LR on PP

The question of Kazakhstan’s future is an important wedge issue in the development of the neo-Cold War between the U.S. and Russia. Some have argued that the U.S. should confront Kazakhstan for its failure to democratize at a more rapid rate. In her latest installment on Publius Pundit, La Russophobe argues the opposite. Check it out and add your thoughts in the comment section regarding this important and under-discussed topic.

Thanks for reading La Russophobe !

Berezovsky Pokes a Finger in Putin’s Eye

Radio Free Europe reports that if the Kremlin thought it had exiled oligarch Boris Berezovsky holed up in U.K., it was mistaken:

Kyrgyzstan’s opposition claims that Berezovsky, who is wanted in Russia on criminal charges he denies, secretly flew into the country from London in July for talks with President Kurmanbek Bakiev. Bakiev has denied ever meeting with the Russian businessman. Kyrgyzstan’s 24.kg news agency today reproduced a letter that the head of a Kyrgyz parliamentary commission that is probing Berezovsky’s alleged contacts with Bakiev received on October 20 from Russia. In it, a senior official with the Russian Prosecutor-General’s Office says Moscow has obtained confirmation that Berezovsky visited Kyrgyzstan for a few hours on July 29. The official says Kyrgyz authorities did nothing to arrest Berezovsky, thus violating “their international obligations.”

Interesting talk about “international obligations” from Russia. Apparently, Russia had no obligation not to poison Ukrainian presidential candidate Viktor Yushchenko, nor any obligation to refrain from instigating a coup d’etat against Georgian President Mikhail Saakashvili, but Kyrgyzstan is “obligated” to arrest Berezovsky on trumped-up charges everyone in the whole country is guilty of so that he can be sent to Siberia and not seek to oppose the rise of the neo-Soviet Union. Kyrgyzstan, of course, is yet another country which has turned its face to the West and which Russia is seeking to reel back in to the neo-Soviet fold.

Kyrgyzstan also gave Russia a poke in the eye following the Russian protest, responding:

Kyrgyz General Prosecutor Kambalary Kongantiyev said he had no information about Berezovsky’s visit. “If they (Russia) wanted a criminal investigation they should have asked us to detain Berezovsky. There was no such request,” he said. Russia has made clear it expects ex-Soviet states to help detain him. Berezovsky has won asylum in Britain.

In other words, if you hotshot Russians can’t keep track of him, that’s not our problem, it’s yours.

Thanks for reading La Russophobe !

Berezovsky Pokes a Finger in Putin’s Eye

Radio Free Europe reports that if the Kremlin thought it had exiled oligarch Boris Berezovsky holed up in U.K., it was mistaken:

Kyrgyzstan’s opposition claims that Berezovsky, who is wanted in Russia on criminal charges he denies, secretly flew into the country from London in July for talks with President Kurmanbek Bakiev. Bakiev has denied ever meeting with the Russian businessman. Kyrgyzstan’s 24.kg news agency today reproduced a letter that the head of a Kyrgyz parliamentary commission that is probing Berezovsky’s alleged contacts with Bakiev received on October 20 from Russia. In it, a senior official with the Russian Prosecutor-General’s Office says Moscow has obtained confirmation that Berezovsky visited Kyrgyzstan for a few hours on July 29. The official says Kyrgyz authorities did nothing to arrest Berezovsky, thus violating “their international obligations.”

Interesting talk about “international obligations” from Russia. Apparently, Russia had no obligation not to poison Ukrainian presidential candidate Viktor Yushchenko, nor any obligation to refrain from instigating a coup d’etat against Georgian President Mikhail Saakashvili, but Kyrgyzstan is “obligated” to arrest Berezovsky on trumped-up charges everyone in the whole country is guilty of so that he can be sent to Siberia and not seek to oppose the rise of the neo-Soviet Union. Kyrgyzstan, of course, is yet another country which has turned its face to the West and which Russia is seeking to reel back in to the neo-Soviet fold.

Kyrgyzstan also gave Russia a poke in the eye following the Russian protest, responding:

Kyrgyz General Prosecutor Kambalary Kongantiyev said he had no information about Berezovsky’s visit. “If they (Russia) wanted a criminal investigation they should have asked us to detain Berezovsky. There was no such request,” he said. Russia has made clear it expects ex-Soviet states to help detain him. Berezovsky has won asylum in Britain.

In other words, if you hotshot Russians can’t keep track of him, that’s not our problem, it’s yours.

Thanks for reading La Russophobe !

