Volga Region Faces Serious Problems This Fall, New Study Concludes

Paul Goble

            Staunton, September 1 – The Volga Region is likely to face especially serious problems beginning this fall as it seeks to recover from the pandemic and economic crisis, according to a new study. That finding is especially important given upcoming elections there and the rise of protests in regions and republics generally.

            The National Expert Center and the Center for Regional Policy has released a 29-page report on the situation in the Middle Volga and why it is likely to be so difficult. (For the full report, see nacexpert.ru/wp-content/uploads/2020/08/Доклад-регионы-ПФО_25082020.pdf; for a summary, iarex.ru/articles/77251.html).

            Declining tax revenues, federal subsidies and outside investments, the report says, put this entire region on the path to economic degradation at what is likely to be the most difficult time in recent years. Industrial production is likely to fall further, leading to a further decline in revenues and thus making it even more difficult for these regions to escape their depressed state.

            The agrarian sector needs more help than the regional authorities are able to give it because they are increasingly constrained by a growth in their state debts.  Moscow will either have to provide more money or it will be confronted by a major region in the center of the country that is increasingly desperate, the authors of the study say.

            The situation in Mordvinia and Udmurtia is especially dire already, the experts say. These regions are not in a position to do much to solve their problems. Others are slightly better off but only slightly, and their relative advantages may decline as the economic crisis continues into the fall.

            The authors point to three worrisome trends that will only be highlighted by upcoming elections in four of the federal subjects that are part of this super region (Chuvashia, Tatarstan, Perm Kray and Penza Oblast). First of all, Moscow has been rewarding regions for how they voted on the constitutional amendments rather than according to need.

            Second, both regions that rely on the export of raw materials and those who count on earnings from sending industrial production to other parts of the country are already in deep recession. Only those, like Bashkortostan, where agriculture is doing relative well, have avoided disaster.

            And third, because the regions are so desperate, Moscow’s control over them has increased not decreased because the regional authorities have no choice but to defer to the center in the hopes of getting aid. But in doing so, they reinforce the current problems of a hyper-centralized system and set the stage of the intensification of problems in the future.