Kadyrov seeks to boost popularity through gas debt write off and land swaps

Analytics | | 5-02-2019, 08:10

The ongoing financial crisis and in Russia has led to the reduction of federal subsidies to the North Caucasus region, and to the republic of Chechnya in particular. For example, in 2018 the federal budget allocated only 401 million roubles to Chechnya, which is a steep decrease from multi-billion rouble subsidies that the republic was receiving until 2014. The decrease of subsidies in recent years has been marked by the rise of violent incidents in 2018. As reported by the Caucasus Knot, the number of conflict-related incidents increased in 2018 by 37,5% compared to 2017. Experts have also noted the reduction in the number of conflict victims from 75 in 2017 to 35 in 2018. 

The Chechen security services claimed that they have managed to intercept 15 Chechen citizens attempting to travel to the Middle East in order to join the radical Islamist group, Islamic State of Iraq and Syria (ISIS). However, the number of potential ISIS recruits has seemingly decreased last year, comparing to 2017, when over 50 individuals were detained during their attempts to join ISIS in Iraq and Syria.

The changing dynamics of conflict violence can largely be attributed to the transformation of Chechen Islamist underground, which steadily adapts to the ISIS tactics of relying on solo terrorist attacks with the use of basic weapons, such as knifes and home-made explosives. This explains the reduction in the number of conflict-associated fatalities and lower number of individuals attempting to join ISIS in the Middle East. 

In light of deteriorating security in the republic, Kadyrov’s efforts to boost the image of his government have largely taken the shape of securing social benefits for the republic and focusing on border demarcation deals with neighbouring North Caucasian republics.

Bearing in mind that the recent land swap with neighbouring Ingushetia has failed to significantly boost Kadyrov’s long-term popularity in Chechnya, the Chechen leader’s most recent attempt to increase his popularity domestically was an effort to write off the republic’s enormous gas debt. 

 

Unexpected gas debt write off

The decision by the Grozny court on 20 December 2018 that the regional division of Gazprom “Mezhregiongaz” have to write off 9,353 billion roubles of gas debts of Chechen republic has been unprecedented in the Russian Federation. The General Prosecutor’s Office of Russia has challenged the Chechen prosecutor’s office decision and ordered it to support Gazprom’s appeal of the Chechen court’s decision. Kadyrov refused to back off and on 24 January 2019 repeated his accusations against Gazprom, blaming the gas company of incompetence and of false debt calculations in Chechnya. 

Nevertheless, this development has already encouraged MPs of four other Russian federal districts to file similar appeals to their judicial bodies. The statement by the Chechen prosecutor’s office associating the court’s decision with the threat of popular protests created precedent for other North Caucasian autonomous republics notorious for high levels of political violence, such as Dagestan and Ingushetia. The fact that the legality of the Chechen prosecutor office’s decision has been challenged by Moscow, which has issued support for Gazprom, suggests that Kremlin was either not aware about Ramzan Kadyrov’s initiative to write off Chechen gas debts or was not expecting that Kadyrov’s venture will send countrywide shockwaves.   

Successful elimination of a multibillion gas debt would have served as a potentially successful image boost project for Kadyrov’s regime. The prosecutor office in Chechnya explained that the decision to write off energy debts was taken not only because the debt payment terms have long expired, but also because Gazprom’s efforts to raise debts created “social tensions” amongst the population that could have erupted into “widespread public protests.” Following Kadyrov’s statement that the exact amount of the gas debt write off is yet to be calculated, the prosecutor’s office was quick to remove from its official website information about the 9.3 billion roubles debt.

Although Gazprom in its recent statement refused to write off gas debts to Chechnya and is preparing to challenge the Chechen court’s decision legally, Kadyrov reinstated on 24 January his earlier claims that “Mezhregiongaz Grozny” has made up the debts artificially by invoicing deceased residents (“dead souls”) and individuals who no longer reside in the republic. The Chechen court’s energy write off verdict has been interpreted by the political opposition in Russia as blackmailing that could potentially destabilise the existing federal system of governance in the North Caucasus. While Chechnya is known to officially have only 30% of unpaid energy debts, neighbouring Ingushetia has over 65% and Dagestan 43% of outstanding energy debts. 