Berezovsky Pokes a Finger in Putin’s Eye

Radio Free Europe reports that if the Kremlin thought it had exiled oligarch Boris Berezovsky holed up in U.K., it was mistaken:

Kyrgyzstan’s opposition claims that Berezovsky, who is wanted in Russia on criminal charges he denies, secretly flew into the country from London in July for talks with President Kurmanbek Bakiev. Bakiev has denied ever meeting with the Russian businessman. Kyrgyzstan’s 24.kg news agency today reproduced a letter that the head of a Kyrgyz parliamentary commission that is probing Berezovsky’s alleged contacts with Bakiev received on October 20 from Russia. In it, a senior official with the Russian Prosecutor-General’s Office says Moscow has obtained confirmation that Berezovsky visited Kyrgyzstan for a few hours on July 29. The official says Kyrgyz authorities did nothing to arrest Berezovsky, thus violating “their international obligations.”

Interesting talk about “international obligations” from Russia. Apparently, Russia had no obligation not to poison Ukrainian presidential candidate Viktor Yushchenko, nor any obligation to refrain from instigating a coup d’etat against Georgian President Mikhail Saakashvili, but Kyrgyzstan is “obligated” to arrest Berezovsky on trumped-up charges everyone in the whole country is guilty of so that he can be sent to Siberia and not seek to oppose the rise of the neo-Soviet Union. Kyrgyzstan, of course, is yet another country which has turned its face to the West and which Russia is seeking to reel back in to the neo-Soviet fold.

Kyrgyzstan also gave Russia a poke in the eye following the Russian protest, responding:

Kyrgyz General Prosecutor Kambalary Kongantiyev said he had no information about Berezovsky’s visit. “If they (Russia) wanted a criminal investigation they should have asked us to detain Berezovsky. There was no such request,” he said. Russia has made clear it expects ex-Soviet states to help detain him. Berezovsky has won asylum in Britain.

In other words, if you hotshot Russians can’t keep track of him, that’s not our problem, it’s yours.

Thanks for reading La Russophobe !

Berezovsky Pokes a Finger in Putin’s Eye

Radio Free Europe reports that if the Kremlin thought it had exiled oligarch Boris Berezovsky holed up in U.K., it was mistaken:

Kyrgyzstan’s opposition claims that Berezovsky, who is wanted in Russia on criminal charges he denies, secretly flew into the country from London in July for talks with President Kurmanbek Bakiev. Bakiev has denied ever meeting with the Russian businessman. Kyrgyzstan’s 24.kg news agency today reproduced a letter that the head of a Kyrgyz parliamentary commission that is probing Berezovsky’s alleged contacts with Bakiev received on October 20 from Russia. In it, a senior official with the Russian Prosecutor-General’s Office says Moscow has obtained confirmation that Berezovsky visited Kyrgyzstan for a few hours on July 29. The official says Kyrgyz authorities did nothing to arrest Berezovsky, thus violating “their international obligations.”

Interesting talk about “international obligations” from Russia. Apparently, Russia had no obligation not to poison Ukrainian presidential candidate Viktor Yushchenko, nor any obligation to refrain from instigating a coup d’etat against Georgian President Mikhail Saakashvili, but Kyrgyzstan is “obligated” to arrest Berezovsky on trumped-up charges everyone in the whole country is guilty of so that he can be sent to Siberia and not seek to oppose the rise of the neo-Soviet Union. Kyrgyzstan, of course, is yet another country which has turned its face to the West and which Russia is seeking to reel back in to the neo-Soviet fold.

Kyrgyzstan also gave Russia a poke in the eye following the Russian protest, responding:

Kyrgyz General Prosecutor Kambalary Kongantiyev said he had no information about Berezovsky’s visit. “If they (Russia) wanted a criminal investigation they should have asked us to detain Berezovsky. There was no such request,” he said. Russia has made clear it expects ex-Soviet states to help detain him. Berezovsky has won asylum in Britain.

In other words, if you hotshot Russians can’t keep track of him, that’s not our problem, it’s yours.

Thanks for reading La Russophobe !

Berezovsky Pokes a Finger in Putin’s Eye

Radio Free Europe reports that if the Kremlin thought it had exiled oligarch Boris Berezovsky holed up in U.K., it was mistaken:

Kyrgyzstan’s opposition claims that Berezovsky, who is wanted in Russia on criminal charges he denies, secretly flew into the country from London in July for talks with President Kurmanbek Bakiev. Bakiev has denied ever meeting with the Russian businessman. Kyrgyzstan’s 24.kg news agency today reproduced a letter that the head of a Kyrgyz parliamentary commission that is probing Berezovsky’s alleged contacts with Bakiev received on October 20 from Russia. In it, a senior official with the Russian Prosecutor-General’s Office says Moscow has obtained confirmation that Berezovsky visited Kyrgyzstan for a few hours on July 29. The official says Kyrgyz authorities did nothing to arrest Berezovsky, thus violating “their international obligations.”

