Federalism
in Russia: How Is It Working
Conference Report
February 1999
This
conference was sponsored by the National Intelligence
Council and the Bureau of Intelligence and Research
of the US Department of State. John Battilega
of the Science Applications International Corporation
served as rapporteur. The views expressed in this
conference summary are those of individuals and
do not represent official US Government positions
or views.
Contents
Conference
Highlights
Section
One: Opening Remarks
Section
Two: Federalism in Practice: A Comparative Approach
Section
Three: How Russian Federalism Is Working in Practice
Section
Four: Russian Regional Views on Federalism
Section
Five: How Real Is the Danger of Disintegration?
Appendixes
A.
Conference Agenda
B.
Speaker Biographies
C.
The Prospect for Disintegration Is Significant
D. The
Prospect of Disintegration Is Low
On 9-10 December 1998 the National Intelligence
Council and the State Department Bureau of Intelligence
and Research jointly sponsored a conference that
examined the current state of federalism in Russia.
The conference consisted of 22 presentations from
experts outside the government, interspersed with
general discussion between the experts and government
attendees. The agenda focused separately on global
experiences with federalism, current institutional
arrangements between the center and the regions,
current political interactions between the center
and the regions, and Russian regional views on
federalism. The final session featured a competitive
analysis of the case for and against disintegration.
John Battilega of the Science Applications International
Corporation served as rapporteur.
Conference participants did not endeavor to produce
a coordinated summary of findings. Nevertheless,
most participants seemed in agreement on some
major issues. In addition, during the presentation
and discussions, there emerged a number of points
that seem particularly salient in evaluating the
state of federalism in Russia. These highlights
summarize those areas of agreements and especially
noteworthy points, but, except as noted, should
not be considered as necessarily representing
the views of the conference as a whole or the
conference organizers.
-
Russia today meets the classical definition
of a federation by its inscription of that
principle in the Constitution (as opposed
to a decentralized system such as China where
the center can unilaterally and legally take
back powers it had once given away). But if
the Constitution is amended to make governors
appointed by the center rather than elected,
as is being proposed by some, Russia would
revert to being a unitary state.
- Successful
federalist systems have traditionally arisen
on the basis of historical characteristics
and predispositions that were consistent with
the federalist form of governance. Russia
does not have these. Moreover, Russia is developing
its new system of center-region relations
at the same time it is forming a new governmental
structure, is shifting to a market economy,
and is attempting to create new political,
economic, and social systems. Consequently,
it will take a long time for Russia to work
out its own effective form of federalism.
-
One expert also pointed out that any federal
system is in a continuous process of evolution,
and Russia should be viewed in that context.
-
Federalism is inherently messy, and Russia’s
difficulties in dealing with it put it closer
to the norm of other federal systems in the
world. It is the deeply rooted US system that
is the exception because federalism was invented
in the United States and has become ingrained.
Still, Russia is neglecting the important
part that the judiciary must play in the development
of federalism. It has tried to resolve issues
in longish documents (for example, the Federation
Treaty of 1992, the Russian Constitution,
and the bilateral treaties) instead of developing
a court to deal with future problems that
no one can envisage today.
- The
governors are playing a decisive role in center-regional
relations, but they are very diverse in terms
of their views. Given the extent to which
regional lobbying defines the institutions
of Russian federalism and the mindset of its
principal actors, it is likely that there
will be a continuation of a bilateral negotiating
game between regions and the center.
- Personal
relationships and deals are much more important
to governors in getting things done than is
legislation. Loud threats of "fiscal
secession," however, are not genuine
but are rather attention-getting protests
by governors who feel they are not getting
their proper share of funds.
- A
complicating factor in Russia is the expectation
that the center should play the role of social
equalizer as well as maintain a superpower
military. But the share of GDP collected by
the center as taxes is declining--down to
10.4 percent in 1997, as compared to 17.9
percent in 1992. The center does not have
the money to fulfill what is expected of it.
- Some
in Moscow argue that Russia is not actually
89 viable pieces but approximately 20 or so
with clearly distinguishing characteristics.
They favor recasting Russia along those lines
not only for economic reasons but because
they think this would make for a simple and
more effective federalist system. The impact
of such a restructuring on federalism is questioned,
however, by others, and in any event it is
unclear how it could be done in practice without
breaking up the country. Moreover, a majority
of governors are against such an action.
-
National political parties, which are only
embryonic in Russia, are important centripetal
forces that help offset centrifugal tendencies
in federal systems.
- The
coming elections will affect the evolution
of federalism. The campaigns for president
will most likely divide the regional elites.
Only after a new president is elected will
it be possible to effectively address many
center-regional issues. If the new president
also leads a party that holds a majority in
the Duma, progress in resolving various issues
could accelerate.
-
The thrust of opinion was that Russia would
not disintegrate, that is, split into two
or more parts in such a way as to destroy
the Russian state as we have known it in history.
In the competitive analysis on the prospects
for disintegration, the case " for"
rested entirely on the center collapsing through
incompetence and some regions concluding they
would be better off on their own. This argument
was rejected by most participants.
- Several
experts viewed the lack of viable economic
alternatives as a factor working against separation.
Foreign economic alignments for seceding regions
are not likely, nor is significant foreign
investment.
- Presenters
on the regions, however, warned that, while
the regions do not want to secede, the ball
is in Moscow’s court, and Moscow could stir
up problems through ill-considered actions.
One regional scholar, for example, pointed
out that, while the some 50 asymmetrical and
not fully transparent bilateral center-region
treaties are not ideal and in some cases may
not be working too well, they nevertheless
reflect today’s realities: any attempt to
undo them would be courting trouble.
-
Despite their parlous financial state, the
elements of the power ministries (Army, Federal
Security Service, and Ministry of Interior)
stationed in the regions have not been suborned
by regional authorities. One scholar asserted
that the FSB is intimidating governors by
putting some of their deputies and even relatives
on trial for alleged financial fraud.
- Besides
Chechnya and Kaliningrad, whose secession
would be troublesome but not fit the definition
of disintegration above, the area to watch
is the Russian Far East, primarily because
of its remoteness from Russia’s other economic
zones.
- State
failure cannot be excluded, but it could result
in widespread anarchy without actual disintegration.
Section
One
Opening
Remarks
John Gannon
Chairman, National Intelligence
Council
This conference is the latest in a series sponsored
jointly by the National Intelligence Council and
the State Department Bureau of Intelligence and
Research. It is especially timely. Whither Russia
and the future of Russia as a federalist state
are everyday topics and encompass a complex set
of issues. It is important to consider the issues
in their entirety and to consider alternative
outcomes. It is important to understand both the
process by which federalism is forming in Russia,
and it is equally important to understand why
and how that process may fail.
This conference draws together a set of experts
on the major underlying factors to discuss and
dialogue in order to promote a greater understanding
of the issues and of potential outcomes. The conference
begins by addressing the general topic of federalism
as it is practiced globally in order to develop
a better foundation for understanding the circumstances
of Russian federalism. The second session focuses
on how Russian federalism seems to be actually
working in practice. The third session examines
the political interaction between the center and
the regions, followed by a fourth session focused
on Russian regional views on federalism. The final
session features a competitive analysis to explore
and discuss the possibilities of further disintegration.
It is our intent that the conference feature discussions
and insights from all participants and a critical
examination of the many complex issues associated
with Russian federalism in the context of the
Russian transition. For that, we are fortunate
to have in attendance, both from within and outside
the government, experts on all facets of this
situation. The conference report that will summarize
the deliberations will be extremely useful to
both policymakers and analysts.
CONTENTS
Section
Two
Federalism
in Practice: A Comparative Approach
George Kolt
National Intelligence Council (Chair)
When considering Russia today, two major questions
concerning its future often come up. The first,
and splashiest, is whether Russia is going to
break up. The second question, and in my view
the more important one, is the underlying question
about how regionalism in Russia is actually working
today. In this conference we will put the emphasis
on that second question and, from that basis,
explore the first question in our last session
via competitive analysis of the alternatives.
To set the stage for the detailed examination
of regionalism in Russia, the first session puts
the Russian situation in the more general context
of global federalism. Experts will address the
experience of other countries that are dealing
with the problems of establishing viable center-region
relations. The first speaker will present a structural
examination of federalism as it has evolved globally;
subsequent speakers will address center-region
relations in Germany, China, Nigeria, and Brazil.
Our commentary will draw on these examinations
to highlight some of the challenges facing Russia.
Douglas Verney, University of Pennsylvania
Issues of Federalism
Federalism is a form of government that differs
from unitary forms of government in terms of the
distribution of power between central and subnational
entities, the separation of powers within the
government, and the division of legislative powers
between national and regional representatives.
Federalism is a very familiar American concept,
having been first invented in Philadelphia in
the 18th century. In the United States, federalism
is more than a form of government--it is a full
concept of operations found abroad only in Switzerland.
There are lesser forms of federalism in other
countries, and those forms can be divided into
parliamentary federalism (for example, Canada),
and presidential federalism (for instance, the
Latin American countries). A true federation has
both a distribution of political power specified
in the constitution and a direct relationship
between political power and the individual citizen.
A new form of federalism--executive federalism--is
also emerging in which major constitutional issues
are decided by executives instead of by legislatures.
Other emerging features include constitutionally
specified representatives of local governments
and three tiers of representation. Russia currently
does not fit well into any existing category,
with the Russian form of federalism still developing
as a part of the Russian transition.
Carl Lankowski, American Institute for Contemporary
German Studies
Federalism
in Germany
Federalism is working well in Germany, probably
because of several important historical characteristics
that preceded the founding of the Federal Republic
in 1949--a socially and culturally homogeneous
population, a tradition of federalism going back
several centuries, a strong sense of nationalism,
and institutional experience with federal processes.
World War II attenuated strong regionalism and
resulted in a social leveling stemming from massive
movement of the German population. The war experience
also provided strong incentives for the creation
of a system of checks and balances to prevent
dictatorship in the future.
Constitutionally, Germany is a parliamentary state
that has fusion between the functions of the executive
and legislative branches, and a cooperative and
interwoven distribution of executive, legislative,
and judicial powers among three levels of government.
There is a fixed revenue-sharing system specified
in the Constitution and a true multiparty system
that makes gridlock a distinct possibility on
contentious issues. At the same time, the size
and scope of German entitlement programs has led
to executive federalism on some issues. The 1990
reunification created financial strain because
of the large resource requirements of the former
East Germany, and the membership of Germany in
the European Union may create additional federalist
issues, since some of the provisions of the EU
actually contradict specifications of the German
Constitution.
Joseph Fewsmith,
Boston University
Federalism
in China
China does not have a federalist system of government--it
has no constitutional division of power. At the
same time, issues of center-regional relations
go back several thousand years. In 1978, China
started to deliberately decentralize to promote
economic development and political unity. China’s
economic decentralization appealed to several
favorable characteristics that differentiate China
from the Russian situation: China’s economy had
been decentralized to varying degrees since 1957,
China’s centralized economic plan covered only
about 600 products (vice about 20,000 Soviet products),
and China had a large rural sector with an underutilized
labor force.
Decentralization has been a major factor in China’s
economic growth over the last decade. Some believe
that this has created a de facto federalism that,
once formalized, will lead to future Chinese democratization.
Others believe that decentralization has created
pressures that could lead to fragmentation. The
Communist Party has provided a unifying force
to date that has kept center-regional relations
under control. At the same time, the Chinese leadership
is aware of the pressures and potentials and is
taking steps to try and restore greater control
over the regions, although it is difficult to
renege on powers once delegated. The more decentralized
economic system has also created problems. Local
control over the banking system has resulted in
local investment priorities and more effective
collection of local than of national taxes. Some
have suggested that China will eventually formally
institutionalize a federal system. This seems
unlikely, given China’s long history of political
power. At the same time, a better and more institutionalized
relationship between the center and the provinces
could lead to a de facto federalist system that
might help China resolve problems with Tibet,
and perhaps even Taiwan.
John Paden, George
Mason University
Federalism
in Nigeria
In theory, Nigeria is a three-tier federation,
with local, state, and federal levels designated
by federal law. Nigeria has seen itself as a federal
structure since its transition from colonialism
in 1960, although it has undergone periods of
parliamentary and presidential federalism, followed
by military centralized rule, and, most recently,
efforts to transition to a civilian rule. Nigeria
as a nation is an extremely complex structure,
being comprised of 250 to 400 ethnolinguistic
communities distributed throughout 36 states but
grouped into six natural geocultural zones that
are increasingly becoming a key element in the
federal structure. The country is about half Muslim
and half Christian and has an oil economy. Nigeria
does not yet have an approved constitution. With
six geocultural zones, it is difficult to ensure
power-sharing in a democratic system in which
the dominant geographic groups from the northern
states can form coalitions with selected others.
Current plans, however, are for a rotational principle
that rotates six key executive/legislative offices
among the zones for a five-year tenure.
Revenue-sharing difficulties revolve around three
points: the relative proportions of federally
collected revenues that should be assigned to
the center; the appropriate formulae for distributing
the central revenues among the states and localities;
and the percentage of federally collected revenue
that should be returned to the oil-producing states
and communities. The most difficult challenge
of transition from military to civilian rule may
well be the shift from centralization to decentralization.
Federalism may erode into a confederalism that
in turn may lead to pressures for partition or
secession. Fortunately, the focus on horizontal
federalism across the 36 states and/or six geocultural
zones has resulted in a general political culture
of acceptance of the idea of equality of units
in terms of access to political power. Nigeria,
as Russia, is committed to federalism, but without
the practical experience of devolution required
to avoid the dangers of succession. At the same
time, Nigeria has several indigenous traditions
that, in effect, were profederalist models and
a British pragmatic concept of experimentation.
David Samuels,
University of Minnesota
Federalism
in Brazil
Brazil and Russia have much in common. They both
are large countries, have rich/poor disparities,
and have current problems with organized crime.
Both countries have been unable to solve severe
macroeconomic and fiscal problems, have lagged
in aggressive political and economic reform, have
strong presidential institutions with difficulties
enacting legislative change, and have a fragmented
party system.
In Brazil many of the difficulties stem from several
key elements of the federalist system that constrain
presidential initiative and contribute to policy
gridlock: a symmetric bicameralism in which the
strong Brazilian senate forces the president to
explicitly consider a regional balance of partisan
forces, severe malaportionment and regional disparities
in the legislature, a Constitution (the second
longest in the world) that embeds many policies
and procedures that other countries treat via
ordinary law, a very high share of fiscal resources
that remain with the subnational governments,
very strong gubernatorial positions coupled with
strong propensities for political leaders to seek
gubernatorial vice national careers, and an extremely
poor nationalized party system. This form of federalism
has seriously constrained reform efforts by the
national government. Given the strength of state
interests within the national congress, the balance
of forces in terms of intergovernmental relations
in Brazil is unlikely to change in the near future.
Blair Ruble,
Kennan Institute for Advanced Russian Studies
Commentator
Currently, in non-US countries, the issues of
federalism are focused on real, and big, political
issues that determine the relationship of the
individual to the state. The important thing to
contemplate is how to interpret global experiences
with federalism in terms of the situation in Russia,
to consider what has to happen for federalism
to work in Russia, and to think about what will
happen if it does not. There is a great deal of
ambiguity in the Russian situation.
Historically, Russia has been a "tribute"
state, with a strong impulse toward centralization.
Moscow dominates Russia in a way that no other
central government dominates its regions, and
the party lists guarantee that Muscovites will
get elected. The president has too much power,
and it will be important to obtain a functioning
system of checks and balances in the face of a
strong impulse toward centralization. Indicators
of countervailing forces in Russia will include
competitive elections, a functioning central state
that can distribute revenue, and a functioning
court and legal system to define and enforce a
process for dealing with conflict. Russia is not
yet a federalist state, but it is evolving to
become one.
General Discussion
n
many of the countries discussed, there was a historical
foundation for federalism and social prerequisites,
with entities that freely bound themselves together.
This is not the Russian experience. In Russia
all regions view federalism as a zero-sum game,
and many regions do not want to get together and
compromise. One expert argued that the regions
really want to stay a part of Russia and asked
rhetorically where the funds would come from to
support a separated region, given the very poor
climate for foreign investment. In other countries,
factors that have caused regions to bind together
include a common perception of an external military
threat, civil wars that have not resolved internal
problems, and an expanding internal market. Most
recently, the computer revolution, with information
readily available, has been a countervailing factor
to recentralization (for example, China and India).
Taxation systems and how they evolve will be an
extremely important indicator.
So far, the Russian transition has shown that,
unless there is a legitimate enforcement mechanism,
taxation and legal structures will not work. One
individual also pointed out that functioning courts
and laws have historically arisen over a long
period of time from stable political systems.
It was also suggested that any federal system
is in a continuous process of evolution, and so
Russia should be viewed in that context.
