Saturday, August 15, 2020

Pandemic hasn’t Given Russia’s Regions Freedom But Rather Made Them More Dependent on Moscow, New Figures Show


Paul Goble

            Staunton, August 12 – When the pandemic began and Vladimir Putin said the regions had to play the primary role in combatting it, many in Russia and elsewhere began to talk about “coronavirus federalism” and to suggest that a major result of the disease would be significant decentralization.

            But in fact, the reverse is proving true, Finanz.ru says in an analysis of the situation. The economies of the regions have been hit even harder than the economy of Moscow; and as a result, the regional governments are now more dependent on the center for subsidies than they were earlier (finanz.ru/novosti/aktsii/u-rossiyskoy-ekonomiki-otmirayut-regiony-1029492607).

            Overall, Russia’s regions have experienced a slight recovery from their bottom point in June, the Center for Development of the Higher School of Economics reports; but they remain mired in a deep recession even in the places where the economies have come back the most.  As a result, tax revenues are down, and regional governments are more dependent on Moscow.

            This situation has become disastrous so quickly because even before the pandemic hit, many regions had no financial cushion. Just under half (47 percent) had funds on hand to cover a month’s expenses. One in seven could cover only a single week’s. and 14 had so little money that they couldn’t cover more than a day or two.

            As a result, regional governments have had no choice but to turn to Moscow for aid, something that gives the center the whip hand as far as political choices are concerned. Those regions that don’t do what the center demands won’t get anything, and they and their governments will suffer.

            If “corona-federalism” existed for a brief time at the beginning of the pandemic, it has certainly ended now. The only consequence of its having existed is that some regional leaders may have gotten a taste for making their own decisions and that makes having to go back to taking orders from the Kremlin even more bitter. 

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