ON  THE  WAY  TO  THE  GLOBAL  WORLD:

ADMINISTRATIVE  AND  NETWORKING  STRATEGIES  OF  THE RUSSIA’S  REGIONS

 

Oleg Alexandrov, Andrey Makarychev

 

 

INTRODUCTION

 

The decade of 1990s has witnessed the rise and fall of Russia’s regions as both domestic and international actors. This peculiar trajectory deserves special attention.

 

           By the end of 1990 it became clear that due to emergence of new political, economic and public actors Russian political space became much more complex than ever before. New patterns of institutional and non-institutional interaction were coming into being, with new corporate actorship to emerge on the basis of new labor ethics. These new trends were very much consonant with the world-wide crisis of hierarchical models of organizations and mushrooming of networking managerial models, which in Russia have however their own specificity.

 

Regions’ survival in increasingly complex and demanding environment consisting of a variety of actors[1] depends on how they are to be positioned in the frameworks of both horizontal cooperation and vertical subordination. Traditionally, the regions in Russia were perceived as administrative units looking for their room in the “administrative staircase” of political power. Vertically, the regions are parts of what could be called “administrative market” composed of political institutions each having its niche in newly reconstructed “vertical of power”. Yet this is just one part of the story, since the regions increasingly find themselves interacting with other structures and institutions that in a strict sense are not a part of “administrative market” and are not attached to specific territory to the extent the regions are. Horizontally, the regions have to discover the potential of coalition building with other “sovereignty-free actors” (James Rosenau’s expression). What became important is social interaction with other members of regional milieu, interchange of resources and information, coordination of political and social practices, combination of different experiences[2].

 

In our paper we treat the regions as those units that belong to both administrative (vertical) and networking (horizontal) areas of decision making. This paper wishes to contribute to understanding the extent to which the coalitions of the regions and other new actors are instrumental in Russia’s adjustment to the imperatives of new global environment. We would like to explore whether the interactions of the regions and other new actors could facilitate Russia’s integration to the world community and serve as communicators with the global milieu. One of the main aims of this paper is to identify the spheres of social interaction between the regions and other new actors, and to appraise their results in terms of Russia’s integration to the global world.

 

 

1. REGIONS AND THEIR CHALLENGERS

 

This chapter seeks to analyze the vitality of the present form of Russian regionalism and  assess the chances of Capital and Information as its strongest challengers. “Capital actors” are exemplified by financial-industrial groups which are alliances of industrial enterprises, banking and insurance institutions, investment corporations, and commercial funds[3]. “Information actors” are those professionally related to producing and distributing the knowledge-based information products (including the media, Internet, telecommunication agencies, public policy research institutions, etc.). Neither of these two large groups of new actors is intrinsically coherent, and the divergences within each of them are very significant. Yet for analytical purposes we shall deal with them as groups of actors having common background and interests vis-à-vis other actors.

 

1.1. The Rise and Fall of the Regions

 

     It is rather hard to comprehensively characterize the roles of regional elites as political actors. There are contrasting attitudes to the regional governments both in Russia and abroad. Thus, Sergey Medvedev thinks that the regional governments are pragmatic and rational actors. They can “be seen as a factor of stability and continuity” and “are to a large extent preventing the authoritarian government in Russia”[4]. To confirm this view one may recall for example that this were the regions (like Chuvashia, city of Moscow and others) that the international organizations have addressed for cooperation projects after the August 1998 meltdown[5].

 

     On the other hand, Gleb Pavlovsky, the head of the Moscow-based Foundation for Effective Politics, characterized regional leaders as “mediocre managers which found themselves at their own in the revolutionary redistribution of property”. In the words of Pavlovsky who is one of top political advisors to President Vladimir Putin, the mentality of the regional leaders is a mix of prejudices inherited from the times of USSR and perestroika, often embedded in ethnocratic and even racist colors[6]. Philip Hanson noted that “regional government activity tends ... towards autarky”[7]. Some of the regional governments are very conservative and show no initiative in globalization issues. Thus, it was the central government that forced the Kuban’s legislature to pass the law giving the residence rights to the CIS citizens who were married to the locals for more than five years. Yet the regional anti-migration lobby is eager to convince the federal center to grant to Krasnodar Krai the special status of border region, which might end up in banning the residence permits for foreigners from “Near Abroad”[8]. By the same token, Moscow city authorities impose administrative barriers on the way of capital and migrants.  

 

      Thus, it is hard to decide unequivocally whether the regions are the sources or the impediments for innovations. Probably they were both – depending on the nature of leadership in each specific region and the period we are referring to.

 

In the beginning of 1990s there were much hopes that the regions would turn into the locomotives of the reforms Russia badly needed. Regions were the first to undermine the political monopoly of the center. They gradually increased their sphere of influence both internally and externally[9]. During 1990s decentralization was a dominant tendency.  Regionalism became the top issue of the Russian political life, for it questioned the traditional forms of state ruling. The power of the federal center was moving to regions, involving new people in the process of governance and making forms of policy making more complex. Russian political scientist Arbakhan Magomedov indicates two major factors that gave start to regionalism in the beginning of 1990: crisis of identity, which occurred against the background of breakdown of the Soviet Union, and refusal of regional elites to follow the line of the Gaidar reform.[10]

 

In mid-1990s the federal center decided on signing of power-sharing agreements as a means to concretize the rights and status of each particular region in Russian economic and political space. Since 1996 regions received the right to elect governors in the same way the leaders of ethnic republics did this since 1991. Actually, the period from 1991 till 1998 was the golden age of Russian regionalism.

 

     Yet the truth is that much of initial expectations have faded by the end of 1990, with increasing incompetence and inefficiency of the regional elites, their failures to secure the regional economic growth and provide decent living standards. Regions’ defaults on their international financial obligations and the defeat of the Primakov - Luzhkov regional coalition in 1999 parliamentary election were the most notorious signs of the weakness of the regional elites. As Piotr Shchedrovitsky puts it, the regional leaders failed to cope with mass political processes under such rather unfavorable and imperfect conditions as scarce information, political uncertainties, growing number of extreme situations. A large part of them have proved their disinterest in networking forms of social and political actions, human capital development (what is being called “antropostructures”[11]), and expert analysis. The broadening spheres of social and economic life were staying behind their reach – those basically related to financial flows and intellectual capital. The regional elites have also experienced the value crisis[12]. Instead of formulating strategic goals and investing in long-term projects, the regional elites were by and large obsessed by misleading slogans of “stabilization”, “strengthening national spirit”, etc.[13] Governors were trying to use every pretext to protect their political and economic domains from any competition. Thus, Khabarovsk Krai governor Viktor Ishaev has lobbied in favour of canceling the municipal elections in those subjects of federation adjacent to the border under the guise of “security context”[14], while Igor Farkhutdinov, the governor of Sakhalin, has spoken out against establishing the free economic zone in the Kuril islands explaining his position quite overtly – “who in that case will be the governor?”[15]. As a result, the bulk of regional regimes have evolved to autocracy, which discredited the very idea of regionalism.

 

     The regional elites have failed to perform the function of “spatial transfer of innovation”[16]. Taking into account growing debilitation of regional elites and their vanishing innovative potential, the question has to be asked: does it manifest the eventual “death” of the regions as strong political actors? Or the regions have to change their roles? And who are the new non-central actors, more adequate to the challenges of modernization?

 

     It is yet too early to give precise and detailed answers to these questions, but it might be certainly assumed that the new engines of Russian modernization have to be those actors dealing with Capital and Information, two basic substances to predetermine further development of Russian regions.

 

 

1.2. The Challengers

 

       Two basic sources of innovation – Capital and Information – have undermined political  might of the regions. In this section we are going to analyze those actors that are associated with each of them and have their say in the regional policy issues.

 

1.2.1. Financial-industrial groups (FIGs)

 

     Financial-industrial groups as international actors. Much of financial-industrial groups’ resources are due to their international credentials. Many of Russia’s major financial and industrial groups, being regional institutions by background and the nature of their business, pursue far-reaching international strategies. Major Russian oil companies trade in international securities markets and have industrial assets beyond Russia. For example, Siberian-Ural Petrochemical & Gas Co., or Sibur, bought 24,7% stake in Hungarian petrochemicals company BorsodChem Rt.[17] “Norilsk Nikel” trade marks were recognized as the full-fledged members of trading list run by London Metal Exchange. Russian “Alfa” group was considering buying Swiss-based Marc Rich Investment company which deals with security markets, investment and trade[18].

 

       In 2001 LUKoil has decided to earmark $ 3 million for upgrade of the Odessa Refinery in Ukraine[19]. In March 2001 LUKoil allegedly bought the controlling stake of Austrian Avanti (which owns about 700 filling stations in Austria, Hungary, Germany, etc.).[20] Russian oil and gas companies based in Sakhalin, Irkutsk and Tomsk (“Vostokgazprom” is one of the strongest among them) are competing with British Petroleum for energy supply contracts in China and other South East countries. “Yukos” company is heavily involved in supplying the oil to “AB Mazeikiu Nafta” of Lithuania[21]. 

 

     “Siberian Aluminum”, the second largest producer of aluminum in the world, has its office in New York which plays pivotal role in its financial operations within US banking system.  Among its major financial partners to open credit lines were Westdeutsche Landesbank, Raiffeisen Zentralbank, Societe Generale, Credit Lyonnais, and Natexis.

 

     Of course, one should not idealize neither the current state nor the perspectives of international actorship of financial-industrial groups. Many of them are deeply involved in property disputes and corruption scandals. For instance, Mikhail Zhivilo, the owner of “Mikom” group, was arrested in France in 2001 by Interpol order. He is accused in large-scale financial wrongdoings in Kemerovo Oblast metallurgic plants[22].

