NORTH CAUCASUS: ENERGY HUB OR JIHADIST HOTBED ?

The Boston Marathon bombing in April 2013 abruptly brought to attention the situation in the North Caucasus where, according to Russian President Vladimir Putin, Russia faces the same threat of radical Islam as the West does elsewhere.

Most observers, who label the North Caucasus “Russia’s southern underbelly”, agree that the nationalist cause that inspired Chechen fighters 20 years ago evolved into a more complex conflict where separatism mixes with inter-ethnic clashes and Islamic jihadism.

Analysts note that this mutation, which has as much do with the global spread of Islamist fundamentalism as with Russia’s ruthless actions in the region, is bound to have long-term consequences in an area situated at a cross-point of cultures and civilizations which is, at the same time, of paramount importance for the energetic strategy of Russia, Europe and even Asia.

Although Russia, America and even the insurgents agreed so far that the Boston bombers Tamerlan and Dzhokhar Tsarnaev acted on their own[1], America’s investigators still find it hard to understand how a regional conflict in Russia might resonate tragically in Boston. The most acceptable explanation is that the brothers’ difficulty to integrate in America made them to seek mental refuge in their native land. The internet and social networks that served as a channel created an illusion of engagement without experience or memory. The brothers never fought in the Chechen wars or lived in Chechnya for any length of time. Yet their lives and their sensibilities seem to have collided with North Caucasus’ violent and tragic history. In some respects, they are typical of the young Chechen generation born in exile: shaped by family stories of deportation and oppression and instilled with a sense of war and desire for revenge.

Even if the family did not live in Chechnya, their grievances were stirred by the separatists who declared Chechnya’s independence after the end of the Soviet Union in 1991. When Russia launched a “small victorious war” against Chechnya in 1994, nationalism was the main cause. By the end of the first war, it left 50,000 dead, Chechnya was in ruins and nationalism had been superseded by Islam. The second war in 1999 began with an insurgence of Chechen rebels into Dagestan, with the aim of freeing their Muslim brothers from occupation by infidels. The Islamisation of the conflict also opened up a sectarian fight between Sufism, a traditional form of Islam based on local customs, and Salafism, the radical form that promotes sharia law. When in Chechnya the authorities began a policy of hunting down Salafis and enforcing Sufism as a state ideology, the violence spread, including to Dagestan where the Tsarnaev brothers lived before going to America.

The links between the bombing of the Boston marathon and North Caucasus reminded the analysts and the media about an area still prone to conflicts and clashes that the world cannot safely ignore.

So far, the Russian government reacted to the questions about North Caucasus with a double message. On one hand, Moscow argues, they deserve western support, since militancy in North Caucasus has nothing to do with Russia’s policies and is purely another front in the international “war on terror”. On the other hand, they say it is a domestic Russian issue and foreigners have no right to internationalize it or question Russia about it. Most western governments, with enough other problems on their agenda, have so far agreed to play along with this doublethink. But analysts agree that such a line is increasingly untenable.

An even bigger problem is the fact that, in this region of nine million people, Moscow is seen as losing authority, while no one else seems yet gaining it. Some of the Russian media called North Caucasus Russia’s “inner abroad” because of its differences to the rest of the country. Where most of Russia is Orthodox Christian or atheist, the region is predominantly Muslim. While Russia has an ageing and shrinking population, the demographic situation in the north Caucasus is more like Gaza. The young heavily outnumber the old, the birth rate is rising, in some areas unemployment is at about 50 per cent.

 

I. A history of separatism and violence

 

The term “North Caucasus” designates the region situated within European Russia, in the northern part of the Caucasus Mountain Range, between the Black and Caspian Seas. Politically, it is a part of the Russian Federation, divided into the North Caucasian (Chechnya, Dagestan, Ingushetia, North Ossetia, Kabardino-Balkaria, Karachay-Cherkessia, Stavropol Krai[2]) and Southern Federal District (Adygea, Astrakhan, Kalmykia, Krasnodar, Rostov, Volgograd).

The North Caucasus has a small, diverse population of 9.86 million. The most numerous of its dozens of national and ethnic groups are Russians (3,178,128), Chechens (1,335,183) and Avars (863,884). The main indigenous ethnic groups are Adyghe, Avars, Balkars, Chechens, Circassians, Dargins, Ingush, Kabardins, Karachays, Kumyks, Laks, Lezgins, Nogays, Ossetians, Russians, Tats and Shapsugs. The most homogeneous republics are Chechnya and Ingushetia, the most diverse region is Dagestan, with over 30 distinct ethnic groups.  Russian is the official state language, but republics also have their own state vernaculars, some of which belong to Nakh-Dagestani (North East Caucasus) and the Abkhaz-Adyghe (North West Caucasus) groups. Others speak Turkic languages (Nogays, Kumyks, Karachays, Balkars), while Ossetian and Tat belong to the Iranian group of Indo-European languages. All use the Cyrillic alphabet.

Islam, the majority’s religion in five republics, is more prominent in the north east than in the west, but it is becoming omnipresent overall. Most follow the Hanafi and Shafi’i Sunni madhhabs (Muslim school of law and jurisprudence). Sufism is widespread in Chechnya, Ingushetia and Dagestan; and Salafi religious groups are becoming more visible, especially in Dagestan. The main Christian Orthodox groups are the Ossetians and Russians, and the areas with significant Christian populations are Stavropol Krai (majority), North Ossetia (80 per cent), Adygea (c. 70 per cent), Karachay-Cherkessia and Kabardino-Balkaria (about one third). Dagestan, Chechnya and Ingushetia have small Christian populations.

Integration of the North Caucasus has always been a challenge for the Russian state. Since the sixteenth century, the region has been fought over by the neighboring great powers: the Ottoman Empire, Persia and Russia, and this influenced people’s concept of their identity, national struggle and ties to central state authority. The full conquest of the North Caucasus was completed in 1864, when the Russian government initiated the mukhajirstvo (resettlement) of Circassian highlanders to the Ottoman Empire. The process, which lasted until 1867, depopulated whole areas in the north-west and created a sizeable diaspora in Turkey (an estimated 1.5-2 million Circassians), Jordan (estimated 170,000) and Syria (estimated 100,000)[3].

“The Mountainous Republic of the Northern Caucasus”, a confederation formed in 1917 after the Russian Empire’s disintegration and outbreak of the civil war, was the only serious attempt to unite all Caucasus people in a common independent entity. After the establishment of Soviet rule, another attempt at administrative consolidation was undertaken, but the Gorskaya (Mountain) Autonomous Soviet Socialist Republic – part of the Russian Soviet Federative Socialist Republic (RSFSR) – was abolished in 1924. There have been few if any subsequent efforts to revive a common North Caucasus political unit.

North Caucasus insurgency

The area of North Caucasus has always been one of the most important fronts of the Russian policy since the czars’ time, and in modern times it acquired a fundamental importance for the country’s energy and security agenda.

The North Caucasus is considered by most analysts a conflict-prone zone, where, after two wars and numerous conflicts, the situation continues to be mostly unstable. What started as a war of independence of Chechnya against Russia in 1994, became what analysts named a diffused and multifaceted insurgency with overlapping conflicts, that may be grouped in three categories: (a) nationalist struggle against Russian rule; (b) clashes between different ethnic groups over traditionally disputed territories; (c) jihad-type insurgency of the religious radicalized militancy against the Russian authorities, combined with the aim to establish an Islamic caliphate in North Caucasus.

While in the 1990s and the early 2000s the violence in the North Caucasus was mainly Chechnya based, in the last years the levels of violence increased in the neighboring areas – mainly Kabardino-Balkaria, Dagestan, Ingushetia, North Ossetia and even beyond North Caucasus. The recent years were marked not only by a quantitative but also by a qualitative rise of the violence, since the insurgent groups began to attack military and security as well as economic targets, drawing the media’s attention to the scale and scope of the North Caucasus insurgency.

The insurgency is less aiming independence from Russia, as was the case during the Chechen wars, but ethnic-nationalist movements seek for representation and having territorial claims. Such movements are active in Ingushetia and North Ossetia, over the status of the Prigorodny district, an issue which is seen as another indicator of Moscow’s inability to ensure security in the region.

Main local conflicts

The insurgency in the North Caucasus continues despite the official declaration of the end of the Second Chechen War on 15 April 2009. The violence is concentrated mostly in the republics of Chechnya, Dagestan, Ingushetia and Kabardino-Balkaria, with only occasional clashes and bombings elsewhere (including Moscow and North Ossetia), but there are also concerns it may spread west, with a risk to compromise the safety of the planned 2014 Winter Olympics.

