Russia wants jobs, investment to calm North Caucasus

Russia must create jobs in its volatile North Caucasus region to help dissuade young people from joining an Islamist insurgency and prevent new violence, the Kremlin's envoy to the region said. Explaining a shift in policy as Russia prepares to host the 2014 Winter Olympics in the area, Alexander Khloponin said Moscow could no longer fight the insurgency with force alone and called development an urgent priority.
"We can keep endlessly killing bandits but we need to create an economic platform to stop the swelling of the ranks of armed groups," Khloponin, a former businessman and regional governor appointed by President Dmitry Medvedev, said in an interview.
"If we don't create jobs, we will only get a hotbed of tensions," he told Reuters at the St Petersburg International Economic Forum, Russia's version of the World Economic Forum in Davos. "Then not even God can guarantee there won't be more attacks."
Russia drove separatists from power in Chechnya in the second of two wars a decade ago but the Islamist insurgency has continued in other, mainly Muslim parts of the North Caucasus. Khloponin said the average age of the insurgents, who are seeking an Islamist state and have staged bomb attacks in Moscow, was now 18.
"Some are as young as 14. They are Robin Hoods who have lost their way... I cannot resolve this problem by just deploying soldiers to the region," he said. "If we want stability in the Caucasus we have to kill the militants but also give youths somewhere to earn their bread."
Despite pouring money into the North Caucasus to try to increase stability and win the loyalty of local leaders, Moscow has struggled to curb corruption, clan rivalries and unemployment that is as high as 50 percent in some places. The risk of violence is a concern for foreign investors in Russia but Khloponin was trying at the St Petersburg forum to persuade business leaders to back a $16-billion plan to build a chain of ski resorts in the Caucasus mountains.
Under a deal signed on Friday on a joint Russian-French venture, France will provide $1.2 billion (840 million euros), mostly in ski lift equipment, and Russia will invest 400 million euros in infrastructure, he said. Russia has ski areas around Mount Elbrus and elsewhere in the western part of the North Caucasus, but much of the infrastructure is rudimentary and few foreigners visit.
Khloponin said Moscow was learning from Turkey's experience in its Kurdish areas how to create industrial parks and private-public partnerships in the restive region. He said that 60 billion roubles ($1.93 billion) of the $16 billion he is seeking would come from the state and the remainder from other investors.
He acknowledged risks were high and investment into the North Caucasus was "scary" because of corruption, violence and administrative barriers, but said the government was ready to guarantee 70 percent on investment. "We must take investors by the hand, like a woman, and help them carry out these projects," he said.
"She has to believe she is safe with you that is why I am sure that we will attract this money because we are ready to share investors' risks, to protect them and ensure their money doesn't go missing." Just days after Russia unveiled its plans in January, a suicide bombing killed 37 people at Moscow's busiest airport and masked gunmen shot dead three tourists heading for the ski slopes of Mount Elbrus, the hub of the planned resort clusters.
This was a new tactic by the militants which sounded a warning to Russia before it hosts the Winter Olympics in the Black Sea resort of Sochi, 120 miles (190 km) west of Elbrus' slopes. "I am worried of course... as long as there are bandits in the Caucasus it will stall economic development," Khloponin said.
Russian authorities have killed and captured some senior militants in recent months, but 754 people were killed in the region in 2010, including 178 civilians, according to the Caucasian Knot, a news portal that monitors casualties. Khloponin accused the former Soviet republic of Georgia, with which Russia fought a brief war in 2008, of trying to stir ethnic tensions before the Sochi Games. Georgia has denied the charges and Khloponin said it was now time to "turn the page" on historical differences over the region that stretch back more than a century.