CONTENTS
Section
Three
How
Russian Federalism Is Working in Practice
Jack Sontag,
US Department of State (Chair)
This session will examine current Russian federalism
and discuss how it seems to be working in practice.
The presentations concentrate on Russian institutional
relationships, their current structures, and the
possibilities for the next generation of evolutions.
The first part of the session focuses on institutional
arrangements between the center and the regions;
the second part examines their political interactions.
Part One
Institutional
Arrangements Between the Center and the Regions
David Triesman,
University of California at Los Angeles
Financial Arrangements
Over the last several years, the Russian Government
has experienced a decline in federal tax revenues.
In 1992 the federal tax revenue was about 18 percent
of GDP; in 1997 it had dropped to 10.4 percent.
During this same period, the revenue distribution
to the regions exhibited a pattern of decentralization,
followed by slight recentralization, and then
more decentralization. In 1992 about 40 percent
of the federal revenue was returned to the regions,
increasing to 55 percent in 1993, dropping to
50 percent in 1995, and increasing again to 55
percent in 1997. In 1993-94 the regions were making
greater cries for sovereignty, and the center
was responding to the pressures.
It is important to note that agreements between
the center and the regions have stabilized the
revenue flow in the larger regions (for example,
Sakhalin, Bashkortostan, and Tatarstan), but revenues
have been falling in the smaller regions. The
federal tax share from 1995 to 1997 was falling
the fastest in Yamalo-Nenetsk AO, Lipetsk, Taymyr
AO, Karelia, Khantiy-Mansiysk AO, Vologda, Magadan,
Murmansk, Vladimir, and Irkutsk. These, for the
most part, are northern regions. The center is
trying to use fiscal policy to affect the regions
politically and has in place a treasury system
to transfer the funds; this is getting harder
to do, however, because the center is collecting
decreasing amounts of revenues. Another basic
problem is how to get the profitable regions to
subsidize the unprofitable regions. The drop in
global oil prices is also factor, since this affects
basic revenue flows into the oil-rich regions.
Peter Stavrakis,
University of Vermont
Big Business
and Banking
The recent financial crisis has resulted in the
closure of over 1,600 banks, at least temporarily.
141B rubles are required for bailout, which the
government does not have. By the time this situation
is eventually sorted out, about half the banks
will be permanently closed. Because of Russian
banking accounting practices involving double
and triple bookkeeping, it is difficult for the
government to determine which are the strategically
important banks. At the same time, the state has
a strong incentive to do so and an opportunity
to recapture control of the banking industry from
the oligarchs.
In the regions, many banks are in better shape
than in Moscow, since they participated less in
the national pyramid schemes and stayed focused
more on the local productive economy. The regional
governors also recognize the banks as key financial
instruments and are working to develop separate
bases for financing, especially by more direct
foreign investment. Moscow at the same time is
working to prevent direct foreign financing of
the regional banks. The new Director of the Russian
Central Bank, Viktor Gerashchenko, is using his
position to centralize Moscow’s control over financial
institutions. This is also a major objective of
the Agency for Restructuring Credit Institutions,
created specifically to manage reforms in the
financial sector.
Dale Herspring,
Kansas State University
Military
Relations
The situation in the Russian military has been
deteriorating rapidly. Discipline has collapsed,
pay is three years in arrears, equipment is antiquated,
the budget is funding only 40 percent of what
is needed, morale and readiness are at an alltime
low, the officers and NCO’s are leaving in droves,
and the general officers have become politicized.
Military reform plans are meaningless because
there are no funds to carry out the needed changes.
It is interesting to think about the possibilities
of a military coup to restore control in Russia,
but for it to be successful would require an effort
without resistance. With any significant opposition
in Moscow, civil war is likely. This is because
the military no longer has any of the characteristics
associated with a well-structured military institution--it
is no longer cohesive, and it lacks stability
and predictability. At the same time, regional
authorities are trying to court the military,
and troops are dependent on the regions for food
and fuel supplies. So far, the military does not
appear to be acting autonomously from central
authorities, but the situation is clearly moving
in this direction. It seems unlikely that the
military would initiate regional devolution; however,
it may well split along regional lines under pressure.
If the military collapses, hungry soldiers may
also gravitate either toward the mafia or to criminal
gangs. In fact, criminal activities on the part
of both soldiers and officers has reached epidemic
proportions.
It is becoming increasingly difficult to think
of the military as a single institution. Instead,
it is a body that is gravitating toward several
militaries, with the most probable outcome being
a form of military-supported warlordism from the
regions. At the same time, it is important to
remember that the military is a key part of Russian
society and, as such, reflects conditions in society
at large. The breakdown of central control within
the military may not be currently as advanced
as in the rest of society, but it is moving in
that direction. The more Russia moves toward chaos
and collapse, the more it will be reflected in
the military, and the more it will raise the specter
of civil war or further disintegration. The military
is no longer a bulwark of Russian society, and
a key question is whether the military will become
a major part of the problems of the Russian transition
rather than an element of the solution.
Timothy Frye,
Ohio State University
Judicial
System and Police Functions
A survey was conducted in 1996 to assess the degree
to which the racket in Russia was actually functioning
as a substitute for the judicial system and police
functions. The survey was conducted in three citiesMoscow,
Ul’yanovsk, and Smolensk. The term "racket,"
for the purposes of the survey, could range from
organized crime to local economic associations
or other organizations not associated with the
local police or judicial system. The survey targeted
shopkeepers and other similar enterprise owners.
The findings indicated a positive relationship
between predatory regulation and contact with
the racket, with the racket functioning as a substitute
for the local police function, but less so for
the court system. One conclusion is that, given
the tax share they actually receive, local governments
do have not incentives to provide the necessary
services to shopkeepers; at the same time, economic
liberalism is working because the shopkeepers
are turning to the racket to satisfy their economic
demands.
General Discussion
The
discussion centered around two main topics: the
importance of credible institutional arrangements
and the Russian military. One expert argued that
legal, legitimate, and functioning institutions
have to be there for federalism to work. At the
same time, the institutional arrangements that
Russia inherited from the Soviet Union are decayed,
and it is difficult to make the necessary transition
to federalism. Another expert commented that institutionalization
also depends on expectations, and there is a strong
disconnect between current expectations in Russia
and what the state can actually accomplish. There
is a continuing disintegration of authority. It
is important to have respected institutions--for
example, the armed forces and the reserve banks--but
these are not currently there.
The military discussion focused on the degree
to which the armed forces may be shifting allegiance.
Russia has no experience with localized military,
but the regional authorities are clearly using
general officers for local political purposes.
At the same time, although the military is under
great stress, the military leaders are not confused
about where their allegiance lies--it is to Moscow.
There is only limited anecdotal evidence to support
a military devolution toward warlordism.
Part Two
Political
Interaction Between the Center and the Regions
Nikolay Petrov,
Carnegie Endowment for International Peace
Federal Power in the Regions
Russia currently exhibits more a character of
competitive feudalism than competitive federalism.
All federal structures are dependent on the regions.
The disintegration that is under way is due, not
to separatist desires, but because the center
is not adequately taking care of regional needs.
The governors are playing a decisive role in center-regional
relations, but they are very diverse in terms
of their views.
The regions are faced with a very complicated
set of problems and are facing the end of the
Yel’tsin regime without a clear idea of what comes
next. At the same time, Primakov has indicated
that he will start to pay more attention to the
needs of the regions. There appear to be two possibilities
for Russia: either the country will disintegrate
in a soft way or delegation of authority to the
regions will be greater.
Darrell Slider,
University of South Florida
Regional
Influence on National Politics
Russia’s 89 regions have played an active role
in shaping the existing system of federal relations.
The principal institutional framework for this
influence is the upper house of the national assembly,
the Federation Council. Although this institution
could provide a mechanism for checks and balances
between the center and the regions, in fact, so
far the Federation Council has most often acted
to disrupt the development of a normal federation
by seeking to retain and expand regional powers
far beyond that envisioned in any federal system.
Moreover, the members of the Federation Council
have purposely created gridlock in the legislative
process in order to stall legislation that would
encroach on their considerable powers.
In the absence of federal legislation, regions
are allowed to pass their own laws on any given
policy area. The goal pursued by most regional
leaders is to preserve the current informal system
that distributes power and resources on the basis
of individual lobbying of central government officials.
Given the extent to which regional lobbying defines
the institutions of Russian federalism and the
mindset of its principal actors, the most likely
outcome will be a continuation of a bilateral
negotiating game between regions and the center.
Thus the prospects for the emergence of a genuine,
effective federal system are remote for the foreseeable
future.
General Discussion
Federations
with national parties have fewer problems, and
those have not yet developed in Russia. It takes
time to form effective national parties (for instance,
the United States had such a problem in its early
days). There also need to be institutions and
activities that promote cross-regional coalitions--for
example, repeated presidential elections. One
expert pointed out that some of the problems of
center-regional relations in Russia look a lot
like what is happening in Europe between the EU
nations or between the subnational entities and
the host countries. At the same time, another
expert remarked that West European countries,
by comparison, generally do not have presidents
or strong parties, but they do have more law focused
on the people’s interests and a functioning court
system to enforce that law. Finally, there was
a call for taking the long view on what is happening
in Russia, considering a range of options and
understanding how those options might come about
and what they would probably mean in practice.
CONTENTS
Section
Four
Russian
Regional Views on Federalism
Peter Clement, Central Intelligence Agency
(Chair)
The topic of regional views on federalism is currently
of great interest. It is important to better understand
how the regions view federalism, their relationships
to the center, and their relationships to each
other. Seven presenters will examine these issues
in nine different regions.
Marjorie Mandelstam Balzer,
Georgetown University
Republic of Sakha (Yakutia)
Leaders of the Sakha Republic are searching for
negotiated compromises with Moscow authorities
that would represent an asymmetric federalism.
Leaders and citizens feel let down by the lack
of support from the center, for example, during
the major Lena River flood of 1998. Recent economic
crisis has exacerbated already serious problems
with the nonfulfillment of the 1995 Bilateral
Treaty. People see a direct correlation between
their lack of salaries and the manipulation by
the center of gold and diamond deals with foreign
companies, particularly De Beers. The Sakha heads
of Almaz-Rossiya view their company as stimulating
long-term investments in the republic and also
the Federation as a whole. In political terms,
Sakha President Nikolayev initially had a personal,
patron-client friendship with President Yel’tsin,
but that has declined. Nikolayev is popular and
populist, a legally elected president. He can
ill afford to be an "ethnic entrepreneur,"
stirring Sakha nationalism in a republic where
the Sakha are only about 40 percent of the population.
A few opposition movements, or proto-parties,
are forming--active in the Sakha parliament, the
Il Tumen, and in preparation for upcoming presidential
elections. My Yakutiany (We Yakutians) and Novaia
Yakutia (New Yakutia) are each focused on creating
a sense of multiethnic loyalty to the republic
as a whole, not to just the titular ethnic group.
Identity in the republic is multileveled: to local
communities, to the international North (Northern
Forum), to Asia (Japan and Korea), and to other
Turkic republics (Tatarstan, Bashkortostan, and
Turkey).
Within Rossiya, Sakha prefer far more than two
unpalatable choices, recentralization or disintegration.
Asking neither for their own army nor for their
own currency, they expect to keep their internal
borders. Novaya Yakutia politicians explain they
could contribute more taxes to the federation
if they were allowed to develop the republic’s
mineral wealth. They call for mutual respect,
beyond the politics of federal paternalism and
Soviet legacies.
Ildus Ilishev,
US Institute of Peace
Republic
of Bashkortostan
The Soviet state was founded as a supranational
entity. Federalism was viewed as a transitional
form that would, within a short period of time,
transform the traditional cultural, language,
and religious identities of several scores of
nations into a single and uniform Communist identity.
Currently, the main questions are what foundations
the renewed statehood will be built upon and whether
new forms and principles can be developed for
numerous ethnic groups to coexist. Bashkortostan,
with 4 million people, is rich in natural resources
and is second in industrial potential in the Ural
economic area. In 1919, Bashkortostan was the
only republic founded on the basis of a bilateral
treaty. The republic negotiated a bilaterial treaty
with the Russian Federation in 1994. The treaty
provides for the maximum development of self-government
in all elements of power. The role for the center
is largely restricted to securing the unity and
integrity of society, with regional governments
entitled to own their material resources and to
decide independently on all matters within their
jurisdiction. To Bashkortostan, a treaty is a
confirmation of a special legal status, sovereignty,
and recognition of the right to independently
solve issues related to local property, budget,
legislation, judiciary system, and foreign trade.
Even though the best theoretical federalism for
Russia is a constitutional federalism, a treaty-based
federalism reflects current realities and is the
only possibility for the compromises necessary
to reflect individual differences between the
regions. Treaty-based federalism will work until
active secession becomes imminent, which is not
the current case: the majority of the people in
Russia want to live in Russia--their home. Baskortostan
is making efforts to build a federation that would
meet the interests of scores of different nations
and peoples, ethnic groups, and communities within
the new Russia. In fact, the Russian Federation
is already functioning as an asymmetrical federation,
and the only way to keep the Federation together
is to ensure a constitutional recognition of its
asymmetric composition.
Elise Giuliano,
University of Chicago
Republic
of Tatarstan
The Tatarstan formulation of federalism is "strong
center, strong regions." As the ethnic homeland
to Russia’s largest non-Russian ethnic population,
Tatarstan was the first republic to lead a serious
nationalist challenge to the integrity of Russia.
In 1994 it was the first republic to sign a power-sharing
treaty with Moscow, which became a template for
center-regional agreements throughout the Federation.
After 1994, Tatarstan changed its focus from increasing
its political autonomy to increasing its economic
autonomy, and especially to attracting investment.
It passed a law allowing foreign ownership of
land and tax breaks for joint ventures with foreign
partners. Tatarstan has concluded trade agreements
or joint ventures with 80 countries and is one
of the few Russian regions that has entered the
international arms market as an independent entity
outside of Russian participation. Tatarstan has
also been deliberately establishing relations
with the newly independent states and with the
other regions within Russia. At the same time,
Tatarstan would like the structure of the Russian
Federation to remain just as it is and vehemently
opposes a change in status or a redrawing of boundaries
for any regions, including its own. Its recent
political interactions with the center demonstrate
steady attempts to increase or maintain its autonomy,
tempered by a commitment to stay a constituent
member of the Federation.
Tatarstan continues to set trends in its economic
and political relations with the center and with
foreign countries by taking on responsibilities
without waiting for Moscow’s permission. Tatarstan
has positioned itself as a model for the other
regions, and, via its actions, is defining what
it means to be a successful region, creating expectations
for both itself and for the other regions. Moscow
is paying attention. Currently, Tatarstan has
issued very strong statements concerning the possible
unification of Russia and Belarus. President Shamiev
has stated that, if Belarus unifies with Russia,
he would take this opportunity to renegotiate
the status of Tatarstan so that the republic would
have equal status with Belarus. Tatarstan, therefore,
continues to lead the challenge that the regions
and republics represent to the federal center.
Dmitry Gorenburg,
Harvard University
Republic
of Khakasiya
Khakasiya, with a population of 600,000, of which
11 percent are ethnic Khakass, was organized in
1930 as an autonomous oblast that was a part of
Krasnoyarsk. It is a wealthy region, rich in natural
resources. It contains the largest hydroelectric
dam and a major aluminum plant in Russia. Khakasiya
became a separate republic in 1991, leading to
a period of tension with Krasnoyarsk. Because
of conflicts with the central government, Khakasiya
did not begin to negotiate a bilateral treaty
with Moscow until 1996, eventually signing it
in 1997. Its nationalist movement has never been
very strong, even though in 1998 the government
announced that all schools would teach the Khakass
language. Khaksiya has always seen itself as a
constituent part of Russia: its Constitution does
not even mention the republic as a state within
Russia, instead referring to itself as a subject
of the Russian Federation.
One key impact of Khakasiya on the structure of
federalism came from its precipitation, as a result
of the registration of Aleksey Lebed as a candidate
for governor, of a decision as to whether the
federal government had authority over local election
laws. Lebed did not meet the seven-year residency
requirement. In June 1997, the RF Constitutional
Court ruled that local residency requirements
over one year were unconstitutional, setting the
stage for the eventual Lebed victory. The relationship
between Khakasiya and Krasnoyarsk has smoothed
since the election of the Lebed brothers as governors
of the two regions. Khakasiya also has taken active
part in cooperative agreements among Turkic republics,
although limited by not being Muslim. At the same
time, Aleksey Lebed recently instigated a tax
revolt against Moscow, declaring after the financial
crisis in August 1998 that Khakasiya would cease
transferring funds to the federal budget. Khakasiyan
attitudes suggest that the formal disintegration
of Russia is not likely but also that a continued
process, and eventual institutionalization, of
decentralization is needed as a road to stability.
