Standard of living in Chechen Republic

By the level of social and economic development Chechen Republic (together with Ingushetia) in the past occupied one of the last places in the country. The profitable part of the budget for 90% was supported by centralised subsidies. After the break with Russia Chechen Republic actually became "a free criminal area": alongside with impoverishment of the population there was enrichment of criminal shadow structures. Welfare of the majority of citizens at the beginning of the 90-s sharply decreased.

Many companies stopped their operation, number of the unemployed exceeded 60 - 80% of working population. The indebtedness for salary in industry, construction, agriculture in 1993 constituted 983 million roubles. The situation continued to deteriorate during the following years.

According to the data of Chechen authorities, at the end of 1997 the cost of living per one inhabitant of Chechen Republic for one month exceeded 300 thousand roubles, and in the first quarter of 1998 it was 400 denominated roubles. It included only staple food products. According to official data the official income of the population in the form of salary, pensions, children's allowances did not exceed 100 roubles per person for one month. Therefore, the level of legal income in Chechnya in 1998 constituted only 1/3 of the living cost.

The salary at few working companies, including in oil production, was almost never paid on time: in 1996 - 1998 the intervals between payments were from 3 - 4 months to 2 - 3 years. More or less regularly the budget of Chechen Republic financed military structures. It was impossible to pay all debts for salary. That is why by a special decree of the President A. Maskhadov all debts for salary acquired before January 1, 1999 were frozen and available budget funds should be used only for current payments. Payment in kind was widespread in many companies: at brickworks - by bricks, at a sugar plant - by sugar, at a meat-processing factory - by sausage, at the plant "Red Hammer" - by iron doors of their own manufacture. People then exchanged the products at the Central market in Grozny or sold in neighbour regions. The same situation was observed in agriculture: 4% of the crop - that was the size of payment in kind during harvesting campaign of 1998. In administrative sphere almost all organisations and companies transferred to paid services, having established tariffs for any certified or stamped documents.

The population in Chechen Republic received the main income from self-employment in different spheres of shadow economy. During the post-war period the "wild" oil business was very popular - unauthorised pumping of oil from oil pipelines, its subsequent processing at mini-plants (there were more than 800 of them in 1999) and sale of primitive petrol in the territory of Stavropol Territory, Dagestan, Kalmykia. According to those involved in this activity, it allows to earn money quickly: after several months the income allows to purchase a car or a tractor.

Another widespread way of survival - the lease of land and cultivation of vegetables for sale. Vegetable growing in post-war Chechnya was quite a boom despite the necessity of initial investments for the rent, purchasing of seeds, etc. Cattle breeding and vegetable growing rescued many people in Chechnya. In the mountain areas of Chechnya (Nozhay-Yurtovsky, Vedensky and other regions) local population led seminatural way of life and quite often in order to survive cultivated cultures used for production of narcotics - poppy and hemp.

Trade and "shuttle" business (to Turkey and Russia) are extremely widespread. Those who have cars work as private taxi. Budget employees who did not receive salary for many months and even years - doctors and teachers - provide paid teaching and treatment services.

Extremely low actual income was partially compensated by free public utilities, and by the fact that during all these years Russia supplied electric power and gas to Chechnya free of charge.

Practically all population permanently living in Chechen Republic is on the verge of survival. At the same time there is a very rich top - people from the top-echelon and military criminal structures who used transfers from the federal budget to Chechnya and some other sources, including production and processing of narcotic substances (heroin) and their illegal supply to Russia, for personal enrichment. In the 90-s more than 100 armed and organised criminal groups were registered in Chechen Republic who were involved in train robberies, kidnapping, stealing of cattle from the neighbouring Stavropol Territory, etc. The mutual actions of Chechen criminal society and Russian organised crime on manufacture and importation to the Russian Federation of false 50,000 rouble notes, financial manipulations with false letters of advise, etc. damaged greatly the economy of Russia.

The illegal money (estimated in several billions of dollars) and investments from abroad were also used for the arming of bandit groups.