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

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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.

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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

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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

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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

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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

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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 disint