NikolayPetrov,
Carnegie Endowment for International Peace
Krasnoyarsk
Krasnoyarsk is an extremely important Russian
region. It is the second-largest region in Russia,
is four times the size of France, is 3,000 kilometers
long ranging from the Arctic to the southern border,
and forms a wide belt dividing eastern and western
Russia. The region is well known and well represented
in Moscow and is a former major military-industrial
base. Aleksandr Lebed was elected governor under
an election organized under federal law to remove
the residency requirements. There is a spectrum
of political parties represented in the region,
but none sufficiently coherent to provide organized
opposition to Lebed. Local laws on government
and on impeachment provide controls on Lebed’s
power.
The size of the region also presents internal
governing problems. For example, the mineral-rich
revenue-generating northern city of Norilsk is
combined with many lesser towns up to 1,500 miles
southward under a single Duma representative in
Moscow. Lebed’s activities inside the region are
focused on trying to introduce new mechanisms
designed to make Krasnoyarsk a model for all of
Russia. Externally, Lebed’s political party has
a few active and influential political supporters
in each of the other Russian regions, all promoting
the possibilities for regional cooperation.
Svetlana Tsalik,
Stanford University
Sverdlovsk
and Novosibirsk
Sverdlovsk and Novosibirsk Oblasts offer a good
litmus test of developments in Russian federalism.
Both were pillars of the Soviet military industrial
complex and with the end of the Cold War have
suffered above-average rates of decline in production.
Both are centers of learning, are financial capitals
of their macroregions, and have current governors
that were dismissed by Yel’tsin after the events
of October 1993 for defying Moscow. In the past,
the two regions have been leaders in their respective
macro-regions--the Urals and Siberia. Moreover,
in both regions, the ousted governors were reelected
not only as governors but also as heads of their
respective regional economic associations. Despite
strong similarities in the structure of their
economies and in their political histories, the
two regions have had markedly different rates
of success in getting Moscow to respond to their
needs. Principal grievances fall into four categories:
center debt to the regional defense sector; center
debt to the overall regional budget; devolution
of expenditures to the regions (especially for
higher education, hospitals, pharmaceuticals,
and culture) without corresponding transfer of
tax funds; and the appointment of federal officials
in the region.
The principal differences in achieving successful
resolution of grievances are due not to structural
factors within the regions but rather to significant
differences in the leadership style of their respective
governors. Rossel, in Sverdlovsk, has been able
to demonstrate his loyalty to Yel’tsin and has
been rewarded not only with fiscal concessions
but also with leeway to bypass federal law. Mukha,
in Novosibirsk, has not demonstrated strong support
for Yel’tsin and, as a result, Moscow has turned
a deaf ear to Novosibirsk’s grievances. In the
aftermath of the recent financial crisis, it is
also clear that the relationship between the center
and the regions should not be viewed as a zero-sum
one. In fact, when Moscow gets weaker, the regions
weaken too. In the current context, since the
central government is unable to fulfill its budget
obligations to the regions, Moscow may prefer
letting them fend for themselves, even if they
bend federal law to do it, rather than facing
outrage and social protests if Moscow tried to
strongly enforce the law.
Mikhail Alexseev,
Appalachian State University
Primor’ye
Westernization through the Pacific gateway has
been a historical aspiration of political elites
in the Russian Far East. Communist rule was historically
a major obstacle. Since the collapse of the Soviet
Union, key political actors have had high economic
incentives for integration with the Pacific Rim
economies at the expense of economic ties to Moscow.
Internationalization promised larger incomes from
raw material exports, higher transit fees, more
foreign investment, and modernization. At the
same time, remaining under Moscow’s rule entailed
higher electricity, transportation, and export-import
tariffs; unpaid wages; power shortages; a defense
burden; environmental damage; and redtape.
In spite of these apparent advantages for separation,
Primor’ye’s regionalists have failed to develop
enduring concepts of political institutions that
are distinct and separate from those in the rest
of Russia through which local elites could rule
the region independently from Moscow. The Far
Eastern Republic Freedom Party has enjoyed only
marginal public support, and competition among
major Russian political parties in Primor’ye has
not focused on separatism. Without a political
ideology of his own, Governor Nazdratenko’s strategy
toward Moscow has been one of tough bargaining
to secure economic interests for his key constituency
in Primor’ye, made up primarily of industrialists
and ex-party apparatchiks. Nazdratenko’s threats
that lack of funding in Moscow would result in
a mass proindependence movement in Primor’ye have
failed to materialize, despite opportunities arising
from the hard-hitting economic crisis. Unless
new conditions give rise to new elites with a
different perception of Primor’ye’s economic incentives
and regional identity, an independent Maritime
Republic will be a hybrid between a specter and
a mirage. This situation also suggests more broadly
for Russia that, absent a separatist political
ideology in a region, political strategies are
more likely to devolve into bargaining with the
center over better terms of staying in power within
existing institutions.
Robert Orttung,
East West Institute
Saratov
and Nizhniy Novgorod
The current governors of Saratov and Nizhniy Novgorod
represent two very different case studies in attitudes
toward Russian federalism. In Saratov, Governor
Ayatskov, one of the most prominent regional leaders,
supports a strong center. He does not advocate
enlarging the regions, nor does he favor an asymmetric
form of federalism. Personal motivations form
a strong part of his rationale: he openly aspires
to be prime minister of the Russian Federation.
He did sign a power-sharing agreement with Moscow
on 4 July 1997, while at the same time being generally
critical of such treaties because they exacerbate
inequalities. Although he resents granting privileges
to individual republics, at the same time he also
does not always follow the lead of the center
in terms of his actions within the Saratov Oblast.
He is not popular with many other governors of
the Greater Volga region, who resent his efforts
to try and make Saratov the capital of the region.
In Nizhniy Novgorod, Ivan Sklyarov succeeded Boris
Nemtsov in 1997. Nemtsov had transformed the region
into a showcase of reform. Sklyarov considers
himself a social democrat who rules in the style
of Moscow mayor Yuriy Luzhkov, with whom he has
generally maintained close ties and explicitly
backs. He is a popular governor and works well
with the other regions. He avoids controversial
comments on the federation structure but advocates
devolving federal power to allow the regions to
better coordinate local actions of police, tax
police, and bankruptcy agencies. He also ignores
federal laws when it is expedient to do so.
CONTENTS
Section
Five
How
Real Is the Danger of Disintegration?
George Kolt, National Intelligence Council
(Chair)
The last session before the general discussion
will explore whether the danger of disintegration
is real or not. This will be done by the analytic
method of competitive analysis. Without assigning
probabilities of disintegration, one paper, presented
by Alexandr Nemets, will take the position that
disintegration is likely. A second paper, by Thomas
Graham, will present the view that disintegration
is unlikely. In both cases, the presenters have
been asked for analytic purposes to interpret
events in Russia from their respective competing
points of view. Neither necessarily represents
a forecast, but rather an interpretation that
provides data for a general discussion of the
topic.
Before the general discussion there will also
be a special presentation by Andrey Fedorov from
the Russian Council on Foreign and Defense Policy
in Moscow. He will discuss the results of a recent
special report on Russian federalism that will
be the basic document for meetings to be held
in February between the center and the regional
governors.
The Prospect of Disintegration Is Significant
Alexandr Nemets, Science Applications International
Corporation
(Abstract) The overall situation in Russia has
deteriorated to the point that separation is becoming
the only way of survival for many of the regions.
By the beginning of 1998, already Russia has become
a "half-broken country." From 1989 to
1998 human losses approached 14 million people,
the number of children below the age of five had
decreased almost two times, the medical service
and educational systems were devastated, and the
number of drug addicts had increased tenfold.
The technological potential has been half destroyed,
with the wiping out of modern industries and serious
depletion of industrial capital funds. Only export-oriented
raw materials producers have managed to survive.
GDP and industrial outputs have decreased by a
factor of 2, coupled with a very large foreign
and internal debt. At least 40 percent of the
population are living below the poverty line,
the rule of crime has replaced the rule of law,
and the central government has lost control of
the situation in the country. In addition, wealth
has become concentrated in several major cities
of European Russia, and the peripheral regions,
especially Eastern Siberia and the Russian Far
East, have become objects of exploitation for
the profit of Moscow’s political and economic
elite.
This overall situation has created significant
pressures and movements for separation, especially
in the eastern regions of Russia. The recent financial
events of March-August 1998 have virtually eliminated
the chances for reversing the trends and have
made disintegration of Russia unavoidable. The
majority of the Russian people are ready for such
a development. (The full text of this paper is
contained in appendix C.)
The Prospect of Disintegration Is Low
Thomas Graham, Carnegie Endowment for International
Peace
(Abstract) Ever since the demise of the Soviet
Union, Russians and foreign observers have debated
whether Russia itself would eventually break up.
The debate has ebbed and flowed with the intensity
of the political struggle in Moscow. There is
a logic to this: disarray in Moscow has allowed
the more ambitious regional leaders to seize more
power locally while compelling the more timid
to assume more responsibility as a matter of survival.
The debate reemerged with renewed intensity in
the wake of the financial meltdown, and ensuing
economic and political turmoil, of this past August.
Regional leaders acted unilaterally in setting
price controls and forbidding the export of certain
products, primarily foodstuffs, from their regions.
Some spoke of creating local currencies or gold
reserves. Yevgeniy Primakov, at the time of his
confirmation as Prime Minister in September, warned
that there was a growing danger of Russia’s splitting
up and vowed to take tough steps to avert it.
Whether he was exaggerating for political effect
is an open question.
Be that as it may, a review of fundamental conditions
and trends suggests that Russia is unlikely to
break up in the next decade, even though the state
will remain weak or grow weaker. There are numerous
factors--economic, social, and political--that
tend to unify the country, and there are no outside
powers now prepared to exploit Russia’s strategic
weakness for territorial aggrandizement, nor are
any likely to emerge soon. The real issue is how
power will be distributed within Russia and the
implications of that distribution for Russia’s
ability to govern itself effectively and to project
power abroad. (The full text of this paper is
contained in appendix D.)
A Recent Russian Study of Center-Regional Issues
Andrey Fedorov, Council on Foreign and Defense
Policy (Moscow)
The current situation is difficult. The federalist
model proposed in 1993 is not working. The process
of signing treaties was motivated more by political
than by economic factors. Some of the treaties
were bad, and the amendments were bad. This situation
could lead to a revision of all of the treaties
and replacement with a more unified approach.
The mode of ratification will be an important
legal issue. Currently, there are also 123 cases
of direct contradiction between the Constitution
and local legislation. The mechanism for resolving
these contradictions is itself unresolved. There
is also a need for some form of reunification.
Russia is not actually 89 pieces but approximately
20 or so with clearly distinguishing characteristics.
It would be a good idea for economic reasons and
would significantly simply federalist governance
to recombine into a smaller number of regions.
How to do this in practice without breaking up
the country is unresolved. A majority of the governors
are against such an action.
The current budget is also not the budget of a
federalist state: every governor has "out
of budget" funds that in some cases are larger
than the budgeted amount. Only six regions tried
to escape paying taxes to Moscow, and, even though
some of the regions are bankrupt, they became
that way because of local policies. There also
is no real danger of widespread hunger: that is
a misperception based on state statistics that
do not reflect much unreported economic activity.
There are some problems in the north, and in Moscow
there currently is a problem with the meat supply.
There are several strong factors working directly
against the possibility of disintegration: the
financial crisis of 17 August demonstrated to
the regions that they cannot stand alone; there
are no strong political forces for disintegration
in the majority of the regions, the Communist
Party is serving as a de facto unifying force;
and there are no groups of governors ready to
work for the disintegration of the country. The
regions are not facing separatism, but economic
isolation, in a situation in which they do not
all have common financial backgrounds. In the
Siberian regions, people are more afraid of the
growing Chinese influence in the region than of
disintegration of the country. It is possible
that, in February or March, Moscow will be forced
to devalue the ruble once again. The biggest overall
problem is the health of Yel’tsin. If he dies,
it will create more problems for federalism, since
the regions will be divided between the candidates
for the new president.
General Discussion
The
theme was the set of factors working for or against
separation. An issue cited as the principal catalyst
for separation was the lack of a functioning center.
One expert argued that the most serious issue
was not political, but rather the collection and
distribution of tax revenues. The coming presidential
election is also a key factor since it will divide
the governors and will make resolution of the
important issues very difficult until a new president
is elected. Even then, solutions will emerge quickly
only if the president’s political party has a
majority in the Duma. The economic issues are
serious, but the key factor is political stability.
The lack of viable economic alternatives was also
discussed as a factor working against separation.
Foreign economic alignments are not likely, nor
is significant foreign investment. The army was
also cited as a powerful unifying element, since
it has clearly declared its allegiance to the
center. There are also clear constituencies in
the regions for staying in the Russian Federation.
Another expert suggested that the risk for regions
who should leave Russia today is much greater
than the risk to Russia without the regions.
A major problem is the weakness of the state at
both the national and the regional levels. At
the same time, the regions are working with each
other in many capacities, and most of the regions
have established interregional offices, which
actually make it easier to work with another region
than to work directly with Moscow. There are no
national concepts of reform emerging, and there
is decreasing willingness of local leaders to
accept the idea of nationwide reform. One expert
argued that the eventual outcome will be a constitutional
revision that will result in a more coherent federation,
but definitely not a loose confederation. Another
expert argued that Russia could either continue
decline in the fashion argued by Mr. Nemets or,
as an alternative, a young and lively president
could be elected who leads a national political
party to victory and turns Russia’s decline around.
Others argued that further disintegration will
not necessarily result in secession, but rather
a looser form of center-regional relations and
a form of federalism that will only emerge as
a result of a much longer term process. Russia
is forming a governmental structure at the same
time it is shifting to a market economy and attempting
to create new political, economic, and social
systems. Russia has historically demonstrated
tremendous resilience. The analogy to Sikorsky’s
bumblebee was suggested, referring to a passage
in which he argued that "By all laws of aeronautics,
the bumblebee should not fly. But it keeps flying.
Maybe the bumblebee does not know that."
CONTENTS
Appendix
A
Conference Agenda
Federalism in Russia: Is It Working?
Meridian International Center
1630
Crescent Place N.W.
Washington
DC 20009
Wednesday, December 9–Thursday, December
10, 1998
Wednesday, December 9, 1998
8:30 a.m.
Registration
and Coffee
9:00
Opening
Remarks
John
Gannon , Chairman, National Intelligence Council
9:20
Federalism
in Practice: A Comparative Approach
What
are the main characteristics of federalism? What
are the main problems that arise in the development
of federal systems? What political, economic,
social,or other factors have contributed to success
or failure in different countries? Are there common
threads among them?
George Kolt , National Intelligence Council
(Chair)
Blair Ruble , Kennan Institute for Advanced
Russian Studies, Commentator
Issues of Federalism
Douglas
Verney , University of Pennsylvania
Germany
Carl
Lankowski , American Institute for Contemporary
German Studies
China
Joseph
Fewsmith , Boston University
Nigeria
John
Paden , George Mason University
Brazil
David
Samuels , University of Minnesota
12:00 p.m.
Lunch
1:15
How
Russian Federalism Is Working in Practice
Jack Sontag , US Department of State (Chair)
Part One
Institutional
Arrangements Between the Center and the Regions
Financial Arrangements
What
are the main features of the Russian system of
federal transfers and tax collection? What are
its strengths and weaknesses, and how is it evolving?
Are the regions gaining greater control over revenue
generated on their territories? What levers do
Moscow and the regions have to increase their
control?
Daniel Treisman , University of California
at Los Angeles.
Military
To
what extent, if any, are civil-military relations
in the regions changing as a result of the weakening
center? Is national command and control over the
military eroding? What are the prospects for the
formation of de facto regional armies and/or warlords?
Dale Herspring , Kansas State University
Judicial System and Police Functions
To
what extent are judicial officials, police, and
security services loyal to Moscow as opposed to
local officials? Does this differ by region?
Timothy Frye , Ohio State University
Big Business and Banking
What
sort of role and influence do the financial oligarchs
have in the regions? Has this role changed since
August? Are the roles of the Central Bank and
Moscow-based banks diminishing in the regions?
What is the outlook for the near future?
Peter Stavrakis , University of Vermont
Break
Part Two
Political
Interaction Between the Center and Regions
Federal Power in the Regions
How
and to what extent is Moscow able to exert influence
in the regions? What role are the presidential
representatives playing? What sort of economic
levers exist?
Nikolay Petrov , Carnegie Endowment for International
Peace
Regional Influence on National Policies
How
and to what extent are regional leaders--either
individually or collectively--able to influence
Russian domestic and foreign policies? What levers
do they have? What role is the Federation Council
playing?
Darrell Slider , University of South Florida
Thursday,
December 10, 1998
8:30 a.m.
Coffee
9:00
Russian
Regional Views on Federalism
What
role are some republics and oblasts playing in
the development of Russian federalism? Is there
a common thread? How do they view the shape of
the Russian Federation and their role in it? How
are the republics and oblasts interacting with
neighboring regions? Are regional associations
acquiring any strength?
