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Opinion
December 1, 2017 www.intellinews.com I Page 24
that governors will now be held accountable for debt problems in their regions. On November
15, Putin signed a decree doubling the number
of indicators with which the central authorities will assess regional governor performance.
Debt, for the first time, features prominently. Governors must report their region’s debt-to- revenue ratio (without counting fiscal transfers as revenue) annually. Superficially, additional indicators mean added scrutiny for regional governors. But Russian political observer Nikolay Petrov sees a different logic: “In fact, it seems to me that the more indicators, the less rigid and strict evaluation becomes...when you have 24 indicators, the picture is less straightforward.” More flexible evaluation, Petrov adds, means greater flexibility for the Kremlin to replace regional governors.
“On one hand, your hands are untied and any governor can be accused and changed because some indicators look worse than they ought
to. And on the other hand, it is impossible to objectively assess the performance of a governor using these metrics.”
Since 2012, the Kremlin has pushed the cost
of national policy initiatives onto regional balance sheets. Thus far, they have managed
to put off absorbing the liabilities – but their day of reckoning will eventually come, barring
a recovery of the Russian economy. However, the same May Decrees that have bankrupted regional treasuries have also weakened the prospects for dynamic growth by prioritizing salary increases over productivity increases. Putin may claim a desire to solve the regions’ fiscal difficulties, but unless the Kremlin realizes that its own policies are the problem, the eventual cost of absorbing regional liabilities will continue to rise.
Chris Jarmas is a columnist covering regional news and politics in the daily news brief. He is a second- year master’s student at Harvard University’s Davis Center for Russian and Eurasian Studies. Previously, he interned at the U.S. Department of State in Moscow and Kiev, and has also lived in Kyrgyzstan.
This piece first appeared in FPRI Bear Market Brief