Saturday, October 14, 2023

Magas’ Mistaken Focus on Promoting Growth Only in Sectors Receiving Subsidies from Moscow Why Poverty in Ingushetia is So High, Economist Says

Paul Goble

            Staunton, Oct. 10 – Many assume that regions and republics that are not doing well aren’t receiving sufficient subsidies from Moscow, but in fact, the misuse of what subsidies they do receive is often a better indication of why poverty among their populations remains so high, Murat Bulguchev says.

            The dean of the economics department of Ingushetia State University says his republic remains the poorest of all not so much because it isn’t getting money from the center but because of the incompetence of the republic leaders who are spending what they do receive in the wrong way (

            In order to look good in Moscow’s eyes, Bulguchev says, the Ingush government spends subsidies on industries that have been subsidized in the past rather than in economic sectors that could show a greater impact on the well-being of the population. Unless that changes, more subsidies won’t necessarily help Ingushetia to get out of the cellar as far as poverty is concerned.

            Many regional governments in the Russian Federation have made significant steps toward the creation of a market economy and allocate subsidies according to what the market suggests will be most successful. But in Ingushetia, the economist says, the situation is entirely different.

            There, the government knows “only how to receive subsidies” and spread them about without taking demand into account or creating anything useful. Not surprisingly, its officials are skeptical of the market and increasingly switch back to command economy patterns without any reliance on economic statistics.

            That is made worse in Magas, Bulguchev says, because “not a single economist now works” at the government’s research institute. Instead, all of them are political analysts who rely on the political arrangements of the past. That too has to change if Ingushetia is going to escape its current situation where 50 percent of the population is below the poverty line.

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