In Chechnya, the insurgency was a direct result of the two post-Soviet wars. The First Chechen War (1994-1996) was a secular, nationalist struggle for independence from Russia and resulted in Chechnya being granted a de facto independence, according to the Khasavyurt Accord signed on 30 August 1996. With a devastated infrastructure and various armed factions subordinate to specific warlords, the next three years saw Chechnya devolve into a corrupted criminal state plagued by armed gangs, an epidemic of kidnappings-for-ransom, and the rise of radical Islam in the region. An August 1999 armed incursion of 1,500 Islamic radicals in support of a Dagestani separatist movement, combined with a series of apartment bombings in Russia gave Moscow a reason for re-invading Chechnya, triggering the Second Chechen War. This time, the Russian military relied heavily on aerial bombardment and artillery before sending in ground forces for mop-up operations. The second Battle of Grozny in 1999 – 2000 saw the bulk of Chechen resistance smashed. What remained of the decimated rebel units withdrew into the southern mountains of the republic in order to wage a guerrilla campaign. The 1999-2009 war caused the displacement of approximately 200,000 refugees, and killed an estimated 100,000 people, both combatants and non-combatants.

An important factor in Russia’s apparent success in Chechnya has been reliance on pro-Moscow Chechen clans affiliated with regional President Ramzan Kadyrov, but there were reports that police and paramilitary forces under his authority have committed flagrant abuses of human rights.

The conflict in Dagestan is mainly religious, between Sufism, a form of Islam which includes local customs and recognizes the state, and Salafism, a more traditional form which rejects secular rule and insists that Islam should govern all spheres of life. Dagestan is double the size of Chechnya, having the most diverse population and religion complex of the north Caucasian republics, with several dozen ethnic groups, most with their own language. Whether Sufi or Salafi, the Dagestani Muslim population wants more autonomy from the Russian government. There are estimates of as many as 1,500 rebels in the mountains and forests of Dagestan who are being actively supported by the local population, with many thousands prepared to join them if needed.

Along with Dagestan, Ingushetia has borne the brunt of the violence in the North Caucasus in recent years. The Islamist insurgency in the republic sprang from the wars in neighboring Chechnya in the 1990s and early 2000s. In June 2004, Ingush and Chechen fighters launched a large-scale attack on Ingushetia’s biggest town, Nazran, killing scores of civilians, policemen and soldiers. In turn, as elsewhere in the North Caucasus, the brutality of state security forces’ repression under the presidency of the former KGB officer Murat Zyazikov has been a major factor driving young men to join the Islamists. Zyazikov’s successor, Yunus-bek Yevkurov, appointed in 2008, had some success in dampening the violence, although he was seriously injured in a suicide bombing by the militants during his first year in office.

The insurgency in Kabardino-Balkaria began in the early 2000s and was led by the Yarmuk Jamaat, a militant Islamist group which flourished as a result of persecution of pious Muslims by police and security forces. In October 2005, militants launched a raid on the capital of the republic, Nalchik, which left 142 people dead. The guerrillas have also carried out numerous assassinations of government officials and law enforcement officers. The republic saw a flare-up of violence in late 2010 and early 2011, but the leaders of the Islamist group were killed in a special operation by security forces in April 2011.

North Ossetia – Alania is home to approximately 709,900 people of mostly Christian background, and it is the most economically developed North Caucasus republic. The worst insurgent violence occurred in September 2004, when Ingush and Chechen insurgents took over 1,000 hostages at a school in Beslan. A more recent violence occurred in September 2010, when a car bomb struck the central market in the North Ossetian capital of Vladikavkaz, killing 17 persons and injuring over 140. The Caucasus Emirate’s Ingush Vilayet reportedly took responsibility, stating that the attack was aimed against “Ossetian infidels” on “occupied Ingush lands”.

The Republic of Karachay-Cherkessia has escaped effects of the regional insurgency, though Russian security forces have reportedly conducted several raids on suspected Islamic militants.

Stavropol Krai has a mainly Russian population, but also a group of Muslims known as the Nogai, famous in Russian history for their fierce resistance to Russian rule. Stavropol had a low-level Nogai insurgency ongoing since 2003, and the territory had recent disturbing attacks.

Ethnic-based clashes

The challenge of ethnic nationalism has been most evident in Chechnya where separatists sought full independence for their republic. After 2003, Moscow adopted a policy of Chechenisation, transferring significant political, administrative and security functions to Chechens. Today the republic has gone through a major reconstruction, and its head, Ramzan Kadyrov, wields virtually unlimited power.

Lack of integration is also a problem within the North Caucasus. A host of ethnic and national groups with their own identities, grievances and aspirations live there. Ethnicity is the central building block of local identities, influencing political and social status. Groups such as the Balkars, Chechens, Circassians, Ingush, Kabardins, Karachays, Ossetians, Russians and the peoples of Dagestan are often settled compactly and have a clear concept of their ethnic homeland, a list of historical grievances and current disputes with neighbors that predispose them to strong, often exclusionary, identity politics.

Several inter-ethnic conflicts that developed at the end of the Soviet Union remain unresolved, continuing to fuel tensions. The Ingush-Ossetian conflict led to full-fledged war in 1992, as both groups asserted claims over the Prigorodny district. Though Russia invested large sums to return displaced persons and rehabilitate their communities, the Ingush in Prigorodny remain unintegrated in the rest of North Ossetia. Exclusionary historical narratives and competition over land and decision-making, fuel conflicts in other multi-ethnic republics, especially Dagestan, Kabardino-Balkaria and Stavropol Krai. Some of the groups maintain maximalist aspirations, including the change of internal borders and establishment of new ethnically-identified entities, though they don’t want to secede from the Russian Federation.

Differences persist also between the local populations in the North Caucasus and the ethnic Russians, in the republics but also in other parts of the Russian Federation, who consider the North Caucasus different, destabilizing and insufficiently loyal. Many residents of the region feel alienated, due to discrimination and xenophobia. Conflicts, instability and unemployment cause significant migration into the neighboring Stavropol Krai, Krasnodar Krai, and Rostov Oblast and Russia’s big cities, increasing ethnic tensions, nationalist rhetoric and violence.

Inter-ethnic tensions may grow with the recent revival of national movements that were particularly strong in the late 1980s and early 1990s. Though political parties based on national or religious identity are prohibited, a new law simplifying registration is likely to make it easier for politicians with nationalist agendas to infiltrate small parties. Already groups such as the Nogays, Kumyks, and Lezgins in Dagestan and the Circassians and Cossacks are sharpening their organizational capacity and political demands that tend to focus on rehabilitation and justice, state support for native language and culture, development, greater autonomy and access to land. Tensions are beginning to appear where the legal framework is not sufficient to address these, existing laws are not implemented, and police and local administrative capacity are perceived as ethnically biased and corrupt.

The widening insurgency is a symptom of the underlying causes of the conflict that have caused nearly two decades of strife in the North Caucasus territories. The ongoing instability and violence in the region has increased unemployment, and created fertile ground for insurgent recruitment. Insurgent attacks continue against Russian and pro-Moscow targets in Chechnya, and have touched nearly every republic and territory of the North Caucasus.

While conditions in Chechnya have to a large extent stabilized under the rule of President Ramzan Kadyrov, the situation in the rest of the region remains tense. Instability, societal insecurity and terrorist attacks since the mid-2000s have spread to the rest of the North Caucasus, particularly Ingushetia, Dagestan and Kabardino-Balkaria. In addition, poor economic, political and social conditions, as well as arbitrary violence on the part of the federal and local forces, all serve to destabilize the region even further. Recent incidents in Stavropol Krai demonstrate that violence may now also be spreading beyond the confines of the Northern Caucasus.

Attacks in Russia

The Russian heartland has not been spared violence from Chechnya and the North Caucasus. Since the 1999 Moscow apartment bombings, a series of high profile attacks against Russian targets were attributed to insurgents from the North Caucasus. The Chechen rebel leader Doku Umarov, who became leader of the so-called Caucasus Emirate[4], took responsibility for some of the main terrorist attacks.

Moscow Pushkinskaya Metro Bombing. During evening rush hour on August 8, 2000, a bomb exploded in the Pushkinskaya Metro Station in the center of Moscow, killing 13 people and injuring 118. Despite intensive investigations, no one has been detained or charged in connection with the attack, and it is not known if the attack was the result of a terrorist attack, organized crime, or had other motives.

Moscow Hostage Crisis. On October 23, 2002, a group of 41 Chechen rebels took more than 800 people hostage at Moscow’s Dubrovka Theater.

Moscow Avtozavodskaya / Paveletskaya Metro Bombing. On the morning of February 6, 2004, an explosion took place on a Moscow subway car, killing 39 persons and injuring about 120. President Putin and Moscow officials immediately blamed Chechen rebels for the bombing, but they denied the attack.

Moscow Lubyanka / Park Kultury Metro Bombings. On March 29, 2010, Dagestani female suicide bombers detonated explosives on two Moscow metro lines, killing 40 persons and injuring more than 60. Chechen leader Doku Umarov claimed responsibility for the attacks to avenge killings of civilians in the North Caucasus by Russian forces, and warned of further attacks in Russia’s heartland.

Domodedovo International Airport Bombing. On January 24, 2011, a suicide bomber killed 35 persons and wounded more than 150 others in an attack at Moscow’s Domodedovo Airport, which is the largest of three airports serving the Russian capital. It was a second attack in this airport, after 2004, when two female passengers boarded separate flights from Domodedovo and detonated explosives that brought down both aircraft and killed 90 persons.

