Russian Big Business to Rebuild North Caucasus

VLADIVOSTOK, December 16 (RIA Novosti) – Russia’s big business will implement large-scale infrastructure projects in the North Caucasus to build production facilities in the region and spur the area’s social and economic development, North Caucasus Presidential Envoy Alexander Khloponin said on Sunday.

The Russian government approved on Thursday a new State Program for the North Caucasus Through 2025, which stipulates 2.5 trillion rubles ($80.9 billion) in spending on its volatile North Caucasus region in the next 13 years.

Under the program, 90 percent of these funds will come from so-called extra-budgetary sources, while the federal budget will allocate about 235 billion rubles ($7.5 billion) in 2013-2020.

The program also calls for boosting annual investment in the region to 2 trillion rubles annually and expanding the region’s output to 6 trillion rubles.

“Big business will engage in the implementation of the state program. But this will not be budget money. This will be investment by large companies,” Khloponin said in an interview with NTV TV channel broadcast for the Russian Far East.

Before Khloponin’s statement, it was not clear where the non-budgetary investment would come from. It still remains unclear whether the proposed funding includes money previously set aside for the region’s development.

“For example, [Russia’s largest privately owned oil company] LUKoil will build an industrial park in Budyonnovsk, including the largest petrochemical refinery with an investment of $140 million,” Khloponin said.

“Another project is a refinery in Grozny, which [Russia’s largest state-controlled oil firm] Rosneft will build. There are also other projects that do not require state support measures. These are the projects of large corporations,” he said.

Large-scale projects included in the program of the North Caucasus development will create thousands of new jobs in the region, the envoy said.

Poor economic conditions in North Caucasus republics and unemployment are believed to be the main factors driving local residents to join militant groups. The troubled North Caucasus region sees frequent attacks on law enforcement officers and government officials as Moscow continues to battle an Islamist insurgency there.

“The state will channel investment only into the social sphere while all the other funds will come from companies,” Khloponin said.


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