'Now on what in my view is the most serious domestic political problem for our country -- the situation in the North Caucasus,' Medvedev said.
'I will speak openly -- the level of corruption, violence, and clan dominance in North Caucasus republics is simply unprecedented,' the president said.
Kremlin officials say privately that the North Caucasus is a cross that Russia's elite has to bear, though they admit endemic corruption among officials has bred poverty and driven youths into the hands of Islamist rebels.
Opponents of Medvedev and his mentor, Prime Minister Vladimir Putin, warn that Moscow's policy of throwing oil money at the North Caucasus while using the army and police to crack down hard on militants has failed.
'The volumes of state financing for the North Caucasus are significant but the effectiveness of the spending of that money leaves a lot to be desired - part of the funds are almost openly being stolen by officials while unemployment and, as a result mass poverty, have reached emergency levels,' Medvedev said.
Unemployment in the republic of Ingushetia was running at over half of the economically active population and the figure in neighbouring Chechnya was about 40 percent.
Locals say violence is spiralling out of control in the mainly Muslim region of Ingushetia, where leader Yanus-Bek Yevkurov was wounded in an assassination attempt on June 22.
'We will continue the fight against international terrorism without compromise (and) destroy the bandits,' Medvedev said, adding that economic backwardness was helping to radicalise the young in some of the republics.
'We will do everything to make sure the lives of people in the North Caucaus become prosperous, and we shall deal with those who who hinder us.'
(Editing by Angus MacSwan) Keywords: RUSSIA MEDVEDEV/NORTHCAUCASUS
(guy.faulconbridge@reuters.com, +7 495 775 12 42)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Neither the Subscriber nor Thomson Reuters warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other information, is provided by Thomson Reuters and its third party content providers for your personal information only, and neither Thomson Reuters nor its third party content providers shall be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon.
http://www.forbes.com/feeds/afx/2009/11/12/afx7115195.html