Worries about the Olympic Games

Observers note that, in the buildup of the 2014 Winter Olympic Games in Sochi, a new wave of violence, instability and insecurity might propagate from the East to West, thus reinforcing the fear of a united insurgency in North Caucasus. The North Caucasus instability is seen as spreading into Russia, and, in the context of the Olympic Games, it is seen as getting an international dimension.

The decision to host the 2014 Winter Olympics in Krasnaya Polyana may also have reignited latent ethno-nationalist sentiments, since Krasnaya Polyana is a historic place for the Circassians and 2014 marks 150 years since their battle with the Russians in 1864. The calls of the Circassian nationalists to break up the unified republic of Karachay-Cherkessia are seen as also triggering a similar claim to divide Kabardino-Balkaria as well. Moreover, the Circassian movement is supported by Georgia, where the Saakashvili regime fears the positive effect of the Olympics on the break-away region of Abkhazia.

The North Caucasus Federal District, as created by Moscow in January 2010, which includes all the North Caucasus republics except Adygea, was seen by some analysts also as an attempt to isolate North Caucasus from the rest of Southern Russia in the context of the Olympic games, since Russia’s strategy is to show that Sochi is Southern Russia and not North Caucasus.

Olympic security weighs heavily on the Russian government, since an Olympic games free of insurgent attacks can mean a great deal of international tourism and foreign investment for the future economic viability of the region. The same is true in the case of the construction and development of the infrastructure needed to support the games. The Russian government claims that it is providing an inordinate amount of resources towards Olympic security, but the recent shooting deaths of three persons on a ski trip to a North Caucasus resort underlines the fragility of the area. The difficulty in securing games that are situated next to a vast, undeveloped, and remote area of the North Caucasus, with high mountains and heavy forests, is problematic.

However, so far the International Olympic Committee stated they have no doubts as to Russian security forces capabilities of keeping the games safe.

“Client-patron”strategy and heavy-handed approach: counterproductive results

Moscow’s efforts to stabilize the region are considered to be ineffective, and the same can be said about the establishment, in January 2010, of the new North Caucasus Federal District, headed by Alexander Khloponin, the former governor of Krasnoyarsk. According to most analysts, the North Caucasus region is already displaying the traits of an unstable frontier zone, similar to the Federally Administered Tribal Area (FATA), at the border between Pakistan and Afghanistan.

Alexander Khloponin is seen as having relatively little real power in the Caucasus, where local elites – Chechnya’s Ramzan Kadyrov being the best example – have direct contact with Moscow due to what analysts describe as a “patron-client system of governance” established by Kremlin in the region in order to stabilize it. The “patron-client” system is a policy of first selecting local elites that Moscow can work with and then giving them Kremlin backed authority by declaring them as de facto independent and legitimate powers on the ground.

The patron-client system is seen as a further “disconnecting” factor between North Caucasus and Moscow, where the region is described as a “far-off frontier”, beyond the Terek and Kuban rivers (South Russian frontier), thus implying that the region is not part of the “real” Russia and is also incapable of self-governance. Such a policy is seen as bound to further alienate the local people from Moscow towards South Caucasus and beyond. Already Georgia has a policy aimed to increase its influence in North Caucasus.

Analysts consider that, in the short term, Moscow’s patron-client policy will ensure Russian territorial integrity, but in the long term it will result in the alienation of the population, thus increasing the risk of secession. The weakness of the state is also bound to increase the risk of international threats, such as arms smuggling, drug trafficking and Islamic terrorism. The system does not address the sources of unrest and violence and is considered incompatible with the modernization projects.

On the other hand, the security forces’ brutal tactics are thought to increase the instability of the region, rather than impose the rule of law. Moscow’s heavy-handed approach is not seen as offering a solution to the historic conflicts, or to the grave economic and social problems of the region. Consequently, the pressure on the Russian government to find a solution in the North Caucasus problem intensified, and a growing minority of specialists consider the possibility of a potential splitting of the North Caucasus from Russia. Some observers have argued that Russia’s efforts to suppress insurgency in the North Caucasus have been the most violent in Europe in recent years in terms of military and civilian casualties and human rights abuses.

According to most analysts, if Russia lost control over of Chechnya and the North Caucasus, this region would fall to the direct control either of Georgia or Azerbaijan, or even Turkey, and eventually would pass under U.S. influence. A Russian-originated, definite and efficient solution of the problems would avoid the penetration of external actors in the Caspian region, the soft “underbelly” of the Russian Federation. Also, according to the “domino theory”, if, for example, Chechnya was lost, so would also be Dagestan, the Caspian coast of Russia, Ingushetia, and the other republics of the Northern Caucasus Federal District. Hence, Russia’s determination and persistence to triumph in North Caucasus, is a necessity, whatever the cost might be in terms of life or money.

 

II. Islamic extremism: North Caucasus and international flavor

 

Since the 1980s, Islam has been growing in the region and currently the North Caucasus is seen as an Islamic region, with Islam increasingly popular among the young generation. However, the majority espouse moderate Islam. Hanafi Muslims are mainly concentrated in the north-west and Sufis are to be found mainly in the north-east. Most North Caucasus Muslim organizations are united under local “Spiritual Boards” of Muslims, which work closely with local authorities, and many imams in registered mosques receive various forms of state support.

For many years, a sectarian conflict divided the North Caucasian Muslims into traditionalists and fundamentalists, mostly Salafis, especially in Dagestan, Chechnya and Ingushetia. Since the late 1990s, Sufis have increasingly seen their predominant position questioned by Salafis, whom their opponents often refer to as “Wahhabis” and whose numbers and influence are steadily growing. The state generally supported traditional Muslims and in effect banned Salafism, deepening the sectarian schism. It saw the “hunt for Wahhabis” as part of an anti-terrorist struggle, and this pressure radicalized the Salafi community and fed the insurgency. Foreign fighters in Chechnya also helped spread jihadist ideology.

Salafi religious organizations (except to a limited extent in Karachay-Cherkessia, Ingushetia, North Ossetia and Stavropol Krai) are not affiliated with the Spiritual Boards. Salafi groups became conspicuous in the region in the mid-1990s. Some of their members fought beside the separatists during the second Chechnya war, and those who returned brought jihadist ideology with them.

Salafism’s growing influence

Fundamentalist Islam, in particular Salafism, has been growing in the region since the end of the Soviet Union. The manner in which it has evolved in the republics depended largely on how the government and its security forces have treated conservative Muslim communities, the historical role of religion and ethnicity, ties to the Chechnya conflict and local religious leaders’ teachings.

Islamisation tends to be more prominent in the east, but Salafi communities are also growing in the west. In the east, an acute conflict with followers of a more traditional form of Islam, mainly Sufis, with whom the state tends to side, contributes to Salafi radicalization. Most Salafis remain peaceful but have difficulties integrating into the local social space and economy.

The Islamisation of the political and economic structures is seen as a worrying trend, since the North Caucasus societies would become less and less integrated into the rest of Russia. Also worrying about the rise of Salafism in the region is the possible introduction of the Sharia law which is gaining support especially among the young people frustrated by the failures of the society and the state to offer opportunities for them. Analysts fear that the “Sharia trend” would only add to the feelings of alienation and “otherness” of the people of North Caucasus towards Moscow and consequently, a drifting away from the region, from European Russia to the Middle East and the Arab world. The trend is already visible in Dagestan, where Moscow proposed the establishment of Islamic educational centers to prevent the teaching of other creeds of Islam and limit the cultural drift towards the Arab world.

In Dagestan, the conflict between Salafis and Sufis began in the mid-1990s, when Islamic youths who had studied abroad, mainly in Middle Eastern universities, returned and began to contest Sufi religious practice, refusing to follow traditional imams and calling the adoration of living sheikhs polytheism. Salafis tried to replace old imams or establish their own places of worship. Since 2010, when the new president, Magomedsalam Magomedov, said he was ready for dialogue with fundamentalist communities, Dagestan has the largest Salafi community in the North Caucasus, with mosques, schools, civic and human rights organizations. In April 2011 in Makhachkala, a first civil dialogue meeting took place that aimed to set parameters for cooperation in the name of non-violence and tolerance and look jointly for mechanisms to prevent youth from joining the insurgency. However, the process was affected by the 28 August 2012 killing of Sheikh Said Afandi, the most influential sheikh in the North Caucasus.

In Ingushetia, six Salafi mosques function, but there are no Salafi enclaves. In August 2012, the chair of the republic Security Council, Akhmet Kotiyev, declared that no Ingush had joined the insurgents for over ten months, but later the situation appeared to be deteriorating again, with 41 police, insurgents and civilians killed in July, August and September 2012.

