Russia is launching a new phase of financial “support” for occupied South Ossetia. The initiatives announced during Sergei Kiriyenko’s latest visit include funding for roads, education, healthcare, culture and the civil sector, as well as for the development of tourism and industry. At first glance, this may appear to be a continuation of the policies of previous years. However, a comparison of recent programmes shows that priorities are gradually shifting: while in previous years the main emphasis was placed on construction and rehabilitation, greater attention is now being given to social support programmes, the population’s everyday needs, and measures aimed at strengthening loyalty.

What Has Changed in the “Assistance” and What Is Planned

As part of the new package, by decision of the Russian President, an additional 1.4 billion roubles (USD 16 million) have been allocated to the programme for the socio-economic development of South Ossetia. A further 500 million roubles (USD 5.7 million) were separately announced for road development and rehabilitation.

Unlike in previous years, a significant part of the new initiatives is directly targeted at the population. Each family will receive 10,000 roubles (USD 120) per schoolchild by 1 September. Meals for primary school pupils will also be funded, while the provision of new medical equipment and ambulances is planned.

Another important area is the inclusion of occupied South Ossetia in Russia’s gasification programme. The 500 million roubles (USD 5.7 million) allocated for roads constitutes a separate infrastructure component. A 200 million rouble (USD 2.3 million) grant programme is envisaged for the cultural and civil sectors, of which 100 million roubles is to be directed specifically towards projects submitted from South Ossetia. Approximately 100 million roubles (USD 1.1 million) are also planned to be spent on establishing a youth centre.

In the economic sphere, the plans include a new knitwear enterprise, the construction of a hotel in Tskhinvali, and the development of mini-hotels and glamping facilities in mountainous areas. In parallel, the selection of investment projects for preferential lending is already underway as part of the 2026–2030 programme.

Trends in Russian Funding in Recent Years

A significant proportion of the funds allocated by Russia to South Ossetia over the years has been linked to the restoration of post-war infrastructure.

For the 2020–2022 investment programme, Russia allocated 4.5 billion roubles (USD 53 million). Under the programme, priority was given to roads, bridges, engineering infrastructure and other capital projects.

The subsequent 2023–2025 investment programme amounted to 3.587 billion roubles. A significant part of this programme was again devoted to infrastructure projects, including roads, improvements to streets, bridges, housing and social facilities. The programme comprised 46 measures, a significant number of which were projects carried over from previous programmes.

This means that, for a long period, the main model of Russia’s financial involvement was focused solely on infrastructure. The main reason for this was presumably related to the construction and development of military infrastructure. The Kremlin has consistently sought to increase Tskhinvali’s defence capabilities by funding its military units and infrastructure projects. This is readily apparent from the large number of military facilities located along the so-called borders of the occupied territories.

New Programmes and New Objectives

The shift is particularly evident in the 2026–2030 state programme. The draft programme approved by the South Ossetian authorities explicitly addresses not only infrastructure, but also increasing its own revenues, developing industry and agriculture, supporting small and medium-sized businesses, tourism, education and healthcare. One of the programme’s main objectives is identified as a transition from a “reconstruction policy” towards more sustainable development.

Therefore, considering the new allocation of 1.4 billion roubles for 2026 in isolation may be misleading: a broader 2026–2030 programme is being implemented in parallel, linking infrastructure, the social sector and business support.

If we compare only the total amounts of the two most recent three-year investment programmes, the decrease is clear:

2020–2022 — 4.5 billion roubles (USD 53.54 million)

2023–2025 — 3.587 billion roubles (USD 42.68 million)

This represents a decrease of approximately 913 million roubles (USD 10.86 million), or 20.3 per cent, compared with the previous three-year programme.

The annual average has also decreased: under the 2020–2022 programme, the average was approximately 1.5 billion roubles per year, compared with approximately 1.2 billion roubles in 2023–2025.

Why Has “Caring” for the Population Become Particularly Important Now?

Since Russia launched its war against Ukraine, Moscow has been operating in a more difficult environment when it comes to allocating financial resources. Under these circumstances, any sign of a reduction or disruption in assistance to South Ossetia increases the risk of discontent among the local population, particularly given that the republic’s economy is significantly dependent on Russian financial support.

From this perspective, strengthening social programmes may serve not only an economic but also a political function.

Against the backdrop of the Russia-Ukraine war, this approach has an additional dimension: it is important for Moscow to ensure that economic problems in a territory under its control and financially dependent on it do not develop into broader social discontent. This is precisely why the most significant part of the new package may not be the 500-million-rouble road programme, but rather the far less visible assistance that people experience in their everyday lives — at school, in hospital, in the family budget or at the workplace. At the same time, the existing projects are another worrying indication of efforts towards the eventual annexation of the occupied territories.