 

     Oleg Deripaska, chief executive of Russian Aluminum, faced $ 2,7 million racketeering lawsuit filed in New York by US-based companies “Base Metal Trading” and “Alucoal”. It is alleged that Deripaska and his trading companies defrauded the smelter and BTM of $ 900 million in aluminum sale revenues[23].

 

     The practice of using offshore companies for money laundering and tax evasion is very widespread. Thus, Novolipetsk metallurgic plant is known for transferring the bulk of its revenues to those foreign companies that were under control of its director Vladimir Lisin, including “Midmay S.A.” (Panama), “Worslade” (Ireland), “Tuscony Intertrade” (Britain)[24].

 

     Not all of the Russian business are happy with globalization. Tensions are not rare between Russian industrial companies and foreign economic actors. Major economic structures operating in the regions feel the pressure from abroad[25] and try to avoid competition by means of protectionist measures. An illustration of this trend is given by “Gazprom”: part of the pressure on it to charge higher prices than it wishes to comes from foreign sources. In 1997, for instance, the IMF included among its conditions for extension of aid that gas prices for Russia’s regions be differentiated on the basis of the transportation distance and location of recipients[26].

 

     Financial-industrial groups as regional actors. Traditionally, Russia was ruled by institutions “glued” to geographic segments of her vast territory. Yet the creeping logic of globalization tends to restrict autonomy of individual territories. The globalization paradigm is based on deconstructing the hard linkage between administrative and economic borders. 

 

     This trend could be traced in Russia as well. By the end of 1990s the capital – regardless of its regional affiliation – had rushed to “new economic platforms”, i.e. those territories where the business conditions were the most favorable. The shapes of these territories resemble “archipelagos”[27] (the term coined by the Expert Institute of the Russian Union of Industrialists and Entrepreneurs) and does not necessarily coincide with the boundaries of the subjects of federation. The new Russian business elite (emerged in the aftermath of August 1998 crisis) came up with the idea to fend off their property from arbitrary and incompetent decisions of regional high-ups, and to make the business structures trans-regionally integrated. FIGs took advantage of both the managerial weakness of the regional elites and their temporary disorientation in the transition period from Yeltsin to Putin.

 

 The logic of economic processes (mergers, purchase of shares, property transfers) has given much of economic power in the regions to newcomers, people from outside not incorporated into political and administrative hierarchies existing in the regions. The regional elites had sooner or later to discover that the developmental strategies of basic economic actors are being decided not locally but either in a different region (which may be the headquarter of oil, gas, or metallurgic or aluminum company), or even abroad. Thus, authorities of the Pskov Oblast (which borders with Belarus, Estonia and Latvia) fail to control the large amount of transportation and cargo flows going through the region.[28]

 

       Very much like in the West, establishments owned by large corporations start playing decisive roles in regional development. Thanks to their economic, technical and financial dominance, large firms can, by the combined effect of their industrial and location policies, transform themselves into “poles” for development and profoundly influence local and regional development[29]. Needless to say that this kind of development naturally provokes conficts of interest between the regional authorities and the big business – as this is the case in Komi republic whose authorities are not happy with the “LUKOil” company activities in the region[30].  

 

      In comparison with the period of beginning of 1990s, the political interests of the Russian corporations in the regions became more articulated by the end of 1990s. Financial-industrial groups and large export-oriented companies tend to institute political control over region, in which their basic economic interests are concentrated. The best illustration of this was the electoral victory of Aleksandr Khloponin, the former director of RAO Norilsk Nickel, who was elected governor of the Taimyr Autonomous Okrug in January 2001.[31] Khloponin, who has resigned from the directorate on the eve of the election campaign, will undoubtedly become the champion of his company’s interests in the region. In a similar way, the head of Sibneft’ and Russian Aluminum companies Roman Abramovich became governor of the Chukotka Autonomous Okrug. Another example is success of Boris Zolotarev, who used the support of Yukos oil company to defeat his opponents and become governor of the Evenkia, the region possessing substantial deposits of oil and gas.[32]  This was the support of “Sibal” and Magnitogorski metallurgical plant that played decisive roles for political careers of respectively Alexei Lebed’, the governor of Khakassia, and Piotr Sumin, the governor of Cheliabinsk Oblast[33].

 

It is well known that „Tiumen’ Oil Company“ has major political stakes in Tyumen’ (the region of rich oil deposits) and Ryazan’ (home to major oil processing plant). “LUKOil”, another wealthiest company, is heavily involved in Volgograd and Astrakhan’ Oblasts. The same goes for “Gazprom” interests in Bryansk Oblast. “Yukos” was supporting the former governors in Voronezh and Ulyanovsk Oblasts, while “Kaskol” was politically engaged in the gubernatorial election in Magadan Oblast[34].

 

Of course, in some regions there is a competition between different companies and banks for getting access to policymakers, and some of them fail to achieve sufficient political influence. Typically, FIGs succeed in those regions which are completely dependent upon certain types of business or natural resources.  By and large, the business groups have their political “protégés” in the key regions, yet relations between these groups and regional elites might nevertheless be tense. For example, there is a lot of tensions between authorities of Khanty-Mansi autonomous Okrug and the group of investors - “Shell” and “Evikhon” companies (the later is run by British-based “Sibir Energy” with the Russian businessman Shalva Chigirinskii as its head). Local officials claim that investors did not undertake sufficient measures to implement the oil extraction project.[35]  The same type of conflict emerged between the administration of Ulyanovsk Oblast and “Severstal’” company which owns “UAZ”, major car-building factory in the region. 

 

     What is more significant is that major region-rooted enterprises might become agents of essential political changes – positive or negative ones - using their overseas connections. Thus, the “aluminum empire” of brothers Chornyi - both residents of Israel - through highly sophisticated network of affiliated structures became the major source of funding for the projects implemented in Krasnoyarsk Krai and were able to control about three fourth of all aluminum production in Russia. London-based Trans World Group (TWG) created by the family of Chornyi is known for mass purchase of shares of Krai’s enterprises (“KrAZ” is one of them) and subsequent draining the profits abroad. The Russian media had reported that the TWG had sponsored gathering negative information worldwide about its opponents in the Krasnoyarsk Krai[36].  In 1999 the rising “Russian Aluminum” holding owned by Roman Abramovich and Oleg Deripaska has purchases “KrAZ” and got rid of TWG, using the governor Aleksander Lebed’ as its tactical ally[37]. 

 

     FIGs as federal actors. Of course we should not exaggerate the degree of FIGs independence. It would be misleading to treat them as completely autonomous actors. The federal government benevolence was always essential for regional business (to create “Tiumen’ oil company” and “Sibneft’”, the decision of the Chernomyrdin government was required).

 

     Yet under Putin the roles of the FIGs as federal level actors have changed. Not only major FIGs have invested large funds in Vladimir Putin’s presidential campaign. More essential is that the interests of Putin and major FIGs coincide in their common desire to impose greater control over the regional elites. This gives good reason to describe Putin – FIGs alliance as long-term, well thought relationship forming a part of the so called “new social contract”[38].     This “contract”, in a sense imposed upon the business elite by the federal state, has its rules. The federal state requires greater social responsibility from the business community, and denies their independent political roles in federal issues[39].

 

     What Putin counts on is that the FIGs themselves would realize advantages of working under the federal government protection. Alexei Mordashov, the general director of “Severstal’” company, was among the first to recognize that “it is easier to bargain under the state roof”[40]. The importance of the federal state for the FIGs was clearly demonstrated in the lobbying campaign of major regional metallurgic enterprises protesting against 1999 trade agreement between Russia and USA that has kept restrictions for Russian metallurgic products in US market[41]. In 2001 these were the biggest regional car-producers that forced the federal government to drastically raise customs tariffs for imported second hand cars. It seems that this was one of rare areas in which the interests of all parties involved – the FIGs, the regional administrations, and the federal government – were almost identical.   

 

 

1.2.2. Information actors

 

      Information is of primordial importance for sub-national politics because its distribution calls for new “epistemic strategies” based on knowledge and expertise tending to circulate without borders. Among information actors are media, think tanks, and a plethora of NGOs intended to make the data and know how available to broader audience in order to make the political process more transparent (ecology and human rights advocacy are primarily based on information management and implementation). The social importance of information actors is that being voluntary and self-governing institutions, they are intended to mediate opposing forces, and invest into “social capital, the cooperative networks that permit individuals to work together for mutual goals”[42]. These social functions are of ever growing importance since there is a huge demand for new ideas and approaches to reforming the Russian regional society[43].

 

     The Russian community of information actors is very different, representing a sort of “islands of perfection” surrounded by the “sea” of old-style conservatism. Yet these communities are important because they facilitate the flow of information between regional, national and trans-national institutions. They signal to domestic constituencies of political changes, and in doing so they play the roles of interpreters, editors, cue-givers, and “filters”.

 

Taking part in the formation of global financial and information space, Russian media - as a part of the “knowledge market” (or “market of ideas”)  - is an important actor in terms of integration of the regions into the world communication structures and projecting the dominating norms and standards of the “information society”. A large part of regional mass media is broadly integrated into the international communication networks.

 

Presently, one can witness a swift numerical increase of electronic enterprises and media in Russia. In 2001 the Russian sector of Internet is 900 million dollars market of electronic transactions. In comparison, in 2000 this index was equal to 460 million, and in 1999 – to 250 million. The same goes for Internet users. Russia has arrived at the 15th place among the countries as to the amount of Internet users as of 2000.[44] The largest internet communities are in Moscow, St.Petersburg, Novosibirsk, Ekaterinburg, Krasnodar, Vladivostok, Irkutsk, Cheliabinsk, Samara and Nizhny Novgorod. Internet speeds up the process of interest group formation, incrementally increases the educational level of the users, makes their voices heard before the crucial decisions are taken[45]. That is why growing regional internet communities can seriously strengthen positions of regional information actors and make unnecessary some of red-tape institutions.