A jamaat uniting 40 local organizations, with several thousand Salafists, many who had studied in the Middle East, existed in Kabardino-Balkaria in 1998-2005. In summer 2002 the radical Muslim Atayev formed the “Jamaat Yarmuk” and began armed attacks in Kabardino-Balkaria. Radicalization of the jamaat happened gradually, as the local security services launched repression against Salafi Muslims in 2003-2004. After the 13-14 October 2005, when 100-200 insurgents attacked the security services in the republic capital, Nalchik, the insurgency resurfaced in 2010 and significantly radicalized with new young leaders.

Karachay-Cherkessia, Stavropol Krai and North Ossetia have significant Christian populations, but in these republics also, the 1990s saw the development of Salafism that became increasingly radical and violent due to links with Chechen fundamentalists and reaction to discrimination, arrest and abuse. There is much less violence than in Dagestan and Kabardino-Balkaria, but the security situation began to deteriorate in 2011 in Stavropol Krai and Karachay-Cherkessia. The Spiritual Board of Stavropol Krai was founded in 2010 to deal with alleged rapid Islamisation of this traditionally Russian region. It unites 42 active Muslim communities. In 2011 a local Salafi jamaat appealed to then-President Medvedev to take measures against illegal arrests and searches.

Unlike the spiritual leaders in Dagestan, Ingushetia, North Ossetia and Karachay-Cherkessia, who are seeking ways to somehow integrate moderate Islamists, Chechnya’s leader, Ramzan Kadyrov, launched the concept of a Chechen Islamic identity that vigorously enforces Sufi Islam and demands that the official clergy enlighten “the visitors of the mosques about the pernicious influence of Wahhabism and extremism”. The foundations of this policy were laid by Ramzan’s father, former President Akhmad Kadyrov[5], who openly opposed the Salafis, condemned their beliefs and proclaimed them enemies of Islam.

Salafism is also seen as growing in the other Muslim areas of Russia, such as the Islamic communities in the Urals and the Volga, as well as in Tatarstan.

The Islamic insurgency

The motivation for young men to go “into the forest”, the euphemism for joining the insurgency are multiple. The root causes for the North Caucasus insurgencies are linked with the challenges of integrating the region with the rest of Russia and include police brutality, corrupt and ineffective institutions and unresolved ethnic and sectarian conflicts.

After two brutal wars, the Chechen conflict transformed itself from a national movement into a powerful jihadist insurgency operating throughout the region. Combatants who in the first war fought under a national liberation banner to create a secular nation-state were gradually islamised. The first Sharia courts were introduced in 1996, and in 1999 de facto independent Chechnya declared full Sharia rule. An Islamist training camp near Serzhen-Yurt village (1996-1999) reportedly introduced thousands of youths from the region to the basics of Islamist and jihadist ideology and warfare. Many returned to their republics to form the nuclei of local Salafi congregations (jamaats), some of which later espoused violence. The spread of the insurgency from Chechnya throughout the North Caucasus was largely completed by 2005.

The Islamist insurgency fed on ethnic disputes and tensions. Insurgents have targeted areas where ethnic tensions exist to exacerbate them further, as in North Ossetia, where terrorist attacks aim to fuel Ingush-Ossetian clashes. Radical websites appeal to affected populations and use Islamist rhetoric to transform old ethnic grievances and persuade youth to join the fight (jihad) against the state and secular system. The effects of the ongoing insurgency continue to be felt across the North Caucasus, where it has spurred mobilization around fundamentalist Islam. Many of these disputes and tensions feed into the Islamist insurgency that causes most of today’s violence. Parts of the younger generation that twenty years ago would have joined nationalist movements to address their grievances have become disenchanted with those movements and choose to join the Islamist insurgency instead. It increasingly operates across the entire region, attracting youth of all ethnicities, and attacking not only federal forces and local police, but also civil servants and elites who disagree with its fundamentalist interpretation of Islam.

On the other hand, Moscow’s failure of the state-building project and its ruthless manner transformed the nationalist cause into an Islamist one, with a jihadist component. Former Chechen fighters began to use terrorism widely, and the state responded with massive, indiscriminate force.

From insurgency to terrorism: The Caucasus Emirate

The notion of Jihad, brought to Chechnya by the foreign fighters, appeared to gain momentum, when Doku Umarov, formerly the so-called president of the Chechen Republic of Ichikeria, declared himself head of the Caucasus Emirate (Imarat Kavkaz) and united North Caucasus under an “Islamic state” based on the Sharia law, with all the North Caucasus jamaats unified and fighting to “liberate the Muslim lands” of the region. The Caucasus Emirate was officially announced on October 31, 2007. Both the Russian Federation and the United States have designated the Caucasus Emirate as a terrorist organization, and the US government offered $5 million for information leading to the capture of Doku Umarov[6].  On July 29, 2011, the United Nations Security Council al-Qaeda and Taliban Sanctions Committee added Caucasus Emirate to the list of entities associated with al-Qaeda.

Caucasus Emirate claims to be composed of “wilayahs” (provinces) in Chechnya, Ingushetia-North Ossetia, Cherkessia (Adygea and southern part of Krasnodar Krai), Dagestan, Kabardino-Balkaria-Karachay, and the Nogay steppe. According to Umarov’s declarations, the Emirate’s fighters “spread from Azerbaijan to Abkhazia”. The group has its own Internet broadcasting facility, Kavkazcenter, which is supposed by Russian authorities to be hosted by Finland.

Caucasus Emirate was faced with leadership schisms and in 2010 suffered from the arrest or death of some of its main leaders and ideologues. Despite the setbacks, Doku Umarov appears to have established a network of jihadist jamaats throughout North Caucasus. Caucasus Emirate is also seen as the group that brought back the suicide bombings after the second Chechen war, with the Moscow metro and the January 2011 suicide bombing at the Domodedovo airport. The Emirate was also reported as having revived the “Riadyus-Salikhiin” suicide brigade established by the late Chechen leader Shamil Basaev.

Since much of the Emirate’s original leadership has been killed by security forces and replaced with a younger, less experienced and unified cadre, the group is seen as less able to carry out large, spectacular acts of terror or engage in lengthy battles with Russian military forces. However, it has not given up the tactic of terror attacks in other parts of Russia, especially on transport lines and hubs.

Caucasus Emirate is seen as a threat to Russian and Western security, since the movement is seen to infiltrate the Volga and Urals Muslim communities (declared as fronts of the emirate’s jihad in 2004). In 2012, extremists attacked the mufti and the deputy mufti of Tatarstan, and analysts see a growing risk that the group might use the 2014 Olympic Games to violently promote its cause.

In the context of the recent Boston bombings, the “Dagestan Command of the Emirates Mujahideen” denied any link to the bombing or the Tsarnaev brothers and stated that it was at war with Russia, not the United States. It also said that it had sworn off violence against civilians since 2012. The statement said “The Command of the Province of Dagestan indicates in this regard that the Caucasian Mujahideen are not fighting against the United States of America. We are at war with Russia, which is not only responsible for the occupation of the Caucasus, but also for heinous crimes against Muslims. Also, remember that even in respect to the enemy state of Russia, which is fighting the Caucasus Emirate, there is an order by the Emir Doku Umarov, which prohibits strikes on civilian targets”. It also urged the U.S. authorities to “focus on the involvement of Russian security services in the events”.

In spite of the declarations about the Emirate’s war exclusively with Russia, Chechen Islamists are active in other parts of the world, recently being noticed in Syria, where the establishment of “Jaish al-Muhajireen wa Ansar” (Army of the Emigrants and Helpers) was announced by Abu Omar al-Chechen (the Chechen) on March 26 by “Kavkaz Center”. In the video, hundreds of militants can be seen swearing an oath to Abu Omar al-Chechen. Another leader said: “We came here to establish God’s law… We have a purpose: to establish Sharia (Islamic law), God’s law” and “To us, there is no difference between Syria, Egypt, Iraq, Afghanistan, Chechnya, the Caucasus, any place”. Chechen militants have been involved in activities alongside the “Free Syrian Army”. Two Christian bishops kidnapped in April were reportedly being held by a Chechen armed group, and an attack on a prison in Aleppo last May involved Chechen militants attached to Jabhat al-Nusra.

An internationalization process

The presence of the Chechen militants in Syria, as well as the investigations conducted in the context of the Boston Marathon bombings and the conflicting points of view of the U.S. and Russia on the subject revealed a trend of expansion of the North Caucasus Islamic extremism not only in Russia but also internationally.

a) According to U.S. reports[7], the well-funded Salafis are now operating throughout Russia, a development that is seen as the threat of the radicalization of the 20 million-strong Russian Muslim community. The reports mentioned that al-Qaeda and other foreign extremist organizations in the Middle East and Central and South Asia increased their financial and moral support of the radical Islamist movement in the Caucasus and in Eurasia. Al-Qaeda current leader Ayman al-Zawahiri, is reported to have been in the area in the mid-1990s and was even temporarily in Russian custody.

