Debts of Russian Regions Projected to Rise Even Further as Officials There are Forced to Borrow Privately at Ever Higher Interest Rates

Paul Goble

            Staunton, Oct. 24 – Since Vladimir Putin launched his expanded war in Ukraine and shifted additional burdens to regional governments, 51 of those more than 80 governments have seen their debt skyrocket; and that rise will only continue as ever more of them are forced to borrow not from the central government but from private banks.

            That will transfer still more money into the hands of Putin’s supporters who own these banks and force regional officials to cut services to their already hard-pressed population, thus exacerbating tensions between the population and governments at both levels (nemoskva.net/2023/10/24/zhizn-vzajmy/).

            In the past, the central government loaned money to the regions directly and at special and lower rates. But the demands on the budget to finance the war appear to have led the Kremlin to stop that practice and thus to put the regions more on their own and forced to deal with the higher interest rates private banks charge.