Peter Clement, Central Intelligence Agency
(Chair)
Republic of Sakha (Yakutia)
Marjorie
Mandelstam Balze r, Georgetown University
Republic of Bashkortostan
Ildus
Ilishev , US Institute of Peace
Republic of Tatarstan
Elise
Giuliano , University of Chicago
Republic of Khakasiya
Dmitry
Gorenburg , Harvard University
Sverdlovsk and Novosibirsk
Svetlana
Tsalik , Stanford University
Primor’e and Khabarovsk
Mikhail
Alexseev , Appalachian State University
Saratov and Nizhniy Novgorod
Robert
Orttung , EastWest Institute
12:00 p.m.
Lunch
1:00
How
Real Is the Danger of Disintegration?
What
are the main centripetal and centrifugal forces
affecting the Russian Federation? What are the
main indicators we would expect to see that would
point to either the strengthening or disintegration
of the Federation? Based on the mix of factors
discussed at the conference, what sort of Russia
do participants expect to emerge once a stable
system takes hold? How long is the process likely
to take? What are the implications?
George Kolt , National Intelligence Council
(Chair)
The Prospect of Disintegration Is Significant
Alexander
Nemets , Science Application International
Corporation
The Prospect of Disintegration Is Low
Thomas
Graham , Carnegie Endowment for International
Peace
A Perspective From Moscow
Andrey
Fedorov , Council on Foreign and Defense Policy
(Moscow)
4:20
Concluding
Remarks
CONTENTS
Appendix
B
Speaker
Biographies
Mikhail Alexseev is Assistant Professor of
Comparative Politics and Post-Soviet Studies at
Appalachian State University, a member institution
of the University of North Carolina. Previously
he was a post doctoral research fellow at the
Henry M. Jackson School of International Studies
at the University of Washington. He also has been
a guest lecturer at the US Air Force Special Operations
School and a research scholar at the Kennan Institute
for Advanced Russian Studies.
Marjorie Mandelstam Balzer is Research Professor
at Georgetown University in the Sociology Department
and the Center for Eurasian, Russian, and East
European Studies (CERES). A sociocultural anthropologist,
she is the editor of the journal Anthropology
and Archeology of Eurasia. She has taught at Grinnell
College, University of Illinois, and University
of Pennsylvania and has held postdoctoral research
appointments at Harvard, Columbia, and the Wilson
Center’s Kennan Institute.
John Battilega is Corporate Vice President
and Director of the Foreign Systems Research Center
of Science Applications International Corporation.
Since 1977 he has directed a research team focused
on Russia/Eurasia. From 1992 to 1996 he also led
teams of American specialists working in Russia
on defense conversion. Dr. Battilega has been
a senior consultant to the Intelligence Community
and the Office of the Secretary of Defense for
more than 20 years. He recently directed a study
for the National Intelligence Council that analyzed
alternative stable futures for Russia in the 21st
century.
Peter Clement is the Issue Manager for Russia
in the Office of Russian and European Analysis
at the Central Intelligence Agency. He has spent
most of his 30-year career at the CIA and has
held a variety of analytical and managerial positions.
Dr. Clement has published numerous articles and
books on Soviet foreign policy, Russian domestic
politics, and politics in Central Asia.
Andrey Fedorov has been Political Project
Director of the Council on Foreign and Defense
Policy (CFDP) since 1997. Previously, he was adviser
to the Prime Minister of the Russian Federation
(1989-90) and Deputy Foreign Minister (1990-91).
The author of numerous publications, Mr. Fedorov
is also Chairman of the Political Research Fund
and adviser to the International and Legal Committees
of the State Duma.
Joseph Fewsmith is the director of the East
Asian Interdisciplinary Studies Program and Associate
Professor of International Relations at Boston
University. He is the author of Dilemmas of
Reform in China: Political Conflict and Economic
Debate and Party and Local Elites in Republican
China. Dr. Fewsmith has written numerous articles
on the politics and economics of contemporary
China and is the editor of The Chinese Economy,
a journal of translations published by M. E. Sharpe.
Timothy Frye is currently an Assistant Professor
in the Department of Political Science at the
Ohio State University. He has written about post-Communist
presidencies, the Russian equities market, and
small business in Russia and Poland. Dr. Frye
is now working on a project comparing the development
of legal institutions across Russia and Poland.
John Gannon was appointed Assistant Director
of Central Intelligence for Analysis and Production
in June 1998. He continues to serve as Chairman
of the National Intelligence Council, a position
he has held since July 1997. Previously, he served
as Deputy Director for Intelligence. Before that
position, he served as Director in the Office
of European Analysis.
Dmitry Gorenburg is a Research Associate at
the Program on Cold War History Studies at Harvard
University’s Davis Center for Russian Studies
and a doctoral candidate in that university’s
Department of Government. He currently is completing
his dissertation, entitled "Nationalism for
the Masses: Minority Ethnic Mobilization in the
Russian Federation." Mr. Gorenburg has conducted
research in several republics of the Russian Federation,
including Bashkortostan, Chuvashia, Khakasiya,
and Tatarstan.
Thomas Graham recently joined the Carnegie
Endowment as a Senior Associate in the Russia/Eurasia
Program. Previously, he was a Foreign Service
Officer on academic leave with RAND in Moscow
from 1997 to 1998. From 1994 to 1997, he served
as Head of the Political/Internal Unit and then
Acting Political Counselor at the US Embassy in
Moscow. Dr. Graham has also served on the Policy
Planning Staff at the State Department and as
a Policy Assistant in the Office of the Under
Secretary of Defense for Policy.
Elise Giuliano is a doctoral student in the
Department of Political Science at the University
of Chicago. Her research concerns ethnonationalist
mobilization in Russia’s republics. She has worked
for USAID on a privatization project in Novgorod,
Russia, and has conducted extended research in
Tatarstan, Russia. Ms. Giuliano is the recipient
of a Fulbright-Hays Doctoral Dissertation Research
Fellowship as well as grants from the John D.
and Catherine T. MacArthur Foundation and the
Mellon Foundation.
Dale Herspring is Professor and Head of the
Political Science Department at Kansas State University.
Before joining the faculty, Dr. Herspring spent
more than 20 years in the Foreign Service. He
spent from 1991 to 1992 as a Senior Fellow at
Woodrow Wilson Center for International Scholars
and during the 1992-93 academic year served as
Professor of International Relations at the National
War College. Dr. Herspring is the author or editor
of seven books and more than 40 articles on civil-military
relations in Germany, Eastern Europe, and the
former Soviet Union.
Ildus Ilishev , currently a Senior Fellow
at the United States Institute of Peace, is chief
expert to the administration of the President
of Bashkortostan in the Department of Foreign
and Ethnic Affairs. He is also senior researcher
at the Russian Academy of Sciences’ Ufa Center,
Institute of History, Language, and Literature.
Since 1994, he has been a consultant to the Committee
on Nationalities in the Duma, the Russian Parliament’s
lower house. His fellowship at USIP will culminate
in a book on the relationship between language
and politics in a multiethnic state.
George Kolt has served since 1992 as National
Intelligence Officer for Russia and Eurasia in
the National Intelligence Council. Early in his
career, he specialized in Soviet and European
Affairs while serving in politco-military, intelligence,
and academic assignments in the Air Force. He
was detailed to the National Intelligence Council
in 1981 first as the Assistant National Intelligence
Officer for the USSR and then from 1984 to 1986
as the National Intelligence Officer for Europe.
After retiring from the Air Force, he headed the
Directorate of Intelligence’s Office of Soviet
and then Slavic and Eurasian Analysis from 1986
to 1989.
Carl Lankowski directs the research program
at the American Institute for Contemporary German
Studies. Before joining AICGS, he served on the
faculty of the School of International Service
at the American University. Dr. Lankowski’s research
activity has focused primarily on issues of European
regional integration, such as European Investment
Bank, the impact of Economic and Monetary Union
on German politics, and the "social dimension"
of European integration.
Alexandr Nemets is a researcher at the Foreign
Systems Research Center at Science Applications
International Corporation (SAIC). Previously,
he was a visiting research fellow at the Hubert
H. Humphrey Institute of Public Affairs at the
University of Minnesota. An expert in analysis
of separatist trends in Russia, Dr. Nemets is
the author of numerous publications in the United
States and Russia.
Robert Orttung is a Senior Research Analyst
at the EastWest Institute in New York. Previously,
he was a senior research analyst covering Russian
domestic politics at the Open Media Research Institute
in Prague. He also has taught at Florida International
University in Miami and the University of California,
Los Angeles. The author of two books and numerous
articles, Dr. Orttung contributes to the Economist
Intelligence Unit’s Business Russia and
is senior editor of the EWI Russian Regional
Report.
John Paden is the Clarence J. Robinson Professor
of International Studies at George Mason University,
where he has been active in the graduate program
in International Transactions, and at the University’s
Institute for Conflict Analysis and Resolution.
The author of Religion and Political Culture
in Kano, Dr. Paden was a professor at Ahmadu
Bello University in Zaria, Nigeria, and the first
Dean of the Faculty of Social and Management Sciences
at Bayero University in Kano, Nigeria.
Nikolay Petrov leads a research project on
Russian elections at the Carnegie Moscow Center
and is consultant to the project on Politics and
Society in Transition. He is the founder of the
Center for Political-Geographic Research, an independent
think tank monitoring regional social-political
developments in Russia. From 1990 to 1995, Dr.
Petrov served as an expert to the Russian parliament,
government, and presidential apparatus.
Blair Ruble is currently Director of the Kennan
Institute for Advanced Russian Studies of the
Woodrow Wilson Center. He also serves as Co-Coordinator
for Comparative Urban Studies at the Wilson Center.
He worked previously at the Social Science Research
Council in New York and at the National Council
for Soviet and East European Research in Washington.
Dr. Ruble is currently engaged in research examining
evolving urban patterns and urban management arrangements
in post-Soviet Russia.
David Samuels is currently the Benjamin E.
Lippincott Assistant Professor of Political Science
at the University of Minnesota. Professor Samuels
specializes in Latin American politics and the
comparative study of political institutions, with
particular emphasis on Brazilian politics, electoral
systems, political parties, legislatures, and
federalism. He is the author of forthcoming articles
in Comparative Political Studies and has received
grant support from the National Science Foundation.
Darrell Slider is Professor of Government
and International Affairs at the University of
South Florida. A specialist on Russian regions,
Dr. Slider has published numerous articles and
chapters on regional politics, economic development,
privatization, and federalism. He is also coauthor
of the book The Politics of Transition: Shaping
a Post-Soviet Future.
Jack Sontag is Chief of the Russian Division
in INR’s Office for Analysis of Russia and Eurasia.
He has worked on Soviet, Chinese, and Russian
affairs for the US Government.
Peter Stavrakis is currently Associate Professor
of Political Science at the University of Vermont
and editor of the journal Problems of Economic
Transition. From 1994 to 1997, he served as
Deputy Director of the Kennan Institute for Advanced
Russian Studies. His works include articles on
contemporary Russian and Ukrainian politics, Russian
regionalism, the effectiveness of US foreign assistance,
and bureaucratic reform in the Soviet successor
states.
Daniel Treisman is an Assistant Professor
of Political Science at the University of California,
Los Angeles, and a National Fellow at the Hoover
Institution, Stanford. His research focuses on
the politics and economics of Russia as well as
comparative political economy. His book, After
the Deluge: Regional Crises and Political Consolidation
in Russia, will be published by the University
of Michigan Press in spring 1999.
Svetlana Tsalik is a doctoral candidate in
political science at Stanford University. She
is writing her dissertation on the regulation
of center-regional relations in weak states. As
a doctoral research affiliate to the Carnegie
Endowment for International Peace in Moscow from
January to August 1998, she conducted field research
on this topic, concentrating on four Russian regions:
Sverdlovsk Oblast, Novosibirsk Oblast, and the
Republics of Sakha and Kalmykia. She is the author
of several publications on Russian federalism.
Douglas Verney is a Visiting Scholar in Political
Science, an Adjunct Professor in South Asia Regional
Studies, and a Fellow at the Center for the Advanced
Study of India at the University of Pennsylvania.
Previously he was Professor of Political Science
at York University in Britain and Visiting Professor
at Princeton University. Dr. Verney is the coeditor
of Multiple Identities in a Single State: Indian
Federalism in Comparative Perspective as well
as many articles, monographs, and chapters.
CONTENTS
Appendix
C
The
Prospect for Disintegration Is Significant
Alexandr Nemets
Science
Applications International Corporation
Summary
The
overall situation in Russia has deteriorated to
the point that separation is becoming the only
way of survival for many of the regions. By the
beginning of 1998, already Russia had become a
"half-broken country." From 1989 to
1998 human losses approached 14 million people,
the number of children below the age of five had
decreased almost two times, the medical service
and educational systems were devastated, and the
number of drug addicts had increased tenfold.
The technological potential has been half destroyed,
with the wiping out of modern industries and serious
depletion of industrial capital funds. Only export-oriented
raw materials producers have managed to survive.
GDP and industrial outputs have decreased by a
factor of 2, coupled with a very large foreign
and internal debt. At least 40 percent of the
population is living below the poverty line, the
rule of crime has replaced the rule of law, and
the central government has lost control of the
situation in the country. In addition, wealth
has become concentrated in several major cities
of European Russia, and the peripheral regions,
especially Eastern Siberia and the Russian Far
East, have become objects of exploitation for
the profit of Moscow’s political and economic
elite. This overall situation has created significant
pressures and movements for separation, especially
in the eastern regions of Russia. The recent financial
events of March-August 1998 have virtually eliminated
the chances for reversing the trends and have
made disintegration of Russia unavoidable. The
majority of the Russian people are ready for such
a development.
Russia Is a Virtually Broken Country
In
1998, Russia, due to continual deterioration since
1989, is a virtually broken country. This is due
to several factors.
If the 1989-98 growth in population were to have
occurred at the same level as in 1986-88, then
in this period the population would have increased
about 9.5 million. In reality, by preliminary
data, the "natural decrease" of population
during these 10 years was about 5 million people;
as a result, Russia lost at least 14 million people,
which would comprise about 10 percent of its present
population. It should be emphasized that the eastern
regions of the country, first of all, the Russian
Far East, suffered in maximal degree from depopulation
processes. It is expected that drastic deterioration
of the social-economic environment in Russia in
August 1998 (the "August 17 catastrophe")
will result in further decrease of birth rate
and growth of mortality, so by the year 2000 accumulated
human losses may approach 20 million. This will
occur even in the case of "peaceful"
situation development without serious internal
conflicts or large-scale famine.
Malnutrition is also a factor. Even before the
"financial catastrophe" of August 17,
1998, malnutrition transformed into a scourge
of Russia. In 1996-97, the average consumption
of meat products fell to the 1960 level, and fish
products to the 1950s level. Simultaneously, nutritional
value decreased from 3,200 to 3,300 cal a day
in 1990 to 2, 300 to 2,400 cal in 1997. And half
this quantity was provided by bread and potatoes.
It seems that the average nutrition level and
consumption of major food products in Russia "returned"
by 1997 to the beginning of the 1960s level.
The situation in food consumption was the worst
in the eastern regions of Russia, where in 1997,
and especially in the first half of 1998, a large
part of the people dealt with real hunger. The
situation became much worse, however, after August
17. Hunger, cold, and poverty are three major
threats to the Primakov government during the
winter 1998-99. The grain harvest in 1998 fell
to about 300 kg per capita, which was the lowest
level since 1946-47. In addition, after "August
17," food imports fell 2.5 to 3 times. Russia’s
own production of meat and milk also continues
to decrease. So in the winter, and especially
in the spring of 1999, Russia may deal with real
hunger, possibly complicated by food transportation
blockade on regional borders. And again, the Russian
Far East, especially the "Far Northeast,"
which is not connected by reliable railroads or
highways with other parts of Russia, has become
the most suffering zone.
The previous several years have also been characterized
by a drastic growth of tuberculosis, sex diseases,
and other dangerous diseases, coupled with a dramatic
devastation of medical service. The number of
tuberculosis (TBC) bearers in Russia increased,
officially, from less than 1 million in 1990 to
2.2 million in 1997 and 2.5 million by mid-1998.
But the real number may be as much as 5 million.
The situation is epidemic in the Russian Far Northeast;
in some districts of the Magadan region, TBC bearers
form up to 50 percent of the population. Between
January 1997 and October 1998, the number of people
with HIV in Russia sprang from about 3,000 to
more than 10,000. Russian officials warn that
the actual number of HIV cases may be up to 10
times higher and would increase several times
by 2000. The officially registered number of diabetics
in Russia is 2.1 million; in reality, the number
is 6-8 million, and they get almost no treatment.
By the beginning of 1998, Russia also had 5 million
insane persons. By the year 2003, there may be
10 million. The number of such persons in Russia
increased by four to five times between 1990 and
1997.