Interesting talk about “international obligations” from Russia. Apparently, Russia had no obligation not to poison Ukrainian presidential candidate Viktor Yushchenko, nor any obligation to refrain from instigating a coup d’etat against Georgian President Mikhail Saakashvili, but Kyrgyzstan is “obligated” to arrest Berezovsky on trumped-up charges everyone in the whole country is guilty of so that he can be sent to Siberia and not seek to oppose the rise of the neo-Soviet Union. Kyrgyzstan, of course, is yet another country which has turned its face to the West and which Russia is seeking to reel back in to the neo-Soviet fold.

Kyrgyzstan also gave Russia a poke in the eye following the Russian protest, responding:

Kyrgyz General Prosecutor Kambalary Kongantiyev said he had no information about Berezovsky’s visit. “If they (Russia) wanted a criminal investigation they should have asked us to detain Berezovsky. There was no such request,” he said. Russia has made clear it expects ex-Soviet states to help detain him. Berezovsky has won asylum in Britain.

In other words, if you hotshot Russians can’t keep track of him, that’s not our problem, it’s yours.

Thanks for reading La Russophobe !

Russia’s Regional Income Gap Spells Disaster

In his Moscow Times column, Nikolai Petrov, scholar in residence at the Carnegie Moscow Center, exposes the horrifying income gap between Russia’s various regions, which threatens to bring the country to the verge of civil war.

The way in which a civil servant’s income is determined today is largely a holdover from the Soviet nomenklatura system. Then, as now, this consisted of a relatively small base salary and a much larger set of payments and benefits granted by management. This is a way of guaranteeing a bureaucrat’s loyalty to his superiors.

Budget relations between the three main levels of power — federal, regional and municipal — operate on much the same principle. Fiscal federalism and the need to improve inter-budgetary relations have been talked about for many years, but the degree to which regional budgets depend on the federal budget and, in turn, municipal budgets on regional budgets is higher than ever. This is particularly evident at present as budgets for 2007 are being worked out at all levels.

Seventy of Russia’s 88 regions receive subsidies from the federal budget, meaning that only one region out of every five is a net contributor. Unlike the federal budget, which is running a surplus, a large number of regional budgets are weighed down with large deficits, and the load is only increasing in many cases. The draft budget recently submitted for the Kemerovo region, for example, forecasts a deficit of 13 percent, despite the fact that the deficit has been dropping steadily in recent years and is running at 3 percent this year. The reason for this is a fall in profit tax revenues from companies whose bottom lines have been hurt by climbing electricity and fuel prices.

Analysts have warned that inequality between regions will only increase as gross domestic product continues to grow. A report by Krasnoyarsk Governor Alexander Khloponin to a recent session of the State Council noted that “the gap between regions in terms of per capita GDP, by which the figure for the richest regions was 64 times that for the poorest in 2000, approached a factor of 300 in 2005!”

Budgetary revenues for the 10 richest regions were three times those for the poorest regions in 2005. The 10 richest regions accounted for more than half of the total regional debt, which was 460 billion rubles ($17.2 billion) at the end of last year. So economic differences between the regions are growing against a backdrop of constantly increasing volumes of income transfers. Whereas federal transfers to the regions accounted for 9 percent of total federal spending in 1999, the figure was more than 18 percent in 2001 and about one-third of all spending in 2005.

The situation is even worse at the municipal level. Recent data from the Audit Chamber show that 40 percent of all budget projections call for deficits and that the average budget income in 2006 dropped by almost 44 percent from the 2005 figure. This was due to a redistribution of revenue sources between the different levels.

Federal economic systems are generally characterized by subsidy systems, where lower levels are only given powers and made responsible in areas they can actually fund. Responsibility for areas they can’t afford to fund is transferred upward. In Russia, unfortunately, it works the other way around: Those powers and responsibilities the federal or regional levels are either unable or unwilling to fund are transferred downward. The money to cover these areas is transferred down either too late or not in full.

The problem with regional budgets that are heavily subsidized yet still run deficits is twofold: There is a shortfall in revenue sources to cover the governments’ mandated responsibilities and the resources that are at hand are used inefficiently. The Kremlin generally ignores the first problem and tries to solve the problems by focusing exclusively on the second. In this it is acting in the only way it knows — by increasing federal control and replacing one set of administrators with another.

