Staunton, September 11 – Much of the inequality in the standard of living in Russia’s regions reflects geography, natural resources, and in the case of Moscow political power, but an examination of similarly placed regions suggest that officials in some are doing a much better job than those in others in taking care of the population.
And during this election season, the Russian justice ministry is preparing legislation that will allow Moscow to take powers away from regional leaders who are not doing well and concentrate control in Moscow even further, thus extending Vladimir Putin’s hyper-centralization program under the guise of populism.
In a commentary on the Svobodnaya pressa portal, Andrey Ivanov compares five pairs of regions, Chelyabinsk and Sverdlovsk oblasts, Altay kray and Kemerovo oblast, Kursk and Belgorod oblasts, Kaluga and Tver oblasts, and the republics of Chechnya and Daghestan in the North Caucasus (svpressa.ru/economy/article/156015/).
In each case, he says, the former is doing far better than the latter in maintaining the standard of living of residents and ensuring that the roads are paved and maintained.
Dmitry Zhuravlyev, the head of the Moscow Institute for Regional Problems, says there are three main reasons for these differences: the qualityof administration, the influence of the heads of the federal subjects in Moscow, and historical development of the branches of industry represented in the each of the two.
The Moscow expert says that what Moscow needs to do is to develop a system of “carrots and sticks” to ensure that governors who fail are punished and not allowed to simply go on to a new job. Elections could do that “in theory,” he continues, but the problems are so acute that they need to be addressed more frequently than when elections are in fact held.
Zhuravlyev says that one needs to remember that the skills needed for electioneering and those needed for effective administration are “very different.” Russia has failed to train people in administration and he suggests that it should open “a school for ‘the liquidation of ignorance of governors.’”
Despite what some think, he continues, expanding cooperation among regions will not help the poorest ones. Only regions that are relatively well-off can afford to cooperate with others; the poorest can’t. Sometimes the latter can’t even build roads to their neighbors: “Today it is simply to drive from Kirov to Moscow and then to Udmurtia than directly from Kirov to Udmurtia.”
Zhuravlyev says he is skeptical that anything will change unless there is “a massive bankruptcy of the regions.” Otherwise, the regional elites will remain “extremely inert” as they are “conservative by definition. They don’t anything changed; they have everything they need. The elite fears changes more than stagnation because there is a risk of losing what they have.”
Sergey Valentey, a researcher at the Plekhanov Russian Economics University, expands on this and points to a very different way forward. He says that “there is no common recipe for the development of regions” and that those who think there is fail to see that they are like those who report on “the average temperature in a hospital.”
He stresses that he opposes the justice ministry plan to pull back powers to Moscow. “Ineffective regions must be taken in hand, but one must increase the authority of the subjects of the Russian Federation and thus stimulate them to organize production on their own territories.” The Russian system now is “too centralized” to work.
Moscow blames the regional rulers but “the decisions of the federal center also can contribute to ineffectiveness” at the regional level. One of those is the arrangement whereby regions collect taxes, send the money to Moscow and wait for some to come back. They thus have no incentive to collect taxes or boost revenues on which taxes are collected.
“The most effective system involves direct elections,” Valentey says. “But this system must be built over a long period.” When Moscow tried to introduce it overnight, “’the parade of sovereignties’ began.” Perhaps what Russia should try is a system like that of France, he says, a unitary state in which the regions have broad authority.
Another example of Moscow’s negative impact on the regions is that the center wants to equalize the regions by taking from the rich and giving to the poor rather than creating policies that encourage the poor to become wealthier. As a result, the rich hide what they have and the poor don’t get enough or have the incentive to change.
The years of oil wealth convinced Moscow that it didn’t have to do anything in this sphere, Valentey says, and as a result, differences in the standard of living among the regions are increasing, with the possibility that this will once again lead to social explosions in one or more of them.