At the same time, medical service in Russia has
been devastated. In 1997, state expenses for medical
service decreased to about 3.4 percent of GDP;
it is expected that in 1998 this indicator may
fall to 2 percent of GDP. Large, six months or
more, wage arrears of medical personnel became
normal. After the "August 17 catastrophe"
funding of medical systems greatly decreased,
import of medicine also decreased several times,
and drugstores in Russian hospitals became empty.
Just as in all other fields, the situation in
the eastern regions is the worst, and in the Far
Northeast medical service has almost ceased to
exist.
There also has been a significant growth of alcoholism
and a tremendous growth of drug addicts. Consumption
of alcohol in Russia increased, by estimation,
a factor of 2 to 2.5 times between 1990 and 1997.
There are many millions of alcoholics in Russia
now, with the exact number unknown. By official
data, the number of Russian drug addicts reached
2 million, but by expert estimations 12 million.
During the last five years, the number of drug
users increased 14 times, with the growth even
greater in large cities. In some cities 10 to
30 percent of teenagers use drugs. The present
economic turmoil will provide new opportunities
for the spread of narcotics.
According to a nongovernment survey in October
1997, incomes of 40.2 percent of Russian people
were below the poverty level, officially equal
at this moment to 407,000 ruble a month (about
$70). They were starving or half starving. By
reliable estimations, the average salary in the
first half of 1998 decreased in real terms by
10 to 12 percent from the first half 1997, and
2.5 times from the 1990 level. Huge wage and pension
arrears have additionally reduced the small incomes
of the "common Russian." By July 1998,
wage arrears reached at least 1.5 months per worker,
while pension arrears reached about 1 to 1.5 months.
At the same time, unemployment increased to 8.3
million (about 11.5 percent).
The distribution of wealth is also important.
Wealth in Russia is geographically concentrated
in Moscow, Petersburg, Yekaterinburg, and Nizhniy
Novgorod, and the poverty is concentrated in the
peripheral regions of the east and the south.
The Russian Far East became an "absolute
poverty zone." In the first half of 1998
at least 60 percent of the people in the Russian
Far East were below the poverty level; in the
Far Northeast (to the north of Trans-Siberian
Railroad) this index was at least 80 percent.
By mid-1998, real average incomes were about 10
percent less than a year ago. After the "August
17 catastrophe," however, the situation worsened.
According to official data, the share of people
below the poverty line officially increased to
30 to 32 percent; by independent surveys, the
number was more than 50 percent. By estimation,
Russia’s average income and consumption, which
corresponded to the beginning of 1960s level before
the "August 17 catastrophe," fell by
the end of 1998 to the beginning of the 1950s
level. And, in the Russian Far East at least 70
percent of local people live now under the poverty
line.
Most of Russian cities and towns do not have enough
money to pay for power, coal, fuel, and oil. As
a result, in most parts of Russian regional and
district centers, temperature in apartments in
the winter season is rarely above 14 C. As in
all other cases, the Russian Far East suffers
the most. In 1995-97, Vladivostok lived without
power. This winter the city is trying to live
almost without heating. And, the Russian Far Northeast,
which accumulated only half the fuel necessary
for the 1998-99 winter, may transform into a real
"death camp" in January-February 1999.
Because of these factors, by the end of 1998,
the human potential of Russia was, without exaggeration,
half destroyed. The prospects for 1999-2000, however,
even for an optimistic scenario, which suppose
absence of social unrest and large-scale epidemics,
are even more grim. This period may well see additional,
and maybe very significant, population decrease
as the result of lack of food, fuel, medicine,
a reduction of living standards to the "century
old" level as a result of economic destruction
and the further reducing of the state social role
almost to zero, and a final devastation of the
medical service and education system. By the year
2000, Russian human potential may be irreversibly
destroyed. Only some very large-scale "assistance
from outside," including the lifting of Russian
debt burden and providing, in addition, many billion
dollars for Russian education, medical service,
and scientific-technical systems may prevent such
development.
Russia’s Almost Destroyed Technological Potential
Russia’s
science and educational systems have been devastated.
In real terms, science financing in Russia decreased
at least 12 times between 1990 and 1997. Evidently,
under the present "postcatastrophic environment,"
the Russian science and technology (S&T) sector
will be finally destroyed. The Russian education
system is half devastated. Education expenditures
were equal to about 2 to 3 percent of GDP in 1997,
which in real terms is about 25 percent of the
1990 level. Teachers wage arrears in many regions
increased by up to one year or more. The catastrophe
of "August 17" may finally destroy the
entire Russian educational system.
Russia’s high-tech industries (general machine
building, electronics, aircraft industry) are
vanishing, with the survival of "high-tech
remnants" (part of the space industry, some
branches of the weapon industry) on the basis
of foreign orders only. Between 1990 and 1997
the output of almost all major industrial goods
in the machine-building and electronics sectors
decreased from five to 10 times. The general machine-building,
electronics, power equipment, electrical appliances,
precision machinery, shipbuilding, and aviation
industries, in practice, ceased to exist by 1997.
1998 brought a new wave of deterioration to Russian
industry. Particularly, the machine-building and
electronics sectors further decreased their output
volume by at least 10 percent. These industries
already cannot produce goods of competitive characteristics
and quality.
Aging and destruction of industrial equipment,
and half destruction of the basic infrastructure
(power system, transport, urban infrastructure)
is the reality. In 1997, total capital investment
decreased four times from the 1990 level; this
included a sixfold decrease of investment in the
productive sector. Only 10 percent of present
Russian industrial capacities is suitable for
competitive products manufacturing. In 1998, total
capital investment, by preliminary data, will
decrease 12 to 15 percent from the 1997 level,
and there is little chance for situation improvement
in the following two years. By the year 2000,
most Russian industrial workshops may transform
into "empty boxes" containing metallic
trash. The capital fund in nonmanufacturing branches
of Russian industry, the construction sector,
transportation, and agriculture are in the same
or even worse shape than in the manufacturing
industry.
Macroeconomic indicators (GDP, industrial and
agriculture output, transportation volume, total
investment) also decreased back to 1950-60s level.
Russian GDP and industrial output by 1997 decreased
at least 55 percent from the 1990 level; as a
result, by reliable estimations, in 1997 the GDP
per capita returned back to the 1960-61 level.
The decrease was maximal in the peripheral regions,
especially in the Northern Caucasus and in the
Russian Far East. Real GDP decrease in 1998 may
be about 10 percent, and contraction of the Russian
economy will continue in 1999-2000. By the year
2000, Russia may return to the 1953-55 "average
Soviet" level.
In 1990-97, the GDP and industrial output of Russian
Far East decreased at least three times, and the
Far Northeast suffered, along with large population
decline, about fourfold economic contraction.
1998 "provided" new devastation even
for "fortunate" regions along the Trans-Siberian
Railroad: their fish, wood, and metals lost customers
both in Russia and in crisis-hit East Asia. What
for the Russian Far Northeast was once the main
economic activity and life was, in practice, paralyzed
by the yearend.
Export-oriented branches (the oil and gas, steel
and nonferrous metals) have become the last stronghold
of the Russian economy. In 1991-97, the oil and
gas, steel industry, nonferrous metals industry,
and some branches of the chemical industry reduced
their output volume for 10 to 50 percent "only,
because from 60 percent to 95 percent of this
production was reoriented toward foreign customers."
Even these branches, however, had to deal with
the aging of capital funds, related production
volume contraction, and other problems of Russian
industry. In October-December 1997, after world
prices fell drastically, even these branches became
money losers. The situation slightly improved
after a threefold devaluation of the ruble in
August-September. The export of oil, oil products,
and some other goods increased greatly, in parallel
with a very significant reduction of internal
consumption.
In 1998 even the prosperous Tyumen region felt
the consequences of both the Russian and the world
crisis. The situation in Eastern Siberia, which
used to export almost entirely its aluminum, copper,
and nickel, was much worse. The Russian Far East,
having "only" fish, timber, gold, and
diamonds, was almost destroyed. It is possible
to expect in 1999-2000 even further stagnation
or slow recession in the Tyumen region, a further
deterioration of the economy in East Siberia,
and an almost guaranteed economic collapse of
the Russian Far East.
Financial Catastrophe
Already
by the end of 1997, the Russian Government’s foreign
debt reached about $131 billion, with an additional
internal debt (in dollars) of $88.3 billion. Jointly,
the debt comprised more than 50 percent of the
1997 Russian GDP. By August 1998, the foreign
debt was more than $150 billion, and internal
debts approached $110 billion, comprising in total
about two-thirds of Russian GDP. The burden appeared
to be too large for the weak Russian economy.
Russia became bankrupt. In September 1998, the
foreign debt of the Russian Government was at
least 75 percent of GDP, and the total sovereign
debt exceeded annual GDP. This does not include
the "nonsovereign debt," the bad debts
of industry, agriculture, transport, and construction
sectors; pension arrears; the obligations of failed
banks to Russian depositors and investors; and
the huge foreign debt of Russian companies and
banks. The total value of these debts in September
1998 greatly surpassed the Russian annual GDP.
By the beginning of December, the Russian Government
had accumulated an additional $2-3 billion in
debts, mainly due to failure of interest payments
to German banks, the Paris Club, and so forth.
The foreign debt of the federal government reached
$154 billion, with the foreign debt of Russian
companies and banks adding $54 billion more. Jointly,
this is more than 100 percent of GDP. The price
of Russian debt obligations at the world financial
markets fell to 6 to 8 cents per $1. Simultaneously
it became known that the Russian state is incapable
of paying its $17 billion of principal debt and
interest due in 1998. The Russian financial situation
is, seemingly, hopeless.
The most probable prospects for 1999-2000 include:
official default on foreign debts, the growth
of total foreign debt up to 150 percent of GDP
level or more; the parallel growth of internal
debts to unpredictable volume; the breaking of
economic ties between Russia and the "outer
world"; and the final devastation of the
Russian economy. In any case, Russia will be incapable
to save either its human potential or its technological
potential from irreversible devastation.
"There Is No More State in Russia"
This
formulation became "common place" in
Russia after "August 17." Paper columnists,
Duma deputies, and governors of peripheral regions
use it almost daily. Indeed, the Russian state,
that is, the federal government, does not perform
almost any functions at all in regards to the
economy, the social sector, the army, crime stopping,
the handling of emergencies, foreign and internal
financial obligations, and so forth. It is possible
to say that the Yel’tsin regime is over, and the
Primakov government controls only the buildings
it occupies. So, who rules Russia? Is it time
to claim that crime and chaos are the only real
"supreme rulers" in Russia? In September
1997, one of the commissions of Congress issued
a detailed report about crime in Russia. But,
evidently, it gave only a slight impression of
what really is taking place, which is that Russia
has become literally a law-free society. A lot
of facts confirm this conclusion; it seems that
no serious counter arguments are available.
Separation is the only way of survival for the
peripheral regions. The strategy of the Russian
political and economic elite from 1992 to 1998
has deliberately shifted the crises to others
as their main survival tool. The shift included
several components, including:
-
A "vertical crisis shifting," which
pushed up to 40 to 50 percent of the population
below the poverty (physical survival) level,
with poverty concentrated in the rural zones,
district centers and other small towns, and,
first of all, in the peripheral regions located
most distant from Moscow.
- A
"horizontal crisis shifting," which
has concentrated wealth in Moscow and in some
other major cities of European Russia by devastating
and robbing the peripheral regions, especially
the Russian Far East, Eastern Siberia, the
regions of the European North, and the North
Caucasus zone. The share of people below the
poverty line in these regions increased from
50 percent in 1997 to 70 to 80 percent by
the end of 1998.
-
The establishment of a sophisticated mechanism
for exploiting the peripheral regions by:
concentrating maximal amounts of taxes in
the hands of the federal government and the
return of only a small part of money to the
regions in the form of "subsidies";
providing a superbeneficial environment for
Moscow-based banks and other privatization
structures to acquire the most lucrative export-producing
enterprises in the peripheral regions, resulting
in the concentration of most of the export
incomes in Moscow; establishing irrationally
high tariffs for power, transportation, and
so forth, resulting in a concentration of
money, extracted from the regions, in the
Moscow offices of Gazprom, United Energy (power)
System, Railway Ministry, and so forth; and,
finally, the extraction of money from the
regions by illegal activity (usually planned
and fulfilled from Moscow) of many kinds,
including bribes, racket, and financial schemes.
It is possible to estimate that money extortion
from peripheral regions, and first of all East
Siberia and the Russian Far East, by Moscow political
and business elite was the most essential component
of "Russian federalism" in 1992-98.
This practice naturally caused the growing resistance
of the peripheral regions, which transformed by
1997-98 into a mighty separatist movement. Regional
leaders, political and economic elites, and common
people understood properly that Moscow is driving
them to final devastation, so separation has become
the last and only means of survival.
The Situation in the Russian Far East and Siberia
The
general situation development in the Russian Far
East in 1992-98 is characterized by several major
trends:
-
Destruction of human potential here took place
in much greater scales than in other Russian
regions; it resulted in about a 10-percent
population decrease, including at least 25-
to 30-percent decrease in the "Far Northeast"
as the result of ultra-high mortality and
forced migration outflow.
- All
other processes of human potential destruction
in the Russian Far East also were much more
intensive than in other regions. As a result,
by 1998, malnutrition or, more exactly, hunger
became a common phenomena in the Far East,
and especially the Far Northeast. The food
situation in the regions along the Trans-Siberian
Railroad was just a little bit better due
to food supplies from China, which were often
of very bad quality. The situation took really
tragic forms in October-December 1998: the
winter supply of food was not even delivered
to the Far Northeast.
- The
medical system was almost devastated due to
the absence of financing (the situation here
was more serious than anywhere else in Russia).
The education system was also destroyed due
to the absence of financing, with again, the
Far East becoming the Russian leader.
- Alcoholism
and drug addiction in the Russian Far East
took especially dangerous forms due to Chinese
supplies. In particular, China became a source
of cheap drug-related medicines (ethedrin),
which are processed into strong drugs in numerous
underground laboratories on the Russian side
of the border. China also supplied very cheap
fake vodka in plastic packages.
- Vladivostok
became "famous" by collapse of its
water supply system and power-heating system.
Regions of the Far Northeast managed to survive
the winter of 1997-98 on "half supply"
of heating fuel. In 1998 they could not store
even half the necessary fuel stocks, and some
of them had to appeal to the UN for urgent
fuel assistance.
- By
the end of 1998, a large part of the Far Eastern
population was pushed to the brink of survival
or even beyond. "Natural development"
of existing trends (without large-scale assistance
from outside) will bring total devastation
and take the lives of hundreds of thousands
of people.
- Destruction
of the technological potential, established
during the last several decades, became one
more "distinguished feature" of
local reality: Far Eastern industry, except
for export-oriented raw material branches,
ceased to exist by 1998. Even the export-oriented
timber, fishing, and ferrous metals industries
were in decline but managed to survive until
the end of 1997, when the demand for these
goods in East Asia drastically reduced. The
local gold industry was devastated because
of overtaxation and long-term delays of payment
for gold from Moscow. In the Far East the
cost of industrial products, the share of
money-losing plants, and the volume of bad
debts per average enterprise are much higher
than anywhere else in Russia. Such a situation
was caused by superhigh tariffs for transportation,
fuel, and power. By the end of 1998, the agriculture,
construction, and transport sectors were also
almost entirely destroyed, even in the regions
along the Trans-Siberian Railroad.
Talks between Prime-Minister Primakov and local
leaders in November 1998 summarized the problems
of regions "to the east of Baikal lake."
"Does Russia Really Need the Far East?"
That was the main theme of conversation. Primakov
held a meeting with the "Association Far
East--Trans-Baikal Zone" (governors of the
Russian territories eastward of Lake Baikal).
The Head of the Association, the Khabarovsk Governor
V. Ishayev, has expressed the following opinion
of these regions:
-
Since 1992, the Russian Government has left
these regions to their own survival and never
really supported any local initiatives to
enter the Pacific markets. So, in 1998, as
a result of this policy, almost all local
industries, including export-oriented fishing,
timber industry, and the gold industry are
ceasing to exist. The situation is scarcely
better on the Trans-Siberian Railroad and
in seaports. The BAM railway is almost devastated.
The huge oil and gas projects Sakhalin 1 and
Sakhalin 2 may be also closed because of Moscow
policy. The Far Eastern military-industrial
complex is almost destroyed. The Russian military
districts (Far Eastern Army, Far Eastern Border
Guards, and Far Eastern National Guards) and
the Russian Pacific Navy have not received
federal funds since last June and are in a
disastrous situation. They are on the verge
of famine and receive food, heat, and electricity
support from only local governments and charity
organizations. Similar hardships are common
for all federal law enforcement agencies and
organizations.
