Some opinions on special economic zones in the Caucasus

As is known on January 19, 2010 Russian President Medvedev established the so-called North Caucasus Federal Region, which consists of the Stavropol district and all the republics in the North Caucasus apart from Adigei. The capital of this new region is Piatigorsk and former Governor of Krasnoyarsk Alexander Khloponin has appointed its head.

PM Putin said on January 23 that special economic zones would be created to develop the region. This idea is supported by all the leaders of North Caucasus republics, however analyst Mikheil Chernishov challenges it. He considers that such zones are successful when there are appropriate institutions in place in the region, but the North Caucasus lacks these.

Chernishov thinks that if such zones have special tax regimes and a state-financed infrastructure the situation in the region will not change, as there will be corruption and money will disappear. He thinks that much depends on the role of the newly-appointed Governor of the region, what he will declare a priority and whether he will start modernising the institutions of the region.