A virtual reality has been created in Tskhinvali region. Whilst on paper enormous amounts of money are being spent by the Russian government for the wellbeing of population, in reality everything disappears into an “economic black hole”.
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By Lia Chlachidze
Ethnic conflicts in the South Caucasus periodically resurface to remind about the human tragedies; where lives are plagued not only with post-war trauma but also by the forces which try to disguise the existing reality and monopolize the political, economic, social and cultural spheres. One of the clearest examples is the Tskhinvali region with its painful past, depressing present and dark future. Instead of discussing the broken bridges and other problems caused by narrow nationalistic sentiments and armed conflict, this article focuses on general everyday social problems which affect the absolute majority of Tskhinvali region.
Until 2004, Tskhinvali region managed to be economically independent due to its transit function between Georgia and Russia. During 2004-2006, despite the suspension of direct transit, the region continued with the given function. However, the Russian embargo on Georgian products imposed in 2006 and the 2008 war isolated the Tskhinvali region, making it completely dependent on Russian financial assistance.
As elsewhere, these grave social and economic problems are blamed on corruption by the ruling bureaucratic structures. However, data and facts provide a basis to the claim that economic collapse in Tskhinvali region cannot be solely reasoned by local factors and the corruption of local authorities.
It is necessary to analyze expenditures and the distribution of material assistance allocated by Russia to Tskhinvali region, taking into consideration The current demographic data. Namely, it is known that Russian subsidies allocated to Tshinvali during 2008-2011 totaled 43 billion rubles (forbes.ru reported that during the period Tskhinvali region received approximately 30b rubles from the Russian Federal budget, 2b rubles from the Moscow Government, 10b rubles from Gazprom and another 1b rubles from the Special Fund. If consider the then exchange rate, the sum amounts to approximately $1.43b).
The zero economic effect of the spending forced the Kremlin to reconsider its financial policy in the region. As result, Moscow initiated the South Ossetia Republic Social-Economic Development Support Program, based on the first project of which the region should have changed to an autonomous development regime; although Tskhinvali still enjoys full subsidization (92.2% of the total 2016 budget comes from funds transferred from Moscow).
Financial assistance received from Russia is quite impressive. During 2012-2016, the volume of Russian financial assistance was 30,204b rubles (approximately $715m), which in total (from 2008 until present) amounted to 73b rubles ($2.147b on average exchange rates). It is more than clear that it is a colossal amount of money for a region with a population of 36,000. If we calculate per capita, it appears that for each resident of Tskhinvali region have been allocated $7,500 per year, every year, for 8 years. Any international rating would say that every ordinary Ossetian should be a citizen with high revenue, having the possibility of receiving high-quality medical care, normal education and spending vacations abroad; although, would one be able to find a citizen who would say that they are being given $7,500 per year?
It is apparent that the embezzlement of such financial resources would be impossible for the local authorities in Tskhinvali region. Clearly, the main existing mechanism primarily works for the benefit of the Moscow authorities, who use different schemes and misappropriate amounts allocated to Tkhinvali region. As a result, the amounts to be used in Tskhinvali sharply decrease. To be more precise, a major part of the allocated amounts do not come from Moscow to Tskhinvali at all. In addition, the use of such financial levers makes it possible to involve certain representatives of Tskhinvali governing elite in minor corruption deals and, as a result, have complete control over them.
The aforementioned amounts show that if we consider official data, Tskhinvali region is already flourishing and has already reached the level of development of European countries; although, the low credibility of official documentation is once more confirmed by the example of implemented infrastructural projects financed by Russia. Namely, by statistical data, a large part of Russian funding is allocated for the repair roads in the villages of the region, which creates the impression of active reconstruction works being underway. In reality, the funds allocated for roads are mainly spent for reparation of roads surrounding the Russian military bases; a clear demonstration of the cynical attitude of the Kremlin towards the region, which is characterized by complete neglect of the interests of the local Ossetian population.