Beginning in January, the administration of subsidized regions will be transferred to an external administrator in Moscow. The government will recommend administrators to be appointed for a term of one year by the Supreme Arbitration Court in regions where total debt exceeds the region’s revenues by more than 30 percent, or where regional revenues consist mainly of federal transfers. The external administrators will perform an analysis of the regional budget and draft a plan for escaping the crisis. The list of regions that will end up with this external financial administration has not yet been published, but the most likely candidates are those in the Southern Federal District, where transfers comprise up to 70 or 80 percent of budget revenues.

Thanks for reading La Russophobe !

Russia’s Regional Income Gap Spells Disaster

In his Moscow Times column, Nikolai Petrov, scholar in residence at the Carnegie Moscow Center, exposes the horrifying income gap between Russia’s various regions, which threatens to bring the country to the verge of civil war.

The way in which a civil servant’s income is determined today is largely a holdover from the Soviet nomenklatura system. Then, as now, this consisted of a relatively small base salary and a much larger set of payments and benefits granted by management. This is a way of guaranteeing a bureaucrat’s loyalty to his superiors.

Budget relations between the three main levels of power — federal, regional and municipal — operate on much the same principle. Fiscal federalism and the need to improve inter-budgetary relations have been talked about for many years, but the degree to which regional budgets depend on the federal budget and, in turn, municipal budgets on regional budgets is higher than ever. This is particularly evident at present as budgets for 2007 are being worked out at all levels.

Seventy of Russia’s 88 regions receive subsidies from the federal budget, meaning that only one region out of every five is a net contributor. Unlike the federal budget, which is running a surplus, a large number of regional budgets are weighed down with large deficits, and the load is only increasing in many cases. The draft budget recently submitted for the Kemerovo region, for example, forecasts a deficit of 13 percent, despite the fact that the deficit has been dropping steadily in recent years and is running at 3 percent this year. The reason for this is a fall in profit tax revenues from companies whose bottom lines have been hurt by climbing electricity and fuel prices.

Analysts have warned that inequality between regions will only increase as gross domestic product continues to grow. A report by Krasnoyarsk Governor Alexander Khloponin to a recent session of the State Council noted that “the gap between regions in terms of per capita GDP, by which the figure for the richest regions was 64 times that for the poorest in 2000, approached a factor of 300 in 2005!”

Budgetary revenues for the 10 richest regions were three times those for the poorest regions in 2005. The 10 richest regions accounted for more than half of the total regional debt, which was 460 billion rubles ($17.2 billion) at the end of last year. So economic differences between the regions are growing against a backdrop of constantly increasing volumes of income transfers. Whereas federal transfers to the regions accounted for 9 percent of total federal spending in 1999, the figure was more than 18 percent in 2001 and about one-third of all spending in 2005.

The situation is even worse at the municipal level. Recent data from the Audit Chamber show that 40 percent of all budget projections call for deficits and that the average budget income in 2006 dropped by almost 44 percent from the 2005 figure. This was due to a redistribution of revenue sources between the different levels.

Federal economic systems are generally characterized by subsidy systems, where lower levels are only given powers and made responsible in areas they can actually fund. Responsibility for areas they can’t afford to fund is transferred upward. In Russia, unfortunately, it works the other way around: Those powers and responsibilities the federal or regional levels are either unable or unwilling to fund are transferred downward. The money to cover these areas is transferred down either too late or not in full.

The problem with regional budgets that are heavily subsidized yet still run deficits is twofold: There is a shortfall in revenue sources to cover the governments’ mandated responsibilities and the resources that are at hand are used inefficiently. The Kremlin generally ignores the first problem and tries to solve the problems by focusing exclusively on the second. In this it is acting in the only way it knows — by increasing federal control and replacing one set of administrators with another.

Beginning in January, the administration of subsidized regions will be transferred to an external administrator in Moscow. The government will recommend administrators to be appointed for a term of one year by the Supreme Arbitration Court in regions where total debt exceeds the region’s revenues by more than 30 percent, or where regional revenues consist mainly of federal transfers. The external administrators will perform an analysis of the regional budget and draft a plan for escaping the crisis. The list of regions that will end up with this external financial administration has not yet been published, but the most likely candidates are those in the Southern Federal District, where transfers comprise up to 70 or 80 percent of budget revenues.

Thanks for reading La Russophobe !

Russia’s Regional Income Gap Spells Disaster

In his Moscow Times column, Nikolai Petrov, scholar in residence at the Carnegie Moscow Center, exposes the horrifying income gap between Russia’s various regions, which threatens to bring the country to the verge of civil war.