-
The major Far Eastern seaports of Vostochnyy
and Vanino now work at 20 to 30 percent of
their capacity. Many Far Eastern (mainly,
Far Northeastern) territories suffer a disastrous
situation with their fuel, heating, electric
power, and food supplies.
-
The Russian Government takes the bulk of regional
revenue from the local territories in the
form of high federal taxes and does not return
back the funds due them. For example (in addition
to taxation robbery), the Japanese Government
loan for the development of the Far Eastern
economy was stolen by Moscow. Simultaneously,
the Far East witnesses the fast economic development
of neighboring China and watches the increase
of Chinese ethnic population in the Russian
Far East and the penetration of Chinese capital.
-
Never in Russian history (Russian or Soviet)
has the government treated the Far East in
this way. The Far East is thirsty for the
creation of a better industrial and (foreign)
investment environment and for fair distribution
of revenues with Moscow. It is the last chance
for the Russian Government to hold onto these
territories) inside Russia. Today the Russian
Government has only two alternatives: take
emergency measures for saving the Far Eastern
economy or develop and implement a plan for
evacuation of Russians (that is, the entire
local population) from these regions. (Ishayev
meant, in the second case, that the entire
Russian Far East would be instantly occupied
by China.)
Primakov has assured the regions that now he understands
the local problems but will not give any promises.
It is possible to conclude that the Far Eastern
regions gave "the last warning" to Primakov.
At the same time, they understood that the Russian
Far East cannot rely on the Russian Government
and should save itself by all means available,
as if this zone is independent already.
Within the Far Northeast, the social-economic
situation in each of the major subregions is as
follows:
- Chukotka:
Over the last 10 years the local population
has decreased from about 150,000 to about
60,000. Most of the "nonindigenous"
population was evacuated to the "mainland."
Timber mines, mercury and uranium mines, and
part of the gold mines were deliberately destroyed.
The remnants of the local golden industry
fail to survive. No other industry is "afloat."
In 1997 the local governor proposed to evacuate
the remnants of the ethnic Russians and to
transform Chukotka into a "territory
directly ruled by the Russian president."
(In practice this means lending Chukotka to
a Russian oil company for exploitation of
the local sea shelf’s rich hydrocarbon resources.)
By 1996-97 the region’s social sector, including
the education and medical systems, was broken,
with at least 80 percent of the population
living below the poverty line. By the end
of 1998, the local population dealt with terrible
lack of food and fuel. A further catastrophe
in winter 1998-99 will only be averted if
there is foreign assistance.
- Kamchatka:
During the last several years, the local population
on the peninsula has decreased at least 10
percent to about 500,000. All industrial and
agriculture branches ceased to exist except
for fishing and fish processing. Most fishery
vessels sell the fish in US, Canadian, or
Japanese seaports without paying any taxes
to Moscow. This means that, for the most part,
the Kamchatka economy has already been effectively
integrated into the US, Canadian, or Japanese
economies. In October-November, the peninsula
dealt with acute lack of food and absence
of fuel, which led to collapse of the power
supply system and caused the appeal of local
Duma deputies to the UN for urgent aid. Kamchatka
may survive the winter of 1998-99 only if
food/fuel assistance from the United States,
Canada and/or Japan is available. Kamchatka
has large gas resources on the western coast
shelf, but their development may be accomplished
only on the base of sophisticated US/Canadian
technology.
- Magadan:
In 1991-98 the population decreased from about
240,000 to about 120,000. All local industries
except for, to some degree, fishing and gold/silver
extraction are smashed. The social sector
is broken. Tuberculosis and other diseases
are "flourishing." By 1997 the fraction
of people below the poverty line definitely
exceeded 70 percent. The region has little
chance to survive this winter without serious
foreign assistance, and the local government
will eagerly accept such aid. According to
preliminary data, the Magadan shelf of the
Sea of the Okhotsk is rich with oil and gas.
The region is engaged already in negotiations
with South Korean and some other foreign companies
about hydrocarbon resources development.
- Sakha-Yakutiya:
From 1991 to 1998 the population decreased
"only" about 5 percent to 970,000 to 980,000,
due to the comparatively strong social policy
of Yakutia president Nikolayev. In 1996-96
the local government had several "fighting
rounds" with Moscow over the ownership
of the ALROSA company, engaged in diamonds
extraction, and over the distribution of incomes
from diamonds export; it was a real "new
Chechnya" campaign, only without the
direct use of weaponry. The republic receives
almost all its income from the gold and diamond
industries, but Moscow "confiscated,"
especially in 1996-98, most of this income.
As a result, in 1996-97 the local social sphere
suffered greatly, and most local people fell
below the poverty line. In addition, in the
spring 1998, Yakutia suffered a large-scale
flood, with losses so great that Yakutia appealed,
via some Moscow papers, for assistance from
Russia and abroad. Yakutia meets the winter
of 1998-99 with few resources of stock and
fuel. At the beginning of November, Canada
provided $10 million aid to Yakutia, but the
republic needs at least 10 times more. Yakutia
has huge natural gas resources, and Japanese
companies are interested in their development.
On the other hand, active penetration of Chinese
shuttle traders in Yakutia and the emerging
"Chinese settlement" in Yakutsk
became a serious complicating factor in this
region in 1997-98.
- Sakhalin:
Sakhalin Island and the Kurile islands
are rich with coal and timber. The surrounding
sea is rich with fish, and the Sakhalin shelf
contains huge hydrocarbon resources, with
development actively started in 1995-98 by
US and Japanese companies. In 1997-98, however,
the local economy (the coal and timber industry,
fish processing, and oil and gas extraction
at the northern part of the island) was almost
entirely smashed. In addition, huge forest
fires in the summer-autumn 1998 caused new
losses for the local economy. At least 75
percent of about 600,000 local people are
living below the poverty line in the second
half of 1998. The Sakhalin government is counting
on aid from Alaska and Hokkaido in the expected
very hard winter of 1998-99. The situation
on the Kurile island chain is even worse than
that of Sakhalin Island.
-
The Okhotsk and Ayan districts of the Khabarovsk
region, Tynda, Zeya, the Selemdzha districts
of Amur region (BAM zone), and the sea shelf
of the northern Khabarovsk districts,
are rich with hydrocarbons. These districts
have large timber resources; however, the
"usual" problems of the Russian
Far Northeast and forest fires in May-October
1998 made survival of these districts very
problematic; The Khabarovsk governor Ishayev
will eagerly accept any assistance from the
US-Japanese side (but not from China).
-
The situation in the BAM zone of the Amur
region is scarcely better (according to
Ishaev’s conversation with Primakov, cited
above). This zone has an unusually perfect,
for the Far Northeast, infrastructure with
the BAM railroad as its backbone. The zone
is rich with hydropower resources, coal, timber,
and various minerals. At the same time, the
penetration or, more exactly, large-scale
expansion of the Chinese into this region
is an extremely serious factor.
- Eastern
Siberia is a "soft reproduction" of the
Russian Far East devastation model. It has
many resources for development, but Moscow
takes almost all local incomes from the export
of aluminum, copper, nickel, and platinum.
As a result, the general social-economic situation
in Eastern Siberia is on the "average
Russian" level or even worse. The "deceived
expectations" of local people caused
very strong anti-Moscow sentiments in 1996-97
and especially in 1998.
-
The Krasnoyarsk and Irkutsk regions
have huge oil and gas resources and count
on large-scale investment, first of all from
the United States and Japan, for local hydrocarbons
development. On other hand, Chinese penetration
was significant, at least in the Irkutsk region,
in 1995-98.
General Separation Trends in the Eastern Regions
in 1996-98
The
emergence of a "separation potential"
in the Primor’ye (Maritime) region and the Khabarovsk
region already took place in 1995-96. The heavy
failures of Russian troops in Chechnya in January-March
1995 showed the weakness of the federal government;
as a result, the Far Eastern governors became
bold in their disputes with Moscow. Maritime (Primor’ye)
region governor Nazdratenko was the first Far
Eastern leader to directly blame Moscow for local
problems. More exactly, he claimed in March 1995
that Moscow is selling Primor’ye to China in the
guise of border-settling agreements and that Moscow
policy caused destruction of the local economy
and infrastructure. Almost simultaneously, Khabarovsk
governor Ishayev started his own "secret
complot" against Moscow. He tried to concentrate
control over the local economy and finances in
his own hands, while diminishing the "Moscow
share." At the same time, Ishayev tried to
establish strong ties to the political and business
circles of the United States and Japan.
The withdrawal of Russian troops from Chechnya
in August 1996 fueled disintegration moods in
the peripheral regions of Russia. Growth and maturing
of the secessionist mood in the Russian Far East
took place at the end of 1996 to the autumn of
1997. Already by this time in the eastern regions,
from Chita to Vladivostok, who were suffering
from social-economic devastation and poverty,
Moscow was considered to be the major enemy; a
large part of the local people dreamed to be rid
of the "weak, greedy, corrupt and criminal"
Moscow.
Several local leaders, including first of all
Nazdratenko in Vladivostok, and possibly, Ishaev
in Khabarovsk, Yakutia president Nikolayev, Magadan
governor Tsvetkov, and Sakhalin governor Farkhutdinov
began considering the opportunities for separating
from Russia by transforming into independent states.
To prepare for this, they began to establish local
stocks of precious metals as the base for future
issuing of independent currencies and to put local
power systems under their control. In addition,
during the period autumn 1996 to autumn 1997,
the above-listed Far Eastern leaders were engaged
in the following centrifugal activities:
-
Khabarovsk governor Ishayev more or less "took
on his balance" the local troops of the
Russian army and Border Guards. Simultaneously,
as the chairman of the Far Eastern and Trans-Baikal
Association, he tried to transform this group
of regions into a united block opposing Moscow.
Ishayev considers the United States and Japan
as the political and economic protectors of
the future Far Eastern Republic.
-
Maritime governor Nazdratenko produced a new
series of anti-Chinese and anti-Moscow statements.
Moscow’s attempts to limit his authority during
the summer-autumn of 1997 failed; Moscow’s
defeat gave new courage to other "rebels."
-
Magadan governor Tsvetkov established strong
ties to potential investors--in the local
gold, silver, oil, fish industries--from the
United States, Japan, and Canada and concluded
several large-scale investment agreements.
Simultaneously, despite fierce resistance
from Moscow, he transferred the Magadan seaport
to local control and established an independent
regional Precious Metals Fund.
-
The struggle between Moscow and the Yakutia
Republic for the control of local resources,
first of all diamonds, took, an especially
ugly form from December 1996 to September
1997. Moscow used all means available, including,
in practice, the economic blockade of Yakutia.
Finally, Yakutsk, after suffering huge economic
losses, yielded to Moscow pressure and in
October 1997 signed a new agreement with De
Beers about diamond export on Moscow-dictated
terms. But, by the end of 1997, Yakutia had
its own Golden Fund and even started the use
of golden chips as salary payment. Simultaneously,
Yakutiya upgraded its ties to US, UK, and
Japanese business circles and reportedly made
definite attempts to establish serious political
ties to these countries.
The case of the "Eastern Arc" (including
the Sakhalin region and Kamchatka and Chukotka
peninsulas) is especially interesting. Sakhalin
in March 1997 temporarily ceased tax payment to
Moscow. By the summer of 1997, along with the
growth of US and Japanese business presence at
Sakhalin Island and a new deterioration of the
local economy and the social sector, secessionist
moods became very strong. By autumn 1997 the South
Kurile islands population openly claimed a merger
with Japan. Kamchatka’s fishing industry effectively
"separated" from Russia and integrated
into the US-Japanese economies, and the desires
of local people moved in the same direction. In
Chukotka a large part of the local population
and some of the districts’ heads were actively
considering "selling off" this region
to the United States. Shortly, the entire Eastern
Arc, as the zone most distanced from Moscow and
most close to the United States, Canada, and Japan
(not only geographically, but in economic and
political aspects also) was by autumn 1997 dreaming
for secession from Russia and merging (in any
form) with the United States or Japan.
Other Separatist Flames
By
the end of 1997, separation trends in Eastern
Siberia and in the Northern Caucasus Muslim-dominated
republics were also growing. Under the environment
of a new economic crisis, the "flame of separatism"
embraced not only the Russian Far East but also
Eastern Siberia, the national republics of the
Northern Caucasus, the Muslim-dominated republics
of the Volga-Ural zone, and even Petersburg, with
animosity toward Moscow becoming the dominating
factor in all these regions. The dismissal in
March 1998 of Chernomyrdin’s government, which
had very strong ties to regional leaders, became
a crushing (maybe, final) blow to the integrity
of Russia. In January-March 1998, the situation
in these regions was as follows:
-
The separatist movement became very strong
in Petersburg, with the adoption of the "Petersburg
Constitution" by the local Duma demonstrating
the influence of separatist forces.
-
In 1997 and the beginning of 1998, the Tatarstan
Republic president Shaimiyev was transformed
into an "almost sovereign ruler,"
and the share of ethnic Russians among the
local leaders shrank.
-
In February 1998, Kalmykia Republic president
Ilyumjinov dismissed the republican government
and put all executive structures under his
own direct control, thus reducing Moscow’s
influence, which had already been weakened
by that moment to almost zero.
-
The Tuva Republic (the most southern part
of Eastern Siberia) reestablished shamans
and lamas (Buddhist monks) communities with
serious influence as executive advisers. The
republic effectively "fell out"
of Russia and was considering codification
of this separation.
-
By spring 1998, the national (Muslim-dominated)
republics of the Northern Caucasus, namely
(in addition to Chechnya), Dagestan, Ingushetia,
Kabardino-Balkaria, Karachaevo-Cherkessia,
and Adygea, became de facto independent from
Moscow. They began establishing their own
armies, not controlled by Moscow. Some of
them even started guerilla war against the
ethnic Russian-dominated Stavropol region.
In reality, Moscow had been holding these
regions inside Russia only by paying tribute,
just as in the 16th and 17th century Moscow
had to pay tribute to the Crimean khan. Simultaneously
the Russian-dominated Stavropol, Krasnodar,
and Rostov regions were forming Cossack troops
to fight, without Moscow support, the Muslim
republics.
By the spring of 1998, it became clear that even
such "centralizing" systems as a united
power supply system, a united money system, the
army, and a legal system based on the Russian
Constitution became extremely weak and could not
keep Russia together. Disintegration became the
unavoidable prospect. Leaders of the Russian Far
East regions (mainly along the Trans-Siberian
Railroad, and first of all, Khabarovsk governor
Ishayev) started open discussions about the Far
East reestablishing itself as a separate republic.
They attempted to reestablish control over local
armed forces. Ishayev published an interview in
a Moscow paper that warned Moscow that "the
Russian Far East is ready for separation or is
separating already." By spring 1998, the
influence of Moscow in the Russian Far East was
reduced, in practice, to zero. Cessation of attacks
on Maritime governor Nazdratenko demonstrated
that point perfectly. During the period September
1997 to April 1998, the political-economic elites
of the Far Northeast regions had also upgraded
their ties to foreign (first of all, US, Japan,
Canada, and UK) business circles in the form of
raw materials export and investment project realization.
Simultaneously, local political elites (especially,
inside the "Eastern Arc") did their
best to establish strong ties to the governors
of Alaska and the state of Washington, Hokkaido
island, and the British Columbia Province.
These trends were continued during the period
May-August 1998. Separatist trends in the peripheral
regions were stimulated by the new severe worsening
of the financial and social-economic situation
in Russia and, especially, the following:
-
The blockade of major railroads, connecting
the center with Eastern Siberia, the Far East,
the Northern Caucasus, and the northeast of
European Russia in May-June.
-
The June events in Kalmykia (the murder of
an opposition journalist) and Bashkortostan
(the comedy-like reelection of acting president
Rakhimov) showed that local leaders, without
exaggeration, had been transformed into sovereign
rulers.
-
The victory of General Aleksandr Lebed in
the Krasnoyarsk governor elections in May
transformed the Krasnoyarsk region into a
"consolidation center" of separatist
forces all over Russia. This victory also
demonstrated that Moscow is very weak and
that peripheral regions are capable of speaking
with Moscow "as equals."
-
The capture of the government building in
Makhachkala, capital of Dagestan Republic
in May 1998 demonstrated that Moscow’s authority
in Dagestan and other North Caucasian Muslim
republics had diminished, in practice, to
zero.
By August 1998, several "centers of force,"
in the form mainly of regional governors’ associations,
emerged. These centers evidently will determine
the geography of the forthcoming disintegration
of Russia:
-
The Moscow center (Mayor Yu. Luzhkov), which
covers most of European Russia (except for
Northern Caucasus, north of European Russia,
Tatarstan, and Bashkortostan).
-
The Yekaterinburg center (Governor Rossel),
which covers most of the Ural zone.
-
The group of national (Muslim) republics in
the Northern Caucasus and Kalmykia, each of
which is moving toward independence or had
already reached de facto independence by August
1998.
