Moscow Alienating Sakhalin by Taking Too Large a Share of Its Earnings

Paul Goble

            Staunton, September 5 – Sakhalin, whose oil reserves should make it as wealthy as Yamalo-Nenets, is instead far poorer, the result of Moscow’s taking an even higher share of the profits than it does from the polar region. But Sakhalin residents can see this and are ever more alienated from Moscow and the center’s United Russia Party.

            That is the conclusion Meduza journalist Andrey Pertsev draws in an important article abut the way that Moscow’s confiscatory approach is sparking outrage in the populace and forcing leaders in the region to hide their links with the central government (meduza.io/feature/2019/09/03/brosili-i-zabyli).

            “Sakhalin has every basis to become a most well-off region,” the journalist says. It has fewer than a half million residents and enormous reserves of oil which foreign companies can easily ship abroad. But instead f flourishing, it is falling behind and now ranks 53^rd in per capita income while Yamalo-Nenets similar in many respects ranks 12^th.

            The reason is simple: In recent years, Moscow has taken a far larger percentage of the income and taxes of Sakhalin than it has from other regions.  And it has done this so openly that the entire population can see it and is furious at Moscow and the Russian federal government more generally.

            In March 2015, Aleksandr Khorshavin, the last local man to head Sakhalin, was arrested and charged with corruption for which he was ultimately sentenced to 13 years in prison. But local people now believe that he was charged to get him out of the way because he resisted Moscow’s demand to send an even higher percentage of local revenues to the center. 

            Under him, the blast retained 75 percent of its taxes; under his successor, outsider Oleg Kozhmyako, it was able to hold onto only 25 percent.  He was despised by many because he sold out to Moscow, Pertsev says, and because he made grandiose promises which in every case, he failed to make good.

            As a result of his concessions, Sakhalin is sending 32 t 33 billion rubles (500 t 550 million US dollars) every year to the center. He and Moscow insisted this division was “just.” The people of Sakhalin didn’t and don’t agree. And they circulated a petition which got 17,000 signatures protesting what he had done. 

Putin replaced him with Valery Limarenko, who drew some obvious conclusions. He became one of the half dozen governors who broke with United Russia and ran as outsiders even though they were part of the power vertical. And he campaigned by criticizing all kinds f things associated with the ruling party. 

That strategy has worked so far – to anticipate, he won election on Sunday with 57 percent of the vote – but whether he can maintain his position remains uncertain. He is likely going to have to be more critical of Moscow than Moscow is going to like to win friends in Sakhalin and less supportive of the people there than they want to keep his standing in Moscow.

The crunch will come when the next budget is announced. Then Sakhalin residents will see whether they are getting more of what is theirs or whether even more is going int the pockets of those in Moscow.   Pertsev’s article signals just how hard maintaining that balance is going to be.