Russia faces its biggest local economic and social problems nowadays. This article talks about the changes in the Russian national government for the past years, in relation to the approaching parliamentary and presidential election. Past problems got worse instead of it being solved as it shows. The connection of Moscow and Russian regions has not been absolutely affected by the said elections.
Two key points were addressed, for the possibility to reform the dysfunctional and controlled connection of the capital and 83 governmental subjects, of the Russian federation by the outgoing President Medvedev, the first he did was he requested decentralization and condemned the incompetence of Russia’s too controlled action, second was that he was better than the next leader, Vladimir Putin, who is less active. During his time many of the local leaders were eliminated from office, some of them were even high in position, like the Moscow’s mayor, and presidents of Republics of Tartasan and Bashkortostan. But the said problems of the Russian federal system have only been affected in a small way by these actions. As a matter of fact this article will show that such actions even contributed to worsen the situation. Vladimir Putin, the previous leader, significantly changed and created in 2000 to 2008 the Government structure that Dmitiri Medvedev took over last 2008. Locals became reliant to the government after this term, politically, after 2004 local elections were cancelled and the present Government leader choose a designating governor, and economically locals rely on federal transfers and controlled tax interest in Government budget. Government invested proposition or so called big projects were the priority of local politics as acquainted by Putin during his term. Projects like, the 2012 APEC Summit in Vladivostok, 2014 Summer Olympics in Sochi and extension of governmental perimeter in Moscow and change of locations for Government organizations within new city perimeter (2011), are just few of his proposition that will help in improving Russia. Instead of its local development, developing Russia’s image was the main focused of such proposition. Some of the proposition included in 2006, are the National Projects on Quality Education, Affordable Housing, Modern Healthcare and Demographic Sustainability. But was not fully executed till 2008 due to shortened government Financing. In 2007-2008 many special economic zones were made, not even contributing for the local improvement, it immediately came to an end at the same time.
But still later 2008, the time of President Medvedev, the global economic problems was the one that affected the connection of the centre and locals, and not his administration. Extended financial transfer to the local by one third was done by the National Government last 2009, because of concerns for social rejection. Of 19 percent, the Government share went up to 27 for local budgets. Increased in transfers were distributed all over the country, instead of focusing to the locals who are more suffering from the problem. But Moscow continued to take control at the time of Medvedev’s term, because the said amounts of transfer were not given away properly to the locals.
To enhance state expense on programs that will benefit the citizens such as, increasing job opportunities and different assistance programs, is the main focus of the government at times of economic problems. From 2008-2010, 53 percent of government expenditures went to this program and a growth of 65 percent in citizens assistance program. On the other hand, additional healthcare and local budget on education budget was not provided, even though financial crisis was actually lessened. The development of citizen’s financial stability was not the main concern of the government, but aiming political stability.
Figure 1: Shows the 2010- 2008, percentage movement of local money consumed. All information came from the Federal Treasury, which was computed by the author.
But, this amount of expenditure in locals is extremely hard for Moscow to support. In 2010, 7 percent of the local transfers decreased and 1 percent within January and August 2011, when the government problems are gone. These are important points, in relation to economic build up. Until Government financing of Putin’s propositions are developing fast, in which the Krasnodarsky and Primorsky locals, where the Sochi Olympics and APEC summit will be held, got Government budget investment of 25 percent, other locals now have no choice but keep the money and avoid too much social expenses.
Chechnya’s extensive budget is still ongoing, in spite the fact that Moscow’s budget was on hold due to economic problems. Compared to other Russia’s local, Chechnya has 15 percent more government budget than the others, in which 90 percent of the said budget came from Government transfer funds, in the first half of 2011. Chenchnya will still be the government’s priority, even though some republics of North Caucasus that includes, Ingushetia, Dagestan, Karachaevo-Cherkessia, has an enhanced budget of 20-25 percent. In addition to that, issues in governance in those areas affects economic enhancements and are difficult to attain. The government now has the reason to provide government subsidies to North Caucasus, because of these issues of effectiveness.
