Chechnya: "The next step...full annihilation of bandit formations" Vladimir Putin.
Russia proudly raised over the her flag over the smouldering ruins of a defeated Grozny in a scene reminiscent of the raising of the Soviet flag on top of the Reichstag in Berlin at the end of the Second World War. Vladimir Putin declared the long battle for the Chechen capital over. "We taught them a very good lesson, the terrorists have suffered irreparable damage" he went on to claim "The next step...full annihilation of bandit formations" as he refers to the Chechen rebels.
The war in Chechnya is far from over - the rebel Chechens have retreated to the southern mountains where they will wait until spring and shift to guerrilla warfare. Russia could well be mired in a long and bloody struggle with the Chechens fighters who refuse to accept defeat.
With Grozny in ruins Russia has no plans to rebuild the capital of its breakaway republic - more importance has been placed on the rebuilding of the Chechen oil industry that it has spent much of the past five months bombing. The Kremlin has assigned the sole right to extract and exploit the Chechnya's oil and gas reserves to Rosneft, Russia's last big state-owned oil group. The region has great potential as a conduit for the vast oil wealth of the Caspian basin.