December 19th 2001 · Prague Watchdog / Yevgenia Borisova · PRINTER FRIENDLY FORMAT · E-MAIL THIS · ALSO AVAILABLE IN: CZECH 

Chechnya started to slowly rise from ashes

Yevgenia Borisova, special to Prague Watchdog

It may sound strange, but war-torn Chechnya has this year started to slowly rise from the ashes.

However, the economic program to restore Chechnya that is being implemented will not be a solution if it is not backed up by a complex program of coordinated efforts by the military, political, economic and law-enforcement structures. That hasn't happened yet.

On the outside, things are moving ahead.

“I have seen quite a few private houses being restored, and — I am probably one of the luckiest residents of Grozny — I have seen builders working on my apartment block on Ordzhonikidze Prospekt!” said Mayerbek Nunayev, resident of Grozny, in an interview.

Nunayev’s apartment block, with about 150 flats, is located in downtown Grozny and it is the only 9-story building that has remained in one piece in the embattled Chechen capital. Dozens of other high-rises have been reduced to heaps of rubble.

Builders warned Nunayev not to set a date for a house-warming party because “funding is scarce.” This year, Chechen officials said, about 1,500 private houses will be reconstructed — a miniscule fraction of what needs to be repaired after intensive bombing, shelling and looting in the first and second Chechen wars.

There is no precise information in Chechnya on how much damage has been done to the Chechen residential and industrial sector. It is believed that 60 percent of housing is either completely or partially damaged and the devastation to the industrial sector is estimated at tens of billions of dollars. A plan to reconstruct the most ravaged city — Grozny — is yet to be created.

Construction works in Chechnya are being funded under the Program of the Restoration of Economy and Social Life in Chechnya approved by the Russian government at the beginning of this year and which was allocated 14 billion rubles ($480 million) from budget and non-budgetary funds. It was also supposed to generate revenues from sales of Chechen oil.

But while state-owned monopolies, including Gazprom, national power grid UES and the Railways Ministry, obtained the money almost immediately, the Construction Ministry delayed until September, when it opened a special office in Chechnya.

Yet by the end of November only 4.5 billion rubles ($155 million) of the Program's cash has been spent.

The government is now hastily spending the money because, for bureaucratic reasons, it may not be able to use any leftover money in the next financial year.

“The Program is working,” said Stanislav Ilyasov, head of the Chechen pro-Kremlin government, at a recent news conference.

He said that schools, hospitals, markets, dry-cleaning shops and other enterprises, including industrial and agriculture, are working and much of the infrastructure is restored.

About 400 kilometers of railroads within Chechnya have been restored and the train Gudermes [second biggest town in Chechnya]-Moscow is now operating as well as a few local commuter trains. Almost 200 villages and towns now have electricity, 120 have gas. Water pipelines are restored in 11 villages. This year telephone lines were extended to all the districts of Chechnya and now the lines for 2,000 phones are being installed.

Pensions and child allowances are being paid regularly.

Oil and agriculture business is being restored: About 3,200 tons of oil is extracted a day and Chechnya harvested 220,000 tons of grain this summer.

It also sowed some 155,000 hectares of lands with winter wheat — more than the republic tilled before the unrest began a decade ago.

Officials say that about 90,000 jobs were created in Chechnya this year. The numbers of registered companies and private entrepreneurs is growing — from 767 companies and 3,989 individuals in the beginning of 2001; they skyrocketed to 2,206 companies and 100,789 entrepreneurs as of Oct. 1.

More than 1 billion rubles in taxes had been collected by December.

But the republic’s business structure is almost inoperational: It has no commercial banks and it has yet to sort out ownership issues, because no privatization has been conducted according to the federal rules.

And most Chechens of working age are still jobless and have no income.

Desperate to feed their families, many locals agree to plant land mines or assist guerrillas in other ways for even the smallest sums.

“Poor, wretched people are taking up arms for just $30 to $40,” said Lieutenant-General Vladimir Moltenskoi, Commander of the Unified Troops in Chechnya, to Interfax in November.

“Only when people understand that the most important is working hands and not an assault rifle will we start seriously talking about the end of the counter-terrorist operation,” he added.

