Restive Regions Wriggling Under Moscow’s Thumb

Worried that they will be destroyed by the financial and political collapse in the Russian capital, the far-flung regions of this giant country are trying to save themselves by getting out from under Moscow’s thumb.

Regions from east to west have been using the chaos in Moscow to seize more power, declaring their own states of “economic” emergency to justify possibly illegal price controls.

Last week, powerful Krasnoyarsk Gov. Alexander I. Lebed signaled that restive regions could go further still--by bringing in their own currencies to escape the consequences of the Russian ruble’s collapse and what he called the central government’s “forced passivity.” This, he told national ORT television, would signify the beginning of the dissolution of Russia.

The possible consequences of growing regional power are a hot topic in Moscow.

“Ultimately, Russia may become a contemporary Holy Roman Empire with a wide-ranging spectrum of political regimes, from anti-Semitic dictators in the Krasnodar region to a corrupt patriarchal regime in Moscow and liberal capitalism in Novgorod,” political analyst Yuliya Latynina said.

“From a purely economic point of view, such an outcome may actually be a welcome one. . . . However, the problem with this particular outcome is that the West would have to deal with 88 nuclear powers . . . with leaders no more competent than Saddam Hussein or Moammar Kadafi.”

The confirmation Friday of a new prime minister, former Foreign Minister Yevgeny M. Primakov, may calm regional leaders’ immediate political fears--that Moscow’s leadership has imploded and they must fend for themselves. Until Primakov’s confirmation, President Boris N. Yeltsin and parliament had been at an impasse over who could run the country.

But the underlying cause of the political crisis is an economic catastrophe that cannot be voted away. Even though the country has a new prime minister, many of Russia’s 150 million people are still in dire straits now that the ruble, banking system and markets are crippled.

The Russian Federation is a patchwork of 89 republics, regions and territories stretching over 11 time zones. Only a few of them are rich enough--in gold, diamonds, timber or oil--to contribute to the federal budget. Eighty survive at least partly on subsidies from Moscow. The rich few, and ethnically non-Russian republics, have long harbored desires to escape Moscow’s control but been kept in check by the might of federal structures.

Now, however, those central structures are weaker than they have been since the Soviet collapse in 1991. The government and Central Bank are in crisis. Tax collection and payment of state-sector wages are paralyzed. Hyper-inflation looms.

A more long-standing indicator of an imperiled federal system is Russia’s military disintegration, a constant feature in the post-Soviet period, noted Graeme Herd, deputy director of the Scottish Center for International Security at the University of Aberdeen.

“The army has ceased to exist as an effectively coordinated entity. Only key elite units have fuel or back pay, and even their loyalty is under question,” Herd said. “Across Russia, many military units have, in effect, been regionalized.”

The regional power grab, however, is only an acceleration of a process that has been going on quietly for some time, said the highbrow daily Noviye Izvestia.

“De-privatization is in full swing in the provinces,” the newspaper said. “It is not nationalization, because property is taken from private hands and returned to regional bodies and not to national, federal institutions. This process is going on in all regions regardless of their governors and electorate.”

The strengthened regions have also been trying to take property away not only from private owners but also from the center. Noviye Izvestia said the regions are increasingly insisting on the right to control their own mineral resources.

Not only that, but regions are adopting laws that differ from federal ones. While the lower house of parliament, the Duma, opposes private ownership of land, for instance, the Saratov and Novgorod regions trade in land, and the region around Moscow is following suit. Tatarstan and Bashkortostan, ethnic republics in the region of the Volga River, want to create their own judicial systems.

The paper said regions are increasingly insisting on keeping part of the taxes they collect for the federal budget to offset delays in payments due from the chronically inefficient center. They are also trying to remove barriers to borrowing directly from abroad and want greater freedom to organize their own banking systems and budgets.

Although government administration chief Igor Shabdurasulov said indignantly last week that “declaring a state of emergency in Russian territories is the sole prerogative of the president,” Moscow seemed powerless to enforce its views on increasingly powerful regional governors.

“By regulating prices, I certainly place myself on the brink of violating the law, but I consider these actions quite warranted,” Lebed boomed as he imposed an emergency economic regime on his Siberian territory. “The emergency situation forces me to take emergency measures.”

Other regional bosses have joined Lebed in introducing possibly illegal price-capping measures: the coal-mining Kuzbass basin in Siberia; the oil-rich Tatarstan republic on the Volga; the Communist-sympathizing Voronezh region of southern Russia; Kaliningrad, a military exclave beyond the nation’s main western border; the Arkhangelsk and Murmansk regions in the far north; the mostly agricultural Chuvash republic; Bashkortostan in the southern Ural Mountains; and northern Russia’s Vologda region.

Prices Are Rising While Wages Lag

The danger that governors say they are trying to avert is real. Russian consumer prices went up 36% in the first week of September alone; in some regions, such as the Far East’s Nakhodka free trade zone, prices of staple foods soared 200% to 300%, according to the Itar-Tass news agency. But wages are not going up, and Russia’s harvest this year is believed to be down nearly 50% from last year’s.

Imported goods make up 60% or 65% of food products sold in Russia--and up to 85% in Moscow. But they have stopped coming.

Many foreign companies are canceling deliveries to Russia because they have no faith in Russian banks, while Russian import companies have stopped buying abroad because they cannot afford customs duties or are afraid they will be unable to exchange rubles for dollars.

Andrei A. Kokoshin, secretary of the Russian Security Council before his dismissal last week, sought to reassure the country, saying there is “no danger of famine in Russia” because there are still 18 million tons of grain from last year’s harvest in stock. But he admitted that the situation is “dangerous” in several regions, such as the Pacific coast territory around Vladivostok.

One of the main tasks facing the incoming central government will be winning the regional governors’ support. But federal officials will have to pay for it.

Greater Conflict Seen Between Moscow, Periphery

Aberdeen University’s Herd warned that increasing conflict is likely in the near future both between Moscow and the outlying regions and between “donor” and “consumer” regions.

“Russian center-periphery relations would then be governed by a vicious spiral of vice: As federal subsidies dry up, tensions between counter-elites in dependent regions are exacerbated, and competition for control of the limited handouts then becomes more intense, leading to disorder and higher levels of corruption,” he said.

Possible later outcomes, he said, might then include the unraveling of federal control into a confederation of regional blocs, with consequences ranging from “a protracted and unstable assimilation of the confederation by the regions” to the “final and most frightening outcome,” civil war.

“At present, the disintegration scenario has yet to be substantiated by events--but nevertheless remains waiting in the wings,” Herd said, “should the meltdown of federal structures continue.”

But, he added, continued uncertainty is the likeliest outcome: “It is more likely that the current federation will retain its patchwork ‘unity,’ as stagnation, disintegration and democratization processes continue to coexist.”