Colloquium |
Economic Reforms in RussiaVladimir GimpelsonDr. Gimpelson is Head of Department, Institute of World Economy and International Relations, Russian Academy of Sciences, Moscow.
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Russian Reforms in Regional DimensionA balance-sheet of reforms has many aspects: political, financial, social, moral, etc. I would like to focus my short presentation on the regional dimension of the Russian transition. The Chechen war highlighted once again that successes and failures in reforming Russia are, to a considerable extent, regionally dependent. A threat of separatism proved to be rather efficient in squeezing special privileges from the centre. The weak Federal Government is forced to be very sensitive to local elites which have strong control over their localities and population. The forthcoming Parliamentary elections can strengthen this influence even more.One of the key questions often raised is whether Russia will survive as a united country or fall to pieces as happened with the Soviet Union. I think this is a very important issue with obvious implications not only for the Russian reforms but for international security as well. I want to pinpoint right now that I do not believe in the most pessimistic scenario; nevertheless I consider policy on the relationship between the centre and the regions as very important for future development. Structural Aspects of Regional PolicyVast inter-regional economic differentials in Soviet Russia used to be mitigated by the strong centre that redistributed resources and incomes between regions. The collapse of the party-state system weakened the centre and destroyed this redistributive mechanism. This increased the gap between the rich and poor regions depending on their structural profiles. The liberalisation of prices and the tendency to integrate the Russian economy into the world market multiplied the existing structural differences.If the "rich" regions seek to avoid redistribution to the "poor" ones and thus to increase their incomes, the latter (with the strong elements of traditionalism) would like to avoid reforms. The reforms threaten the existing traditionalism and, correspondingly, the power of ruling elites. This is true, first of all, for the poor ethnic republics. One can divide all Russian regions into five major types that differ in their economic profiles. Roughly speaking, there are those which are competitive and adaptive on the world market (primarily due to their mining and extractive industries), and those that lack these advantages. (1) These groups are the following:
Each of these structural profiles requires a different adjustment strategy.
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Political Factors of Economic SeparatismThe attitudes and behaviour of regional elites can strongly influence the region-to-region and centre-to-regions relationships. The collapse of the Soviet state has created an institutional void and allowed local leaders to increase their power at the expense of the diminished power of the central government. The squeezing of more independence and the threat of separatism have become powerful tools in the political and economic bargaining over taxes, subventions, privatisation rules and other sensitive issues. Boris Yeltsin's offer of sovereignty to local elites in 1991 did much to provoke their political and separatist ambitions. He did this to win in his struggle with Gorbachev but now it is working against him.The regional leaders are preoccupied mostly with keeping and strengthening their power. This has a stronger impact on their policy than any initial pro-market or anti-market attitudes. For example, among the regions with the most rapid privatisation there are those led by reformists and those led by communists as well. Moscow, which is considered as one of the most pro-reformist territories, has moved at a very moderate pace in large-scale privatisation and has been disputing the general privatisation approach with the government. Moscow's Mayor, Yu. Luzhkov, who opposes the radical privatisation approach, has managed to get almost full control over ownership transfers in the city. The same tendency can be seen in the case of price control policy. The Ulyanovsk pattern is probably the extreme one; nevertheless, in the majority of regions their authorities use elements of the same price control policy. The fact that the regional leaders are to be elected only strengthens the populist element in their strategies, provoking them to claim a "better" economic and social policy than Moscow. Political preferences of the local elites are tied in with the attitudes of the population in these regions. Several elections (from the 1989 elections to the December 1993 elections) confirm the stability of electoral behaviour and show that different patterns of support for and opposition to the reforms are concentrated in specific geographic areas. This geography largely resembles the structural division of the country. The political attitudes may be illustrated by the results of the December 1993 elections. The votes cast for the different parties show the variation between pro-liberal versus pro-conservative approaches on the one side, and federalist versus centralist attitudes on the other side. (6) The statistical analysis of the vote shows four major clusters of regions. The first constellation of regions illustrates the disposition towards a more liberal economic policy. It includes the capitals (Moscow and St. Petersburg), the Northern areas that are rich in natural resources, the Far-Eastern regions and the most developed regions of the Urals. This is mostly groups (a) and (c) according to the structural classification developed here. The second cluster is made up of the ethnic Russian and industrially less- developed regions with a relatively high rural and agricultural population. These regions oppose the pro-liberal economic policy and favour economic interventionism. At the same time, they support the idea of the strong centre dominating weak regions. This group includes some traditional regions in the South of European Russia and corresponds with group (d). (7) The third cluster is characterised by the "Strong Control Over the Economy" plus "Strong Regionalism" attitude. A number of autonomous units favour this model of development. This group is led by Tuva, Kabardino-Balkaria, Ingushetia and Altay republic. As we see, it includes from the economic point of view the weakest regions with a strong element of traditionalism. They reject the rapid economic transformation and strive toward a local power which can defend them from the economic reforms pushed by Moscow.
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