In 2013, the Strategic Research Center – Region devised the Tskhinvali region development strategy till the year 2030. According to the document, special attention must be paid to hydroelectric resources. Since 2013 until today, the issue of the construction of hydropower stations is included in economic development projects for Tskhinvali region every year – for example: the 2015 documents states “the construction of four hydro-power stations each worth 500 million rubles, which must result in an export of electricity to Russian Federation (or Tskhinvali supplies power to Russia…), which will become the serious source of additional income”. However, it is doubtful that this project will be implemented or bring any benefit to Tskhinvali’s economy. The fact is that the Caucasian mountain range rivers are seasonal; the output of hydropower stations constructed on them is very low in winter (when there is the highest demand for electricity) and during the summer high water period, the demand for electricity decreases. In addition, the construction of large hydropower stations means flooding large territories, which will create the threat of ecological catastrophe. It is also a fact that serious investors refrain from allocating their funds for such doubtful projects, as it is unlikely that even the expenses for the construction of the stations would be compensated later. This is one of the main reasons of why despite numerous attempts by local authorities; it has not been possible to attract investors to the sphere of utilization of hydropower resources.
According to the same strategy, the development of local agriculture is also of significance for the economy, but any type of investment is doomed to fail. A good example of this are the 240m rubles spent for the construction of a farm in Khetagurov village, which, based on the results achieved (not a single investor joining), can be qualified as unreasonable budget expenditure. Another indication of the catastrophic situation in the field is the fact that despite the existence of 1,268,000 apple trees in the region, apples are being imported to Tskhinvali City from North Ossetia. This is mainly conditioned by the fact that Russian bureaucracy pays attention only to the data on paper and focuses less on the real situation in the region, which in most of the cases is deplorable.
It is apparent that the grave economic situation in Tskhinvali region affects the social environment and results in the regression of all the vitally important spheres. The situation is particularly important in the healthcare sphere. The salaries of 305 doctors and hundreds of medical personnel are at the level of third world countries (average salary of a doctor is 14,137 rubles or $214; salaries of medical personnel are far lower). This hampers the motivation for professional development and the desire to work legally. Despite impressive statistical data represented in official documents, there is very high corruption in healthcare and increases of mortality due to the low qualification of doctors. Research conducted in schools and kindergartens highlights an alarming situation in view of the health condition of the future generation; namely the spread of gastrointestinal diseases among juveniles (plus psychological and behavior disorders). All this is primarily reasoned by the combination of low-quality catering and ineffective healthcare system. The situation is further exacerbated by an increase in the cases of oncologic diseases, as the local population have no access to preventive medical services. Considering all the aforementioned, one of fundamental human rights – right to quality medical services – is violated in the region.
One of the most acute problems is the demographic situation, which can be analyzed from two different angles. On one hand, negative demographic processes promote negative economic tendencies and, on the other hand, the so called “drain of brains” makes implementation of important economic and political reforms impossible. The aforementioned tendency is confirmed by the statistics, according to which Ossetian students studying in Russian higher education institutions based on quotas allocated to Tskhinvali region population (approximately 80 quotas per year) do not return,, which results in low education levels.
Birth-mortality statistics are also a significant problem in view of demography. The given statistics are highly negative – 1,700 have been born and 3,000 have deceased in Tskhinvali region during 2009-2014 and in 2015, according to official data, the numbers of newborns and of the decreased is almost proportional (560 born and 523 deceased). Still, it has to be noted that here we see manipulation with the statistics; from the 560 newborns, 260 have been born outside of Tskhinvali region (to improve statistics, children born in the Russian Federation have been included in Tskhinvali’s regional data). The only real result of the current social policy are the abandoned ancient Ossetian villages and rapid depopulation of Tskhinvali region.
Analysis of the described situation clearly shows that a virtual reality has been created in Tskhinvali region; whilst, on paper, “by consideration” of the “brilliant” traditions of Soviet bureaucracy enormous amounts of money are being spent for the wellbeing of population, in reality everything disappears into an “economic black hole”. It is noteworthy that the aforementioned is not the only problem for Tskhinvali region and it is necessary to further discuss numerous other problems that the local population faces.
Lia Chlachidze is a civil activist and leads one of the NGO`s in Shida Kartli region (Conflict region borders to South Ossetia). Her birthplace is village Ergneti which is a frontline of the conflict zone. During the conflict her NGO was helping people for humanitarian aids and post conflict rehabilitation. She also works in Shida Kartli municipality as a chief of administration division.
The Civil Forum for Peace is a member of the Global Coalition for Conflict Transformation, comprised of organizations committed to upholding and implementing the Principles of Conflict Transformation.
The views expressed in this article do not necessarily reflect those of TransConflict.