For more than two decades the Russian security services and propaganda organs have been claiming that the armed insurgents in the North Caucasus were financed from outside, although facts to prove this have been rarely made public.
In recent years, approach towards this issue has changed. Even the highest echelons of the Russian authorities were forced to admit that real causes of crime, ethnic and religious tensions, which have reached the critical level, are to be found on the place and sources of financing of the insurgents come from inside the country.
An article by Vladimir Mukhin published in the Nezavisimaya Gazeta under the heading "Rebels were deprived of currency and gold reserves" reported that the security forces have recently established routes of smuggling of industrial gold, stolen or illegally obtained at Kolyma gold mining companies in the Magadan region, into the North Caucasus, in particular, Ingushetia. They have established both senders and recipients of the precious metal, while immediate handlers have been detained.
According to the press service of the Federal Security Service (FSB) a large quantity of gold has been seized although the exact figure has not been specified. For example, they cite only one episode when over 17 kilograms of gold mined in the Kolyma region and intended for transportation to the Caucasus were seized from one of the members of the gang. The price of one kilogram of industrial gold on the black market is 1.5 million rubles. Accordingly, the price of 17 kilos is 25.5 million rubles.
The investigation in the Magadan region determined that just one criminal group has stolen one billion rubles through fraud and money laundering to send it to the Caucasus. Although the amount of financial aid for the insurgents is much higher.
As it turns out, the second most important source of funding for the armed underground is budget funds allocated to the North Caucasus.
According to the Chamber of Control and the Head of the Prosecutor General's Office in the North Caucasus Federal District Artem Melnikov, financial violations in the North Caucasus amount to 18 billion rubles. It was also found that most of the money has got into the hands of the insurgents through officials entrusted with a task of allocating budgetary resources.
Head of the Republic of Ingushetia Yunus-Bek Yevkurov has repeatedly told journalists that the main source of financial and material support of the armed underground is local officials and businessmen. This view is shared by the head of the North Caucasus Federal District Alexander Khloponin, who acknowledges that the amount of finance coming to insurgents from outside is about 10% of all the money they spent. The rest comes from local sources.
The International Crisis Group that studies and analyses the situation in conflict zones worldwide has recently published a report on the North Caucasus which said that the financing of the North Caucasus insurgency from foreign sources ceased in 2002 and it was connected to the death of well-known Arab warlord Khattab.
The organization argues that the increasing tendency of young people to join the insurgency is not due to financial reasons. The reason for this process is unresolved ethnic and intra-confessional issues and low levels of governance.
In this respect, the International Crisis Group attaches great importance to problems of human rights violations in the region, existence of corrupt institutions and uneven economic development.
The trend towards realistic assessment of the situation in the North Caucasus should become the basis for making relevant conclusions and taking adequate measures.