 

Thanks to growing spread of information actors people living in remote cities and towns are able to compare their living standards and draw their conclusions accordingly. Mass media is also contributing to the inter-regional competition by focusing ratings on economic attractiveness of regions and political influences of their chief executives vis-à-vis each other.

 

       At the same time, not all information actors foster greater transparency. Some of them tend to monopolize certain segments of information market and impose their owners’ views over information consumers. Taking into account that mass media remains the main translator of political preferences and the basic tool for reshaping the mass conscience[46], no wonder that TV and press market developed into a major battlefield of political and ideological factions. Information actors – apart from performing enlightening functions - are also widely used as  political tools. That is why much efforts have been undertaken to incorporate the largest media structures into the Kremlin-run sphere of influence.

 

     With the spread of negative information campaigning, the governors have started to realize  how sensitive the media policies are. Eduard Rossel, the governor of Sverdlovsk Oblast, had personal appointment with Vladimir Gusinsky – at that time the owner of NTV – to discuss this channel’s coverage of events in this region[47]. The governors Penza, Orenburg and Kemerovo Oblasts were among the first to face the negative PR challenges coming from Internet. By the same token, these were local channels (“TVK-6” and “Afontovo”) that were utilized by Krasnoyarsk tycoon Anatoly Bykov to boost his political ambitions as opposed to the governor Alexander Lebed’[48].

 

      Most of the governors try to survive in the information battle by nurturing the loyal media. Egor Stroev, the head of Oriol Oblast and the chairman of the Council of Federation, by his order created regional TV Channel completely funded by regional administration, with no permission from Russian State Company for Television and Broadcasting (VGTRK)[49]. Administration of Kirov Oblast is known for forcing the state institutions to subscribe on its official newspaper[50]. The administration of Krasnoyrask Krai is tightening its grip over the largest regional newspaper “Krasnoyarskii rabochii”[51].    

 

        Numerous attempts have been made to introduce more restrictive changes in the “Law on mass media” adopted in 1991. Most proposals getting from legislative, executive and even juridical branches are directed against the freedom of speech. Either they suggest putting mass media under direct of indirect control of the authorities (administration of the President, regional governors, State Duma, heads of local administration, deputy commissions etc.), or they insist on establishment of regulatory organs that could exercise a ‘soft’ control over broadcasting or publishing materials. Endeavors to sue regional or local authorities for violating laws had led to no positive results as majority of Russian courts defend interests of local power elite.

 

     Some of the governors were quick to treat the media not as information intermediary between them and the people, but rather as their direct opponents. General Vladimir Shamanov, being elected the governor of Ulyanovsk Oblast, in his first interview had threatened the local media which had not supported his campaign with repercussions[52].

 

      The regional practice is that mass media are largely exposed to political and administrative influences. The Glasnost Defense Foundation argues that there is a plenty of tools that are widely used against the media in the regions:  indirect (informal bargaining) and direct (threats) pressure, refusal to provide information, financial control over media outlets, etc[53]. The most inimical attitudes to the free media were reported in Kalmykia, Tatarstan, Northern Ossetia, Ingushetia, Dagestan[54]. Radio Liberty has extensively covered violations of journalists rights by authorities in Yaroslavl’ and Belgorod Oblasts (the legal prosecution of the leading journalists Elvira Mezhennaia and Olga Kitova, respectively)[55]. Other regional experiences testify that the governors treat the independent media in rather unfriendly manner. Authorities of Bashkortostan has applied a variety of administrative measures to close the “Russkii obozrevatel’” opposition newspaper[56]. The same “sticks” were applied against the “Khronometr” newspaper which was criticizing the administration of Kostroma Oblast[57]. Not better is the situation in Omsk Oblast, where the governor Leonid Polezhaev has openly called for “cleasing the media from foreign evil” and made impossible the work of opposition TV channels (“STV-3” and “Antenna-7”)[58]. The winner of the election campaign in Magadan Oblast Valentin Tsvetkov urged the Moscow-based head office of the publishing house Argumenty i Fakty to discontinue publications of its regional edition “AiF-Magadan” under the pretext of his disagreement with the coverage of regional election campaign by this newspaper.[59] 

 

To sum up, the regions have faced the most serious challenges from the combined efforts of largest financial-industrial groups and the information actors. Yet this is not to say that the regions are doomed to step down. Most likely, they are to transform into more effective units better prepared to meet the challenges of globalization. In course of this transformation, two kinds of resources are open for the regions – administrative and non-administrative. In the following chapter we are going to assess the opportunities and the limitations of each of them. 

 

 

2. REGIONS’ ADMINISTRATIVE MARKETS

 

     Administrative channels were always available for the regions. The totality of these channels form peculiar “administrative market” to include a variety of official institutions each having its predetermined and well fixed place in the hierarchy of state power.

 

2.1. Regions and the Council of Federation

 

For a large period preceding the Putin’s administrative reform, Council of the Federation - the upper chamber of the Federal Assembly - has been the institution possessing considerable power to decide political questions of major importance - the state of emergency, deployment of military forces abroad and impeachment of the President[60]. As the only central state institution that profited from the regionalism, it became tribune of the regional representatives, played a key role in developing relations between the center and the regions and received the right to control the important part of the legislative procedure. The Council of Federation was always a legal background for governors’ “get-together”. During 1990s Council of the Federation continually increased its role within central state hierarchy and achieved the highest positions in 1999 when it insisted on 55 to 45 percent distribution of the state budget in favor of regions. Politically, at that time it became the third major instance after President and his government.

 

The Council of the Federation has already experienced three stages of transformation. From 1993 to 1995 members of the Council were elected, since 1995 consisted and till January 1st 2002 the Chamber will consists of heads of regional executive and legislative branches. The new law on the Council, adopted in the course of the Putin’s administrative reforms on 2000, envisages a new membership that will finally take effect after January 2002. New members of the Council of Federation will represent regional executive and legislative branches, but will not include the heads of these organs.[61]   

 

Since the Council of Federation is a part of “administrative market”, the way it is recruited is under control of it most weighty actors. Gennady Saveliev, the governor of Komi-Permiatsky autonomous Okrug, and Yurii Spiridonov, the head of the Komi republic, quite explicitly recognized that the federal center and the administration of the federal districts very insistently pushed their own candidates from each of the subjects of federation[62]. Not all regional leaders like it. Alexander Prokhorov, the governor of Smolensk Oblast, and Murtaza Rakhimov, the president of Bashkortostan, have criticized the widely spread practice of distributing the Council of Federation seats among influential figures residing in Moscow, with no experience in the regions they are supposed to represent in the upper chamber of the parliament[63]. Yet the new recruitment model is a good prove of changing meaning of territoriality for Russia’s politics: for example, the republic of Khakassia has nominated Arkady Sarkisian – deputy Director of the “GAZ” factory located in Nizhny Novgorod and vice president of “Sibal” group – to be its representative in the Council of Federation[64]. What matters are not regional allegiances but professional linkages and qualifications, as well as belonginess to a certain policy group.  

 

 It is doubtful that Putin’s reforms have undermined the power of the regional chief executives. Even being deprived of their seats in the upper chamber of the parliament, they still have some levers to control their new representatives there. Yet the validity of the Council of Federation is becoming a question. Two main options are discernable for the perspective.

 

The first one is that the members of the Council of Federations will be popularly elected. Among the proponents of this idea are liberal parties (SPS and Yabloko), Sergey Kirienko, Konstantin Titov and some other regional leaders. The second option would be to abolish this institution or significantly diminish its rights and, consequently, expand the rights of the State Council (as advocated by Vladimir Zhirinovsky, Mentimer Shaimiev[65], Alexander Dzasokhov, Aman Tuleev, Mikhail Prusak and some others).

 

 

2.2. Regions and the State Duma

 

State Duma, the lower chamber of the Federal Assembly and another administrative actor, is a successor of the former Supreme Council that was forcefully dismissed by President Yeltsin in October 1993. Apart from its legislative activities, State Duma approves of the Prime Minister after his presentation by the president and is empowered to initiate impeachment procedure. The basic channels of State Duma’s influence are powers to decide on the state budget, ratification of international agreements[66], and hearing reports of ministries officials, which provide the parliament with an opportunity to debate serious policy issues, however, without any legislative decisions.

 

The State Duma is an important link in a chain of regional interests. The experience of the last ten years proves that state budget becomes an element in political rivalries between executive and legislative power on the one hand, and regional lobby, on the other. In its turn, the executive power ignored its own obligations and even using state resources to make pressure on political opposition (by making selective subventions not to all but only to loyal regions and newspapers).

 

Under the new Putin’s political regime, the governors keep widely using the State Duma deputies as their lobbyists. This was the case in summer 2000 when the governors succeeded in amending the Putin’s legislation proposals concerning the reform of the governance. These were the governors that stood behind the clauses stipulating “soft rotation” of the governors from the Council of Federation, and the right of the governor to unilaterally appoint and recall his representative to the Council of Federation. To some extent, due to governors’ lobbying  Putin’s project lost much of its initial anti-regional drive[67].

 

 

3.3. Regions and the State Council

 

     The governors actually are motivated by keeping their residual powers and privileges. Their reaction to Vladimir Putin’s reform was a mix of the search for compromises and opposition to the federal center (as exemplified by Nikolay Fiodorov of Chuvashia). Putin’s reforms were applauded by those regional leaders adhered to strengthening the central government. Thus, Oleg Koroliov, the governor of Lipetsk Oblast, deems that “the state ought to be either strong or non-existent. That is why we need a powerful and mighty center capable to restore the order”[68].

