Page 10 - RusRPTDec19

Murmansk, Belgorod regions and the Kamchatka Territory grew most rapidly. Outsiders on the debt burden are the regions with the lowest incomes, comments Semen Isakov, vice president of Moody's.
The Central Bank several times increased the risk ratios for retail loans (while the bank needs more capital to issue a loan), but could not cool the market. Then the regulator thought about the direct restriction of certain types of loans to banks and financial institutions.
2.4 ​ ​Popularity of Russian regional governors reaches all time high
The popularity of Russia’s regional governors has reached an all time high​ of 65% in October, only 3 percentage points behind the popularity of president Vladimir Putin of 68%.
While majority (55%) of Russians polled dislike the federal government in Moscow, against the 43% that approve of it, the regional governors have seen their popularity rise steadily in the last two years as they steadily closed the gap with Putin.
The increase is probably due to several reasons, one of which has been the Kremlin’s insistence that the regions fulfil Putin’s May Decree orders that mandated increases in salaries for regional workers in the public sector such as teachers and doctors. These targets were set several years ago and have been a burden on regional budgets, but force through by the Kremlin. The​ ​May Decrees​ were renewed last year with new targets and the whole programme has been expanded into the​ ​12 national projects​ that are designed to “transform” the country.
Another reason is Russia’s regions are emerging from a near-miss debt crisis in 2014-2016 where the debt of many regions was reaching unsustainable levels. As ​bne IntelliNews ​extensively reported at the time the Ministry of Finance was forced to step in and take “​manual control​” of some regional finances to prevent them from defaulting on their obligations earlier this year.
Finally about a third of Russia’s regions have been flourishing on the back of local investment into infrastructure and burgeoning local production. Increasingly regional governors in the better off regions are in competition with their neighbours to attract domestic investment, which has focused them on improving the local business environment, investing into infrastructure, but also attracting qualified workers.
The stand out examples of Kazan, Sochi and Krasnodar are well know and all of these cities have experienced reverse migration where workers that moved to Moscow to find better paid work are now returning home to the regions where although the pay is less the overall standard of living is better – especially if you have young children. The population of Krasnodar in particular has reportedly doubled in the last two years.
Finally the weight of political power has shifted towards the regions during the last presidential election in 2017. Regional governors maybe popular, but the ruling United Russia party is not and its approval rating has reached its​ ​lowest level in 14 years of 32.2%,​ according to the state owned pollster, the Russian Public Opinion Research Centre (VTsIOM).
United Russia has been in decline for several years and in the run up to the 2017 elections Putin’s team turned to the regional governors to delivery the vote that resulted in Putin’s landslide victory. But that also meant giving the governors the resources to win the votes and some of the glow they generated has rubbed off on them.
10​ RUSSIA Country Report​ December 2019 ​ ​www.intellinews.com