Rebuilding of South Ossetia in spotlight

As the reconstruction of South Ossetia accelerates, its financing is becoming all-important. Meanwhile, with most of the region still in ruins, Georgia is attempting to buy off Tskhinval by offering more money.

Ruined country

Following the August’s Georgian-South Ossetian conflict the scale of destruction in South Ossetia was massive. The country had the vast majority of its key administrative and infrastructure objects destroyed.

The situation in the region has been tense since the 1990s, making it impossible for private businesses to flourish. The latest military action that took 1,492 lives (according to South Ossetian authorities) was disastrous for Ossetian economy, leaving the South Ossetian administration with no money to satisfy the most basic social needs.

Seventy per cent of the South Ossetian capital, Tskhinval, is still in ruins although hundreds of emergency workers from Russia arrived in the republic immediately following the end of the military action to help the people recover and help restore essential indispensable facilities.

Schools for instance were restored in less then a month ready for September 1 – start of the academic year. Four hundred workers from Russia worked around the clock to get the schools ready.

Building in progress…

As the consequences of the war were dealt with, an array of major construction projects was launched in South Ossetia. With spring looming closer they are bound to accelerate. According to South Ossetian President Eduard Kokoity, more large-scale house building in South Ossetia is due to start within days.

A good example is the Moskovsky block in Tskhinval, with more then 200 cottages for some 3,000 inhabitants, which will be completed by September 1, 2009. All the production costs of the block – $U.S. 75 million – were covered by Moscow’s administration, thus the block’s name.

Other Russian regions are doing their bit too. Nizhny Novgorod Region signed an agreement to supply South Ossetia with raw materials, while Saint-Petersburg’s architects are designing a general plan for Tskhinval. Tyumen Region also has a block in the west of Tskhinval.

In addition, Moscow’s administration intends to allocate some additional $US 30 million from the city’s budget surplus on building key social and infrastructure objects in the capital, Tskhinval. A decree on that has been signed by Moscow’s mayor Yuri Luzhkov.

Meanwhile the Russian Finance Ministry is preparing to transfer the first sums from a total of $US 300 million of federal aid promised earlier by Prime Minister Vladimir Putin.

…or laundering?

Days before the federal financial support was allocated, the first tension between Tskhinval and Moscow arouse.

To avoid embezzlement of the reconstruction money, the Russian side proposed employing Russian officials to control the distribution of the finances. According to some sources, the proposal was met by opposition from the South Ossetian administration.

However, speaking to RT, Kokoity rushed to play down the tension.

“Today the authorities of South Ossetia and Russia are elaborating procedures of fiscal control over expenditures that the Russian Federation has allocated for reconstruction of South Ossetian infrastructure, so that both sides can control the quality of work done and conform to the budgeted value” he said.

Georgia opens purse in vain

Meanwhile, another source of aid for South Ossetia has manifested itself.

Commenting on the Moscow administration’s promise to send $US 30 million, the Vice-Speaker of Georgia’s Parliament, Mikhail Machavariani, told Ekho Moskvy radio station that his country has substantially more money to give South Ossetia.

“We have some $US 4 billion, which is way more than Moscow is ready to give. And if Russian forces leave the region, a part of that sum will be spent on repairing the infrastructure of Abkhazia and South Ossetia,” Machavariani said.

Machavariani’s declarations were labelled ‘cynical’ by South Ossetia’s ambassador in Moscow, Dmitry Medoev.

«[Georgia’s President Mikhail] Saakashvili’s offer, voiced through the vice-speaker, have absolutely no prospects. The freedom and independence of South Ossetia are not for sale. The people of South Ossetia have paid a high price for it. A price that can’t be measured by money,» Medoev said.

Russian aid not forever – Kokoity

As aid to South Ossetia becomes an area of speculation, Kokoity says his country will not need it forever.

Kokoity acknowledged that it’s impossible to finish Ossetia’s reconstruction without Russia’s help, but South Ossetia "has more then enough basis for federal status and a decent economic potential to become an independent and successive country.

“Agriculture and winemaking has potential in the country,” Kokoity believes, adding, “as do eco-tourism and mountain skiing in the more distant future. Naturally Russian business is our prime partner, but our doors are open to everyone.”

However, before the country starts to operate as an area for business, it has to rebuild its infrastructure, which it’s doing with Russian help.

Ruben Zarbabyan, RT