 

      The State Council was invented by President Putin in the aftermath of launching his administrative reform. Since the governors were to be deprived of their seats in the upper chamber of the parliament, the President offered them a political compensation in the form of the State Council membership. This body is not envisaged in the Constitution, which   makes its functions shaky and blurred. President himself said that he treats the State Council as a “political organ of strategic purpose” which is not supposed however to substitute either the parliament or the government[69]. In Putin’s concept, the State Council is the “platform” for negotiations between the center and the provinces[70].

 

Yet Nikolay Fiodorov, the president of Chuvash republic, is convinced that this institution has no power, and nobody knows what exactly it is about[71]. Gennady Saveliev, the governor of Komi-Permiatsky autonomous Okrug, has called the State Council “not completely legitimate organ”[72].

 

     Political background of the State Council was revealed in the Report issued by a group of mostly left-wing economists and presented by Khabarovsk Krai governor Viktor Ishaev at the first session of the State Council. This document is very uncertain with regard to perspectives of Russia’s globalization. It stipulates that the federal government should support both leading sectors of Russia’s economy with greater potential for global competitiveness, and underdeveloped sectors with scarce investment opportunities like agriculture. However Ishaev Report strongly suggests that domestic investments are to prevail in further Russia’s economic reforms. It even comes up with the idea of introducing limitations for foreign capital in those industries where the Russian producers have obtained good economic results. There is no indication in this paper that tackling ecological issues, transportation problems, economic security and other matters is possible only with strong international support.

 

     The Report is very unclear with regard to which regions ought to be given priority in terms of federal center’s economic policy. It assumes that disparities between the leading regions and the outsiders is a menace for the country’s integrity, and proposes that the Northern and Far Eastern regions, as well as border territories merit special treatment and privileges. At the same time the Report recognizes that the process of concentration of the capital in advanced areas (“locomotive regions”) should be supported as well[73].

 

The political perspectives of the State Council are still dubious. Gleb Pavlovsky admits that one of most likely options is its transformation to the weak body of complaining regional politicians eager to have an access to the President[74].

 

 

2.4. Experimentation with Federal Districts

 

The choice in favor of Vladimir Putin has clearly demonstrated that the notions of strong state and order supplemented by the idea of modernization were perceived as the top priority of the future ruling group. President Putin began his administrative reform with division of the Russian Federation in seven federal districts, the borders of which with a small exception corresponded to the military districts. This did not gone unnoticed, and appointment of five high-ranking military officers to run these districts only increased public concern about the future of federalism in Russia. These new entities also created a new model of relationship with the federal center, based on new distribution of resources in favor of federal districts.

 

     There were several goals of creating federal districts:

n    greater centralization and unification;

n    undermining regional clan systems based on partonage and patrimonialism;

n    elimination of inter-regional conflicts.

 

In accordance with the reform, federal structures located in regions (courts, regional offices of public prosecution and regional unites of the Interior Ministry etc.) are to be led out of the control of regional authorities and get under supervision of presidential plenipotentiaries. The President explained the creation of federal districts by the fact that a great number of regional and republican laws contradicted the federal Constitution. Hence, the general idea of the President was to insist on implementation of federal laws on the whole territory of Russia. Meanwhile, presidential envoys in seven federal districts received the right to attend meetings of the cabinet of ministers with the right of consultative voice and to participate in sessions of the government commissions and councils.[75] Earlier, President Putin nominated presidential envoys to be the members of Security Council.       

 

The federal districts are double-faced institutions. On the one hand, they are a part of Putin’s globalist agenda, as they were designed to break down trade and commercial barriers between the regions, and foster free movement of capitals and information[76]. So far, Putin argues that strengthening of the presidential vertical in response to extreme decentralization and mismanagement in previous years poses no danger to democratic institutions, and even strengthens them. In his opinion, fortifying of state institutions and the leading role of federal structures in reforming the country does not contradict the tendencies of globalization and regionalization he would like Russia to be involved.[77] In tune with the President, his representative in the North West Federal District Viktor Cherkesov pointed out that “it is time to finish up with all what complicates the life of investors – complicated accounting system, non-transparent financial flows, and violations of minority auctioneers rights. Investors can not feel secured in the country where from time to time rumors about reconsidering privatization status quo are being circulating”[78]. 

 

      Yet on the other hand, the federal districts are very much in tune with the logic of administrative proliferation. The expansion of administrative and regulative functions of the heads of the district gave raise to harsh criticism among political experts. Leonid Smirniagin, Sergey Borisov and other specialists had questioned the necessity to redraw the regional map of Russia along the lines determined by Putin. Basically the arguments are that the new administrative borders are arbitrary and ill-substantiated[79]. With nomination of seven “governors general” regions are likely to become more dependent on the federal center and less flexible in international projects.

 

Political leaders had also voiced their criticism. Thus, Nikolay Fiodorov posits that the very model Putin adheres to – the president relying on expanding system of bureaucratic institutions with special roles to play for the military and special services – is the relict of totalitarian regime[80]. He is supported by the deputy chairman of “Yabloko” faction in the State Duma Sergey Ivanenko[81]. The regional legislature of Primorskii Krai has issued the statement accusing Konstantin Pulikovskii, the head of Far Eastern Federal District, in “unprecedented pressure” towards the participants of the gubernatorial election in this Krai in order to facilitate the victory of one of his deputies[82]. The State Duma member Viktor Pokhmelkin (representing the Union of Right Wing Forces) deems that the danger is that the representatives of the president actively encroach upon prerogatives of other institutions[83]. A good prove of this tendency is the confession of Sergey Kirienko that his staff gives regular consultations to the regional policy makers concerning the nomination of candidates to the Council of Federation. “We do not hide that we have to work with these people in the future”[84], Kirienko said.

 

     It is very much telling that the importance of the federal districts is assessed by their heads in purely administrative terms – the criteria is keeping regular contacts with the head of the state. What is more, the Presidential representatives have their say in nomination to public offices, control over federal subsidies and targeted federal programs in strategically important industries. Some of the presidential representative want to supervise the state shares in certain industrial enterprises.

 

Even more symptomatic is that the representatives of the presidents resist to all attempts to frame legally – and evidently constrain - their sphere of responsibilities, keeping them as broad (and indistinctive) as possible. Konstantin Pulikovsky argues that the new tasks might permanently spring up, and the “life itself” has to define the circle of their goals. Georgy Poltavchenko, the head of the Central Federal District, presumes that he – along with other presidential representatives – might need some more financial powers (in particular, he discussed the idea of creating a regional development fund, or assigning part of the federal budget to the federal districts). Piotr Latyshev, the head of the Ural Federal District, was even more explicit insisting that “there are no issues which I would not treat as mine”[85]. Russian political analyst Viacheslav Nikonov has testified that in the North West Federal District the governors are in no position to get in touch with federal ministries without prior reporting the case to the presidential representative[86].

 

In result, the competencies of the heads of the federal districts are as broad that they tend to interfere in almost all segments of the regions’ life[87]. This uncertainty might easily divert their attention from the top priority issues to the peripheral ones, like repairing urban sewing networks or supervising local parties, and deprive Putin’s reform of the much needed sense of mission (it is quite revealing that Sergey Kirienko, when asked about his long-term strategic goals, quite frankly responded “Don’t know yet”)[88].

 

     Political attitudes of the districts’ heads are also very questionable as viewed from the globalization perspectives. Thus, Grigory Poltavchenko posits that “there should not be such a notion as free market economy”. He complained that “the Russian market is overstocked with foreign products of doubtful quality”[89]. Skeptical attitudes to international cooperation are also heard in Viktor Kazantsev’s statement that “there was too much flattering with the cozy idea of twinning relations with foreign cities”, which turned out to be ineffective and of much less potential than twin-sister relations between Russian cities[90].

 

     Piotr Latyshev was known for his cordial relations with Belarus President Alexander Lukashenko (in Latyshev’s opinion, “nowadays Belarus does not face such large-scale problems as Russia does”[91]).  In tune with most Russian hard-liners, Viktor Cherkesov praised the most recent version of the Russia’s information security doctrine, which received rather controversial publicity in the media community due to overwhelming emphasis on state’s secrecy and anti-liberal wording[92].

 

      Thus, the federal districts by and large represent administrative response to the challenges of the regional development. The logic of district-building resembles very much that one of region-building, with heavy administrative measures applied. Putin’s representatives themselves confirm this view. Georgy Poltavchenko sincerely admitted that he “served all his life in rather hard administrative structure, and got used to receive all decisions as orders”[93].  On another occasion he said that he is not inclined to “discuss the issue of whether the President had to introduce federal districts or not. The chief executive formulated the task, and we ought to fulfill it”[94]. It is very telling that Poltavchenko, in his own words, still has a small statue of Felix Dzerzhinsky, the founder of KGB, in his working table[95].

 

      Though Sergei Kirienko argues that the core function of presidential envoys is “policy coordination”[96], in practice most of them have allergy to horizontal forms of interactions. Konstantin Pulikovskii was the first of the presidential representatives to overtly call for banning the democratic elections of the governors[97]. The most noticeable illustration is Piotr Latyshev’s ostensibly negative attitude to the “Larger Ural” inter-regional association.[98] It is likely however that some governors could keep treating the associations as alternative pattern of integration and communication with the federal government. “Larger Ural” and “Siberian Accord” for example are rather active in promoting their agenda in economic issues skipping presidential representatives. It might be that competition between the federal districts and the inter-regional associations will sharpen in the near future.

 

     It is worthwhile noting that the relations between two administrative structures – the subjects of federation and the federal districts – are far from being peaceful as well. The Novgorod Oblast governor Mikhail Prusak and the president of Bashkortostan Murtaza Rakhimov deem the existence of the institution of presidential envoys unjustifiable[99]. Samara Oblast governor Konstantin Titov declared that he does not consider himself as a political subordinate to presidential representative in the Volga Federal District. The newly elected governor Vladimir Egorov of Kaliningrad Oblast prefers to communicate on core issues directly with the federal government by-passing presidential representative in the federal district. The most notorious conflict is being developed between the governor of Sverdlovsk Oblast Eduard Rossel and the head of the Ural Federal District Piotr Latyshev. Latyshev, known for its caution and adherence to half-measures, have lost momentum in such important areas as economics and foreign relations[100]. Another telling example is the President of Ingushetia Ruslan Aushev refusal to subordinate to Viktor Kazantsev (“He has no constitutional powers... He might elaborate on issues but is in no position to give me directions”[101]).

