OREANDA-NEWS. May 05, 2011. “The federal programme for the development of the North Caucasus must become a major instrument in resolving the region’s socio-economic issues, supporting business, launching new production lines, forming a modern social infrastructure, and reducing unemployment, which has become the main social headache in the region.”
Vladimir Putin’s opening remarks:

Ladies and Gentlemen,

Today, we are holding the second meeting of the government commission on the socio-economic development of the North Caucasus. As we agreed, today we’ll discuss the draft federal programme on the region’s development. In effect, this federal programme for the  development of the North Caucasus must become a major instrument in resolving the region’s socio-economic issues, supporting business, launching new production lines, forming a modern social infrastructure, and reducing unemployment, which has become the main social headache in the region. It is very important to make sure that all those who live in this region see the results of this programme’s implementation.

No doubt, much will have to be done. It will be necessary to attract considerable funding and improve the investment climate. The mechanism of government guarantees is designed to encourage business activity in the region by minimising the risks of investors and supporting the most important projects.

Today, I have signed the relevant government resolution: this year alone, the total value of state guarantees for the North Caucasus will amount to 50 billion roubles. In this context, I’d like to draw the attention of the federal and regional authorities to what is happening with government guarantees that have been granted for projects in the Chechen Republic. We dealt with this issue over the past year and discussed it at the commission’s previous meeting, but, regrettably, nothing has changed. This is absolutely impermissible. I’d like to know right now why Chechnya has not yet made use of its government guarantees. I am familiar with the excuses that are being made. The Finance Ministry says that the projects have not been thoroughly outlined. But you know what? Making excuses is easy. If they haven’t been thoroughly analysed, then help them get it done! Let the Ministry of Regional Development, the Ministry of Economic Development, and the Finance Ministry assist them. We initially had the same problem in 2009 when we suggested a package of government guarantees as one of the ways of supporting the real economy. Who took advantage of these guarantees? Very few. And we should not allow this to happen again.

It is necessary to make the most of the development institutions that have been set up expressly for the North Caucasus. They are designed to attract domestic and foreign capital to the region and to render expert assistance to the business community in implementing investment projects. I hope that our colleagues from Vnesheconombank and the North Caucasus Development Corporation will make a meaningful contribution to this effort. As of today, the corporation has reviewed several dozen business plans and selected five of the best, which require total funding to the tune of 62 billion roubles. The corporation will issue a loan of 7 billion roubles to support them. These projects will include the development of an iron ore deposit Kizil-Dere in Dagestan, establishment of a chemical centre in the Stavropol Territory, building of year-round health resorts in Arkhyz and Veduchi, and upgrading of the tourist and resort zone of the Caucasian Mineral Waters.

These projects will create hundreds of jobs, remove a number of infrastructure restrictions on business development, and substantially increase tax revenues at all levels.

We also expect promising results from the North Caucasian Resorts joint-stock company. It will carry out projects in six special economic tourist zones in the Caucasus, including four in the North Caucasus.

The plans provide for the establishment of infrastructure – roads, hotels, and ski runs. It is very important to ensure the safety of tourist centres and of the people who arrive there on vacation.

Allow me to repeat that the federal programme for the North Caucasus development should become one of the main instruments of development in the region. It integrates major federal programmes that are already operational – such as the “Southern Russia,” “Development of the Chechen Republic,” and “Development of Ingushetia” programmes – along with new sub-programmes that are to be drafted for each region of the North Caucasus Federal District. In other words, after the adoption of this federal programme, all territories of the district will have their own development plans and will receive adequate federal support for their implementation.

The work and funding of the former federal targeted programmes will remain unchanged. In this context, however, I’d like to request the Ministry of Regional Development to rule out a potential overlap of measures in the federal targeted programmes and sub-programmes for the regions of the North Caucasus Federal District.

I hope that this comprehensive approach to the federal programme will improve the management of budget resources and make it possible to channel funding into priority areas. Apart from that, I’d also like to ask the Ministry of Regional Development to step up its efforts in finalising and adapting the federal programme – all the more so since over 30 investment projects with total funding of 145 billion roubles have already been approved and any delay on the programme would impede the efficacy and timeliness of their implementation.

Our colleagues from the regions should also actively join these efforts, assist those who are initiating the projects I just mentioned, and, if need be, adjust their business plans and complete the necessary estimates and documentation.

Today, we’ll listen to the reports of the leaders of Dagestan and Ingushetia on the socio-economic development of their republics. Let’s get down to business. Mr Basargin, please go ahead.

Viktor Basargin: Mr Putin, Ladies and Gentlemen,

Last September, the government approved the Strategy for the Development of the North Caucasus Federal District up to 2025. The strategy relied on major investment projects that were selected upon review of the situation in the regions of the North Caucasus Federal District and identified priorities in its development.

The federal programme must become an instrument for implementing this strategy. In line with your instructions, a decision was made on drafting this programme. The Ministry of Regional Development elaborated its draft and submitted it for approval to all federal departments and all regions of the North Caucasus Federal District on April 15.

As you’ve noted, the programme is aimed at promoting the socio-economic development of the district’s regions and upgrading its living standards. To achieve this goal, we are planning to improve the investment climate: to attract investment to the projects that will be selected under the programme, to establish development institutes in the district, to develop its social services through federal funding, and, last but not least, to create a more positive perception of the North Caucasus. 

As you’ve said, there are already three federal targeted programmes directed at the south of Russia (up to 2013), the socio-economic development of the Chechen Republic (up to 2012), and the same development of the Republic of Ingushetia (2010-2016). To achieve the objectives of these programmes, we would like to request their extension for another year. In conclusion, I’d like to mention a problem that all the three programmes share.

After the programmes on Chechnya and Ingushetia are carried out, we will introduce amendments to the federal programme and adopt sub-programmes for these republics. In other words, they will not be left in the cold upon the completion of their federal targeted programmes. The federal programme includes eight sub-programmes directed at five regions of the North Caucasus Federal District.  We have also adopted three additional sub-programmes. The first two are dedicated to the socio-economic development of the Caucasian Mineral Waters area (in line with your instructions) and the Prigorodny District of North Ossetia (Alania), where Ingush and Ossetian people live side by side. The third is designed to enhance the overall investment appeal of the regions of the North Caucasus Federal District.