Staunton, Dec. 22 – Wealth in Russia will be concentrated in Moscow as long as the Russian economy is dominated by big businesses closely tied to the government, Natalya Zubarevich says; and this will be the case regardless of whether Vladimir Putin or any other ruler in the Kremlin wants things this way.
The Moscow State University economic geographer says that there will always be inequality among regions both because of natural differences in resources and differences in the policies and skills of officials and businesses in different parts of the country but that the dominance of big business will overshadow much of this.
One consequence of this dominance and its being centered on Moscow is that the capital has come out of the economic crisis which began about a decade ago far more quickly than other regions and that as a result, inequality among the regions has increased and continues to do so (rosbalt.ru/moscow/2021/12/23/1937064.html).
That was all the more obvious and infuriating to Russia outside of Moscow because it followed a period during which income from oil and gas exports contributed to a reduction in regional inequality after 2005 as a result of the center having greater possibilities to redistribute funds, Zubarevich continues.
But the priorities of the government in this regard have not been about fighting poverty or promoting development, she says. Instead, they have been about geopolitics. “The Far East must be held, Crimea and Sevastopol must be showcases of development, and the North Caucasus must simply be given money [to keep it quiet]. The others are more or less on their own.”
Another indication of this approach, Zubarevich says, is that border regions which might otherwise benefit from wealthy neighbors like Kaliningrad, Murmansk, and Leningrad don’t. That is because the center is more concerned to build up borders than obtain the benefits from abroad that a more cooperative approach would bring.
“If we change priorities from geopolitics and make development the goal, we must keep in mind that one of the consequences will be that inequality of the regions will grow,” the geographer points out. Any country that is seeking to develop has to pay this kind of a price to achieve that goal.
But if Russia makes eliminating poverty the goal, then it will have to confront the fact that a great deal of tax money will go to support places like Tyva, Daghestan, Chechnya and Ingushetia where much of the economy is in the shadows. That won’t be easy to justify to many Russians elsewhere.
Whatever goal the government decides upon, it will thus have to balance equality and effectiveness because focusing only on one will undercut the other and thus make things worse in at least some ways. The best way forward, she argues, is transparency, stability, and greater autonomy for the regions themselves.
Unfortunately, Russian policy is now moving entirely in the opposite direction.