From Submission to Rebellion: The Provinces Versus the Center in Russia

By Vladimir Shlapentokh; Roman Levita et al. | Go to book overview

14
THE CENTER AND REGIONS IN THE PERIOD OF MARKETIZATION OF THE ECONOMY

One of the most important areas in the struggle between the center and the regions was economics. For the most part, this struggle concentrated on the disposal of the taxes collected in the regions and on the property issue--that is, what property should be considered federal or local.


Taxes and the Budget

For moderate regionalists, a main point in their program was economics, with the focus on taxes. In 1993, the Russian regional budget made up about 15 percent of the GNP (gross national product). Most regional leaders found this to be too low. As in any other society, the regions, even in Soviet times, tried to eliminate the amount paid in federal taxes and to increase subsidies from the center.1

After 1991, regional demands for the redistribution of tax incomes became one of the most important elements in the regionalists' programs. The regions, especially the so-called donor regions, or economically powerful regions, demanded the radical diminution of the amount of money transferred to the center. These powerful regions were prepared to reject the center's subsidies, which usually made up a smaller portion of the money transferred to the donor regions from the federal budget. In 1992, for instance, transfers to the Russian regions totaled 3,518 billion rubles (budget transfers: 274 billion rubles, budget investments: 443 billion rubles, budget subsidies to agriculture: 358 billion rubles; direct credits: 1,980 billion rubles), whereas the transfers from these regions to Moscow amounted to 4,018 billion rubles.2

The donor regions regarded subsidies as a powerful form of leverage wielded by Moscow over local government and preferred to have independent financial resources. In 1993, they received only about one-half of all revenues given to the

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