No one denies this. Many also believe that federal money will never be enough to revive the economy of Chechnya and some are prepared to put their money into restoring enterprises.

“We can’t sit and wait. We have to restore our economy,” said Usman Masayev, head of the Moscow-based Diaret concern, who Chechen businessmen recently elected chair of the Union of Chechen Industrialists and Entrepreneurs.

Masayev this year formed a pool of 15 Chechen businessmen who work in different Russian regions. The pool plans to invest $10 million of private money to restore several factories in Chechnya including a sugar and a bread factory in Argun, a town near Grozny.

Masayev and his partners are following the example of Khanpasha Amirov, who reopened a Gudermes brick factory in March. It was the first factory reopened in Chechnya after it was destroyed in the war. Amirov invested his own money and borrowed some more and the factory quickly began to turn a profit.

Masayev said in an interview Dec. 10 that the sugar and bread businesses are going well and very soon his factories will be able to supply not only Chechens, but also export to other regions.

Masayev said there is a lot of interest among businessmen about working in Chechnya.

“I have crowds of them in my both offices in Moscow and in Chechnya. I believe that people will soon start to do real business."

But he seems to be overly optimistic.

His colleague who works in Chiri-Yurt restoring a cement factory is much less enthusiastic about business opportunities in Chechnya.

Ruslan Maayev said in an interview that his factory suffers a lot from ongoing thefts and other problems.

More than 600 people are already working at the factory restoring it from the rubble and soon the factory will be able to produce 600,000 tons of cement a year and also to sell limestone.

But there are real problems, Maayev said.

The roads are frequently blocked by federal troops. That hinders deliveries and staff movement, the railroad from the factory to Argun is destroyed, the limestone quarry — where the equipment was broken or stolen — is occupied by the troops and the factory is constantly being looted — by guards provided by the government and by federal troops.

“In September, we got a whole battalion of guards, but thefts only increased and we had to get rid of them,” Maayev said.

“After that federal troops walked in, all the construction materials we accumulated were gone with them. They took every single piece of material that we bought with the money provided for the restoration: Several truckloads of granulated marble, bitumen, rubberoid [material to cover roofs], wood. They simply put it on trucks and took it away.”

The last time they came was at the end of October, Maayev said.

“Of course, they did not identify themselves. They simply entered the factory in their armored cars, made the guards put their faces to the wall and then took what they wanted. We have written complaints from our staff saying that they were tortured by the troops and I submitted the complaints to the Prosecutor’s Office.

“I have filed my complaints to all law-enforcement bodies here, but nothing is being done. Even now, we are so afraid that the troops will come in and destroy all we have restored."

Masayev sighed sadly when asked to comment about non-stop theft and other problems created by federal troops.

“Of course, there will be problems as long as the military operation is still on. But I am sure it is a temporary thing and we must move on.”

The latest blow was done to Argun’s business potential on Thursday (Dec. 13) by the federal troops during the latest cleansing operation.

During a several-day operation in which a number of Chechen fighters were reportedly arrested, the power station which had been restored by local energy company Grozenergo and on which Masayev relied for his sugar factory was seriously damaged and much of the equipment, including telecommunications, was stolen.

“The military has penetrated to the TETs-4 [energy station] and put the equipment out of action,” Interfax quoted Nurdin Usamov, general director of Grozenergo, as saying at a news conference in Grozny Thursday (Dec. 13). “They carried out a pogrom at the station... They behaved in a provocative manner and humiliated the staff... Several people were detained and taken away without any explanations. We don't know where they are.”

The station also supplies electricity to many buildings in Grozny and the military base in Khankala, but that did nothing to hinder the thefts.

Usamov said staff left their workstations fearing for their lives when the military invaded the station. He said next day that Moltenskoi promised him to find the culprets and to punish them.

With the help of federal cash and private investment, several food factories and mills reopened recently in Chechnya. A mineral-water bottling plant operates in Sernovodsk. Plans exist to repair several diary and meat processing enterprises.

However, most major enterprises that supported the lives of thousands of Chechen people have been destroyed to the extent that they must be flattened and no other long-term employment opportunities are being considered.