Two organizations were formed due to Medvedev’s previous comments on political and economic over controlling, one of this is designated to Deputy Prime Minister Dimitri Kozak which aims to decentralize the government, and the other was designated to Presidential Envoy for the North Caucasus Federal District Alexander Khloponin whose main purpose is for economic decentralization. Because of these changes, local areas will now be hold for 30 to 35 percent of minor government documents as well as sum money. But still the Government Bureau will still authorize the implementation of the said documents. This concludes that decentralization of government’s function and inter-budgetary collaboration is not the main purpose of this procedure instead it aims to develop governmental changes.
During Medvedev’s term, the local leaders who are eliminated and replaced did different roles in Moscow. Companies like Gazprom and AFK System, since Bashkortostan new government has acquired significant areas in Bashkorstan’s oil enterprise. When Yury Luzhkov’s gave up his position as Moscow’s Mayor, Putin and Medvedev’s close businessperson held different business possessions, in which the previous Mayor held to. Now the government has the capability to handle the 25 percent budget for Moscow’s locals, a total of 1.5 trillion rouble, because of Sobyanin the new Mayor. In Tatarstan, they are lucky that the former president Shamiev appointed the next person to take over his power, with that they still have the capability to control their oil and chemical industry.
Constant development in mutual reliance of authority and business in local areas of Russia is being shown through modification of local leaders. Dispersion of assets is the result of loss of capacity that led to loss of authority on assets. At the time of President Medvedev, such organizational problems have worsened.
The problem for Russian Government that they should be aware of…
Ongoing economic problems around the world affect the decreased in interest of other countries in Russia. Financing keeps on decreasing in local regions, which resulted to a drop of 16 percent of Russia’s financing by 2011. Increased in financing is only noted in small number of locals. Despite a small improvement in the financial area of Russia, it is not enough to attract other investors to invest in their country. Government financing is only the main source of other locals, but it mainly proceed to the big propositions, such as the Primorsky and Krasnodarsky locals as mentioned before. Some locals like Sakhalin and Krasnoyarsk, growth of financing is from great amount of oil and gas industry. Operative procedures done by local governments which is good for financing surrounding, is the reason for other local places such as, Kaluzhskaya and Leningradskaya , for the continues increased in financing.
2008 to 2010 was the time were a decline twice as much in the Foreign Direct Investment (FDI) in Russian local areas happens. The place where this decline was not felt was in Kaluzhskaya and Leningradskaya local, in which current proposition on production business is ongoing. But a growth of one third in FDI took place on the second quarter of 2011 as compared to 2010. But the main reason behind this significant growth was, due the latest oil and gas propositions in Sakhalin and Yamal-Nenetsk Autonomous region, which has a big percentage (30%) in Russia’s FDI. In conclusion locals related to big propositions that are being financed by the government and local areas that have big oil and gas industry are the only expected areas that will contribute to economic advancement.
The relationship of Russian citizen and its Government are beginning to end due to the decrease in government funding. Yearly, an increase in government funding by 10-13 percent plays a big role at the time of economic growth in 2000 for balance in government. In 2009 subsidies and financial assistance are being granted through government reserved funds, which resulted to only small decrease in government funding. Decline in funding was only felt by about 20 areas in Russia because of reduction of workers and salary, in commercial production and increased lay-off workers, specifically in areas of mechanical engineering and metallurgy industries.
Pensions and financial assistance collection was terminated in the middle of 2011, a decreased of 1 percent on government funding was again felt. Areas with huge commercial areas including Moscow are only few of 54 areas in Russia whose government funding was decreased, with the largest drop of 5 to 10 percent in areas with major oil and gas production.
Life’s worth and community problems arise in relation to the decrease wages of the people. Therefore the government goal to continue its plan such as the improvement of income for governmental solidity and acceptance of government strategy will be hard to achieve if the government is not able to control this problems.
Probable problems may occur in the future in employment in local areas, if it will not be improved. Unproductive job openings, as one of the major problems in local areas during 2009 crisis, were not given proficient action to be resolved. The privilege of the local authority to remove workers were limited and restricted to save employment just to maintain governmental solidity. Because of this, the citizens, particularly in areas were employment is almost difficult to find, took jobs that have small compensations and will help them sustain their financial problems in any way, even with the no work no pay policies. Not enough approach and financing support for employment relocation forced this particular problem to get worse. Number of loss of jobs in 2011 went to 6.6 percent according to MOT methodology the pre-crisis point, regardless of the aggravating economic situation
Decrease in availability and community programs services is continuous. Local healthcare and education improvement for the past years was carried out by the National government. But the government cannot financially afford such programs and cutback of different services is the only way they can do to avoid too many expenses. Now the 19 local areas suffer from decrease in healthcare financing last 2010 lower compared to 2008. For the coming years, federal transfers in local regions will also decrease so community expenditure is expected other decrease.