On December 1, 1996, al-Zawahiri went on a trip to Chechnya, under a false identity, using his medical credentials for legitimacy, with his aides Ahmad Salama Mabruk and Mahmud Hisham al-Hennawi, hoping to re-establish the faltering al-Jihad. They were arrested within hours of entering Russian territory and spent five months in a Makhachkala (Dagestan) prison awaiting trial. In April 1997, they were sentenced to six months, and were subsequently released a month later. There have been doubts as to the true nature of al-Zawahiri’s encounter with the Russians in 1996. Jamestown Foundation scholar Evgenii Novikov argued that it seems unlikely that the Russians would not have been able to determine who he was. Assassinated former FSB agent Alexander Litvinenko alleged, among other things, that during this time, al-Zawahiri was being trained by the FSB. Former KGB officer and writer Konstantin Preobrazhenskiy supported Litvinenko’s claim and said that Litvinenko “was responsible for securing the secrecy of Al-Zawahiri’s arrival in Russia” and that Al-Zawahiri was trained by FSB instructors in Dagestan, in 1996–1997.

Al-Zawahiri referred to the Caucasus as one of three main fronts in the war against the West. Recently, al-Qaeda in the Arabian Peninsula (AQAP) translated al-Qaeda’s online journal, Inspire, into Russian to attract extremists in Russia and Eurasia.

The reports also referred to Doku Umarov’s statements that the Caucasus is part of the global jihad: “after expelling the kuffar (non-believers), we must reconquer all historical lands of Muslims, and these borders are beyond the boundaries of the Caucasus”. They conclude that Chechen jihadists have the means and motivation to take part in a global jihad and, if the North Caucasus transforms itself into the Caucasus Emirate, as its indigenous Islamist groups hope, Caucasian terrorism will only spread further in Eurasia as NATO forces prepare to leave Afghanistan.

b) In turn, Russian analysts[8] suggested the involvement of the West, and the so-called “U.S. allies”, such as Qatar and Saudi Arabia, of financing the rebels, assuming Washington’s (and London’s) control of and blessings upon such activities.

In June 2009, Chechen leader Ramzan Kadyrov stated that that Washington was “the control center” of the Islamic insurgency in the North Caucasus. Kadyrov was echoed by the more moderate president of Ingushetia, Yunus-Bek Yevkurov who accused British and U.S “special services” of sponsoring fatwas in the region so as “to break Russia apart, the same way the Soviet Union was broken apart”. In Kabardino-Balkaria, the deputy interior minister gave voice to similar conspiracy theories. This combined with another driver of anti-Western sentiment, the 2008 war in Georgia, during which many North Caucasians were persuaded that the United States was behind the Georgian attack on South Ossetia.

Accusations about the U.S. covertly supporting Islamic fundamentalism and separatism in the North Caucasus re-surfaced in the context of the Boston bombings and the subsequent CIA failed recruitment of a FSB anti-terrorism specialist.

After the bombing, the Russian press revealed that the accused bomber Tamerlan Tsarnaev (who died during the attack), became a radicalized Muslim while participating in a covert CIA program, run through the Republic of Georgia, to destabilize North Caucasus. The program attended by Tamerlan Tsarnaev was run between January and July 2012, under the cover of a series of seminars hosted by the “Caucasus Fund of Georgia”, a group affiliated with the Jamestown Foundation, which Russian analysts linked with the CIA. Tamerlan was supposedly linked to Jameston through his uncle, Ruslan Tsarni (aka Tsarnaev), a business associate of former CIA Turkish specialist Graham Fuller, who participated in a number of Jamestown events. During the six months, Tamerlan Tsarnaev was supposedly radicalized by Dagestan radical imam Abu Dudzhan, killed in a fight with Russian security forces in 2012. Tsarnaev, who also visited Dagestan in 2011, was linked with a Salafist organization in Dagestan called the “Union of the Just”, and while in Dagestan, he was allegedly advocating for the policies of Anwar al-Awlaki, the U.S.-born al-Qaeda leader who was killed in a U.S. drone strike in Yemen in 2011.

In 2011, the FSB informed the U.S. authorities about Tsarnaev’s ties to terrorists. The first Russian request came via the FBI’s Legal Attaché’s office at the U.S. Embassy in Moscow in March 2011. It took the FBI until June of 2011 to conclude that Tamerlan posed no terrorist threat, but it did add his name to the Treasury Enforcement Communications System, or TECS, which monitors financial information such as bank accounts held abroad and wire transfers. In September 2011, Russian authorities alerted also the CIA about Tamerlan Tsarnaev. At some point in time after the first Russian alert and either before or after the second, the CIA entered Tamerlan’s name into the Terrorist Identities Datamart Environment list (TIDE), a database with more than 750,000 entries maintained by the National Counterterrorism Center in McLean, Virginia.

Moscow analysts also accused Georgia of becoming a nexus for the U.S. aid to the North Caucasus opposition, mentioning that through Georgia, the U.S. and British intelligence allies were funneling cash and other support for secessionism by ethnic minorities in Russia, including Circassians, Chechens, Ingushetians, Balkars, Kabardins, Abaza, Tatars, Talysh, and Kumyks. One of the main operations cited by the Russian authorities in this context was another Jamestown event, the March 2010 conference in Tbilisi titled “Hidden Nations, Enduring Crimes: The Circassians and the Peoples of the North Caucasus Between Past and Future”. Russian security indicated in their first communication with the FBI that Tamerlan Tsarnaev had changed drastically in 2010, and local analysts hinted that this may have happened after the “Hidden Nations” conference in Tbilisi[9].

The Russian special services monitor and operate against North Caucasus separatist and Islamist group abroad. In 2004, a former acting president of separatist Chechnya, Zelimkhan Yandarbiyev, was assassinated in Qatar and several years later, on 16 September 2011 in Istanbul, three Chechens were killed after Friday prayers. A small caliber pistol was reportedly used, similar to one in three other killings of Chechens in Istanbul in 2008 and 2009. The primary target was apparently Berg Musayev, a close ally of Doku Umarov. Alleged Russian agents reportedly left the country before Turkish authorities could apprehend them.

After the recent arrest and expulsion of two CIA agents who were trying to recruit members of the Russian intelligence service fighting against Salafist separatists in the Caucasus, the Russian analysts spoke about the CIA’s “decades-long” covert support for terrorists operating in the Northern and Southern Caucasus and mentioned that the ultimate goal of the CIA’s campaign was for the Muslim inhabitants of the region to declare independence from Moscow and tilt toward the “Wahhabi Muslim-run” governments of Saudi Arabia and Qatar.

 

III. Energy: the prize of stability

 

North Caucasus’ strategic importance for Russia and Moscow’s need for stability and security in the area have political and territorial reasons, but analysts agree that the main place comes to the economic ones. The North Caucasus region lies between the Caspian and Black Seas and is a nexus of energy flow for oil and gas pipelines. Moving energy through this region from Caspian Sea terminals is the most direct route to markets in Europe, and avoids the need to build and maintain pipelines to divert energy around areas experiencing insurgent conflict.

Caspian oil and gas production holds the best promise for rapid employment in the region. From 1999-2005, Lukoil, the biggest private-owned Russian oil company found six new oil fields in the Caspian Sea, with estimated deposits of 4.7 billion barrels of oil. The largest field, Vladimir Filanovsky, estimated as being the largest oil field found in the last 20 years in Russia, contains an estimated 600 million barrels of oil and 34 billion cubic meters of gas. Lukoil stated that Filanovsky field is expected to begin producing in 2014, and the company plans to invest 22 billion dollars in the North Caucasus within 15-16 years to develop these fields.

Transporting hydrocarbons through the North Caucasus from the Caspian to the Black Sea is the most direct route for the Russian government to access markets in Europe and abroad. It is imperative for the economic vitality of Russia that Kremlin maintains this route. Considering the amount of energy income at stake, Russia must have stability in the region to assure the flow of petroleum and to build energy infrastructure for the future.

Two pipelines currently pass through the North Caucasus, carrying crude oil from fields in the Caspian Basin to markets in Europe and abroad. The Caspian Pipeline Consortium (CPC) carries oil from the Tengiz field in Kazakhstan to the Black Sea port of Novorossiysk, located in Russia’s Krasnodar Krai. The CPC runs north of Dagestan and Chechnya, passing through the Russian Republic of Kalymkia, as well as the Stavropol and Krasnodar Krai. The CPC carries approximately 560,000 barrels per day (b/d) and its expansion may bring the total throughput to 1.3 million b/d.

The second is the Baku-Novorossiysk pipeline, running from the port city of Baku, Azerbaijan, to Novorossiysk, passing through Dagestan and Chechnya, which has created security challenges. Threats to the security of the pipeline following the 1994-1996 war prompted the Russian government to build a bypass around Chechnya through Dagestan. Work on the bypass began in 1999 and was completed in 2000, with a throughput of approximately 50,000 b/d. In 2010, the Russian state-owned oil company, Rosneft, began construction of an oil refinery in the Chechen capital of Grozny, which is estimated to be complete in 2014. Vladimir Putin, who was Prime Minister when construction began, stated that the refinery would allow Chechnya to be a new center of the Russian oil industry.

