Chechnyas Financial Dependency on Moscow Reaches Record Levels

The financial reliance of the Chechen Republic on the Russian federal government is the highest in the nation, with over 92% of its expenditures for 2024 being funded by Moscow.

These statistics highlight the precarious state of the North Caucasus republic’s economy and its continued dependence on support from the Kremlin.

In 2024, total government spending at all levels within the republic reached 580 billion rubles (approximately $7.3 billion), an increase from 375 billion rubles (around $4.7 billion) in 2021, according to estimates from the Ravenstvo Telegram channel, which examined data from the Federal Treasury.

A significant portion of this budget, amounting to 149 billion rubles ($1.88 billion), was received as non-repayable transfers.

On average, grants and subsidies provided around 95,000 rubles ($1,200) for each resident of Chechnya, which is nearly double the national average of 48,500 rubles ($600).

Additionally, the federal budget allocated 150 billion rubles ($1.9 billion) for law enforcement and military services in Chechnya.

The Kremlin heavily depends on the republic to supply troops for its military operations in Ukraine, with reports indicating that the Akhmat special forces unit has deployed over 50,000 fighters to the front lines.

Pension disbursements earmarked for the region reached 215 billion rubles ($2.72 billion), while an extra 26 billion rubles ($328 million) were designated for the mandatory health insurance subsidies.

In comparison, Chechnya’s own revenue for 2024 was a mere 37 billion rubles ($470 million), sufficient to cover only about one-fifth of its regional budget and representing just 6% of the total government spending in the republic.

Despite this extensive financial backing from the federal government, Chechen officials frequently assert that the levels of funding are inadequate. Prior to the 2024 budget, Chechen Prime Minister Muslim Khuchiev expressed that the republic still lacks the necessary resources for developing vital social infrastructure and for meeting public-sector salary obligations.

Other regions that depend heavily on federal assistance include Tyva (79% of its budget from federal sources), Ingushetia (78%), Dagestan (72.8%), and Karachay-Cherkessia (68.2%), alongside the occupied Ukrainian regions of Kherson (76.8%), Donetsk (70.9%), Luhansk (65.4%), and Zaporizhzhia (67.3%).

Conversely, wealthier areas like Moscow (8%), Sakhalin (9%), and Tyumen (10.7%) receive minimal federal subsidies.

From an economic perspective, Chechnya remains significantly behind the majority of Russia. Its industrial production is still 55% lower than the levels seen in 1990, and its gross regional product per capita in 2023 was the second-lowest in the country, being more than four times below the national average.

Chechnya also ranks among the top five regions with the highest poverty rates in Russia.