Rich regions to get less from Moscow
The Russian government will cut transfers to successful regions and step up support to the worst-off of federal subjects. The measure is intended to cut the increasing social and economic gaps between the regions.
In the period 2009-2010, the regions with positive tax revenues will get 3 billion RUB less, Nezavisimaya Gazeta reports. Meanwhile, more money will flow to the poor Russian regions. The decision announced by government last Friday marks a shift in the system of federal allocations to the regions. While the government early this year said it would continue to support also the wealthy regions, it now says the rich regions will have to contribute more to the poorer federal subjects. Over the next four years, the best-off regions will have their federal transfers reduced to only about 30 percent of the 2007-level. About 17 regions will experience the cut, the newspaper writes. The redistribution of federal money comes in a situation with growing social and economic cleavages between the regions. According to Nezavisimaya Gazeta, the richest Russian region now has 23 times more budget money per inhabitant than the poorest region. Only with the help of federal transfers, the gap is reduced to 6-7 times. The new system of federal transfers is likely to increase the rich Russian regions’ demand for more control over their own tax revenues.