Oil in the North Caucasus

The main source of the Chechen economy before the 1994-1996 war had been petroleum, with drilling taking place to the east of Grozny, oil refining in Grozny, and a major oil pipeline running east to west between the Caspian and Black Seas. Natural gas is also abundant in Chechnya and runs in pipelines towards the west.

The change from cable-tool to rotary drilling resurrected production in the Caucasus after the Soviet Revolution. The growth of production, including the areas of the North Caucasus, also brought other fields on line. These were initially the fields around Grozny and Maykop. The production of the northern Caucasus increased from 100,000 poods[10] in 1877 to 1,656,000 poods in 1889. In the latter year, Terek furnished 275,731 poods, Elisabetpol 3,000 poods, and Dagestan 3,955 poods, while in the Signakh field near Tiflia, 55,296 poods were obtained.

Georgia was one of the early exporters of oil from Russia to Europe through the port at Batoum (now Batumi). In the period from 1884 to 1914, Georgia exported a total of around 165 million barrels of oil, that mainly came from the fields around Grozny (now in Chechnya, Russia) and later from the fields around Maykop (now in the Republic of Adygea in Russia). The Grozny fields were producing about 18% of Russian oil in 1915.

The oilfields around Grozny were first developed in 1893 and grew steadily, with 386 wells by 1917. The Grozny field peaked at around 154,000 b/d in 1932, while the output from the entire Chechen-Ingushetia region, which fed to the three refineries at Grozny, fell to around 148,000 b/d by 1980 and to 106,000 b/d by 1985. Grozny then became more of a pipeline terminal. The first major pipeline running from Grozny to the refinery at the port of Tuapse was built in 1927. The pipeline was later extended to also pick up oil from the Maykop fields, and fell into disuse in 1968 when it was replaced with more modern pipelines to the rail terminals and oil terminal at Tikhoretsk.

During the Second World War, the region became a target for German occupation, given that oil from the region was providing a third of German imports in 1940. However, although Operation Blau reached Maykop, the smallest of the three main oil concentrations, the oil fields were destroyed, so only around 70 b/d were left available. The German Army was blocked in the siege of Stalingrad to the north and did not reach Baku.

Grozny had an unfortunate history with the surface structures being largely destroyed, first in the Revolution and then by German bombers. The town and facilities were rebuilt and became the center of the local oil business. The Chechen wars of 1994-96 and 1999-2000 then largely destroyed the center of the city. Similarly, the oil wells in the region were impacted; in the 1994 war only 100 wells, out of 1,500, were operating.

Recent finds that are resurrecting the promise of the North Caucasus are situated offshore. Between 1999 and 2005, Lukoil carried out a series of explorations in the North Caspian and found six large fields off the Dagestan and Kalmykian coasts. These were Khvalynskoye, Yuri Korchagin (50,000 b/d), Rakushechnoye, Samatskoye and Filanovsky. The fields were initially assessed at around 4.7 billion barrels of oil. The initial well flowed at 6,400 b/d with reserves estimated at 600 million barrels, with 34 billion cu. m. of natural gas. Overall, North Caspian production was anticipated to peak in 2013 at 170,000 b/d, but Filanovsky alone, due on line in 2014, is anticipated to reach 210,000 b/d.

In the longer term, Lukoil is expecting to be able to further develop the North Caspian to reach a production capacity of 320,000 b/d of oil and 13 billion mc of natural gas per year, by 2020. Lukoil expects that the increase in production will be able to offset declines that are anticipated from Western Siberia by that time.

 

The geopolitics of pipelines

For Russia, the promises of the new oil resources, as well as the potential of the North Caucasus as a transit route for energy resources are challenged by serious security risks, the main one being the splitting of the North Caucasus region, which would isolate Moscow from the oil and gas pipelines that join the two seas. Other risks are that transit pipelines through autonomous republics may be sabotaged by rebel groups, or the local independent authorities could illegally tap into the pipelines to satisfy their own energy needs. Legal and environmental issues may further complicate the picture concerning energy transportation.

The North Caucasus oil areas and transit routes remain indispensable for Russia, since disputes over the legal status of the Caspian Sea have made it difficult for the five littoral states to share the seabed among themselves. The governments of Iran and Turkmenistan have clashed with the authorities in Azerbaijan over the ownership of specific oilfields in the Caspian Sea. These disagreements have so far prevented the laying of subsea pipelines across the Caspian Sea. In May 2007, the US Energy Information Administration projected that by 2015, Caspian oil production could reach 4.3 million b/d in addition to the region’s proven reserves of 17-49 billion barrels. For Russia, an independent Chechnya could not only lead to a loss of revenue from the republic’s modest oil production and ruin the plans to extract transit fees for Azeri “early oil”[11], but could also result in a potentially significant loss of Caspian reserves once the sea’s waters and seabed were divided.

The discussion over the Caspian Sea legal status (previously regulated under the USSR-Persia Treaty of 26 February 1921 and the 25 March 1940 USSR – Iran Treaty) began almost immediately after the demise of the former USSR that resulted infive Caspian littoral states (Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan). Two opposing positions quickly developed: Russia insisted that Caspian waters and seabed should be divided according to coastal length, while Iran held out for an equitable 20 percent division for each of the five littoral states. Under the Russian formula, Azerbaijan, with 259.1 miles of coastline, would have receive 15.2 percent of the Caspian waters and seabed, Iran (319.1 miles of coast) 8.7 percent, Kazakhstan (526.4 miles of coastline) the largest share, 30.8 percent, leaving Russia (315 miles of shore) at 18.5 percent, and Turkmenistan (285.4 miles of coast) 16.8 percent. Azerbaijan and Kazakhstan soon supported Kremlin’s stance, while Turkmenistan wavered between Moscow and Tehran.

Most members of the Russian political elite, who identified Chechnya as the main source of tension, a haven of terrorism, and a geopolitical threat, also stressed that a possible Islamic “mountainous confederacy” from the Caspian to the Black Sea, would effectively isolate Russia from both. Under Russia’s own definition of future division of the Caspian offshore waters and seabed, Dagestan, with its 249 miles of Caspian coast, would have pared Russia’s shoreline nearly back to the Volga delta, leaving it a paltry 66 miles of coastline and would shrink its offshore share under Moscow’s own formula by four-fifths, from 18.5 to 3.92 percent.

The Chechen conflict also forced Moscow to build in 2000 a new oil pipeline bypassing Chechnya[12], in order to connect Baku with the Russian Black Sea port of Novorossiysk, since the pipeline controlled by Transneft, Russia’s pipeline monopoly, the sole export route for Azeri “early oil” exports, crossed through 160 km of Chechen territory. Work began on the bypass line on 26 October 1999. The pipeline was rerouted through Makhachkala, the capital of Dagestan. The total length of the Baku – Novorossiysk pipeline is 1,411 km, while its throughput capacity is 140,000 b/d or 7 Million Tons per Year (MT/Y). The pipeline diameter is 720 mm. The new section, known as the Makhachkala – Novorossiysk is also used for the transit of Turkmen and Kazakh oil, after it is delivered to the port of Makhachkala by tankers. In April 2000, the pipeline construction was completed, totaling 250 km for the Chechen bypass via Dagestan to Tikhoretsk, with a technical capacity of 120,000 b/d. Although it avoided unstable Chechnya, the pipeline is also seen as a possible target for the local insurgents and Islamic extremists, since the conflicts spread into practically all the North Caucasus republics.

The North Caucasus instability, as well as its own strategic considerations made Azerbaijan reluctant to use the North Caucasus transit routes for its oil, and it gradually lowered the amount agreed with Russia in 1997. It resulted in a yearly decrease of Azeri oil being transported through Baku-Novorossiysk, as other pipeline routes were developed, such as Baku-Supsa (1999) and Baku-Tbilisi-Ceyhan (2005). However, the northern route retained some importance for Azerbaijan as an alternative route to export its oil, as seen during the Russian-Georgian war of August 2008 and during the summer of 2009 when the BTC pipeline exploded.

Economy: investment, but not from the Russian state

The Moscow government is aware that the economic situation in North Caucasus is one of the main reasons for the instability of the region and directly influencing the profitable energy sector, but so far, its policy is seen as rather to avoid direct spending and count on the private investment. Analysts see small chances of success of such an approach, since the private businesses would have to invest billions of dollars in social and development funding.

In fact, the approved direct government development funding to Chechnya, Ingushetia and other unstable North Caucasus areas was far less than requested by regional officials and, according to sources, direct state funding from oil revenues to help finance a North Caucasus tourism cluster was almost completely cut due to the economic downturn.

After lengthy deliberations, Russian government agencies announced in December 2012 that the state financing for the North Caucasus development in 2013 – 2025 was lowered from $180 billion to $83 billion. More importantly, for the period of 2013 – 2020, the government plans to attract $7.5 billion in investments, of which only 10 percent, or $750 million, should come from the state budget. The bulk of the investments should arrive after 2020, which is well beyond the Russian government’s planning horizon. Since, according to the Russian government’s decision, all state programs must be subject to public hearings, analysts are skeptic even about the lowered sums, bearing in mind the widespread negative attitudes toward the North Caucasians among ethnic Russians.

