Paul
Goble
Staunton, February 10 – One of the
greatest difficulties Moscow faced in the 1990s was the decision by many
regional governments to give advantages to industries on their own territories
by erecting barriers of various kinds to the import and sale of goods produced
elsewhere.
Vladimir Putin as part of his drive
to create a common legal space and his erection of ‘the power vertical’ largely
eliminated this phenomenon in the early 2000s. But now, Russia’s Anti-Monopoly
Service warns that “regional economic separatism” is returning as local elites
seek to do what they can to cope with the economic crisis and cutbacks in
subsidies from Moscow.
In a report on this declaration
today, Yulya Starostina of the RBC news agency says that in their drive to somehow
find money for their budgets, regional elites have concluded that they have no
choice but to “defend their suppliers from competition coming from other
regions (rbc.ru/economics/10/02/2018/5a7d9cf19a7947787492490c?from=main).
That was the conclusion the Federal
Anti-Monopoly Service reached in report presented to a recent session of the
State Council for the Development of Competition in the Regions, a copy of
which Starostina says, RBC has in its possession.
“In spite of the Constitution which
calls for ‘the unity of an economic space and the free movement of goods and
services,” the report says, “in a number of regions protectionism has appeared,”
something that represents “a threat to the economic integrity and national
security of the state.”
After the economic separatism of the
1990s was overcome, the service’s report continues, “over the last several
years” as a result of the economic crisis, “manifestations of regional economic
‘separatism’ have become ever more characteristic conditions in the conduct of
business in some subjects of the Russian Federation.”
The report defines “economic
separatism” as “an extreme and widespread form of regional protectionism when
local powers support ‘their’ own producers and oppose the entrance into [their]
markets of other participants,” now largely in order to try to get money for
their local budgets, something local firms have to pay but outsiders don’t.
“This leads to a distortion of
competition and a worsening of the business milieu,” the service report
says. And it stresses that these “negative
tendencies” are typical not only in the alcohol trade “but for other branches
of the Russian economy and especially in the agricultural sector.”
Among the most widespread forms of
this “regional separatism,” the report continues, are oral and even written prohibitions
on the importation of goods from other regions.
Sometimes food examiners are used to achieve that end, with officials in
Volgograd oblast, for example, invoking animal infections to ban the import of pork
from Samara.
In addition, it says that there are violations
of the law “when regional authorities without justification refuse to offer subsidies
to participants in the market who are registered on the territory of another oblast”
or give local producers special tax and fee incentives. The first has happened in Saratov; the second
in Orenburg, the report says.
Natalya Zubarevich of the Moscow
Independent Institute of Social Policy says that all the regions have an
interest in getting as much tax money as they can, especially since most of it
goes to the center and doesn’t come back.
But she says that in her view, “it is incorrect to apply the term ‘separatism’”
to this phenomenon.
Most regions are in debt and many
face current budget deficits largely because of Moscow’s policies. “Don’t call
this separatism; Call it the right rules of the game in existing circumstances”
and remember as well that “it wasn’t the regions which created these rules of the
game.”
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