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RUSSIA'S TINDERBOX - Belfer Center for Science and International ...

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<strong>and</strong> dependent on subsidies from the center to stave off collapse. 4 Be<strong>for</strong>e 1991, 50-70% of the<br />

budget revenues of the republics came from direct federal subsidies <strong>and</strong> centralized bank credits,<br />

with Chechnya, Ingushetia <strong>and</strong> Dagestan being the most heavily subsidized. In the post-Soviet<br />

period, the republics’ problems have been compounded by dramatic declines in industrial <strong>and</strong><br />

agricultural production. In 1992, <strong>for</strong> example, industrial production fell by 36% in North Ossetia,<br />

30% in Chechnya, <strong>and</strong> 28% in Dagestan, as opposed to 18.8% <strong>for</strong> the Russian Federation as a<br />

whole. In Chechnya, per capita food production declined by 46% in 1992, in contrast to an average<br />

decline of 18% across Russia. In the North Caucasus region in general, industrial production fell by<br />

23% <strong>for</strong> 1992, <strong>and</strong> by a further 21.6% in 1993, while the corresponding decline <strong>for</strong> the rest of the<br />

Russian Federation was only 16.2% in 1993. Likewise, average salaries in the North Caucasus<br />

declined to one third of the average <strong>for</strong> Russia, although prices on all commodities rose to the same<br />

levels across the Federation. By 1993, as a direct result of economic collapse, 97% of the republican<br />

budget of Ingushetia, <strong>for</strong> example, came from Russian federal government subsidies.<br />

These economic difficulties, the high population density, extreme ethnic diversity, <strong>and</strong> a<br />

number of other important factors have combined to turn the North Caucasus region into a<br />

maelstrom of ethno-political conflict. Since 1991, a series of often violent disputes have erupted<br />

between Ossetians <strong>and</strong> Ingush; between Kabardinians <strong>and</strong> Balkars, <strong>and</strong> Karachais <strong>and</strong> Cherkess;<br />

between Chechens <strong>and</strong> Laks, Chechens <strong>and</strong> Avars, Kumyks <strong>and</strong> Laks, <strong>and</strong> Lezgins <strong>and</strong> Azeris in<br />

Dagestan; between Cossacks <strong>and</strong> all of the other ethnic groups; <strong>and</strong> between Chechens <strong>and</strong><br />

Russians. These disputes center on the issue of which ethnic group has the ultimate political<br />

authority over a certain territory <strong>and</strong> the people who inhabit it <strong>and</strong> thus who determines access to the<br />

region’s scarce resources of l<strong>and</strong>, housing <strong>and</strong> jobs.<br />

In terms of the potential <strong>for</strong> widespread violence over these issues, the North Caucasus could<br />

be the next Bosnia. As many as 50,000 people may have died so far in the war in Chechnya, almost<br />

600 people were killed in the 1992 conflict between North Ossetia <strong>and</strong> Ingushetia, several hundred<br />

people have been killed in armed clashes in other republics, <strong>and</strong> hundreds of thous<strong>and</strong>s in the region<br />

have been made homeless. In addition, all of the elements that produced conflict in the Balkans are<br />

present in the North Caucasus:<br />

• the disintegration of a large multi-ethnic Communist state that removed the<br />

ideological underpinning from a complex national-territorial administrative structure;<br />

• a multi-ethnic mix of people with historic grievances who oppose the administrative<br />

border arrangements within the state <strong>and</strong> the new configuration of international<br />

borders;<br />

• a faultline between Eastern Orthodox Christianity <strong>and</strong> Islam;<br />

4 In contrast to its share of Russian agricultural production, the North Caucasus economic region is responsible <strong>for</strong><br />

only 7.6% of Russian industrial output. Industry in the region is dominated by mineral <strong>and</strong> raw material extraction,<br />

<strong>and</strong> the production of oil <strong>and</strong> gas. Prior to its secession from the Russian Federation in 1991, Chechnya accounted<br />

<strong>for</strong> 50% of the total oil production in the region. Chechnya was also the center of oil-refining in the North<br />

Caucasus, with the refinery in Grozny producing 90% of Russia’s aviation engine oil.<br />

iii

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