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. Last Updated: 07/27/2016

$5Bln Program Approved for South

The Cabinet on Thursday approved a program that will pump $5.3 billion into the Southern Federal District, the first regional development project of its kind.

The Economic Development and Trade Ministry's five-year plan, dubbed "South of Russia," consists of 737 investment projects and will start next year.

Under the plan, foreign investors are expected to cover 60 percent of the $5.3 billion, with the state pitching in 17.6 percent, regional governments 9 percent and local administrations the rest.

"The program involves a set of political, managerial, legal, economic, social, scientific and technical measures," said Viktor Kazantsev, President Vladimir Putin's special representative to the southern district.

Prime Minister Mikhail Kasyanov "set strict terms for the program," said Kazantsev, adding that fine-tuning of the program will be completed by July 25.

The program's main goal is to create conditions for economic growth and improve the social climate in the South.

The Southern Federal District is one of seven "super-regions" created by Putin last year and includes five regions: Krasnodar, Rostov, Stavropol, Astrakhan and Volgograd; and eight republics: Adygeya, Dagestan, Ingushetia, Kabardino-Balkaria, Kalmykia, Kar-achayevo-Cherkessia, North Ossetia and Chechnya.

The program so far does not involve Chechnya, which may be included in two or three years, Kazantsev said.

Kazantsev said the program aims by the end of 2005 to create 700,000 jobs and boost salaries, which are one-fifth less than the national average.

The project aims to further exploit oil and gas deposits in the Caspian Sea and build new pipelines. It also proposes measures for developing tourism, small- and medium-sized businesses, the Internet, the wine industry, tobacco growing and livestock breeding.

The ministry estimates that by 2006 agricultural production will more than double from its current level.

The South has 15 percent of the country's population but contributes less than 6.5 percent of the gross domestic product, even though 70 percent of all international trade goes through southern ports.

Valentin Lednyov, deputy head of the State Duma's social policy committee, said "the complicated program is a mess and will definitely lead to a waste of money.

"There are plenty of nice projects, but the problem is that they have never been carried out completely," Lednyov said.

With so many investment sources, ministries and authorities involved in the program it will be difficult to follow spending and even harder to find anyone responsible if something goes wrong, he said.

Last year, a Finance Ministry audit department discovered financial violations involving 1 billion rubles ($34 million) in the budgets of the southern Stavropol and Rostov regions and the republic of Ingushetia, said Viktor Ampilov, deputy presidential representative in the Southern Federal District, Interfax reported.