Of the Chechen oil complex — the main industry in the region that used to employ 18,000 people and process up to 17 million tons of oil a year — only one enterprise remains that, if its equipment is repaired, is capable of processing a mere only from 0,4 million tons of oil to 1 million tons a year.

According to a statement provided by pro-Moscow Chechen government's Economics Ministry, “all the oil processing and petrochemical enterprises have sustained significant damage while not a single refinery has escaped unscathed.”

The republic now could rely only on revenues from sales of crude oil — but the business is far from orderly.

Officials believe that at least 500 tons of oil a day out of 3,200 tons that are extracted are stolen — much of it from wells that are poorly guarded.

This year 700,000 tons of oil will be extracted from eight operating Chechnya oil wells, according to Alexander Stepanenko, spokesman for the state-owned oil company Rosneft that controls the legal oil business in Chechnya via its local affiliation Grozneftegaz.

Next year Grozneftegaz plans to extract 1.4 million tons of oil — but the share that actually ends up for legal sales will depend on who controls the oil wells.

In summer, a special oil police was created to guard oil wells with headquarters in Tolstoi-Yurt near Grozny.

But people are afraid to work for the oil police, a resident of Tolstoi-Yurt said in an interview.

“I know six men who worked there and they were all shot dead,” the resident, who did not want to be named, said. “The wells are located far from where people live and the guards are easy prey for guerrillas or locals, who steal it to process at their makeshift refineries, or for federal soldiers who want their cut from the extraction and transportation.”

Fighting oil thefts is the talk of the town in Chechnya. Everyone understands that it will stop only when people get other jobs, or at least when the end comes to the makeshift refineries, which have at times numbered in the tens of thousands.

But the economy is picking up slowly in the republic while natural gas — the fuel for makeshift refineries — is free.

Free gas is used in huge amounts to light dark streets in Grozny — most districts of which have no electricity — and to heat up big tanks with oil to process it into petrol in the backyards of Chechen homes.

Regular raids by the federal troops keep revealing hundreds of new oil-processing operations, but for every tank they blow up, a new one is established and the business goes on.

“Of course, these people pay bribes to those policemen who are supposed to fight this business,” a Tolstoi-Yurt resident said. “I will never believe that they can’t find the homes that cook petrol — the smell is too distinctive not to identify such locations.”

Nor is anything being done to the traders of low quality homemade petrol who openly sell their produce in 10-liter jars on main roads throughout the republic.

Federal troops officially deny any involvement.

For those Chechens who have nothing to do with oil or did not manage to get a job at working enterprises, hopes for a better life are dim. Even lower are the hopes for those who live as refugees in other regions of Russia and CIS countries.

According to Ruslan Avtayev, head of the pro-Moscow Chechen Emergency Situations Ministry, about 162,000 Chechens have to live in Ingushetia, North Ossetia, Dagestan and Stavropol region because they have lost their homes in Chechnya.

Humanitarian aid organizations list up to 310,000 refugees living in Ingushetia only. The discrepancy is due to the fact that in April the now abolished Nationalities and Migration Ministry stopped listing new refugees even though they kept coming throughout the whole year.

Thousands of Chechens live in other Russian cities, including Moscow and St Petersburg. Several thousand Chechens live in Georgia.

Only 639 Chechens have moved back to live in Chechnya this year, Avtayev told Interfax at the end of November.

People apparently do not believe they will find safety and jobs in Chechnya.

Bislan Gantamirov, chief federal inspector for Chechnya in the South Federal District of Russia, said at a news conference Friday (Dec. 14) that the situation in Chechnya “practically has a character of constant chaos in all the kind of activities.”

“I could say that the counter-terrorist operation and the fight with extremists has entered a new phase that could be called a ‘Chechen dead end’. It can be explained, above all, by the unruly and contradictory activities of the federal structures and the absence of a clear program of activities at all levels of power.”

Gantamirov, as well as most Chechen politicians, the Chechen administration and the pro-Moscow government believe that only a complex and coordinated program of the management in the political, economic, military and law-enforcement fractions of the Chechen campaign could bring the order to the republic.

Such a program, which would have to be approved at the highest level and offered for the implementation in Chechnya, does not exist.

Yevgenia Borisova is a correspondent of the Russian daily "Moscow Times".


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