 

     The troubles the federal districts have to meet dealing with the capital and information actors, are pretty much the same as the subjects of federation have experienced already. This is due to the fact that there is no much difference between these two administrative actors (the regions and the federal districts) in terms of the attitudes to the business and information communities. Like each of the governors, each head of the federal district tries to develop his own economic program and get an access to financial flows[102]. Like most of the governors, Piotr Latyshev “openly offers to the businessmen to solve all their problems through his office”[103]. In the tug-of-war between Rossel and Latyshev, each side has to rely upon support of the wealthiest entrepreneurs. Konstantin Pulikovsky has imposed a great deal of administrative control over the media outlets that have been serving the former governor of Primorsky Krai Evgenii Nazdratenko[104].

 

     Latyshev, with the financial support of the Russian tycoon Oleg Deripaska, has started a new TV project to cover his policies in the district)[105]. Leonid Drachevsky did the same in Siberia[106].

    

The big problem is that purely administrative measures can hardly help the regions (either “small ones” or “big ones”) to survive. Georgy Poltavchenko has recognized himself that “the President awaits for proposals from us”[107]. Hence, what matters for district-level “anti-crisis management” (one of most widely used phrases of Sergei Kirienko[108]) are intellectual products like new ideas, recommendation, advice, etc.

 

President Putin has assumed that the presidential representatives would be the core figures in creating the local civil societies[109]. He did not give any details on what exactly is meant by that, which itself is very indicative. Most likely, what Putin had in mind is that his representatives are supposed to strengthen political resources of some of the regional actors that could contribute in divesting the governors of excessive powers – like the regional legislatures and local branches of all-Russian political parties. Yet it is hard to expect that the presidential envoys are apt for the delicate task of nurturing the civil society institutions. Presidential representatives’ attitudes to the media are for example very much similar to that ones of the governors. In their views, mass communications are basically instruments for mobilizing public opinions and reshaping the mass awareness. Some of the presidential representatives have already understood that for successful work they have to achieve some degree of personal popularity, which is unthinkable without information actors[110]. Thus, Piotr Latyshev is eager to widely use the media to revive such trans-regional identifications like “sibiriak” (the resident of Siberia) and “uralets” (the resident of the Ural)[111].

 

       At the same time, according to Leonid Drachevskii, not all of presidential representatives’ activities ought to “go public”[112]. Even Sergey Kirienko, obviously the most pro-liberal among the seven districts heads, assumes that only the President – not the general public – is supposed to judge on how effective is his work[113].

 

     One and a half year after Putin’s reform there is still no consensus among policy makers as to its long-term effects. Federal districts go through a period of differentiation. Relations between the federal center and the seven federal districts are still being shaped. The process of making the regions’ legislation to come to terms with the federal laws also gives mixed record. Tatarstan’s President Mentimer Shaimiev, for example, still adheres to the principles of sovereignty of this republic as a political entity associated with the Russian Federation[114], while the leaders of Udmurtia were quick to delete from region’s legislation all norms taking it away from Russia’s federal legal acts (“sovereignty” was swiftly changed to “autonomy”, the clause of Udmurtian citizenship was canceled, private property was guaranteed)[115].

 

     Districts are still in search for their international identities. In some cases the concept of cultural integration is being put forward. Sergey Kirienko, for example, noted that the territorial area of responsibility of Russia’s leaders, both national and subnational, is defined not by administrative borders but rather by cultural factors (he refers to the “area within which people think and speak Russian”[116]). In other cases (Southern federal district) “the larger regions” seek to contribute to peace enforcing and soothe the whole bunch of security-related matters.

 

    It is still unclear how far the federal districts are to go. From Sergey Kirienko’s perspective, federal districts are rather political instruments of the President than autonomous political institutions. Nikolay Fiodorov, on the contrary, argues that the federal districts will inevitably evolve into new subnational governments.

 

     There is much uncertainty with regard to the extent to which the federal districts could be treated as new regions. On the one hand, “districts are not new regions and will never be”[117], Sergey Kirienko assumes. On the other hand, Piotr Latyshev deems that “the new configuration of the Ural within the boundaries of the federal district is fundamental organizational prerequisite for deeper integration… which fully corresponds to the national interests of Russia”[118].

 

2.5. Regions and the military

 

     Using military and security structures for civilian governance do not correspond to classic democratic standards, yet peculiar symbiosis between civilian and military elites at the regional level could be treated as another response of the regions to the challenges they have to face. This response could be neatly described in terms of the “administrative network” model. Several high-ranking military officers have made civil political careers under Yeltsin - Ruslan Aushev in Ingushetia, Alexander Lebed’ in Krasnoyarsk Krai, Alexei Lebed’ in Khakassia, Alexander Rutskoi in Kursk Oblast, and Aslan Maskhadov in Chechnia.

 

      Choosing the “men in uniform” as the governors, the regions have experimented with another type of administrative market response to the challenges of modernization. As Steven Main puts it, the generals “know how to obey orders and understand the importance of working with a clearly defined hierarchy and, where one does not already exist, they will create it… You cannot find more manageable governors than generals”[119].

 

Russian military forces since 1991, when by refusing to participate in the putsch they decided the fate of the newly born Russian democracy, began to play a considerable role in political process[120], including its regional level. Alexander Lebed’ seems to be the most internationally reputed of all generals turned into governors. Before being elected as the head of Krasnoyarsk Krai, he was known for his peace keeping efforts in Trans-Dniestr region and Chechnia (he signed famous Khasaviurt agreements for Russian government that stopped the bloodshed in 1996). His political views were a mix of patriotic traditionalism, pragmatism and moderate liberalism. Lebed’ is widely known in the West - sufficient is to recall that prior to his victorious campaign in Krasnoyarsk Krai he went to USA discussing there for ten days the perspectives of investments[121]. Foreign observers have ascribed to him “enormous political strength... Only Lebed’ ... can blame the new suffering on old policies, remove old officials en masse and institute a new policy that gives people some hope that the new suffering will pay out”[122]. 

 

     Yet those hopes - both international and domestic - proved to be exaggerated and misleading. Neither of the regional military of the “first wave” became a nation-wide leader. The ex-military in their capacity of regional politicians got involved into harsh economic and political collisions. Alexander Rutskoi, the governor of Kursk Oblast, had enormous tensions with local elites and the federal law-enforcement agencies in the region, which finally had led to the end of his political career in the region[123]. Alexander Lebed’ got a very controversial reputation by calling for a dictatorship in Russia[124] and relying on forceful methods in solving political disputes[125].

 

     It is believed that under President Putin the military received a new impulse to go into politics. In fall 2000 several of them won the governorship - Vladimir Egorov in Kaliningrad, Vladimir Shamanov in Ulyanovsk, Vladimir Kulakov in Voronezh. In Mari El, Kursk and Cheliabinsk Oblasts the military candidates finished rather close to the winners[126].

 

     It is hard to unequivocally ascertain however that penetration of the military into regional politics is a deliberate strategy of the federal government. Nonetheless, increasing number of generals in Russian political life speak for a new formula of governance Putin is about to introduce. The case of Vladimir Yegorov, the Baltic Fleet commander, supported by Vladimir Putin in his battle for a governor’s seat in Kaliningrad Oblast, reflects the presidential approach to tighten methods of governance over military and strategically important centers and border regions having complicated geopolitical surrounding.

 

     The eventual militarization of Russian politics is a matter of major concern in the civil society. On the other hand, the paradox is that the military governors might foster liberal reforms in the regions. Thus, the new governor of Voronezh Oblast pledged to take this region away from stagnating “red belt”[127], while the administration of the Kaliningrad governor has signed the contract with Yegor Gaidar’s think tank to draft the strategic program for regional development.

 

     To sum up the administrative market analysis, we conclude that the regional political regimes still have political and institutional resources. The electoral cycle of 2000-2001 has confirmed the vitality of the governorship institution: in 20 regions out of 35 the incumbents have won the elections, and in 2 regions the winners were directly supported by the former chief executives. Statistically speaking, the governors’ regimes have scored better than in 1996 electoral cycle, when incumbents had won in less than 50 per cent of all elections held[128]. Yet statistics does not reflect to the whole extent those essential transformations that are taking place within regions. In the next chapter we are going to take a closer look at these alterations which undoubtedly are a part of the globalization agenda for Russian regions.

 

 

3. REGIONS AND NEW FORMS OF TERRITORIAL MOBILITY: TOWARDS NON-ADMINISTRATIVE RESPONSES

 

The administrative market, as we have seen above, has its constrains and limitations. In parallel to it there is a growing world of networking communications in which the regions have to participate and develop new forms of interaction with other new actors. These relations might be that ones of both conflict and partnership.

 

3.1. “The Burden of Geography”: Why the Regions Are Disadvantaged?

 

By the end of the first ten years of the formation of new public actors an animated discussion intensified about the perspective models of Russia’s development.  The first model was traditionally exemplified by territorial actors, namely the regions. Since they are bound to specific location, their operational space is constrained by fixed geographical limits. Yurii Trutnev, the governor of Perm Oblast, has verbalized the “philosophy of localism” in the following way: “we have more trust in our local business operators, those who live and work in our land, because they are more interested in the development of the region”[129].