-
The Tatarstan (President M. Shaymiyev) and
Bashkortostan (President M. Rakhimov) Republics
as "associated members" inside Russia.
-
The participants in the Siberian Agreement,
covering Western Siberia.
-
The Krasnoyarsk center (Governor A. Lebed),
covering Eastern Siberia. At the same time,
this center "screens" the Russian
Far East from Moscow.
-
The Khabarovsk center (Governor V. Ishayev),
covering the Far Eastern and Trans-Baikal
regions along the Trans-Siberian Railroad.
-
The Yakutia Republic (President M. Nikolayev),
Magadan region (Governor M. Tsvetkov), and
Sakhalin region (Governor I. Farkhutdinov).
Each of these regions approached de facto
independence and was considering formal independence.
-
Nobody’s regions" (without strong leaders),
awaiting further situation development in
Moscow and in neighboring regions. These include
the Murmansk region, the Karelia Republic,
the Arkhangel’sk region in north European
Russia, and the Far Eastern regions of Kamachatka
and Chukotka.
Separation Trends After August 17, 1998
After
the financial crisis of August 17, the financial
capabilities of the Moscow center shrank almost
to zero. Moscow lost, in practice, all the tools
of situation influence, let alone control, in
the peripheral regions. Half the Russian regions
(local legislature assemblies), especially in
the Russian Far East, demanded Yel’tsin’s resignation.
Several eastern regions permanently ceased tax
payments to Moscow. In practice they started the
final steps toward real (codified) independence.
The leaders of Yakutia, Magadan, Sakhalin, and
Khabarovsk are behaving more or less as independent
rulers, both in internal policy and in ties to
foreign countries.
Simultaneously, Moscow agreed with the transformation
of Russia into a de facto confederation by praising
the role of the regional governors’ associations.
These associations of regions will rapidly transform
into new economic and political entities. Particularly,
the Far Eastern Association--at least, part of
it, covering the regions along the Trans-Siberian
Railroad-- became the real prototype of the Far
Eastern Republic and the last "intermediate
point" before codification of this republic.
The Far Northeast regions, eventually smashed
by cold, hunger, and poverty, are engaged in a
desperate search for large-scale foreign assistance
and a reliable foreign protector (United States,
Canada, Japan). The local leaders are awaiting
the slightest support from abroad to start formal
separation from Russia. The Kalmykia Republic
in mid-November attempted to claim formal independence
from Moscow. This became an "action signal"
for many peripheral regions. Indeed, on November
19-20 in Khabarovsk, Far Eastern leaders made
a "last warning (ultimatum)" to Primakov.
In October-November, Russian and US media started
discussing the possibility of "exchange of
Chukotka, Kamchatka, and Sakhalin for Russian
foreign debts." At the same time, Russian
media started publishing detailed scenarios of
disintegration during the spring 1999.
Finally, it appears certain that the Russian Far
East and, first of all, the Far Northeast, are
abandoning or have already abandoned Moscow’s
sphere of influence and are actively trying to
enter the US (US-Canadian-Japanese) sphere of
influence. The most decisive stages of this process
may take place in first months of 1999. Eastern
Siberia may follow the Russian Far East example
by mid-1999. Precise developments in other regions
cannot be forecast at this moment.
CONTENTS
Appendix
D
The
Prospect of Disintegration Is Low
Thomas E. Graham, Senior
Associate
Carnegie Endowment for International Peace
Ever
since the demise of the Soviet Union, Russians
and foreign observers have debated whether Russia
itself would eventually break up. The debate has
ebbed and flowed with the intensity of the political
struggle in Moscow. There is a logic to this:
disarray in Moscow has allowed the more ambitious
regional leaders to seize more power locally while
compelling the more timid to assume more responsibility
as a matter of survival.
Thus, the bitter struggle between President Yel’tsin
and the Supreme Soviet that dominated Russian
politics from late 1992 until the latter’s abolition
in October 1993 accelerated centrifugal forces.
The referendum approving the new Constitution
in December 1993 and elections to the national
parliament the same day reinforced centripetal
trends. Concerns about the country’s unity were
finally eased in February 1994 when Tatarstan,
the only region save for Chechnya that had refused
to participate in the elections, signed a bilateral
agreement with Moscow declaring that it was part
of the Russian Federation. Indeed, one can argue
that Moscow’s decision to use force against Chechnya
late in 1994 was at least in part a consequence
of Moscow’s growing confidence that there were
no serious separatist movements elsewhere in the
country.
The
debate reemerged with renewed intensity in the
wake of the financial meltdown, and ensuing economic
and political turmoil, of this past August. Regional
leaders acted unilaterally in setting price controls
and forbidding the export of certain products,
primarily foodstuffs, from their regions (although
in both cases the implementation was not always
effective). Some spoke of creating local currencies
or gold reserves. Yevgeniy Primakov, at the time
of his confirmation as Prime Minister in September,
warned that there was a growing danger of Russia’s
splitting up and vowed to take tough steps to
avert it.[1]
Whether Primakov was exaggerating for political
effect is an open question. Be that as it may,
a review of fundamental conditions and trends
suggests that Russia is unlikely to break up in
the next decade, even though the state will remain
weak or grow weaker. There are numerous factors--economic,
social, and political--that tend to unify the
country, and there are no outside powers now prepared
to exploit Russia’s strategic weakness for territorial
aggrandizement, nor are any likely to emerge soon.
The real issue is how power will be distributed
within Russia and the implications of that distribution
for Russia’s ability to govern itself effectively
and to project power abroad.
Disintegration and Failed States
At
the outset, two terms need to be distinguished:
disintegration and failed states.
For the purposes of this paper, "disintegration"
signifies the breakup of Russia into two or more
de facto independent states, none of which approximates
today’s Russia in potential power, or the annexation
of Russian territory by other states that leaves
Russia at a significantly lower lever of potential
power than today, or some combination of the preceding
two events.
By
this definition, the secession of Chechnya (which
has already occurred de facto), or of Kaliningrad
Oblast (which is likely over the next decade),
or of almost any other region by itself would
not constitute the breakup of Russia, although
each would create serious difficulties for the
Russian state.[2] By contrast, the loss of the territory east of Lake
Baikal would constitute breakup because it would
deny Russia access to significant quantities of
strategic raw materials and access to the Asia-Pacific
region.
A
"failed state" is a dysfunctional state,
one that cannot carry out the core functions of
a modern state, such as defense, preservation
of domestic order, maintenance of a monetary system,
tax collection and income redistribution, and
provision of minimal social welfare standards.
The crumbling of a state, however, is not the
same as the breakup of a country, although countries
with weak states are at risk of disintegrating.
In fact, most failed, or failing, states in the
world today remain at least de jure independent,
even if, in many cases, their unity and borders
are under threat.[3]
For a failed state to break up, one of two things
would have to occur: (1) centers of power would
have to form within the state and begin to act
like independent states in relation to the outside
world, or (2) outside forces would have to intervene
to carve it up.
Breakup
Is Rare
It
is also worth stressing at the outset how rarely
states have disintegrated in the modern era, especially
since the recent breakup of the Soviet Union,
Yugoslavia, and Czechoslovakia would suggest otherwise.
But the rule for the past 200 years has been that
states endure while empires collapse. The French
Revolution legitimized the principle of national
self-determination that eroded the foundations
of the great European empires and gave birth to
dozens of states. That principle lies at the heart
of the post--Second World War international system,
it is enshrined in the UN Charter, and it gave
impetus to the decolonization of Africa and Asia.
In many ways, the breakup of the Soviet Union
can be viewed as the culmination of this process,
particularly if Moscow’s domain is considered
to have included the East European satellites,
as well as the constituent Soviet republics.
At
the same time, the international community has
defended the principles of territorial integrity
and sovereignty, and the United Nations is committed
to preserving the independence and unity of its
members. It has devoted considerable effort to
holding together failed states, such as Somalia,
Sudan, Liberia, Zaire, and Cambodia. Similarly,
the United States and European institutions have
gone to great lengths to maintain the semblance
of a unified Bosnian state, even though a cogent
argument could be made for breaking it up on the
grounds of national self-determination.
As
a rule, states that have broken up--even if only
temporarily--have done so as the result of outside
intervention rather than of domestic factors.
Poland, for example, was partitioned by Germany
and the Soviet Union in 1939. Germany was split
in two by the Western Powers and the Soviet Union
after the Second World War. More recently, Bangladesh
split from Pakistan in 1971 after a civil war
in which it received decisive assistance from
India. The breakup of Czechoslovakia is the exception,
a nonviolent divorce resulting primarily from
internal factors.
More
to the point, the disintegration of ethnically
homogenous states for domestic reasons is unheard
of. The only such state that has come close to
breaking up for domestic reasons in the past two
centuries is the United States, where differences
over states rights led to civil war. With 82 percent
of its population ethnic Russian, the Russian
Federation falls into this class of ethically
homogenous states. That hardly guarantees that
it will not disintegrate, but it does put the
onus on those who believe it will to demonstrate
why Russia should prove to be the exception to
modern historical experience.
Situation
in Russia Today
It
is not difficult to understand why Russian elites
themselves worry so much about their country’s
unity. Over the past decade, one key trend in
Russia has been the fragmentation, devolution,
decentralization, erosion, and degeneration of
power, both political and economic. In part, it
has been the consequence of conscious policy decisions
first by Gorbachev and then by Yel’tsin to modernize
the Russian economy and political system by dismantling
the hypercentralized Soviet state. In part, it
has been an effect--and a cause--of the accelerated
economic decline those policies precipitated.
In part, it has been the result of global trends,
especially in telecommunications and information
technologies, that have tended to diffuse power
worldwide. But, in larger part, it has been the
byproduct of bitter interelite rivalries and governmental
disarray in Moscow, or "the Center"
as it is often called, that have eroded the Center’s
capacity to govern effectively and allowed regional
leaders to seize greater power locally and businessmen
to appropriate vast assets across Russia.
As
a result, the Center no longer controls the political
and economic situation. It no longer reliably
wields power and authority, as it has traditionally,
through the control of the institutions of coercion,
the regulation of economic activity, and the ability
to command the loyalty of or instill fear in the
people.
The
institutions of coercion are in abysmal conditions.
A combination of slashed budgets, neglect, corruption,
political infighting, and failed reform has put
the military on the verge of ruin, according to
a leading Duma expert on the military.[4] The Ministry of Internal Affairs (MVD), Russia’s
police force, is universally considered to be
deeply corrupt and ineffective. Even the Federal
Security Service (FSB), the successor to the once
feared KGB, has faced serious budget constraints
and experienced a sharp decline in its ability
to monitor and control society.
Moreover,
the Center does not enjoy the monopoly over the
legitimate institutions of coercion it once did,
nor does it necessarily reliably control those
nominally subordinate to the Center. Military
commanders are known to cut deals with regional
and local governments in order to ensure themselves
uninterrupted supplies of energy and provisions.
Some military garrisons are supported with money
from local entrepreneurs. Military officers and
MVD and FSB officials routinely moonlight to earn
extra income--or to cover for unpaid wages. As
a result, the loyalty of the institutions of coercion
to the central government--even of the elite units
around Moscow--is dubious. This does not mean
that they would carry out the will of local leaders--there
is little evidence that they would--but rather
that they would not necessarily defend the central
government in a crisis.
As
is the case with the institutions of coercion,
the national financial system is in a shambles.
It has collapsed for several reasons, including
the Center’s inability to collect taxes from both
firms and individuals and its effort to cover
the budget deficit through foreign borrowing and
the issuance of various domestic debt instruments
that amounted to little more than a massive pyramid
scheme. The Center has not been able to meet its
budget obligations for the last several years;
in particular, wage arrears to budget workers,
including soldiers, doctors, teachers, and other
professionals, is a persistent problem.[5] The sharply devalued ruble remains
the national currency, but the overwhelming majority
of commercial transactions, up to 75 percent by
some estimates, take place outside the monetized
sector, in the form of barter or currency surrogates.[6]
Finally,
for the first extended period in modern Russian
history, the Center is neither feared nor respected.
The lack of fear is evident in the pervasive tax
and draft evasion, as well as in such mundane
matters as the widespread nonobservance of traffic
regulations. The lack of respect is evident in
the general disregard for national holidays and
monuments and the pervasive public distrust of
high-ranking government officials and central
government institutions, repeatedly recorded in
public opinion polls.[7]Over the past year and
a half, the internecine struggles for control
of the central government among competing Moscow-based
political/economic coalitions, most notably the
vicious conflict between groups led by privatization
mastermind Chubays and media magnate Berezovskiy,
fueled public cynicism about the Center. At the
same time, Yel’tsin’s deteriorating health, both
physical and mental, has reinforced pervasive
doubts about the Center’s strength and will.
In
short, the Center now has only a minimal capacity
to mobilize--or extract--resources for national
purposes, either at home or abroad, and that capacity
continues to erode.
The
Center’s weakness is now generally recognized
in the West, and much attention has been focused
on regional heads and the leaders of major financial-industrial
groups, or the so-called "oligarchs,"
as the real holders of power. This view, however,
tends to exaggerate the role of both the regional
heads and the oligarchs and overlooks the great
disparities in power relationships across Russia.
Regional heads may be the most powerful at the
regional level, but their power is limited by
local elites, much as the president is constrained
by national and regional elites. The mayors of
administrative centers, especially if popularly
elected, and the heads of major enterprises, particularly
if they provide the bulk of funds to the regional
budget, often act as effective counterweights
to governors or republic presidents. The electoral
cycle from September 1996 through February 1997
provided a graphic illustration of these limits:
Incumbents won only 24 of 50 elections.[8]
Similarly, the oligarchs have been facing growing
competition from regional businessmen for well
over a year. The financial meltdown of August
and the ensuing economic turmoil have further
undermined their positions, in part because their
banks were heavily invested in the GKO market
unlike most regional banks.[9]
Moreover,
regional leaders have not capitalized on their
newfound possibilities by developing joint positions
vis-a-vis the Center. The eight inter-regional
associations have been noteworthy primarily for
their lack of concrete actions.[10] The Federation Council, where the regional
leaders sit ex officio, has not developed the
corporate identity the State Duma has. Regional
leaders prefer to spend their few days in Moscow
each month not debating legislation but individually
lobbying government officials for funds for their
regions. Although dozens of agreements have been
signed between regions, economically and politically
they are growing increasingly isolated from one
another. For example, according to one study,[11] only a quarter of a region’s product is sent
to other Russian regions, slightly less is exported
abroad, and the rest is consumed locally. Similarly,
regional media, which are now successfully competing
with Moscow-based national media for local audiences,
are extremely difficult to obtain outside of the
area where they are published, while regional
TV generally has quite limited coverage.[12]
Indeed,
for most regional leaders, the preferred channel
of communication is the vertical one with Moscow
not the horizontal one with their colleagues.
They have focused on signing bilateral treaties
with Moscow delineating powers suited to their
own situations, rather than on developing a uniform
set of rules governing federal relations. This
has led to the creation of what is commonly called
an "asymmetric federation." This focus
on relations with Moscow is understandable, given
that most regions depend on transfers from the
Center to meet their budgetary needs and that
they must compete aggressively for the dwindling
funds the Center can allocate.[13]
The
devolution of power, contrary to widespread impressions
in both Russia and the West, has not created strong
regions as the Center weakened. Rather, the situation
is better summed up as follows: "Weak Center--weak
regions." That is, the striking feature of
the Russian political and economic system is the
absence of concentrations of power anywhere in
the country capable alone of controlling the situation
or of creating a coalition for that purpose. In
this, Russia offers an imperfect parallel with
feudal Europe, where power was also greatly dispersed.[14] For Russia, as it
was for feudal Europe, the central question is
where power will finally be concentrated with
what consequences for the country as a whole.
Unifying Factors
In
this absence of strong, organized centers of power,
with the central state growing ever weaker, what
holds the country together? There are several
factors, including:
- Geography.
Simply put, Russia is located a long way from
any place that matters outside the former
Soviet Union. Only 12 of 89 regions border
on a country that was not once part of the
Soviet Union (Murmansk and Leningrad Oblasts
and Karelia border on Finland or Norway; Kaliningrad
Oblast borders on Poland; the Altay Republic,
Tuva, Buryatia, Chita and Amur Oblasts, the
Jewish Autonomous Oblast, and Khabarovsk and
Primorskiy Krays border on China, Mongolia,
or North Korea). In addition, Sakhalin Oblast,
an island, lies close to Japan. By contrast,
all of the 15 constituent republics of the
Soviet Union bordered on foreign countries
or open seas. As a result, the overwhelming
majority of regions, should they declare themselves
independent, would find themselves isolated
within Russia or the former Soviet Union.
This acts as a major disincentive to secession.
