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. Last Updated: 07/27/2016

ESSAY: Life of Crime Is the Only Option in Chechnya




The kidnapping epidemic in Chechnya, the murder of the hostages and the continuous reports of a criminal orgy in the North Caucasus have painted a landscape of "a gangster region" in the pages of the Western and Russian newspapers. A perusal of Moscow's dailies gives one the impression that crime is the only way to make a living in the North Caucasus and that the region's inhabitants are genetically predisposed to crime. However this problem of an illegal, shadow economy is much broader than just a purely criminal phenomenon. In fact, it constitutes the entire Caucasian economy and establishment.


This shadow economy is dominated by vodka production, oil refining, kidnapping, fish poaching and smuggling. These industries fall into the broad category "Mafia" - which, in Soviet times, simply meant any industry that was not run by the state.


These "Mafia" industries are driven further into the shadows by Russia's chaotic tax system. Businesses can hardly be expected to abide by the law and turn over up to 90 percent of their profits to the state, especially when the state offers them absolutely nothing in return. Since businesses cannot expect to be protected by the authorities from racketeers, their only choices are to bribe bureaucrats for protection or seek it from the gangsters themselves. The end result is that bribes are paid in lieu of taxes. Because of this, it is hardly proper to call a businessman operating in such economic chaos a bandit or a criminal. A merchant who bribes a customs officer to bring cigarettes from, say, Azerbaijan, and then pastes fake tax stickers on the shipment is not unlike a giant part-state-owned enterprise that trades in cars or oil. The only distinguishing factor is the size of the bribes involved.


More so than any other place in Russia, the Caucasus have a so-called "trading mentality." During Soviet times, the region was abuzz with elements of a free market: People ran restaurants out of their homes; there was small-scale industrial production of vegetables and other farm goods; Caucasian construction crews freelanced throughout the Soviet Union.


Because of this well-organized, non-state trade structure, the Caucasus were especially well positioned for the fall of the Soviet Union - and the economic madhouse that would follow. Merchants in the Caucasus learned outlaw skills under Soviet rule and business merged with criminal activity. When the Soviet Union collapsed and trade and business became legal, the Caucasus filled a significant role in Russia's half-criminal, shadow economy.


Different Caucasian republics specialize in different spheres of this economy. Northern Ossetia specializes in vodka production; Dagestan has its poaching industry and armed political clans; Chechnya has its kidnapping and its bootlegged oil - and a bit of everything else as well.


Ossetia owes its vodka boom years to its unique position on the vodka smuggling route that runs north to Russia from Georgia. Pure Ukrainian or Canadian spirit would arrive at the Georgian port of Poti and continue to Ossetia. There, it would be bottled and sent all over Russia. Last year's federal efforts to stomp out smuggling have ebbed the flow somewhat, but official corruption makes it difficult to wipe out the billion-ruble industry entirely.


Dagestan's Caspian Sea sturgeon poaching, on the other hand, continues to swell to such proportions that the ecological balance of the region is in jeopardy. Profits are enormous and the usual police tactics are powerless against the poachers. The poachers have faster boats, better guns and better information. Arrests are impossible because business and politics are inextricably bound together.


Practically all of the politicians and businessmen in this system are supported by their clans, and therefore every gentleman's wardrobe has to include guns. Politicians who work to secure these things for their clans are rewarded with authority. The police, the courts, the ministers, all become a part of the same corrupt, criminal organism.


This situation reaches its pinnacle in Chechnya. All of these features exist there in an even more pronounced form. There is no legal way to make money in the republic. Industry was totally destroyed in the last war and the younger generation knows no other life besides fighting in armed conflicts. Oil pipelines crossing Chechnya are sapped by thieves. Some 80 percent of the oil pumped by Oktyabrneft, one of the Chechen distributors, is stolen through holes punched in the pipelines.


Kidnapping is rampant and profitable. The region is a warehouse of hostages because, until the current war, federal authorities had limited access to the republic's territory. But kidnapping is not so much a law enforcement problem as a social problem, ransoms being the only source of income for a large sector of the population. Until the region's economy is revived, it will continue to plague the region.


These problems must be solved. Any federal efforts toward this have been enveloped by the war. A less violent means of solving the crime issue, however, would be a revamping of the Russian tax and legal codes. Industries must pay taxes but these taxes must be feasible. This system has already turned the Caucasus into a poverty-stricken region. The only way for the people to survive is by smuggling vodka, poaching sturgeon, bootlegging oil and refining it in bush factories - and there is no way to account for any of this industry.


Since you can hardly forbid these activities they should be legalized. License them and put controls on quality. If these shadow economics were legalized, authorities could isolate criminals and fight with them by the usual means. This would lead to a fight against crime rather than a fight against the whole population.


Secondly, the political system has to be revamped. In order for the political system to be solid, it has to be agreed upon by the people, not flown in, ready-made, from Moscow. In a self-regulating society like that in the Caucasus, such an approach is doomed. Moscow and Makhachkala are as far apart culturally as London and Mecca. Moscow's policy's have led to an erosion of the traditional honor-based means of self-rule in the Caucasus. Three years ago, kidnapping was considered shameful. Now it is normal and everyone is doing it - which should be example for Russia of how dangerous it is to go to war with a whole people.


Unfortunately, there are no indications that the Russian government will become any more competent in its dealings anytime soon. Everything will remain the same. The authorities will continue their fight against criminals and terrorists and the Caucasus will try to survive by their traditional means. The Kremlin and the media will continue calling this criminal, but it is actually quite a bit more than that. It is a way of life.


Alexander Iskandaryan is head of the Center for Caucasian Studies. He contributed this comment to The Moscow Times.