 

     The second model is developed by trans-territorial actors, which are not tied up to specific geographic boundaries. These are basically financial-industrial groups, the media, as well as NGOs. Their greatest assets are mobility and networking potential. Their operational space is defined not by territorial landmarks but by economic and financial rationale[130]. Their resources are much more diversified and dispersed all across the country and the world. As Joseph Camilleri puts it, “civil society is constructed and reconstructed, as people from a given locality (or from a multiplicity of interacting localities) penetrate each other’s space, pursue common tasks, and establish, or re-establish, communities that cross spatial boundaries”[131].

 

The administrative model of spatial development of Russia, which can be seen in the activities of regional elites, came in open contradiction with a liberal paradigm, favored by other actors (financial-industrial groups, mass media, NGOs). The widespread practice of locking out flows of goods and information within the regional borders hurts the interests of new actors, speaking in support of free circulation of capital, technologies and information. The most active part of business and information actors had become the “agents of globalization” and began to restructure the territorial, administrative and informational space of Russia.  

 

From the beginning of 1990s the existence of “administrative oligarchy” (an artificially group formed of close to the state businessmen and managers of information resources) facilitated the interplay between the regions and new actors. A number of regions are capable of taking control of financial-industrial groups or export companies. The best illustration to this is the case of Tatarstan, President of which controls the oil- and petrochemical business in the Republic.[132] Tatarstan does not have “oligarchs” as independent political and economic actors.

 

Resource rich regions have a unique lever of influence over financial-industrial groups, oriented at exporting of mineral raw materials. For example, it was Leonid Polezhaev, the governor of Omsk Oblast, who initiated the creation of “Sibneft’” oil company to become one of largest regional business operators in Russia[133]. Natural resources, as a rule, remain the property of a particular republic or region and therefore any question concerning output and processing of these resources is subject to agreements between regions and FIGs.

 

Yet the 1998 meltdown and coming to power of Vladimir Putin in 2000 have considerably weakened the power of governors, depriving them of former administrative benefits and thus giving the way to new generation of economic and information actors.

 

     The Report issued by Sergey Kirienko’s think tank in fall 2000 accused the regional governors in forming the economic climate suitable for a rather limited number of “proxies” (especially those enterprises with largest rate of export revenues), granting special immunities and privileges to them, establishing red-tape hierarchies, erecting barriers for free movement of goods, introducing “administrative taxation” for business operators, giving budget subsidies to insolvent and inefficient enterprises, and other protection measures incompatible with integration to the global world. Strategies of survival of the regions in international arena are chiefly related to either arms trade (the perspective which is based on maintaining international conflicts and arms race), or raw material export.

 

Very few of the regional governments proved to be capable of turning into organizational, intellectual, or financial leaders. As a result, the capital was quick to protest against troublesome administrative restrictions and tough regulations by running away from the regional governments (“the revolt of capital”). The number of depressive regions has augmented after the August 1998 financial crisis, while the aggregate role of the regions in elaborating nation’s strategic priorities has decreased. This was basically due to the fact that the regional governments neglected the new spatial design of the global world in which the shapes of the market forces do not coincide with the administrative borders, and failed to adequately react to the most essential modernization challenges[134].

 

     The territorial actors are becoming increasingly disadvantaged in case they are challenged by mobile trans-territorial actors. This was for example the case of “Siberian Aluminum” group run by Oleg Deripaska that succeeded in imposing its conditions to the governor of Chelyabinsk Oblast Piotr Sumin and the governor of Nizhny Novgorod Oblast Ivan Skliarov.

 

     There are several reasons the trans-regional holdings and corporations might give a hard time to the regional elites. First, the newcomers have at their disposal greater freedom of manouvres. They are in a perfect position to mobilize resources from different territories and industries.

 

   Second, the corporate elites are much more consolidated than their regional counterparts. The latters might be easily split up along different lines which gives the business groups new chances to promote their own agendas.

 

     Third, business groups possess of much higher coalition potential. To challenge the regional elites, they usually team up with the media, NGOs, and foreign institutions. For the regions, the only reliable partner is the federal center and the “administrative market” under its control.

 

     The perspectives of loosing the competition make regional authorities invent new models of spatial development. The regional elites (at least the most advanced of them) make their efforts to diminish their territorial predetermination, to soften the burden of territorial immobility. To survive in increasingly competitive environment, the regional administrations have to invest more resources into networking and horizontal communication[135]. Some of them seriously think about creating their own communication milieu[136]. To increase their adaptive and transformative capacity, the regions have to be in motion, incorporating and accommodating both human and institutional demands[137]. The regions try to reorder and reshape their operations, to make disappear the demarcators of territorial compartmentalization and fixation[138]. The impossibility of creating “regional banking systems” or “regional production cycles” becomes more and more obvious.

 

     The theory of regional governance as a type of corporate governance has appeared. Interestingly enough that even physical residence in the region is not any longer an imperative for the regional chief executives: thus, the Taimyr governor Alexander Khloponin has  assumed that his place of residence – Moscow or Noril’sk - will be determined by its effectiveness[139]. What is peculiar is that those challenges, closely associated with the spread of globalization, came up from inside Russia, and are being developed as domestic phenomena.

 

3.2. New “Spatial Mutability”

 

     There are several options of “spatial mutability” tried by the regions. First, these are inter-regional associations of economic cooperation. Eight of them function nowadays, each uniting neighboring regions with shared problems and demands (North-West, Central Russia, Greater Volga, Black Earth, North Caucasus, Greater Urals, Siberian Accord, Far East and Trans-Baikal[140]). Another type of associations brings together the regions sharing common economic concerns. This is the case of the Union of Grain Producing Regions formed in 1998 to foster creation of inter-regional markets and conditions for free movement of products within Russia, regardless of administrative constrains[141].

 

           During 1990s interregional associations had rather moderate political ambitions, and only attempts of charismatic governors to use them as tools in strengthening their political careers (as in cases of Sverdlovsk Oblast governor Eduard Rossel or Krasnoyarsk Krai governor Alexander Lebed’) contributed to political credentials of these associations. Having been established to promote interregional cooperation and increase positions of regions towards the federal center, interregional associations succeeded in finding ways to better present their interests against the center and their economic potentials abroad. Associations were also one of the instruments for the federal government in its search for making Russian foreign policy more coherent - Kremlin insisted that each subject of federation should voluntarily give up some of its powers, including in foreign economic policy area, in favor of the associations. For example, in one of the most sensitive foreign policy issues, the Russian government wants Belarus to deal with the association instead of dealing with separate regions.

 

However, associations failed to achieve a necessary cohesion between their members that could transform them into influential entities in Russian politics. Having reached the high point under Prime Minister Yevgenii Primakov in 1998 (who invited some of the leaders of interregional association to participate in his government) the “big eight group” exhausted its lobbying potential and now stands in the periphery of Russian politics. In the field of external economic relations associations faced difficulties stemming from individualistic policies pursued by governors of prosperous regions that preferred to establish personal ties to foreign countries rather than to promote joint interests. Moreover, the member-regions present different stages of industrial performance (from agrarian till post-industrial). Under Putin’s presidency the inter-regional associations are trying to keep their residual influence (“Siberian Agreement”, for example)[142].

 

The second group of arrangements were bilateral cooperation agreements:

- between Russian regions, including those geographically remote ones. These agreements help the regions to expand the markets for their industries and find new regional partnerships as a response to heightened economic competition.

-         region-to-region cooperation (“twinning relations”) with foreign provinces and territories. This form of communication plugs the regions to the international networks and favors humanitarian and information exchanges.

-         city-to-city cooperation is one of still underestimated resources for the regional policies in Russia. One of most recent examples was the “Club of the Six” created by  most populated cities of the Volga Federal District. The statement issued by the “Club” explicitly indicated that in the globalizing world these are the biggest cities that are the focal points for innovations, new managerial culture, developing information resources and elaborating strategic approaches to tackle with the future[143]. The urban potential – still undiscovered for many of regional leaders – lays in diversity of resources (business and intellectual activities, human and cultural capital, information and management, transportation and communications networks, media, banking and insurance services)[144]. Cities are important because they possess of highest social and professional mobility of its residents, developed milieu of consumers services, high educational standards, and innovation abilities[145]. This vision of the new roles of the major cities is completely in tune with those approaches being developed in the West that treat “city-regions” as the spatial foundations of the new world system, with essential autonomy of action on the national and international stages[146].

 

      The third way of widening the regions’ horizons was fostering trans-border cooperation and forming trans-border regions (modeled after “Euroregions”, like “Saule” and “Karelia”). As Yurii Deriabin underlines, these collaborative endeavors might plug some of the Russian regions into the system of EU-sponsored funds, projects, and contracts[147].

 

      Another example is the Council of the Leaders of Border Regions of Russia, Ukraine and Belarus institutionalized in 1996. However “apart from the trade, there is very little evidence that true subregional processes are taking root in this area. It is also not apparent that Russian regions and their CIS neighbors try to address the kind of issues that usually make up the agendas of more developed subregional organizations. Many rhetorical and official declarations of intent for subregional and ‘bottom-up’ initiatives have mostly remained purely declaratory”[148].

 

       Transport corridors (Via Hanseatica, “North – South” corridor spanning from Europe to Iran and India, Trans European corridors, etc.) had also their roles to play. Usually all these projects are directly supported by the regional authorities since they are expected to open new markets and widen geographical horizons. 

