Regional Disparity on the Rise

Russia’s economic growth not felt by many in the country.

Even as President Vladimir Putin and his government are lauding Russia’s resurgent economy, official figures are revealing that many ordinary Russians are missing out. 2007 figures released by Rosstat, the Russia’s Federal Statistics Agency, show a growing regional gap, as well as industrial decline in much of the country. As Nezavisimaya Gazeta reported, there is now a 10-fold spread of per-capita incomes among Russia’s 85 federal subjects. As Rosstat concludes in its annual report, generalizing about the Russian economy as a whole is misleading and incorrect.

The figures show industrial decline in 14 regions (up from 11 in 2006). Further, 11 major regions experienced a reduction in fixed capital investment (although the country experienced a 21% increase for the year).

Income stratification also jumped sharply in 2007. Per-capita income in Moscow and a small handful of raw materials regions is now 10 times that of the rest of the country. The highest per-capita income rested at 30,545 rubles (€852 or $1,245).

Meanwhile, the number of billionaires in Russia has increased under Putin, from 7 in 2002 to 53 today.

Natalya Zubarevich, director of the Independent Institute of Social Policy’s Regional Program, explained that “the swollen state budget and regional transfer payments have slightly reduced the budget differences between regions.” However, she also noted that “Regional economic inequality is now on an enormous scale and has already become a political problem for the state.”