Economic development of regions in the multiethnic southern Russia

The article assesses the level and dynamics of the economic development of federal entities in the Southern Russian multiethnic and multicultural region. Most of these federal entities have geostrategic importance for Russia. The studies of past years suggest that high levels of social diversity tend to be associated with poor economic performance of a territory. Our study confirms the high level of interregional socio-economic inequality in territories of the North Caucasus Economic Region (without Crimea and Sevastopol) and their lagging behind the average Russian rates of the most important economic indicators. However, since 2005, relatively high rates of GRP (Gross Regional Product) per capita have been recorded in the entire region and in each individual federal entity as well. At the same time, regional economic policy is not effective enough: as to NCER, an active cluster policy in specialization industries is pursued only in Rostov region. The federal entities of the economic region were grouped by the level and dynamics of GRP, this outcome was compared with the results of a similar grouping of 2008. It was revealed that Krasnodar Krai remains the leader of the economic region, and the group of territories with positive dynamics includes the Republic of Adygea, Dagestan and Chechnya. A decrease in the socio-political tension would greatly contribute to the emerging economic growth in Ingushetia. The Republic of Kabardino-Balkarian and North Ossetia-Alania, in which the growth inhibitory factors require special research and consideration, remain “problematic” economic territories of NCER. The economic development of these NCER entities also depends on increasing the effectiveness of regional economic policies and supporting their “smart specialization”.