However, there are expectations that the energy debt write off will have no impact on the Chechen population. Public polls conducted in Chechnya by the “Caucasus Knot” reveal that the majority of respondents are still regularly invoiced for energy bills, regardless of Gazprom’s decision. Some complain that they were forced to pay bills dating back to 2004, when much of Chechnya was in ruins following the Second Chechen War and energy supplies were inconsistent. Respondents employed by the state told that they are regularly threatened by salary cuts and layoffs should they fail to provide monthly confirmation of energy bills payments. Chechen lawyers claim that the enormous energy debts have accumulated in Chechnya not as a result of the population’s debts, but due to debts of underground oil refineries and brick production factories, which operate under Kadyrov’s protection. 

The Chechen minister of national policy and communications, Dzhambulat Umarov, was amongst the few state officials to provide explanations, beyond the official statements released by Kadyrov. According to Umarov, the bulk of Chechnya’s energy debts have accumulated during the two Chechen Wars when the republic was cut off from the energy grid (and a few years after the conflicts) and, therefore, the republic should not be compared to other Russian regions. 

 

Other regions indignation  

Based on the Chechen precedent, MPs from Astrakhansk and Smolensk regions, as well as from Bashkiria and Chuvashia autonomous republics, have already filed appeals to regional attorneys claiming to write off energy debts of their respective regions. As claimed by the MP from Chuvashia, Konstantin Stepanov, both Chechen and Chuvash republics share so many commonalities that there is no reason for the Chuvash Attorney Office to reject his appeal for the complete energy debts write off for his republic.  

While Moscow remained initially silent, the outcry from the regions has forced Russian officials to act. Almost a month after the Chechen court’s verdict on gas debts, the Russian Federal Attorney General’s Office has taken Gazprom’s side and ordered the Chechen prosecutor office to investigate the legality of their appeal to the court. The only official reaction from the Kremlin thus far was the statement by the President’s press-secretary Dmitry Peskov, who commented that decisions to write off energy debts to other regions are a “complex issue” that has to be considered with Gazprom’s and the population’s interests in mind. 

 

Further land swaps planned  

A week after the Chechen court’s decision on gas debts, a previously unannounced meeting between speakers of Chechen and Dagestani parliaments about possible changes of administrative borders between the two republics took place. The Chechen speaker Mahomed Daudov’s visit to Dagestan to discuss borders comes just 3 months after controversial land swap with Ingushetia that legalised transfer of 268 square kilometres of Ingush lands to Chechnya. Although the exact plans of border changes have not been made public, it is assumed that the speakers discussed the transfer of Aukhovsky district of Dagestan to Chechnya, which has been historically populated by ethnic Chechens. 

Border demarcation talks between Chechnya and Dagestan took place about a week after Chechen authorities launched repopulation programme for Galanchozhsky district, which currently remains unpopulated. The repopulation efforts have been criticized by the Ingush activists who claim that the district was made up of a part of Chechen district (Achkhoy-Martan) and two former Ingush districts (Sunzhesky and Dzheirakhsky). Thus far the repopulation programme has already been dubbed as a failure since no Chechens expressed desire to abandon their livelihoods and relocate to a district that lacks electricity, running water or hospitals. Amidst the failure of Kadyrov’s regime to present land swap with Ingushetia as a major political success, Chechen authorities are eyeing with impatience the neighbouring Chechen-populated Dagestani territories with well-developed infrastructure.   

 

Conclusion

The emerging stand-off between Kadyrov on the one side and Gazprom, supported by the General Prosecutor’s Office, on the other is likely to be solved only by the direct involvement from the President, Vladimir Putin. Nevertheless, Kremlin continues to refrain from taking sides on the controversial issue that involves its major economic asset Gazprom and one of its most loyal regional governors, Ramzan Kadyrov. 

It is likely that in order to reduce tensions in the republic, the Chechen leadership will either focus more closely on the border demarcation talks with its neighbours, or will seek to engage in some sort of regional initiatives. For instance, Kadyrov suggested last week removing road check points on the borders of the North Caucasus republics, particularly hinting at elimination of check points between the Chechen republic and North Ossetia. 

 

 

Author’s bio:

Dr. Huseyn Aliyev is a Research Fellow in Central and Eastern European Studies at the University of Glasgow. Dr Aliyev’s recent book “When Informal Institutions Change” has been published by the University of Michigan Press in 2017. His recent work appeared in Comparative Political Studies, International Security, Security Dialogue and Cooperation and Conflict, amongst others.