The way in which a civil servant’s income is determined today is largely a holdover from the Soviet nomenklatura system. Then, as now, this consisted of a relatively small base salary and a much larger set of payments and benefits granted by management. This is a way of guaranteeing a bureaucrat’s loyalty to his superiors.

Budget relations between the three main levels of power — federal, regional and municipal — operate on much the same principle. Fiscal federalism and the need to improve inter-budgetary relations have been talked about for many years, but the degree to which regional budgets depend on the federal budget and, in turn, municipal budgets on regional budgets is higher than ever. This is particularly evident at present as budgets for 2007 are being worked out at all levels.

Seventy of Russia’s 88 regions receive subsidies from the federal budget, meaning that only one region out of every five is a net contributor. Unlike the federal budget, which is running a surplus, a large number of regional budgets are weighed down with large deficits, and the load is only increasing in many cases. The draft budget recently submitted for the Kemerovo region, for example, forecasts a deficit of 13 percent, despite the fact that the deficit has been dropping steadily in recent years and is running at 3 percent this year. The reason for this is a fall in profit tax revenues from companies whose bottom lines have been hurt by climbing electricity and fuel prices.

Analysts have warned that inequality between regions will only increase as gross domestic product continues to grow. A report by Krasnoyarsk Governor Alexander Khloponin to a recent session of the State Council noted that “the gap between regions in terms of per capita GDP, by which the figure for the richest regions was 64 times that for the poorest in 2000, approached a factor of 300 in 2005!”

Budgetary revenues for the 10 richest regions were three times those for the poorest regions in 2005. The 10 richest regions accounted for more than half of the total regional debt, which was 460 billion rubles ($17.2 billion) at the end of last year. So economic differences between the regions are growing against a backdrop of constantly increasing volumes of income transfers. Whereas federal transfers to the regions accounted for 9 percent of total federal spending in 1999, the figure was more than 18 percent in 2001 and about one-third of all spending in 2005.

The situation is even worse at the municipal level. Recent data from the Audit Chamber show that 40 percent of all budget projections call for deficits and that the average budget income in 2006 dropped by almost 44 percent from the 2005 figure. This was due to a redistribution of revenue sources between the different levels.

Federal economic systems are generally characterized by subsidy systems, where lower levels are only given powers and made responsible in areas they can actually fund. Responsibility for areas they can’t afford to fund is transferred upward. In Russia, unfortunately, it works the other way around: Those powers and responsibilities the federal or regional levels are either unable or unwilling to fund are transferred downward. The money to cover these areas is transferred down either too late or not in full.

The problem with regional budgets that are heavily subsidized yet still run deficits is twofold: There is a shortfall in revenue sources to cover the governments’ mandated responsibilities and the resources that are at hand are used inefficiently. The Kremlin generally ignores the first problem and tries to solve the problems by focusing exclusively on the second. In this it is acting in the only way it knows — by increasing federal control and replacing one set of administrators with another.

Beginning in January, the administration of subsidized regions will be transferred to an external administrator in Moscow. The government will recommend administrators to be appointed for a term of one year by the Supreme Arbitration Court in regions where total debt exceeds the region’s revenues by more than 30 percent, or where regional revenues consist mainly of federal transfers. The external administrators will perform an analysis of the regional budget and draft a plan for escaping the crisis. The list of regions that will end up with this external financial administration has not yet been published, but the most likely candidates are those in the Southern Federal District, where transfers comprise up to 70 or 80 percent of budget revenues.

Thanks for reading La Russophobe !

Russia’s Regional Income Gap Spells Disaster

In his Moscow Times column, Nikolai Petrov, scholar in residence at the Carnegie Moscow Center, exposes the horrifying income gap between Russia’s various regions, which threatens to bring the country to the verge of civil war.

The way in which a civil servant’s income is determined today is largely a holdover from the Soviet nomenklatura system. Then, as now, this consisted of a relatively small base salary and a much larger set of payments and benefits granted by management. This is a way of guaranteeing a bureaucrat’s loyalty to his superiors.

Budget relations between the three main levels of power — federal, regional and municipal — operate on much the same principle. Fiscal federalism and the need to improve inter-budgetary relations have been talked about for many years, but the degree to which regional budgets depend on the federal budget and, in turn, municipal budgets on regional budgets is higher than ever. This is particularly evident at present as budgets for 2007 are being worked out at all levels.

Seventy of Russia’s 88 regions receive subsidies from the federal budget, meaning that only one region out of every five is a net contributor. Unlike the federal budget, which is running a surplus, a large number of regional budgets are weighed down with large deficits, and the load is only increasing in many cases. The draft budget recently submitted for the Kemerovo region, for example, forecasts a deficit of 13 percent, despite the fact that the deficit has been dropping steadily in recent years and is running at 3 percent this year. The reason for this is a fall in profit tax revenues from companies whose bottom lines have been hurt by climbing electricity and fuel prices.

