Page 88 - RusRPTJan23

At the end of the year when the situation is clearer, the federal government will likely increase transfers to regions (or rearrange them, as it is already happening to road subsidies). However, as the negative trajectory is expected to continue in most regions over the coming months, regions will face a much tighter 2023.
The Chelyabinsk Region, for instance, will run a budget deficit of more than RUB51bn ($804mn)—roughly one-fourth of the region’s income. The situation is similar in the Lipetsk Region, albeit there, the regional government says it can rely on reserves instead of assuming new debt.
Regional and local budgets will face increasing burdens next year as they will have to support local industries, mobilized soldiers, and increased social payments.
The types of trade-offs that regions will increasingly face is visible in Novosibirsk’s budget, adopted in the second week of December. It includes expenses on dual use goods for the military, but does not allocate money for planned salary hikes for public employees.
The Ministry of Economy maintains that the federal government will support capital investments through regional budgets, but as development expenses are slashed in the federal budget, some big construction projects will likely suffer further delays (e.g. the construction of a bridge on the Lena river in Yakutia).
The Kremlin, concerned with keeping the regions in line while it concentrates on the war in Ukraine, threw regional administrators a bone in the first half of December. Regional deputies who engage in other activities—typically businesspeople who sit on legislative assemblies—will be exempt from
А public administration reform
income declaration obligations, according to a new bill introduced by Senator
Andrey Klishas and Duma deputy Pavel Krasheninnikov.
“It appears that the Kremlin is throwing a carrot to regional elites with the law.
The authorities will further restrict access to income declarations under the
bill,” Toth-Czifra said.
adopted last year, which redefined the legal
status of regional lawmakers and exposed them to more scrutiny, seemed to
provide another means to rein in local business elites who often run for office
in their regions.
“The turnaround suggests that this may have been deemed
counterproductive—at least under the current circumstances—and that the
Kremlin is aware it needs a degree of cooperation from lower-level elites and
public servants in order to govern,” Toth-Czifra added.
88 RUSSIA Country Report January 2023 www.intellinews.com