Financial Crisis Exacerbated Gap Between Moscow and the Rest of Russia, Statistics Show

Paul Goble

            Staunton, December 19 – The financial crisis that hit Russia a decade ago drove down the budgets of the federal subjects across the country by about 20 percent. Since that time, the budget of Moscow city has recovered almost to pre-crisis levels, while the budgets of many oblasts, krays and republics remain depressed.

            As a result, the gap between the capital and the rest of the country has increased, Russian commentator Aleksey Roshchin says, and has accelerated flight from the regions to the capital, a trend that shows no signs of stopping and that threatens the regional balance and even security of  the Russian Federation as a whole (kasparov.ru/material.php?id=5DFB2DD696444).

            In 2011, the annual Moscow city budget was “approximately 1.5 trillion rubles” (25 billion US dollars). In 2014, as a result of the onset of the economic crisis, it fell by half as did the budgets of the federal subjects.  But now, the budget of the capital has bounced back to almost where it was before the crisis, while those in the regions have not.

            That has led to flight from the regions to the Moscow. The former have lost from 14 to 26 percent of their populations in recent years, and from 30,000 to 35,000 population points in them have disappeared. (For detailed statistics, see finanz.ru/novosti/aktsii/rossiya-vymiraet-s-rekordnoy-za-11-let-skorostyu-1028608603.)

Moscow has seen its population grow by more than twice as a result, Roshchin says, which means although he doesn’t say it, that per capita spending in the capital has not really recovered but only kept pace with the number of people there and that much of the decline in budgets in the regions reflects the decline in the numbers of people there.