev, a specialist on the Caucasus at MGIMO, tells Chablin that “the bureaucrats of the Caucasus are going to have to adapt to new conditions,” ones in which they and not Moscow will be responsible for developing the investment climate and ensuring that money they raise in the private sector is spend in ways that their populations need.

            At the same time, Silayev continues, “the size of the subsidies from the federal budget will not be reflected directly in the domestic situation,” because these are about infrastructure rather than about paying social welfare costs and the salaries of officials.  And the outflow of young people will continue because the North Caucasus will remain poor and overpopulated.

            Fighting such an outflow, he says, is “a false goal: they must learn to administer it.”

            Silayev may be overly optimistic given that money is fungible and any significant cut in subsidies from Moscow will affect what the governments in the North Caucasus can do across the board. At the very least, less money from Moscow will make it harder for the regimes there to maintain social peace at a time when tensions appear to be rising for other reasons.

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