Analysts have warned that inequality between regions will only increase as gross domestic product continues to grow. A report by Krasnoyarsk Governor Alexander Khloponin to a recent session of the State Council noted that “the gap between regions in terms of per capita GDP, by which the figure for the richest regions was 64 times that for the poorest in 2000, approached a factor of 300 in 2005!”

Budgetary revenues for the 10 richest regions were three times those for the poorest regions in 2005. The 10 richest regions accounted for more than half of the total regional debt, which was 460 billion rubles ($17.2 billion) at the end of last year. So economic differences between the regions are growing against a backdrop of constantly increasing volumes of income transfers. Whereas federal transfers to the regions accounted for 9 percent of total federal spending in 1999, the figure was more than 18 percent in 2001 and about one-third of all spending in 2005.

The situation is even worse at the municipal level. Recent data from the Audit Chamber show that 40 percent of all budget projections call for deficits and that the average budget income in 2006 dropped by almost 44 percent from the 2005 figure. This was due to a redistribution of revenue sources between the different levels.

Federal economic systems are generally characterized by subsidy systems, where lower levels are only given powers and made responsible in areas they can actually fund. Responsibility for areas they can’t afford to fund is transferred upward. In Russia, unfortunately, it works the other way around: Those powers and responsibilities the federal or regional levels are either unable or unwilling to fund are transferred downward. The money to cover these areas is transferred down either too late or not in full.

The problem with regional budgets that are heavily subsidized yet still run deficits is twofold: There is a shortfall in revenue sources to cover the governments’ mandated responsibilities and the resources that are at hand are used inefficiently. The Kremlin generally ignores the first problem and tries to solve the problems by focusing exclusively on the second. In this it is acting in the only way it knows — by increasing federal control and replacing one set of administrators with another.

Beginning in January, the administration of subsidized regions will be transferred to an external administrator in Moscow. The government will recommend administrators to be appointed for a term of one year by the Supreme Arbitration Court in regions where total debt exceeds the region’s revenues by more than 30 percent, or where regional revenues consist mainly of federal transfers. The external administrators will perform an analysis of the regional budget and draft a plan for escaping the crisis. The list of regions that will end up with this external financial administration has not yet been published, but the most likely candidates are those in the Southern Federal District, where transfers comprise up to 70 or 80 percent of budget revenues.

Thanks for reading La Russophobe !

Russia’s Regional Income Gap Spells Disaster

In his Moscow Times column, Nikolai Petrov, scholar in residence at the Carnegie Moscow Center, exposes the horrifying income gap between Russia’s various regions, which threatens to bring the country to the verge of civil war.

The way in which a civil servant’s income is determined today is largely a holdover from the Soviet nomenklatura system. Then, as now, this consisted of a relatively small base salary and a much larger set of payments and benefits granted by management. This is a way of guaranteeing a bureaucrat’s loyalty to his superiors.

Budget relations between the three main levels of power — federal, regional and municipal — operate on much the same principle. Fiscal federalism and the need to improve inter-budgetary relations have been talked about for many years, but the degree to which regional budgets depend on the federal budget and, in turn, municipal budgets on regional budgets is higher than ever. This is particularly evident at present as budgets for 2007 are being worked out at all levels.

Seventy of Russia’s 88 regions receive subsidies from the federal budget, meaning that only one region out of every five is a net contributor. Unlike the federal budget, which is running a surplus, a large number of regional budgets are weighed down with large deficits, and the load is only increasing in many cases. The draft budget recently submitted for the Kemerovo region, for example, forecasts a deficit of 13 percent, despite the fact that the deficit has been dropping steadily in recent years and is running at 3 percent this year. The reason for this is a fall in profit tax revenues from companies whose bottom lines have been hurt by climbing electricity and fuel prices.

Analysts have warned that inequality between regions will only increase as gross domestic product continues to grow. A report by Krasnoyarsk Governor Alexander Khloponin to a recent session of the State Council noted that “the gap between regions in terms of per capita GDP, by which the figure for the richest regions was 64 times that for the poorest in 2000, approached a factor of 300 in 2005!”

Budgetary revenues for the 10 richest regions were three times those for the poorest regions in 2005. The 10 richest regions accounted for more than half of the total regional debt, which was 460 billion rubles ($17.2 billion) at the end of last year. So economic differences between the regions are growing against a backdrop of constantly increasing volumes of income transfers. Whereas federal transfers to the regions accounted for 9 percent of total federal spending in 1999, the figure was more than 18 percent in 2001 and about one-third of all spending in 2005.

