As the security situation has worsened in the Northern Caucasus over the past several years, Russian political pundits have taken to theorizing as to what sort of state might emerge there should Moscow become unwilling – or perhaps unable – to maintain its suzerainty in the region. It might be assumed that any economic strategy embraced by this new state would be defined by the political viewpoint of its leadership. When it comes to formulating economic strategy, however, it would seem that Moscow bureaucrats, local pro-Moscow elites and public representatives of the rebel movement in the region are reading from the same manuals.

BACKGROUND: In May 2010, an article entitled ‘The Economic Prospects of the Caucasus Emirate’ was posted on a website operated by agents of Dagestan’s rebel organisation, Jamaat Sharia. This article was attributed to an anonymous third-year university student in the Dagestan State Institute of National Economy. The posting of this economic treatise was remarkable for several reasons. Firstly, it represented one of the first attempts by a representative of the Caucasus Emirate organization to explain the economic policies associated with that body.

In the second instance, the article is remarkable for the fact that neither mainstream Russian economists, nor their neo-liberal counterparts in the West, could take issue with the economic recommendations and conclusions advanced by the anonymous author. He criticises the dependence of the region’s inhabitants on benefits provided by the Russian exchequer. Their reliance on state welfare makes it difficult for the people of the region to contemplate a future free of Russian influence. The fiscal burden of the ‘Welfare State’ is a familiar refrain from centre-right politicians and neo-liberal economists in the West. The author believes that Russia’s economic subsidization of the region’s inhabitants is in fact a psychological weapon in Moscow’s counter-insurgency strategy: it contributes to an impression, popular throughout the Northern Caucasus, that the region is incapable of managing its own economic affairs without Russian involvement.

The author urges his countrymen not to be apprehensive about a scenario whereby subsidies from the Russian budget are no longer available to them: “If Muslims have found the strength, by trusting in God, to struggle with a huge Empire for more than fifteen years, with Allah’s help they will find the strength to feed themselves without any handouts”. At this point it becomes clear that the title of this article is misleading; the author is concerned solely with the economic prospects of Dagestan and does not mention the other republics in the region or their economic resources.

At times, his language is virtually indistinguishable from that used by mainstream politicians in the West. He promises ‘budgetary transparency’ in the new state. He also proposes tax credits and tax exemptions for small businesses. A green agenda is even outlined, with the author foreseeing the new government saving money by switching to alternative sources of energy such as wind and solar power. It is also proposed that Dagestan should make use of more traditional economic assets. The economic importance of the Caspian Sea is outlined; the possibility of exporting agricultural produce is discussed; and the sale of electrical power to neighbouring jurisdictions is envisaged as a means of swelling the state coffers. Taken at face value, this treatise contains a sensible strategy for instituting Dagestan’s economic sovereignty within the context of a new Islamic state in the Northern Caucasus. The article runs to less than nine hundred words, however, and contains too many assumptions about social and economic realities in Dagestan to be in any way regarded as Prophetic.

IMPLICATIONS: The importance of federal subsidies to the economies of the Northern Caucasus is highlighted by the fact that almost 80 percent of Dagestan’s budget is underwritten by the Russian exchequer. In Chechnya and Ingushetia, meanwhile, federal subsidies account for approximately 90 percent of the budget. These statistics demonstrate that a Russian withdrawal from the region would necessitate a difficult economic adjustment for its inhabitants. The author of the treatise welcomes this projected modification of the prevailing economic order. His ambivalence as to how this change will affect the lives of people living in the region resembles the attitude manifested by economic reformers in Russia in the early nineteen-nineties, who were determined to revolutionize the country’s economy at whatever cost to ordinary Russians. For those who would be affected by the disappearance of Russian subsidies the author offers scant consolation, merely advising them to have faith in Providence.

The author also shows a certain naiveté in how he envisages the post-independence economic scenario unfolding in Dagestan. With respect to the agricultural sector, for instance, the author offers the following analysis: “We have good, fertile land, which with proper treatment will yield rich harvests. If the peasants do not interfere, do not create unnecessary administrative barriers and regulatory mechanisms, agriculture will be quite profitable”.

Long-standing disputes concerning land ownership are a feature of the political landscape in the Northern Caucasus, not least in multi-ethnic Dagestan. In recent years, pro-Russian law-makers in various jurisdictions throughout the region have faced serious resistance to their efforts to redraw municipal boundaries. These disputes will not be resolved by a Russian withdrawal from the region, something the anonymous author tacitly acknowledges. The ‘Land Question’ in the Northern Caucasus cannot be ignored and will continue to vex whatever government succeeds to power in the region.

The late Anzor Astemirov, until his death in 2010 the chairman of the rebel’s Supreme Sharia Court, discussed this issue in relation to land disputes in his native republic of Kabardino-Balkaria. Astemirov’s stance on the distribution of land was unequivocal and is worth quoting at length: “… pastures and grasslands cannot be given as private property or as a collective property to a definite clan, tribe or ethnic group. Pasture, water and fuel are the common heritage of Muslims living in the area, regardless of their ethnic or racial identity. The procedure for using such lands is specified by a government that rules according to the Law of Allah”. While Astemirov’s analysis of the Land Question is less dismissive than that offered by our anonymous author, he too believed, with a sort of millenarian conviction, that the imposition of Islamic Law in the region will render localized disputes over land null and void.

CONCLUSIONS: The author of this treatise apparently believes that the withholding of Russian subsidies from the region can be compensated for by “trusting in God”. He also believes that generations-old land disputes in the region can be resolved by referring them to a system of Islamic justice. The first belief is rooted in irrationality; the second is based on wishful thinking.

While the document in question is not entirely specious, it does not offer anything original in terms of the economic strategy it outlines. In fact, much of the program advanced by the author is not at variance with the economic strategy set out by Alexander Khloponin, the man tasked by President Medvedev with rejuvenating the region’s economy. Assuming that representatives of the Caucasus Emirate manage to fill the vacuum of power that would be created by a Russian withdrawal from the region, there is nothing in this treatise to suggest that such a regime would be any more successful than its predecessor at managing the region’s economy.

We must be mindful of the possibility that the disappearance of Russian subsidies might result in mass social unrest. Would an Islamic government have the capacity to deal with such unrest? Furthermore, would such a government have the legitimacy and the resources to enforce Sharia law in questions of land ownership and other legally sensitive matters? The implementation of an economic strategy as envisaged by our anonymous Dagestani economist will naturally be dependent on the ability of any post-independence regime to adequately address the issues raised above.

AUTHOR’S BIO: Kevin Daniel Leahy holds a postgraduate degree from University College Cork, Ireland.