‘Coronavirus Federalism’ Never Existed, Zubarevich Says

Paul Goble

            Staunton, July 12 – Vladimir Putin’s power vertical “didn’t do anything during the pandemic,” Natalya Zubarevich says. Instead, it shifted responsibility but not resources to the regions. That led some to talk about “coronavirus federalism.” But in fact, she adds, that has never existed.

            During the pandemic, “the dependence of the budgets of the regions on the federal center only grew, with five or six exceptions,” the regional economics specialist at the Moscow Institute of Social Policy says. And Moscow even used the little aid it did distribute not so much to help the regions as to ensure the “correct” vote on July 1 (theins.ru/ekonomika/231054).

            The situation with regard to the economy and regional budgets is currently so dire that if a second wave of the pandemic hits, Russia will not be able to reimpose a serious quarantine. “People are tired of being afraid,” but even more the economy and the government would be so damaged that it would take a very long time to recover if ever.

            Indeed, Zubarevich says, while the Kremlin would manipulate statistics to hide what would be really going on, “neither the people nor the economy could withstand another quarantine.” 

            The crisis has hit in three chief directions. First, in the very largest cities, the service industry has been crushed. Second, major enterprises including exporters have seen their incomes drop by far more than anyone expected. And third, the economic losses have led to a decline in government revenue, hitting the regional and local budgets especially hard.

            During the first five months of 2020, Zubarevich says, official statistics suggested “only 22 regions” were running budget deficits. “But by the end of the year, there will be many more.” And recovery won’t be quick. The crisis in regional budgets will extend far beyond the end of this year.

            Exacerbating that situation is the near certainty that Moscow will not provide more funding. It did far less than other governments have done for their peoples and regions, and now the Russian government will have less reason to give any more since the vote on the constitutional amendments is now over. 

             By September, Zubarevich says, the “generosity” of the center “will end and the powers that be will return to their former practice of budgetary stringency.” From their perspective, “all the quarantine limitations have been lifted and it is possible to work.” That may be true for some enterprises, but the problems of regional and local governments will remain.

            Meanwhile, Moscow officials reported today that there had been identified 6615 new cases of coronavirus infection during the last 24 hours, bringing the total to date to 727,162 and that there had been 130 more coronavirus deaths, upping that total to 11,335 (https://t.me/COVID2019_official/1021).

            Russian officials said that the Sechenov University had completed the testing of the first vaccine against the coronavirus, although it remains unclear whether this will mean that the new drug will be available anytime soon or can be used by all groups in the population (ria.ru/20200712/1574227159.html).

            And a new survey by ChekSkan research found that 48.3 percent of a sample of 1300 Russians said that the coronavirus restriction they most wanted to see lifted was the one that keeps them from travelling abroad (rbc.ru/society/13/07/2020/5e2fe9459a79479d102bada6?from=from_main_2).