 

       The fourth tool was found in specific economic and financial arrangements for certain territories that go beyond the traditional practice of business localization. These were numerous experiments all introducing new forms of spatial and territorial regulations in order to strengthen region’s competitive advantages on the global scale:

-         off-shore zones (“Ingushetia”, “Kalmykia”, “Kabardino-Balkaria”, “Altai”);

-         free economic zones (“Nakhodka” in Primorsky Krai, “Yantar’” in Kaliningrad Oblast, “Dauria” in Chita Oblast);

-         free entrepreneurship zones (in Vyborg, Nakhodka, Novgorod);

-         free customs zones (in Moscow, St.Petersburg, Rostov-on-Don, Ulyanovsk, Nakhodka). In this category we can also place “port & customs” sub-zones (Oranienbaum and Kronstadt in Leningrad Oblast);

-         export production zone, exemplified by Russian-Korean industrial complex, which is a part of free economic zone “Nakhodka”[149];

-         special economic zones (in Magadan Oblast);

-         economically friendly zone (in Mari El republic, Ingushetia);

-         special economic region (southern Kuzbass in Kemerovo Oblast);

-         territorial productive zones, created – basically in Nizhny Novgorod Oblast – on the basis of individual enterprises eager to develop reconversion projects;

-         technopoles (International technopark in St.Petersburg, Scientific & Technological Park in Tomsk). The idea of technoecopoles (in Komsomol’sk-on-Amur, Noril’sk, Arkhangel’sk and Apatity) and agropoles (Leningrad Oblast) are being disccused[150].

 

     Some experts are inclined to think that those zones should not overlap with the boundaries of the subjects of federation, since it might be treated by others as unfair competition. That is why the federal center gave priority to smaller zones which are expected to be more efficient.

 

      Of course, not all of the zones were success stories. Many of them were mismanaged due to lack of experience and corruption. Scarce support from the federal government and incoherent federal policy in this issue have also had negative bearing. Yet the cumulative effect of all these arrangements is erosion of hard hierarchical structures, and new openings for associating with the global world.

 

       The fifth way was networking along ethnic lines. Establishing relations with ethnic groups abroad is an important part of expanding the borders of cooperation, communication and influence for Tatarstan, Karelia, Komi, Dagestan and other ethnic republics. Thus, there is an ambitious project of information integration of Finno-Urgian people living in Russia (Karelia, Mari El, Mordovia, Udmurtia, Khanty-Mansy), Hungary, Finland and Estonia[151].

 

        All these new phenomena create multilevel hierarchy of different political, economic, and social arrangements. Ever-increasing amounts of activities now occur in the form of long-distance, cross-regional relationships[152]. The regions thus learn how to survive in the “network society” that is one of off-springs of globalization practices. The networking practices are very much deregulated – as Kenneth Waltz put it, “there is no one to complain to or to petition for relies… No one is in charge”[153]. This deregulation brings the new sense of uncertainty for the regional high-ups: for example, the head of Nizhny Novgorod Oblast government Sergey Obozov has claimed that he is very unsure about the strategic goals of major investors that became the owners of biggest local enterprises[154].

 

     Challenged by resourceful and mighty trans-territorial actors, the regions seek to strengthen themselves by means of acquiring some advantages of their rivals. Like the financial and industrial groups, the regions are eager to diversify their resources. Like the  media organizations, the regions are eager to develop their own information strategies – the authorities of St.Petersburg, Ekaterinburg[155], Yaroslavl’[156], Perm’[157], Kanty-Mansi autonomous Okrug[158] and Volga Federal District[159] were the first sub-national units to introduce their own concepts of telecommunication and digitalization.

 

    The regions’ new “multidimensionality” (they are involved in different projects simultaneously) augments the number of alternatives available, accumulates their resources and helps to keep the number of options open. Of course, the possibilities of adapting to “network society” vary from region to region. It has to be kept in mind that in terms of export volumes and concentration of foreign investments the regions differ in hundreds times. Seemingly, the North West regions of Russia are very much privileged to be located in close proximity to the EU, and especially to the “Northern Dimension” and Baltic Sea areas which are being build upon horizontal, multisectoral set of cooperative networks[160]. There is a clear understanding in this part of Europe that “in a world dominated by global markets local, regional or national competitiveness is no longer only a question of natural resources or inheritance in any way, but primarily a question of whether or not a location is capable of facilitating dynamism, innovation and competition”[161].

 

     The concept of “roaming economic regions”, advanced for that purpose by Sergei Kirienko’s think tank in the Volga Federal District, is one of possible theoretical responses to the challenged met by regions in late 1990s. These are supposed to be the regions with no clear geographic boundaries that would depend on economic rationale and technological considerations[162]. Being a part of different hierarchies of regionalism, the region might take advantage of each of them, pretty much in the same way as the financial and industrial groups profit from having their businesses in a number of regions and industries simultaneously.

 

 To sum up, the logic of new actorship of regions contains intrinsic duality. On the one hand, the regions are entities that are defined by territorial context and location-dependent. On the other hand, regions make their efforts to remove the barriers (and burdens) of territory by networking, and bring different patterns of economic, social and political development into ever closer contacts. Regionalization might therefore be conceptualized in terms of ‘complexes’, ‘flows’, ‘mosaics’, ‘synergies’, ‘transactions’[163].

 

3.3. Challengers Becoming Partners: Politics and Business Forming Alliances

 

        New competitive and demanding environment is essential challenge for regional elites, yet their roles as facilitators and arbiters between competing groups are even increasing in importance[164]. The regions still have unexplored potential for surviving in the rivalry with its challengers. Territorial rooting is a power factor since close proximity brings together the representatives and interests of members of different organizations. The regions have to be the places of technical, productive and organizational integration, not mere replicas of large firms’ industrial strategies.

 

There is certainly some room for positive interaction between the regions and major non-administrative, trans-territorial actors. Region’s actions are embedded in concrete, ongoing systems of social relations, and these relations might facilitate the regions’ profit and rent seeking strategies. Only cooperating with other new actors as equals, the regions might strengthen their social capital, which could be defined in terms of structural embeddedness (the structure of overall assets based on relations), cognitive embeddedness (the degree to which the actors share common code and system of meaning and information), and resource embeddedness (the degree to which the network ties contain valuable and instrumental resource potential)[165].

 

Interaction between regions and financial-industrial groups emerges as a rule on the crossing of respective interests and potential of both actors. Some regions seek to make use of financial-industrial groups’ potentialities to widen their resource capability. Several trade union organizations supported by regional authorities of Ulyanovsk, Perm’, Kazan’, Kursk, and Ufa took the lead in All-Russian action in defense of the interests of home aircraft industry.[166] 

 

The media of course could also be a strategic partner for the regions to use the public coverage of events as an important tool of advertising the regional potential. Apart from that, regions try to actively explore the possibilities of Internet to create their own regional images and provide potential investors with necessary information. This was the case of the “Local Democratic Network” project in which the administration of Nizhny Novgorod has participated along with partners from Tampere and Bologna. As a result of the project, the municipal authorities have created computer and communication network accessible for ordinary users and containing a plethora of information concerning the legislation, database of municipal authorities, press releases, etc.[167] 

 

Some regions regularly and systematically use media publicity for strengthening their international credentials. Thus, Nikolay Petrov and Alexey Titkov deem that a number of Russia’s regions might be called newsmakers - they chiefly refer to Moscow, St.Petersburg, Nizhny Novgorod Oblast, Krasnoyarsk Krai, Kalmikya and Sverdlovsk Oblast. Among the most important newsmaking factors they call widely known reputation of the head of the region (Boris Nemtsov in Nizhny Novgorod prior to 1997, Alexander Lebed’ in Krasnoyarsk Krai, Alexander Rutskoi in Kursk Oblast, etc.).[168]

 

Region-NGOs cooperative relations are also of increasing importance. Perhaps, the best examples are multiple forms of partnership between the Soros Foundation and Russian regional authorities in such varied fields like fostering employment programs (the project run with the “Siberian Accord” inter-regional association), creating distant learning studios (in St.Petersburg), reforming penitentiary system (in Nizhny Novgorod Oblast), upgrading schooling teaching (in Samara Oblast), etc.[169] In St.Petersburg, the “Leontieff Center” was the chief contractor for 1997 city’s strategic development plan.

 

      Hence, what we see is that the regions are becoming more systematic in their networking strategies and pay much attention to recruit resource rich and powerful actors in their networks. These new relations are more turbulent and dynamic in comparison to what we have in more stable economic and social milieu in the West. Of course, not all networks are to be success stories. Wealthy, powerful and prestigious actors are likely to form their cluster of successful power brokers and protect their domains[170].

 

3.4. Uncertainties for the Regions

 

      Our basic point was that the regions will survive provided that they will be willing and able to redefine themselves as simultaneous members of territorial family of actors and the partners for those non-territorial actors that were described above. It is neither sufficient nor effective any longer to rely exclusively upon administrative mechanisms of regional governance. The regions have to admit – sooner or later – that these are financial, industrial and information actors that give birth to Russia’s new corporate and managerial culture. These actors might become a new resource of Russia’s regional governance[171].

 

      Yet the future of the regions is also complicated and obscured by the general crisis of territoriality in Russia.  The end of 1990s has sharpened the whole set of territorial issues all across Russia. According to the Ministry on Federal Affairs, there are 32 territorial disputes in the country.

 

     The first pattern of territorial uncertainty comprises attempts to integrate regions. V.Pozgalev, the governor of Vologda Oblast, is a proponent of enlarging the subjects of the federation. In his view, “we do not need toy kingdoms. All subjects are supposed to be more or less equal in terms of their possibilities”. He suggests that it would be economically rational to leave not more than 50 subjects of federation instead of 89[172]. Saratov Oblast governor Dmitrii Aiatskov deems that instead of seven federal district the President ought to create from 30 to 50 ‘big regions” each of them to include several subjects of federation or even some other post-Soviet republics[173]. Gennady Osipov, the Director of the Institute for Socio-Political Studies, Russian Academy of Sciences, has forecasted that 11 enlarged subjects will compose the Russian Federation over time[174]. Eduard Rossel, the governor of Sverdlovsk Oblast, and the chairman of the State Duma Gennady Selezniov stick to the same opinion[175].