The situation is even worse at the municipal level. Recent data from the Audit Chamber show that 40 percent of all budget projections call for deficits and that the average budget income in 2006 dropped by almost 44 percent from the 2005 figure. This was due to a redistribution of revenue sources between the different levels.

Federal economic systems are generally characterized by subsidy systems, where lower levels are only given powers and made responsible in areas they can actually fund. Responsibility for areas they can’t afford to fund is transferred upward. In Russia, unfortunately, it works the other way around: Those powers and responsibilities the federal or regional levels are either unable or unwilling to fund are transferred downward. The money to cover these areas is transferred down either too late or not in full.

The problem with regional budgets that are heavily subsidized yet still run deficits is twofold: There is a shortfall in revenue sources to cover the governments’ mandated responsibilities and the resources that are at hand are used inefficiently. The Kremlin generally ignores the first problem and tries to solve the problems by focusing exclusively on the second. In this it is acting in the only way it knows — by increasing federal control and replacing one set of administrators with another.

Beginning in January, the administration of subsidized regions will be transferred to an external administrator in Moscow. The government will recommend administrators to be appointed for a term of one year by the Supreme Arbitration Court in regions where total debt exceeds the region’s revenues by more than 30 percent, or where regional revenues consist mainly of federal transfers. The external administrators will perform an analysis of the regional budget and draft a plan for escaping the crisis. The list of regions that will end up with this external financial administration has not yet been published, but the most likely candidates are those in the Southern Federal District, where transfers comprise up to 70 or 80 percent of budget revenues.

Thanks for reading La Russophobe !

Alexei Pankin: Neo-Soviet Bagman

Alexei Pankin is the Moscow Times token neo-Soviet bagman. Identified by the paper only as a “freelance journalist in Moscow” he is regularly put into service dredging up the most inane neo-Soviet propaganda for all the world to see, which then the rest of the Moscow Times stable of columnists can summarily shred to ribbons.

His most recent column trashing Anna’s Politkovskaya is surely his magnum opus. He attacks Anna’s champions for not saying a bad word about her, then he doesn’t give her one serious specific credit for her achievements in journalism. He claims that many other Russian journalists were just as brave as Politkovskaya, then he doesn’t name a single one. He claims it’s improper to criticize a dead person until 40 days after the funeral, then he does so, impugning Anna’s credentials and smearing her champions without saying one single critical word about her opponents. He claims he “knew” Anna well enough to know how she’d feel about the eulogies being written for her, and yet he admits he never worked one single day with her as a journalist; rather, they just read some of the same papers while serving on a journalism jury.

Is it just a coincidence that when you hear the name “Alexei Pankin” you can’t think of a single important story he ever reported? La Russophobe thinks not.

Pankin refers to Evgenia Albats, commentator on Ekho Moskvy radio, as having “democratic sympathies that verge on Bolshevik intransigence.” Yeah, those crazy wackos and their democracy ideas. They should all be shot!

He complains about the Financial Times in classic Russian nationalist rhetoric, claiming that it “described Politkovskaya as ‘Russia’s bravest reporter,’ while the remainder of the article lectured Russians — and Russian journalists in particular, based on Western experience — on how to grieve properly for fallen comrades.” The phrase “don’t lecture Russia” is a stock formulation right out of the mouth of Vladimir Putin.

Alexei Pankin is exactly the type of Russian who has brought the country to its knees with his incomprensible gibberish rationalizing Russian behavior without the slightest sensitivity to facts or reality. He’s the exact same sort of haughty, insular nutjob who populated the Politburo and hence destroyed the country.

Thanks for reading La Russophobe !

Russia Makes Nuclear Power Look Awfully Good

The LA Times reports that the combination of (a) the high price of oil and (b) global warming and (c) Russia’s neo-Soviet antics (as well as the crazed behavior of Russian allies Iran and Venezuela) are inducing the Western World to take another good hard look at nuclear power. It seems that, in light of Russia, nuclear power doesn’t seem nearly so dangerous anymore (that is, unless the atomic station itself is in Russia).

Thanks for reading La Russophobe !

More Outrageous Propaganda from Russia Blog

Yuri Mamchur‘s at it again. Big surprise, right?

Amazingly though, this time he’s gone so far that even the lunatic Mike Averko is taking him to task. If Mike Averko says you’ve gone too far with your russophilia, you know you’re really ready for the booby hatch.