Most analysts stress that the Russian government does not intend to invest directly and instead wishes to attract investors under government guarantees, but even these guarantees would not arrive immediately. It was only at the end of 2012 that Moscow announced it would allot $1 billion for 2013 as guarantees for investments in the North Caucasus tourism project.

According to North Caucasus Presidential Envoy Alexander Khloponin, energy, tourism and other businesses are expected to supply 90 percent of the funding for a 13-year development program in the region (2013-2025). The Russian government approved the spending but stressed that most of the money would be “off-budget”. The “off-budget” money would be supplied by such businesses as Rosneft, which is majority-owned by the state, as well as by foreign companies and private investors seeking to exploit the region’s tourism potential and natural resources, with about $7.5 billion targeted in direct funding through 2020. Khloponin also mentioned a Lukoil project to build a $140 million industrial park in Budyonnovsk, as well as a Rosneft plan for a refinery in Grozny.

Another sector that is contemplated for development is tourism, where the main player is the government-supported North Caucasus Resorts company, which received a significant help at the end of 2012, when the Russian government decreed that Stavropol Krai will join the grand North Caucasus tourism development project, despite the fact that the mainly ethnic Russian-populated Stavropol periodically stressed that it did not want to be associated with the North Caucasus, which is predominately non-Russian and markedly poorer.

North Caucasus Resorts expanded the scope of its activities steadily from the initial five republics of the North Caucasus where world-class ski resorts should have been built (Adygea, Dagestan, Kabardino-Balkaria, Karachay-Cherkessia and North Ossetia), to Ingushetia, then to Krasnodar and recently to Stavropol Krai.

Although the ski resort project is still on paper, North Caucasus Resorts stated it would also build seaside resorts in Dagestan on the Caspian, as well as spa resorts in the Kavkazskie Mineralnye Vody area of Stavropol Krai. Thus, the initial area covered by the special economic zone allotted by the government to North Caucasus Resorts grew from 580 square miles in 2010 to 1,160 square miles, with estimated costs up to $26 billion. Apparently, the company did not take into account the main feature of the Kavkazskie Mineralnye Vody area[13], which is known for numerous ethnic conflicts, mainly between the Cossacks, who are tacitly supported by the local government, and the North Caucasian groups, some of which (the Kabardins and Karachays), are natives to this area, which was taken over by Russia in the 19^th century.

The North Caucasus Resorts company appears also to be interested in other activities in the region. In December 2012, a joint venture of North Caucasus Resorts and the Korean state company Korea Western Power (KOWEPO), Evrazia Energy Holdings considered acquiring the North Caucasus electric power network that virtually controls all electricity supplies in the region. Also, North Caucasus Resorts requested government assistance to set up its own low-cost air carrier to simplify the transportation of Russian tourists traveling back and forth to North Caucasus. The estimated cost of the project ($2–3 billion) would require government support until 2026, when the number of tourists presumably should cover the company’s costs.

However, economic development experts expressed skepticism that businesses will be attracted to region in large enough numbers to provide the 460,000 jobs expected by the Kremlin, despite North Caucasus’ tourism potential and reserves of tungsten, molybdenum, copper, lead, zinc, titanium, oil and gas. One of the reasons mentioned by the analysts was the “image problem” that would have to be addressed in order to attract private investment.

Investment analysts consider that the security risks are too high to expect any returns from investing in the development of the North Caucasus, which is still plagued by violent attacks against people and infrastructure. Foreign tourists are not expected to visit the North Caucasus in large numbers due to security risks, Russian visa hurdles and the unfavorable ratio of price to quality of service.

A Chechen “alternative”

Russia’s reducing financial support has prompted the Chechen leader Ramzan Kadyrov to use his relationship with the Middle Eastern nations in order to attract investments, particularly from the Gulf States. Analysts assess that his international relationships help to promote his leadership in Chechnya among the diaspora and help him in managing the relations with Moscow. He is playing all sides in order to gain a maximum of self- autonomy.

Kadyrov’s approach is not well seen by Moscow, since it bypasses the Russian Foreign Ministry, but Kremlin seems to tolerate it, in the framework of the “client-patron” policy, which also counts as a reason for accepting Kadyrov’s heavy-handed interior policy.

Like his father before him, Ramzan Kadyrov is said to be close to the Russian Presidency and has been given a large degree of control over the Chechen Republic. Before taking his actual position after his father’s death, he was in charge of the family’s militia, the Kadyrovtsy. As leader of the militia, Ramzan Kadyrov had a capacity of maintaining effective security and this was crucial for obtaining the support of Vladimir Putin. Rough estimates place the Kadyrovtsy around 7000.

The Chechen president also clashed with neighboring regional governors, mainly Ingushetian president Yanus-Bek Yevkurov and the Russian presidential envoy Aleksandr Khloponin, whom many see as a future potential leader in the Russian political system. Khloponin’s opposition to Kadyrov is also seen in light of the power struggle between the MVD and the FSB within the north Caucasus. Analysts also assess that as a consequence of Kadyrov’s position against Salafis, Islamic extremism spread to the neighboring areas, such as Dagestan, Kabardino-Balkaria, Tatarstan and recently Bashkortostan.

Chechnya’s most consistent relation is with the United Arab Emirates. In 2010 Ramzan Kadyrov met with the deputy supreme commander of the UAE armed forces, and in 2011, the UAE minister of Higher Education and Scientific Research travelled to Chechnya to inaugurate a center for Koran study and memorization. The Chechen press reported that the UAE holding company, Royal Group, would invest in Chechnya in the property and agricultural sectors. On April 1 2013, Kadyrov met the crown prince of Abu Dhabi, Mohammed Bin Zayed al Nahyan.

As to the relationship with Saudi Arabia, in 2007, Kadyrov met with King Abdullah and reportedly he also delivered a message from Vladimir Putin. One of the members of the delegation was Zyiad Sabsabi, an ethnic Syrian member of the Russian federal Council with close ties to the United Russia political party that frequently used him as an envoy to the North Caucasus regimes.

In 2011 Kadyrov visited Jordan, where a significant Chechen diaspora is located, which is well represented in the military and intelligence structures.

Since Russian state-owned Rosneft’s contract in Chechnya is due to end, Chechnya has been looking for an alternative due to a possible lack of investment from Rosneft. The Chechens consider that an oil refinery on their territory would be important for their exportation rights, especially since Russia expressed the intention to build a refinery in the neighboring Kabardino-Balkaria. Kadyrov is playing a somehow dangerous game, since Rosneft president Igor Sechin[14] is said to be a close ally of Vladimir Putin and if Rosneft regains the license for the Chechen oil, Russian financing might increase again.

On the other hand, Kadyrov invited the Azeri oil company SOCAR to explore oilfields in Chechnya, which could increase revenues by selling oil directly to Europe. The Baku-Novorossiysk pipeline intersects Chechen territory and could serve as a vessel for Chechen oil trough the Baku-Tbilisi-Ceyhan pipeline. Azeri involvement in Chechnya would further strengthen their position in the Caucasus.

Administration: carving and re-carving territories

Part of Moscow’s strategy to improve the stability and the administration of the region consist, as in the past, in various territorial schemes for the region. The North Caucasus republics were changed twice over the last decade, including the creation in 2010 of the North Caucasus Federal District, a solution that is still seen as of little success both by the parties involved (at least one region, Stavropol, is seeking to leave it) as by the analysts, who even suggest new ways to improve the situation.

Senior officials in Moscow are well aware that the existing administrative-territorial borders, drawn in Soviet times if not earlier, are not consistent with the current realities and need to be changed.

Among the federal districts in the Russian Federation, seven were created by President Vladimir Putin in May 2000 and modified by his successor, Dmitry Medvedev, who carved the North Caucasus Federal district out of the Southern Federal District in January 2010.  But its creation has satisfied no one, and it is already clear that the new district was creating more problems than it was solving and both officials and expert observers began to suggest that there must be further reforms of the administrative-territorial borders of the federal districts in general and those in the North Caucasus in particular.

Analysts note that instead of bringing stability in the region, after the North Caucasus Federal District (NCFD)’s creation the situation developed in the opposite direction. Instead of putting the North Caucasus under the control of one structure, the region remained divided between two federal districts, and its diversity means that any attempt to impose a common answer to its various problems will backfire.

Some of the malfunctions noted by the analysts are:

o   The borders of the NCFD are not congruent with those of the North Caucasus Economic Region which includes all the federal subjects of the NCFD plus the Kalmyk republic, Astrakhan Oblast and Volgograd Oblast and the geographic and political borders of the North Caucasus do not correspond either.

o   The NCFD consists of two very different parts, Stavropol and national republics. That has allowed greater migration from the non-Russian areas into Stavropol and exacerbated inter-ethnic tensions there, sparking both violence and ethnic Russian outmigration.

o   The NCFD divides the Terek and Kuban Cossack communities, creating problems for them and for Moscow.

o   The current arrangements further divide the already much-divided Circassian community, most of whose members are in the NCFD but some of whom, in Adygea and Krasnodar, are left outside.

o   The divisions contributed to the growth of Islamist movements in the region.

o   The exclusion of Rostov Oblast, Krasnodar Krai and Adygea from the NCFD created additional administrative problems for the region.

o   The Russian authorities did not take into account the differences between the Eastern and Western Caucasus, which was described as a strategic error.

