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Putin presents Moscow’s ‘New Deal’ for the Caucasus. Economic revival, hotels and ski slopes, commerce and petrol: a new strategy for combating Islamic insurgents

 

Russian Prime Minister Vladimir Putin has presented his country's new economic strategy for Northern Caucasia: new jobs (up to 400,000 in the next decade), tourism, a chain of ski resorts across the Caucuses mountain range, a petrol refinery in the heart of Chechnya, the upgrading of seaports and the long term ambition of including the Caucasus in the North-South Corridor, and an important road-artery that will unite Europe with Central Asia.

Moscow's counter-insurgence drive, aimed at reducing recruitment potential for the Islamic militants who benefit from poverty and unemployment, is Russia's strategy for accelerating economic development in the region. A stable and pacified Caucasia is very much in Russia's interest, and so Moscow has decided to change tactics and will try to win over "the hearts and minds" of the population and thereby reduce the influence of local emirs and sheiks. The years of outright warfare are over, but low-intensity guerrilla activity continues to take its toll on the lives of soldiers, police, and militias on an almost daily basis. Since the beginning of this year, Putin reported, over one hundred rebel combatants have been killed or captured in the area of the so-called "Caucus Emirate", which covers Chechnya, Dagestan, Circassia, Kabardino-Balkaria and Ingushetia. The Russian Prime Minister is convinced that things are moving in the right direction and seemed confident when he stated that Muslim ideological and religious insurgency is increasingly turning into a phenomenon that resembles gang warfare.

The aim is therefore to attract private investment in the area, until now discouraged by the region's instability and lack of security. In illustrating his program at the Kislovodsk conference, Putin also spoke of stimulating local businesses, allotting 200 million dollars to this fund, to cover risks connected with loans conceded by banks to the local population. Another 550 million dollars have been invested in the construction of a refinery in Chechnya, which will transform the Caucasian republic into a new and important player in the Russian petrol industry.

Tourism and Commerce are two further major pillars of the new strategy: 65 million dollars have already been set aside and are ready to be invested in planning a chain of ski resorts and facilities in the Caucus Mountains, a project which will lead to the creation of 160,000 jobs and a customer capacity of around 100,000 tourists. The port of Makhachkala - the capital of Dagestan - will take on new importance as it handles goods in movement on the Caspian Sea, and a motor highway will be built to connect it with the port of Sukhumi in Abkhazia, on the Black Sea.

To carry out all these projects, the Russian government plans to open a branch of the Vneshekonombank state-run bank in the region, as well as a satellite branch of the Russian Ministry for Economic Development which will be responsible for coordinating the 113 different government agencies present in the area and to evaluate, encourage and implement investment initiatives. A kind of plenipotentiary figure will directly represent President Dmitry Medvedev and Vladimir Putin: this will be Aleksander Khloponin, who last January was appointed by the Kremlin as head of the new North Caucasian Federal District.

Nicola Sessa