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| Caucasus/Russia/Central Asia | ||
| Co-owner of Russia's Summa group (Russian billionaire) arrested. | ||
| 2018-04-02 | ||
[GRI] Ramazan Abdulatipov seems ready to close a sale of Dagestan’s state-owned port of Makhachkala to an Iranian-led group. The sale exposes the difficult balancing act elites are playing in the region. Everybody’s fighting over a spoonful The port of Makhachkala, the capital of the North Caucasian Republic of Dagestan, is home to Russia’s only ice-free Caspian port. As of 2014, the physical turnover of the port’s transshipments of oil and gas products, bulk cargos, car ferry service, and small grain shipments was optimistically expected to more than double to 15 million tons a year in a few years. This was welcome news to oligarchs interested in the region’s trade flows. Makhachkala’s facilities, Russia’s last state-owned commercial port, have been an ongoing prize for privatization as Makhachkala is Russia’s closest port to Iran and the two countries are set to deepen trade ties. As is normally the case in Russia, privatization is a smokescreen for personal and state-driven motives. Dagestan is one of the poorest regions in Russia, struggling with endemic corruption, an Islamist insurgency, a large and untaxed shadow economy, and a long legacy of state-mandated economic underdevelopment. The region possesses considerable oil and gas reserves but is stuck paying Gazprom for natural gas from elsewhere, racking up non-payment fines for which Gazprom had the former CEO of local gas firm Dagestanregiongaz Magomedgusen Nasrutdinov imprisoned, and suspended further investment in gas infrastructure in the North Caucasus republics. Lacking access to oil and gas rents, small-scale initiatives to increase trade contacts with Azerbaijan and Iran have been key to Dagestani leaders’ hunt for trade and growth. The current rush of infrastructure investment into Trans-Eurasian trade routes has opened up a new challenge for the Kremlin as it has long relied on economic isolation to keep Dagestani elites dependent on rents and budgets distributed from Moscow. Dagestan’s location is vital to the growth of the North-South Transport Corridor between Russia and India as well as Russia’s ability to extract, export, or else transship Caspian oil supplies. Iran is front and center in this unfolding shift as it attempts to seize a greater share of Caspian trade and prevent Azerbaijan from dominating East-West transit of goods through the Caucasus and on towards Europe. Abdulatipov’s appointment was linked to Dagestani oligarch Suleiman Kerimov, a Dagestani representative on Russia’s Federation Council and billionaire who sought ownership of Makhachkala’s airport and seaport from Abdulatipov’s predecessor. Kerimov, who successfully acquired the airport, has courted Chechnya’s strongman Ramzan Kadyrov as an ally. Kadyrov is seeking means of playing a role in Russia’s Caspian trade to further Chechnya’s contacts, exposure, and linkages with international actors in an ongoing attempt to improve his power base in order to gain more leverage with Putin and the elites in Moscow. Most recently, he agreed to send battalions of elite Chechen troops loyal to him to Syria in his campaign to model Chechnya as a state within a state exempt from Russia’s governing structures. Opposing Kerimov and Kadyrov within Dagestan is Ziyavudin Magomedov, the main owner of the investment firm Summa Group. Magomedov has sought buy-ins into logistical infrastructure across Russia and is most famous in the west for his vocal support of Elon Musk’s Hyperloop project. Much of last year’s drama revolved around who sat as the port’s CEO. A Kerimov-friendly appointee was replaced at the behest of Magomedov by his protégé Andrei Gormakh. In a rather pathetic slight, Kerimov denied Gormakh’s plane the right to land in Makhachkala in early June as several hundred armed seaport workers and supporters of both men faced off. Despite the threat of violence and high tensions, Abdulatipov seems to have thread the needle, as reports surfaced at the end of December that Iran had beaten out interests from China, Azerbaijan, Vietnam, as well as rival oligarchs for potential majority control of the port. Financial Times’ take on it. | ||
| Posted by:3dc |