Monday, April 19, 2021

Specialization and Trade Keys to Success in Regions, But Non-Russian Areas Lag in Both, HSE Says

Paul Goble

            Staunton, April 16 – Russian regions that specialize and then trade with others on the basis of the advantages that such specialization gives do far better than those which don’t play to their strengths and trade but rather develop economies that supply only local needs and engage in little trade, according to scholars at the Higher School of Economics.

            Unfortunately, there is a serious imbalance between the two categories, with Russian regions having major cities falling into the first category and non-Russian republics and districts falling into the second. That contributes to inequality between Russians and non-Russians and unless this is changed, that inequality will only grow (

            These conclusions arise from the HSE’s completion of the compilation of an Atlas of the Economic Specialization of the Regions of Russia, a project that builds on similar efforts in the United States and the European Union to engage in “the cluster mapping” of economies there.

            The HSE scholars say that those regions which specialize and then trade do far better than those which don’t do either. Most of the former either have economies based on major cities linked to other regions or on natural resources that almost by definition must be sent elsewhere to be processed or sold.

            Other regions, to be successful, must focus on developing or establishing branches important for the country as a whole. “In a number of regions,” the HSE study says, this hasn’t happened. And the greatest laggards in this regard are 11 of the non-Russian districts, oblasts and republics which do not have any of these specializations at all.

            These include the Altay Republic, Adygeya, Ingushetia, Khakasiya, Tyva, Kalmykiya, Kabardino-Balkaria, Karachayevo-Cherkessia, the Nenets AO, Chukotka and the Jewish Autonomous Oblast. Unless these places change course, they will fall further and further behind the all-Russian levels of investments, incomes and standards of living.

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