Moscow Set to Slash Number of Company Towns, Ending Subsidies to Places Now So Classified

Paul Goble

            Staunton, May 18 – Before the covid pandemic, Russian officials indicated that they believed that the number of places they were then classifying as company towns (monogorody) – 312 -- far exceeded the number that should be put in that category and thus eligible for special subsidies.

            At that time, Moscow officials said they believed that only about half of the places in that list where one industry is responsible for 20 percent of more of employment should remain so classified and thus eligible for subsidies. But the pandemic and then the start of Putin’s enlarged war in Ukraine put plans to revisit this issue (windowoneurasia2.blogspot.com/2022/01/moscow-seeks-to-solve-problem-of-dying.html).

            Now, Kommersant is reporting, the economics ministry plans to survey these places and drop those that no longer belong on this list and thus reduce their number. The paper notes, however, that the ministry has not specified what the new basis for classification will be (kommersant.ru/doc/6711525).

            But how much of a cut there will be in the number, something that will allow Moscow both to reduce overall spending on such places as well as concentrate the remaining resources on those still on the list is uncertain. But one economics ministry official said recently that he believes only 120 cities should be classified as company towns.

            It is unlikely that economic development has been sufficient to justify dropping almost 200 cities from a category of places that have faced hard times since the end of the Soviet Union. But it is certain that Putin will celebrate such a drop as a triumph of his policies and that his assessment will be uncritically repeated by many both in Russia and abroad.

            In reality, as many studies show, Russia’s company towns overwhelmingly remain part of the dying rust belt and are likely to continue to decay and remain a source of social and even political problems for the Kremlin even if Moscow decides to use a statistical sleight of hand to make itself look better.

For background on company towns and their travails, see windowoneurasia2.blogspot.com/2023/08/russians-leaving-company-towns-at-three.html, windowoneurasia2.blogspot.com/2021/10/shoygus-proposal-threatens-to-usher-in.html windowoneurasia2.blogspot.com/2019/06/moscows-billion-dollar-program-to-save.html, windowoneurasia2.blogspot.com/2017/01/another-fatal-flaw-in-russias-company.html, windowoneurasia2.blogspot.com/2016/12/one-russian-monogorod-may-soon-drop-off.html, and windowoneurasia2.blogspot.com/2016/05/russias-one-industry-towns-continue-on.html.