Problems in Russian Logistical Networks Boosting Regional Businesses

Paul Goble

            Staunton, Apr. 25 – Growing problems with Russia’s logistical networks, including accidents on its troubled railway system (krizis-kopilka.ru/archives/102248), has given local and regional businesses the chance to grow more rapidly than country-wide businesses which rely on distribution, statistics show.

            Re-Russia provides a compilation of data showing that local and regional businesses have grown almost ten percent in the last year after seven years of stagnation, with their sales rising 11 percent in real terms, both far greater than the all-Russian companies have been able to achieve (re-russia.net/review/728/).

            If Russia’s infrastructure problems continue to grow and that is likely because Putin has been pulling money out of projects intended to address these problems and improve the networks, then that will mean that local and regional companies will play an expanded role in many local and regional markets and hence local and regional politics.

            That will constitute a fundamental reversal of trends that Putin’s earlier policies had put in place and may mean that regional and local officials backed by regional and local businesses will become more independent-minded in their thinking, confident that their businesses and officials are now in a better position to address problems than ever before.

            In most countries, as residents of smaller cities and towns now, improved transportation networks have nationalized marketplaces and centralized economic and political decision making. But in Russia today, the new data suggests that the situation is going in precisely the opposite direction.