 

     Some steps were undertaken for practically implementing those ideas. Yurii Trutnev, the governor of Perm Oblast, has launched the process of its integration with the Komi-Permyak autonomous Okrug[176]. Mikhail Prussak, the governor of Novgorod Oblast, has suggested that eventually this region might merge with Pskov Oblast. Arkhangelsk Oblast and Nenets autonomous Okrug could also form a single region, along with St.Petersburg and Leningrad Oblast[177]. Eventual mergers are expected between Kamchatka and Koryak autonomous Okrug, as well as between Buriat autonomous Okrug and Irkutsk Oblast[178]. Interestingly enough that the chain of mergers might be extended to the military districts: it is expected that Volga military district might be united with the Volga military district[179]. 

 

     What are the stimuli for those regional leaders that foster the integration of the regions? Some of them expect to stay at the head of enlarged provinces, others want to assimilate weaker neighbors. As regards their opponents, these are basically chief executives of autonomous Okrugs that are parts of larger Krais, and thus could become the first candidates for loosing the status of the subject of federation. Leaders of the ethnic republic also oppose this idea since they are fearful of loosing their identities and privileges[180].

 

     The second type of uncertainty is related to the redrafting the boundaries of existing units. Thus, Murtaza Rakhimov, the President of Bashkortostan, has applied for membership in the Urals Federal District (instead of the Volga Federal District in which this republic was placed by the decree of Vladimir Putin)[181]. Though Nizhny Novgorod won the bid for being the center of the Volga Federal District, its governor Ivan Sklyarov nevertheless complained that two Oblasts – Volgograd and Astrakhan’ – stayed outside it.

 

     A number of politicians from Kaliningrad are eager to make the federal government to convert this Oblast into a special federal unit, thus separating it from North West Federal District[182]. In a similar way, Boris Nemtsov, the leader of the Union of Right-Wing Forces, had proposed to form a special federal district for Chechnya.

 

      On a lower level, too, the perspectives of altering the current state of affairs are voiced. Two districts of underdeveloped Kurgan Oblast have openly expressed their intention to become the parts of the neighboring Sverdlovsk Oblast because of economic proximity to the large industrial city of Ekaterinbourg[183]. Similarly, Ivanovo residents have appealed for joining the neighboring Yaroslavl’ oblast.

 

      Of course, the plans for reshuffling the territories are not free of conflicts of interests. As soon as Krasnoyarsk Krai authorities have started publicly debating the perspectives of absorbing Taimyr autonomous Okrug (TAO), Alexander Khloponin, the TAO governor, has proposed to include Krasnoyarsk Krai into TAO[184]. The situation is complicated since TAO – where “Norilsk nickel”, major world producer of nickel, is located - is the subject of the federation and simultaneously the part of Krasnoyarsk Krai[185].

 

     Other conflicts pop up as well. There are fears in Perm’ oblast to find itself a victim of hypothetical division between Samara and Saratov Oblasts[186]. Even more acute are relations between the Altai Krai and Altai republic in the aftermath of declared intentions of the former to incorporate the later[187]. Sharp territorial conflict divides neighboring Astrakhan’ oblast and Kalmykia each fighting for its jurisdiction over a piece of land[188].

 

     As we have shown, Putin’s reform didn’t offer a satisfactory response to all confusions of Russian territorial construction. Neither regional nor federal elites treat the current federal arrangements as finite.     

 

     Some preliminary conclusions might be drawn from the current state of relations between the regions and other new actors. First, today’s regionalism in Russia is extroverted rather that introverted phenomena. The federal districts established basically for solving domestic matters quite soon have started the process of positioning themselves in wider international ambit. Federal districts are “regions-in-the-making”. They move from passive objects of Kremlin’s policy to active actorship capable of articulating their interests and policies.

 

     Secondly, regionalism constitutes an open-ended phenomenon. Federal districts are social and political entities that might be constructed and deconstructed. Discussing regionalism - assessing its strength and weakness and drafting its perspectives - means participating intellectually in its construction or deconstruction[189].

 

    Thirdly, we may discern certain levels of regionality. Federal districts were created as “regional spaces” (initially they were purely geographic units existing only in presidential decree). Next they were transformed into administrative units each marked by exceptional loyalty to the federal center. Those administrative structures gave birth to “regional complexes” as political units, cemented by common interests and solidarity. Actually some of these political units are on their ways to “regional societies” (looking for stronger social integration and cohesiveness). Some districts are in search for their international identities (Sergey Kirienko, for instance, adheres to the concept of cultural integration within federal districts).

 

     Presumable formation of “regional societies” in the federal districts is an important landmark because if Putin’s reform is to develop basically within administrative and political elite boundaries, it is doomed to failure (and subsequent deconstruction). Trying to assess the state of the progress of new territorial division of the country, one should keep an eye on the advancement of civic society institutions.

 

     Putin’s territorial reform had augmented the number of subnational actors and options for each of them, including those related to coalition building. Three of them could be distinguished (restoration of unitarism as the least feasible option is discarded in this analysis).

  

     Option 1: increased importance of the federal districts. Keeping strategic touch with explicitly liberal economic policy (as exemplified by German Gref, Andrey Illarionov, Alexei Kudrin, Viktor Khristenko, Sergey Kirienko and other pro-market reformers), the federal districts have a chance to take advantage of concentration of resources, rationalization of economic management, and greater compatibility between national and subnational legislation. Another beneficiary of this scenario might be municipal authorities, one of few potential allies of the presidential representatives in their tug-of-war with the governors. At the same time, the influence of the subjects of federation and inter-regional associations will go down under this pattern of development.

 

     Option 2: regain of influence by the subjects of federation. This might be the case should the federal center decide that the federal districts had accomplished their missions and therefore could be put aside. This variant might be accompanied by mounting activism of inter-regional associations as the most feasible instrument available for the governors in their opposition to the powers of presidential representatives.

 

    Option 3: gradual process of enlarging the subjects of federation through merging the neighboring provinces. In this case the regional elites will split up along political lines: the most loyal regional leaders will undoubtedly support Putin, while others will disagree. Enlarged regions might challenge both inter-regional associations and federal districts.

 

 

CONCLUSION

      As we have said before, the regions have to be identified as the actors belonging to both vertical and horizontal types of communication. The difference between the two is summarized in the table below.

 

Vertical communication

Horizontal communication

Administrative market of state institutions

Networking between equal actors, including non-state ones

Patronage politics

Interest groups politics

“Hard hierarchy” based on administrative connections and personal loyalties

“Soft hierarchies” based on resource potential (chiefly economic and informational)

Existence of the single center of strategic decision making

No single decision making center exists; the rules are plurality and diffusion of authority, rivalry between competing poles of gravitation

Subordination of political relations

Coordination of political relations

Strict and highly formalized rules of officialdom

Flexible and adaptable frameworks of relations based on emerging agendas (often informal ones)[190]

Strict borders of the institutional influences

No strict borders – all influences are of trans-regional and trans-national reach

Bureaucratic rivalries of different institutions each eager to augment its influence at the expense of others (zero-sum-game)

Self-restraining is indispensable condition for effective functioning of the system[191]

Inward-oriented relationship aimed at mustering domestic resources

Outward-oriented relationship fostering internationalization and globalization

 

Russian regional institutions share a sort of “double identity” – they function in two spheres (the administrative and networking ones) simultaneously[192]. In this sense we may assume that the future model of federalism in Russia could be described by the formula “administrative strategies plus networking”.

 

The federal factors – like tug-of-war between the “Yeltsinite” and “St.Petersburg” groupings – have direct impact over the regional developments (as exemplified by the election campaign in Tomsk Oblast[193] in 2001 and other regions). Regions are also very sensitive to business conflicts – like that one dividing RAO “EES” and “Russian Aluminum”, which is the high profile issue for Krasnoyarsk Krai[194].

 

The regions try to get used to the new network reality, and even to catch up the initiative. This is conducive to more positive changes in Russian economic and political performance. Thus, the alliance of three major metal producers – “Severstal’”, Margitogorsk and Novolipetsk enterprises, supported by the governors of Cheliabinsk and Belgorod oblast and Udmurtia - has undertaken concerted efforts to get “market status” for Russian metal makers in the US, and thus increase country’s exportation potential[195]. It is very telling that gathering information and adapting to the international standards in legislation, accounting, and ecology were perceived as having primordial importance for success of their networking.

 

 Of course, actor-to-actor horizontal cooperation is a very vulnerable process. For example, two metal producers – Cherepovets and Magnitka plants – refused to lobby against US-Russian trade agreement of 1999, and were harshly criticized for that by other regional enterprises[196]. At the same time, networking between different actors (basically FIGs and regional administrations) do not necessarily foster pro-globalization agenda: for example, the decision to close the Russian domestic market for second hand foreign vehicles was based on alliance between the governors (Konstantin Titov of Samara oblast), the presidential representatives (Sergei Kirienko), and obviously the car-producers themselves (Oleg Derispaska[197]). A number of Russian FIGs tycoons (like Kakha Bendukidze of “Uralmsh-Izhora” group and Andrei Petrosian of Novolipetsk metallurgical plant) are very doubtful about Russia’s entry in WTO due to fear of more demanding competition[198].

 

Yet what is most important is that on the threshold of the 21st century Russian regionalism is increasingly getting exposed to global influences. The growing role of information poses a serious challenge to regional autarky and stimulates the development of democracy and open society. In its turn, capital largely determines the interplay between the regions and new actors; being the challenger of regionalism, it shapes new forms of spatial development. Yet it would be misleading to negate the vitality of the Russian regionalism. As shown above, the interrelationship between the regions and new emerging actors is getting more and more complex. The actors discussed above are not static ones. They are evolving entities, and their evolution is predetermined very much by constant interactions between them. Due to this interaction, in the regional societies “the local, the national and the global have become intimately related”[199]. Russia is about to take a new turn in its political transformation, challenging the present forms of institutional and non-institutional interaction between regions and other policy actors.



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