- Economic
Infrastructure. The so-called "natural
monopolies," Gazprom (the giant gas monopoly),
RAO YeES (the United Power Grid), and the
railroads, all have networks that link the
country together, as does the river transport
system. Those areas not served by these networks
are isolated regions in the Far North.[15]
- Production
Processes. Most Russian enterprises operate
on the basis of inputs from other Russian
firms. The financial meltdown of August and
the subsequent threefold devaluation of the
ruble have reinforced this tendency by greatly
increasing the cost of imports. As a general
rule, the more technologically complex the
production process, the more extensive the
territory from which inputs are drawn. Airplane
construction, for example, depends on inputs
from dozens of firms across Russia; brick
production is a local matter. In addition,
in an economy increasingly dependent on barter,
enterprises have been compelled to devise
complex networks within Russia (or, more broadly,
within the CIS) both to sell their goods and
acquire inputs.[16]
- Fiscal
and Monetary System. Most Russia’s regions
depend on transfers from the federal government
to fund their activities. In 1997 only eight
regions did not receive money from the federal
Fund for the Financial Support of Subjects
of the Federation, although even these received
funds for federal programs carried out on
their territory.[17]
Moreover, despite repeated threats by regional
leaders to withhold taxes from Moscow, doing
so has proved difficult in practice.[18]
Meanwhile, the demonetization of the economy
both fragments the economic space and isolates
regions from the outside world.
- Political
Structures. The Constitution provides
a framework for governing the country, even
if most bilateral agreements between Moscow
and individual regions, many regional charters,
and much local legislation violate constitutional
provisions. These violations are better seen
not as challenges to the country’s unity but
as part of a multifaceted negotiation on building
federal structures. Regional leaders speak
primarily of the proper balance of power between
Moscow and the regions, not of independence.
- Party-list
voting for the State Duma also tends to
unify the country, because regional parties
are forbidden to participate. Moreover, the
one party with a dense countrywide network
and a mass following, the Communist Party,
supports a strong central state.
- Finally,
power is dispersed across the country.
Unlike the Soviet Union and other countries
that have broken up, Russia lacks two or more
organized major centers of power vying for
control of the country (which at the extreme
could lead to civil war) or seeking to set
up independent states. There are no significant
separatist forces outside of Chechnya and,
perhaps, Dagestan, but even the formal independence
of either of those regions would not tear
the country apart. Tellingly, major regional
figures, such as Moscow Mayor Luzhkov, Krasnoyarsk
Governor Lebed, Orel Governor Stroyev, and
Saratov Governor Ayatskov, harbor ambitions
to become president or at least influential
players in national-level politics.
Political
Will and the International Environment
Most
of the conditions listed above were, of course,
true for the Soviet Union; nevertheless it broke
up. Why should Russia’s fate be any different?
The reason lies in two areas: political will and
the international environment.
As
polls consistently demonstrate, the overwhelming
share of the population and elites of Russia wants
to live in a Russian state. To the extent that
Russians do not recognize the Russian Federation
as their country, it is because they believe Russia
is something larger--including much, if not all,
of the former Soviet Union--not because they want
to see the Federation collapse.[19] In large part, this sentiment is a consequence of a common history,
culture, and customs. Russia is an ethnically
homogenous state, much more so than the Soviet
Union was. For example, according to the last
census (1989), ethnic Russians accounted for just
over 50 percent of the Soviet population; they
account for over 80 percent of the Russian population.
Muslims accounted for about 18 percent of the
Soviet population but only 8 percent of Russia’s
population.[20]
Moreover, ethnic Russians are the largest ethnic
group in all but 11 of the 32 ethnically based
subjects of the Federation. They form an absolute
majority in 18.
As
for the international environment, there is no
outside power that is prepared to exploit Russia’s
weakness and interfere aggressively inside the
country, and no such power is likely to emerge
for several years at a minimum. In part, this
is so because perceptions of Russia’s weakness
lag behind realties. Russia still enjoys a reputation
for power among its neighbors, and the conventional
wisdom is that Russia will eventually regain sufficient
power to back its Great-Power pretensions. The
large nuclear arsenal, although deteriorating,
still serves as a symbol of power sufficient to
deter major outside intervention.
In
addition, most of Russia’s neighbors are focused
on their own domestic agendas rather than external
expansion (for example, Iran and China) or on
rivalries with states other than Russia (for instance,
Pakistan and India). Some states (for example,
Turkey, Iran, and Saudi Arabia) are undoubtedly
fishing in the muddy waters of the Caucasus, including
territories within the Russian Federation, but
their strategic goals are limited to the Caspian
region and Central Asia. There is little desire--or
capacity--to penetrate further into Russia. In
sharp contrast to the way outsiders exploited
the Baltic and Ukrainian nationalist movements
to undermine the Soviet Union, any outside group
that might seek Russia’s dismemberment lacks such
potent levers to use inside Russia today.
Finally,
no major power sees the breakup of Russia in its
interests, even if many may see benefits from
a weak Russia. The United States and Europe are
already concerned about the implications of Russia’s
weakness for the safety and security of weapons
of mass destruction and the materials to build
them and about the potential for major instability
in Russia, which would inevitably spill over into
Europe. Russia’s breakup would only exacerbate
both those problems. For its part, China is seeking
to build partner-like relations with Russia, both
because of the technology transfers it hopes to
receive and because it believes it can use Russia
to help counter US ambitions in East Asia.
Indicators
of Future Developments
Overall,
this review indicates that Russia is far from
being on the verge of breaking up. Nevertheless,
the consequences of that happening would be so
vast that the situation bears close watching.
What in particular should we be watching?
First
of all, we should be especially attentive to changes
in patterns of communication, interaction, and
subordination. So far, we have witnessed primarily
the breakdown and localization of old patterns,
not the creation of new ones. The creation of
new patterns should indicate where concentrations
of power are emerging in Russia; how the importance
of Moscow, as compared to other centers in Russia,
is changing for specific regions; and whether
any regions are being drawn into the orbit of
outside powers. For example:
- Should
the residents of Vladivostok start placing
more phone calls to Beijing than to Moscow
or vacationing more often in Japan than in
Russia, that would be a new pattern suggesting
that Russia’s integrity was under stress.
- How
often and to where regional leaders travel
would give a good sense of their priorities.
Increased travel to neighboring regions would
indicate the growth of horizontal ties as
a counterbalance to Moscow. Increased travel
abroad to a single country would indicate
a relative diminution of Moscow’s standing
and could give early warning of a threat to
the country’s unity.
- The
construction of new roads and pipelines can
tighten a region’s links to the rest of Russia
or to a neighboring state.
- The
widespread circulation of Chinese yuan
as a parallel currency in Russia’s Far East
would suggest closer ties to China and would
pose a threat to Moscow’s role. (That Russians
might prefer dollars, an international currency,
to the ruble is understandable, but preferring
the yuan is an entirely different matter.)
Contrariwise, the rublization of the economy
would indicate Moscow’s growing influence
and would augur well for the country’s unity.
- The
breakdown of military discipline, or the refusal
to obey orders, is obviously a serious matter
for Moscow. An even more serious situation
would arise, however, should military commanders
start to take orders from regional authorities.
Second,
we need to monitor the attitudes of outside powers
to Russia and to consider events that might lead
to a radical change in their propensity to intervene
in Russia:
- How
would the United States and other powers react
to widespread instability or violence in Russia?
Would they intervene as the Great Powers did
during the Civil War of 1918-21 to protect
their interests?
- What
would be the response to a second Chernobyl’
on Russian territory, or to clear indications
that the system for securing Russia’s nuclear
arsenal had grievously broken down? Would
the United States feel compelled to intervene
to secure the nuclear facilities or weapons?
How would the United States respond if regional
authorities requested our intervention but
Moscow was opposed?
- How
would China, the United States, and Japan
react to the depopulation of Russian territory
east of Lake Baikal? The region is rich in
resources, but sparsely populated. Moreover,
there has been an outflow with the sharp economic
downturn since 1991. And, the outflow is likely
to accelerate if Russia makes progress toward
a market economy with greater labor mobility.
The region, it should be recalled, was settled
largely for strategic, not commercial, reasons;
only considerable investment in building market
infrastructure--unlikely any time soon--would
anchor the population there. At what point,
if ever, would any of the three powers be
tempted to move in to exploit the resources
or to deny them to another power?
Concluding
Thoughts
Russia
has always held surprises for those bold or foolish
enough to predict its future. Few observers foresaw
the demise of the Soviet Union a decade in advance,
and many thought it unlikely even as little as
a year or two before it occurred. Many Western
observers failed to realize the country was in
decline, although that was the reason Gorbachev
and his allies began the effort to reform it.
Now the situation is even more complex. Both Russia
and the world are changing rapidly as the world
adjusts to the end of the Cold War and deals with
the ramifications of economic globalization. Much
can occur--and some undoubtedly will--that will
upset even the best argued forecasts. Nevertheless,
a few judgments appear to have good chances of
standing up over the next decade:
- First,
Russia is unlikely to break up. Domestic conditions
and the international environment militate
against such a development, and changes in
either that would lead to the contrary outcome
themselves appear unlikely.
- Second,
if, contrary to expectations, Russia does
break up, it will not break up in the way
the Soviet Union did. The Soviet Union was
undone by movements for national self-determination,
unleashed by the loosening of political restraints
Gorbachev deemed necessary to modernize the
economy, and Moscow’s unwillingness to use
massive force to restrain them. National self-determination
is not a grave threat to the unity of the
ethnically homogenous Russia.
- Third,
Russia’s weakness vis-a-vis the outside world
is a greater threat to its unity than any
domestic divisions. In other words, Russia
is more likely to be pulled apart than to
break up, however unlikely either development
might seem at the moment. Consequently, outside
perceptions of what is happening in Russia
will be a critical factor in determining its
future.
- Fourth,
the most likely scenario for Russia over the
next decade is further muddling down. But
muddling down to what? The question is not
trivial, because the way Russia muddles down
will have significant consequences for its
longer term future and its role in the world.
The key question will be how and where power
is concentrated, if it is concentrated at
all.
If
power is not concentrated, if it continues to
fragment and erode, then Russia is on the path
to becoming a failed state. That will increase
the chances that Russia will break up over the
longer run; it will raise grave risks for any
nonproliferation regime. These issues are well
recognized in the West. Little attention has been
given, however, to another matter. Such a development
would mark a tectonic shift in geopolitics. There
would be considerable opportunity costs because
Russia would be lost as a power that could help
manage the rise of China in East Asia, stabilize
Central Asia, and consolidate Europe and manage
its emergence as a world power.
If
power is concentrated, that can happen either
in Moscow (or one other place) or in several regions.
In the first instance, Russia would be repeating
its historical pattern of recentralization after
a period of weakness, drift, and chaos. Recentralization,
the return to a unitary state, would almost inevitably
entail a resort to more authoritarian methods
of governance, as it has throughout Russian history.
Whether it could generate an efficient economy
is another matter. Much would depend on how open
such a Russia would remain to the outside world.
The
second path would mark a radical break with Russian
history and provide the opportunity for building
a genuine federation. It could also lead to the
peaceful augmentation of the Federation through
the voluntary ascension of regions from other
former Soviet states. Like Russia, all these countries
are suffering from weak government; all are experiencing
their own forms of fragmentation and erosion of
power. Should Russia appear to be rebuilding itself
in a way that guarantees considerable local autonomy
while promising the benefits of economies of scale,
many regions might be tempted to join it, especially
in Belarus, eastern Ukraine, and northern Kazakhstan,
which enjoy considerable historical, ethnic, and
cultural ties to Russia. Such a federation could,
much like the United States although not at the
same level, build a prosperous domestic economy
while creating the capability to project considerable
power abroad.
Footnotes
[1] See
RFE/RL Newsline, September 14, 1998.
[2] Few regions alone are critical to Russia’s overall
potential. One exception is the resource-rich
East Siberian region of Krasnoyarsk, the second-largest
in territory. Its secession would effectively
split the country in two, separating the Russian
Far East from European Russia.
[3] On failed states, see Gerald B. Helman and Steven
R. Ratner, "Saving Failed States,"
Foreign Policy 89 (Winter 1992/93), pp.
3-20. The authors draw examples from the Third
World, but indicate that failed states could
emerge among the successors to the Soviet Union.
[4] Aleksey G. Arbatov, "Military Reform
in Russia: Dilemmas, Obstacles, and Prospects,"
International Security 22/4 (Spring 1998),
pp. 83-85.
[5] Central Bank of the Russian Federation, "Osnovnyye
napravleniya yedinoy gosudarstvennoy denezhno-kreditnoy
politiki na 1999 god," Kommersant-Daily,
December 8, 1998, p. 3-6). (http://www.mosinfo.ru:8080/news/kd/98/12/data/kd120822.html)
[6] According to a study of over 200 enterprises by
the Interdepartmental Commission on Balances
of the Federal Bankruptcy Service, nearly three-quarters
of their earnings are in the form of barter
or promissory notes, that is, they lie outside
of the monetized sector. See "Zhizn’ vzaymy,"
Ekspert No. 8 (March 2, 1998), p. 13.
[7] Yu. A. Levada, "Vlast’ i obshchestvo v Rossii
glazami obshchestvennogo mneniya, in N.A. Zorkaya,
ed., Vlast’ i obshchestvo: Resul’taty reprezentativnogo
oprosa zhiteley Rossii: Analiz i materialy
(Moscow: The Moscow School for Political Studies,
1998), pp. 11-25.
[8]See Michael McFaul and Nikolay Petrov, eds., Politicheskiy
al’manakh Rossii 1997, Vol. 1 (Moscow: Moscow
Carnegie Center, 1998), pp. 117-118, 271, 279-281.
[9] Gleb Baranov, "Banki iz pervoy desyatki popali
vo vtoruyu tysyachu," Kommersant-Daily,
December 12, 1998.
[10]See Vladimir Lysenko, Razvitiye federativnykh
otnosheniy v sovremennoy Rossii (Moscow:
Institute of Contemporary Politics, 1995), pp.
61-65. See also Vladimir Shlapentokh, Roman
Levita, and Mikhail Loiberg, From Submission
to Rebellion: The Provinces Versus the Center
in Russia (Boulder, Colorado: Westview Press,
1997), pp. 197-200.
[11] A. Labrov, L. Polishchuk, and A. Treyvish,
"Ekonomicheskiye problemy stanovleniya
federalizma v Rossii," Paper prepared for
the Conference on "Contemporary Russian
Federalism: Problems and Prospects," Moscow
Carnegie Center, December 10, 1997, p. 4 and
attached map.
[12] Anatole Shub, "Seven Russian Midsize
Media Markets," Audience Analysis
[Washington, DC: US Information Agency, April
7, 1997 (M-53-97)]. See also Vyacheslav Kostikov,
"Imperator i solov’i," Nezavisimaya
gazeta, March 4, 1998.
[13] For commentary on these bilateral treaties,
see the essays by M. N. Guboglo, S. M. Shakhray,
and V. N. Lysenko in M. N. Guboglo, ed., Federalizm
vlasti i vlast’ federalizma (Moscow: IntelTekh,
1997), pp. 108-193.
[14] See Samuel P. Huntington, Political
Order in Changing Societies [New Haven and
London: Yale University Press, 1968 (paperback
edition, 5th printing, 1971)], pp. 148-176.
[15] See the maps in USSR Energy Atlas
(Central Intelligence Agency, January 1985),
pp. 32, 55, and 59, and in Atlas SSSR
(Moscow: The Main Administration of Geodesy
and Cartography under the USSR Council of Ministers,
1996), pp. 166-167.
[16] For an example of barter arrangements,
see Michael Gordon, "As Ruble Withers,
Russians Survive on Barter," The New
York Times, September 6, 1998.
[17] See A. Lavrov, V. Shuvalov, A. Neshchadin,
and E. Vasilishen, eds., Predprinimatel’skiy
klimat regionov Rossii: Geografiya Rossii dlya
investorov i predprinimateley (Moscow: Nachala-Press,
1997), p. 126.
[18] On the tax-collecting system and budget
federalism, see Alexander Morozov, "Tax
Administration in Russia," East European
Constitution Review (Spring/Summer 1996),
pp. 39-47; and Maksim Rubchenko, "Mify
byudzhetnogo federalizma," Ekspert
No. 45 (November 30, 1998). (http://koi.www.expert.ru/current/number2/98-45-62/data/tishkov.htm)
[19] See Russian Independent Institute for
Social and National Problems, Massovoye soznaniye
rossiyan v period obshchestvennoy transformatsii:
real’nost’ protiv mifov, Moscow, January
1996, pp. 11-14. The survey on which this analysis
is based was conducted in October 1995. See
also N.A. Zorkaya, ed., Vlast’ i obshchestvo,
p. 26. The survey on which this analysis
is based was conducted in February/March 1998.
[20] For further thoughts on the social
and culture factors that unite Russia, see Al’gis
Prazauskas, "Slagaeyemyye gosudarstvennogo
yedinstva," Pro et Contra 2/2 (Spring
1997), pp. 22-29.