In Mamchur’s latest, and most pathetic, propaganda screed, he claims that New Zealand is in the process of enacting a restriction on NGO activity that is the same as Russia’s, and expresses outrage that the Western world is not crititizing New Zealand in the same way it went after Russia. Yup, that’s the kind of insanity a Russophile like Mamchur is capable of if he gets up a really good head of steam.

Of course, it’s all completely insane.

First of all, La Russophobe never dreamed she’d be quoting Mike Averko, but even he states the obvious in a comment to the post, that “Russia is a much larger country and therefore subject to a greater monitoring.” Of course, Mike leaves out the other half of the story, namely that not only is Russia much larger but it also has a history of decades of totalitarian rule in which millions perished at the hands of oppressive dicatorship, leading ultimately to the catastrophic failure of the state. New Zealand has no such history. So, what Mike is really saying is that Yuri is guilty of appallingly stupid, ham-handed, classically neo-Soviet propaganda, the kind even the most benighted Western moron can see right through. Mike has higher expectations for his own work (though he doesn’t achieve them).

Second, the question in New Zealand is limited to one of taxation. New Zealand is saying that certain groups may not qualify for tax status as a charity, and may have to pay taxes on their income as if they were businesses, should they be found to have other-than-charitable motivations. Once they do that, they can act with total impunity. As the article Mamchur relies on states: “From next February, the commission will have new powers to strip charities of their tax-free status if they become too heavily involved in politics.” In the Russian case, what we’re talking about is registration. This means the permission of the government to operate in Russia under any circumstances, in advance. As in prior restraint. As La Russophobe recently documented, this resulted in Russia closing down organizations like Amnesty International and Human Rights Watch. These groups would love to pay Russia a fixed sum and then operate with impunity throughout the country. Dream on. In another completely inane post, Mamchur writes:

The Moscow offices for the Carnegie and Ford Foundations, American Trade Assembly, United Families Foundation, Oxfam and many other foreign NGOs have successfully registered and are continuing their work. Yens Zigert, director of the Moscow branch of the German Heinrich Boell Foundation, said: “This was the fastest case of registration I’ve ever seen in my practice.” He also said that the only German foundation that didn’t get registered yet is the Friedrich Naumann Fund. Svetlana Brezhneva, head of the Moscow office for the British foundation CAF, said that they still had not registered, but were continuing their charitable activities. “We were promised to get registration next week,” said Brezhneva.

Apparently, Mamchur thinks that the Kremlin has the same hostility for the Carnegie and Ford Foundations, ATA, UFF and Oxfam that it has for Amnesty, HRW and the dozens of other NGOs that it denied registration to under its new law. That’s simply lunatic propaganda. If you think otherwise, just try to find something provocative that any of them has written about Russia.

Third, the article Mamchur relies on for his “understanding” of the New Zealand measure (he doesn’t provide readers with a copy of the text) states: “‘If there is any hint of political taint in this, New Zealanders will stand up in droves and change it,’ says Garth McVicar of the Sensible Sentencing Trust.” This statement is entirely credible where New Zealand is concerned. Not only would such a statement be totally incredible where Russians are concerned, but in fact no such statement was even made.

Fourth, in case Mamchur hasn’t noticed, Western criticism of Russia’s NGO proposal was totally meaningless since Russia went right ahead and enacted its new NGO law heedless of Western criticism, and Western criticism was exactly on target since Russia then went right ahead and invoked it to shut down Amnesty International and Human Rights Watch (and dozens of others). New Zealand hasn’t shut down anybody nor is there any reason to believe it will do so since (as noted above) New Zealand doesn’t have a history of totalitarian dictatorship and imperialism. So not only were Western concerns about Russia’s NGO law proved valid, but there isn’t the slightest reason to think such concerns could possibly be valid where New Zealand is concerned even if the two laws were the same, which they aren’t.

This is the Russophile nutjob in a nutshell, it’s how it’s been for so many decades in Russia that these folks think it’s normal. Sadly, even though the Berlin Wall fell, they still think they can fool people with this gibberish, just like “the Emperor’s New Clothes.” La Russophobe doesn’t doubt that Yuri Mamchur, even now, really believes that New Zealand and Russia are the same, and that the two laws are the same (even though he hasn’t read them). If you’d asked Leonid Brezhnev, he’d have said exactly the same thing. He really thinks its someone biased or unfair to expect an alcoholic to be more careful with alcohol than a non-alcoholic, and to expect a totalitarian to be more careful with anti-democratic measures than a democrat. Unless Russia finds a way to distance itself from this kind of “thinking,” it’s surely doomed.

Thanks for reading La Russophobe !