Among the proposed solutions was the formation of two federal districts in the North Caucasus in place of the existing NCFD. The first of these, the West Caucasus Federal District (or possibly Azov-Black Sea FD) would include Rostov oblast, Krasnodar Krai, Stavropol Krai, Adygea, Kabardino-Balkaria, Karachay-Cherkessia, and Ossetia, having as administrative center in Vladikavkaz, Krasnodar, Maykop, Rostov or Stavropol. Such a district would have a high percentage of ethnic Russians, no deep Islamic traditions, religious diversity and relative ethnic homogeneity among the indigenous groups, and its economic potential would be based on industry, agriculture, and mountain resorts.

The second, the Eastern Caucasus Federal District or possible Pre-Caspian FD, would include Ingushetia, Chechnya and Dagestan. It could have its center in Grozny, Makhachkala or possibly a new city or a rotating capital.  There would be “no Russians” in it, the populations would be strongly Islamic, and they would be ethnically diverse. Economically, they would rely on oil production and the generation of electrical energy, communications, and some agriculture, especially in Dagestan.

Such a division would have as an advantage the diminishing of the ethnic and religious tensions, uniting the regions with an ethnic Russian majority and including the Islamic republics, Ingushetia, Chechnya and Dagestan in a single FD.

The authors of this proposal did not elaborate on the separatist potential of the new “eastern” Islamic entity which would retain the main energetic resources of the North Caucasus.

 

IV. Uncertain perspectives

 

Most analysts stress that instability and terrorism risks in the North Caucasus are far from solved problems and the Kremlin is unlikely, in the long term, to hold control over the region. Unless it better assimilates the people of the North Caucasus into Russia, their tendency to turn away from Moscow is likely to continue.

Although Secretary of the Russian Security Council Nikolai Patrushev recently announced[15] the decline in terrorist activities in the North Caucasus and said that “the number of terrorism-related crimes went down 43%”, he acknowledged that “hidden tensions remain in interethnic relations”, as showed by “a tangible growth of extremism-related crimes”. He cited as main reasons “the systemic flaws in education and upbringing of young people” and “the growth of influence of radical Islamic organizations”.

Analysts agree that Russia will only be able to address the currently instability in the North Caucasus if it first overcomes much broader structural, but also leadership challenges, which until now made Moscow a weakened power with a growing terrorist threat inside its territory.

According to Kremlin observers, the current political stagnation, combined with systemic corporate mismanagement brought back the economic conditions of the early 1990s and are threatening the breakdown of the system. The negative effects of a second fall of the Soviet-derived economic system may be much bigger than the political collapse of 1991, which marked the end of the Cold War.

Post-Soviet Russia and its rise to global influence were built on the exploitation of resources by state-directed companies. In a manner of speaking, Putin dropped the ideology of the Soviet imperial system but kept its political culture in pursuit of a primitive form of mercantile capitalism which became the post-Soviet economic system. This is why President Putin regards Gazprom, Rosneft, Rusal, VEB, VTB, and other corporations  involved in the development, export and financing of Russia’s energy and mineral resources as “strategic industries”. But, like all twilight systems, the same flaws that caused the imperial system to collapse and which remain embedded in its political successor will cause the post-imperial system to collapse as well. Putin, Medvedev, and Russia’s financial elite are confronting an economic crisis for which its strategic industries and federal budget are unprepared.

The inheritance of post-Soviet Russia included the well-educated and calculating elite of KGB-trained siloviki, a centralized, resourced-based economy, and a business elite capable of only theft and the simulation of management. With these fragments of Soviet political culture, the Kremlin built a hugely wealthy oligarchic economy which threw off enough profits to finance the post-Soviet state. At the moment, 60 percent of the state revenues come from taxes and income from Gazprom, Rosneft, and other fossil-fuel corporations.

Such an economic system can function only for as long as the profits of aging, mismanaged “strategic industries” generate enough profits, but in the last decade, the decline of commodity prices, increased competition, and the rising costs of Russia’s regions have overtaken profits. In short, the slowing of a post-imperial state is already beginning at the economic level. It remains to be seen whether or not Putin can change the twilight political culture and restructure the wealth-creating industries quickly enough to avert systemic collapse.

Until this occurs, the question remains for how long Russia will be able to retain its effective power and governance over North Caucasus.

As already assessed by the analysts, the economic loss of the North Caucasus by Russia would essentially mean losing the Baku-Novorossiysk oil pipeline, which passes through Dagestan and Chechnya. A new pipeline, though costly, would have to be built above the North Caucasus. However, Lukoil’s current exploration of Caspian Basin oil is focused entirely offshore, and future oil could therefore be diverted through a new pipeline from the offshore oil fields through Kalmykia, then above the region through Rostov and on to the Black Sea port of Novorossiysk.

An independent North Caucasus could also diminish Russian influence in the region, if the North Caucasian government chose to do business with regional and international partners to the exclusion of Russia, or in competition with Russia. For now, Russia enjoys a monopoly of influence in the region through the direct appointment of the Head of the North Caucasus Federal District, as well as the appointment of governors to the republics. Losing the region would mean losing this exclusive authority and access. Furthermore, an independent North Caucasus would completely change the strategic balance in the South Caucasus “near-abroad”, mainly the ex-soviet republics of Georgia, Armenia, Azerbaijan that were defined by Moscow as being of first interest for Russia.

On the other hand, analysts stress that, even if a prosperous and united North Caucasus region could one day seek independence from Russia and deny, or at least limit, its access to the region Russia would still have access to the Black and Caspian Seas through the Rostov Oblast (Region), and Kalmykia, respectively.

Moreover, a prosperous North Caucasus should bring stability to the region, and a thriving economy will provide jobs. Reducing the high level of unemployment among North Caucasian youth should undercut the ability of Islamic militants to recruit them, and this could lead to a decrease in violence within, and outside of the region. This is a goal worthy of Russia’s best efforts at economically developing the North Caucasus.

 

[1] Similar considerations were made in the context of the assassination of a British soldier, killed in a daylight attack in the southeast London district of Woolwich on May 22, 2013. The phenomenon of “home-grown” and “lone-wolf” terrorism was analyzed in a previous paper.

[2] Krai and Oblast are administrative divisions and federal subjects in the Russian Federation. Historically, Krais were vast territories located along the periphery of Russia, since the word krai also means border or edge. The word oblast is often translated as “area”, “province”, or “region”. There is no difference in legal status between the Krais and the Oblasts.

[3] Some Circassian activist groups, many outside Russia, are seeking recognition of this as genocide, especially before the 2014 Sochi Winter Olympics, which are to be held on the site of the events.

[4] The organization is described in a later chapter of this analysis

[5] Former Chechen (Moscow chosen) President Akhmad Kadyrov, assassinated in May 2004

[6] According to the National Anti-Terrorism Committee (NAC) of Russia, which announced on 24 May 2013 the “elimination” in Ingushetia of Djamaleil Mutaliyev, the military emir of the Caucasian Emirate, Doku Umarov “is hiding from the Russian justice in Britain”.

[7] Presented to the U.S. Congress during the spring of 2013

[8] Details about the Russian approach may be found at www.strategic-culture.org

[9] FSB officials confirmed this at the end of May 2013 and showed a copy of the note to a U.S. congressional delegation visiting Moscow. According to the official declarations, the letter mentioned Tsarnaev’s 2010 radicalization but not the connections with Georgia and the Jamestown foundation.

[10] Poods were the early Russian measure of production and there are 8.33 poods per barrel

[11] The term refers to the “Early Oil Project (EOP)”, the first large-scale oil project in the Caspian Sea region, in operation since 1997.

[12] It was, according to historians, Vladimir Putin’s first job when he was appointed Prime Minister on 9 August 1999 by President Boris Yeltsin.

[13] It is formed of several small cities, including Pyatigorsk, Kislovodsk, Zheleznovodsk and Essentuki. The area borders Kabardino-Balkaria and Karachaevo-Cherkessia and has special status within Stavropol Krai, with the highest population density and, arguably, the highest ethnic diversity.

[14] Sechin is often described as one of Putin’s most conservative counselors and the leader of the Kremlin’s Siloviki faction, a statist lobby gathering former security services agents. According to Stratfor, Sechin was “USSR’s point man for weapons smuggling to much of Latin America and the Middle East” and he reportedly served with GRU agent and arms smuggler Viktor Bout. Stratfor also assessed that Sechin “commands the loyalty of the FSB” and “represents the FSB’s hand in Russia’s energy sector”.

[15] At the end of May 2013, during a visiting session of the Security Council in Pyatigorsk.