It is important to cut down and adjust to education and healthcare region because of the big population in local areas of Russia. But in spite of the situations in different regions, modifications were still being made in different areas. Because of this, citizens all over the state are not pleased with the service contribution in education and healthcare areas. Since healthcare and education are the two most important requirements for the citizens to continuously have the capability to financially sustain their family, this issue is a big crisis.
The discrepancies on improvement in Russia’s local areas exacerbate because of the government too controlling method. In Moscow, monetary possessions are being allotted for healthcare and other programs, in central part and other local areas. Many domestic migrants, about 60 percent were fascinated in Moscow and some of its local area. Increasing amount in the financial stability and giving importance to its citizens needs is continuously happening in Moscow. Increase in Moscow’s population became the reason for Moscow for its difficulty to deal with other concerns such as infrastructure. Take the case of Moscow’s road network, caused by the large amount of motor vehicles for it to fall down. Delegation of authority in political and economic aspects, cut back of national governance and planned improvement could ease the present financial problems. Problems will continue to build up, conservation; road and railroad problems will get worse, if the root cause of Moscow’s problem will prolong. Issue on population in Moscow will not be resolve by simply increasing its borderline. Catching the attention of labor immigrants by improving production activity will be possible.
Modifications in local areas are being impaired by the ineffective regulation. Bad outcomes took place in federal centers because of the too much control of livelihood and economic properties.
Adequate products were not being given and the right to re-invest in other areas and provide job, were not being done by other improved areas. Improvement procedure for government and economic area is moderate due to the insufficient action. Under improved areas are facing issues on profit seeking establishments, because the over controlled program of re allotment, privilege citizens improve different facilities, which resulted for the government to grant release of funding, instead of paying for the improvement of specific areas. Privileged people, in other areas, became reliable on the government financial support; implementation of support progress was disabled, because of degradation and manual control.
In addition to that, unequal increase in government management organization happened due to controlled qualification at governmental area. Government officials in Russian areas, is composed of 2.5 bigger population compared to the local civil staffs, this includes those who are in provincial areas of government and those in government management organization. Ineffective way of leadership will not improve by simply decreasing the capital coming from the center. On the other hand, the characteristic of Russian government still have the chance to change, if the allotment of funding to different areas of Russia and authorization of the government to the local officials in taking efficiency.
The polls and Russian government
The government and its local area connection can be affected by the near Duma and presidential elections just like the past national elections. Community support and increase in wage on local staff will be implemented by giving supplementary budget from the government. Revision on funding, prior to the said elections in the month of March, are already been set by the government, about 200 billion roubels ready to be given. Local capabilities were violated when President Medvedev proposed to increased Teachers wage. Water gas, electricity, or known as service expenses, supposed raise in price was delayed up to July 2012, which is being raised annually every first month of the year.
Provincial and other areas will now face the outcome in the said action. Locals will be forced to look for new source of funding for the increase in wage of teacher, when the said election is finished. Since many of the Russian regions local budgets rely on government allowance, change will soon be felt, so districts should find a way to make up for the decreased in funding from the service expenses.
Prediction of the plans in 2012-2013, in which a decrease in the government funds in different local areas, will take place after the said election. The same will happen on funding in healthcare, education, and community services. While Chechnya and the projects for the 2014 Winter Olympics in Sochi will continuously received big amount of funding.
The Local officers in Moscow will have a significant part in the said upcoming election in the said place. United Russia will evaluate their leadership capability and different aspiring presidents on corresponding areas. This is the only vote that matters in the upcoming elections. For the ruling organization supplementary allowance will be granted for the areas with positive evaluation in 2007 and 2008. But there are also chances that leaders are being replaced from its current position if United Russia is not satisfied with the outcome. As what have seen in the 2007/2008 election cycle as well as Russia Provincial political dependence and financial form, it has been a habit for leaders and local officials to win the vote of Moscow by doing their best to achieve a good outcome of the election.
