Russian Firms Restoring Ties Between Regions that Regional Governments Avoid, Experts Say

Paul Goble

            Staunton, March 12 – In Soviet times, because the economy was entirely controlled by the state, regional officials cooperated with one another and developed close links. But the privatization of the economy after the collapse of the Soviet system destroyed the basis of these links and few have been restored, commentator Kirill Zotov says.

            On the one hand, as he points out, state institutions at the regional level play a smaller role in the economy than they did; and on the other, as he does not, Moscow has generally opposed inter-regional cooperation on the economy fearful that it will grow into political alliances against itself (iarex.ru/articles/80054.html).

            But now interregional economic cooperation is again expanding, but the chief actors in this are not the regional governments, which focus on foreign trade rather than the domestic economy, but rather the corporations and firms which see profits to be made by working with suppliers and customers in adjoining or nearby regions. 

            Marat Khamidullin, head of the Agency for Non-Standard Political and Corporative Situations, says that it is not yet appropriate to speak about ties among the regions of the kind that existed in Soviet times. “Now, relations among regions are not at the level of government policy but rather at that of local and regional holding companies and entrepreneurs.”

            That means, Oleg Ivanov, head of the Center for Regulation of Social Conflicts, that “the amount of interregional cooperation is “directly proportional to the economic possibilities of the regions.” Regions with strong economies are moving to cooperate; those in recession are not yet doing so.

            Moscow and St. Petersburg are far and away the leaders in promoting interregional cooperation with their neighbors and others further afield, largely because so much economic and political power is concentrated in them. A distant third but far ahead of most other federal subjects is Tatarstan.

            Moscow sociologist Dmitry Loboyko says that regions should be encouraged to work together but there are serious problems that must be overcome. The Kremlin’s promotion of centralization in recent years has left the regions with few strong economic and political players who can take the lead.

            And that means in turn, he warns, that “the most stable” basis for ties are not economic and political links but “traditional ties,” either those left over from the past or ones resting on “national, religious and clan links,” yet another reason why many at the center see any growth in these links as “a threat of ‘federalization.’”