Economic Transition in Russia and the New States of Eurasia

By Bartlomiej Kaminski | Go to book overview

12
Reforming Intergovernmental Relations Russia and the Challenge of Fiscal Federalism

Christine I. Wallich

Russia is facing a difficult period of economic and political transition. The Federation is attempting simultaneously to restructure its entire economic system, protect the well-being of its citizens, stabilize prices and attain external balance, provide public services to support social and economic development, and establish a system of governance acceptable to regions whose cultural identity, natural resource endowments, and degree of economic development differ widely. In addition, it has only recently overcome a constitutional debate over its future.

The stresses of reform, political tensions, and constitutional challenges have caused Russians to become aware (in President Yeltsin's words) of "the still fragile foundations of the Russian Federation."1 These developments have given a new urgency to tackling in a more conclusive way the economic and political problems facing Russia. Resolving these challenges would be no easy task even in a country with a long and uniform cultural heritage, a history of strong government, and a cohesiveness of purpose to provide a guide and vision for the future. In Russia, it will be that much harder.


Forces Tearing at the Federation

Why has dissatisfaction with the Russian Federation arisen, and how fragile is the Federation itself? The present fragility of the Russian Federation can be attributed to several factors. Centrifugal forces arise from the challenge of its geographical and historical heritage; ethnic groups' aspirations fuel separatism; and the rich endowment of natural resources is both the hope of Russia's future and a source of resentment for those oblasts ( Russia's second level of government and the equivalent of a state) that resent Russia's usurpation of the resource

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