PUTIN’S TERRITORIAL REFORM:

PUTIN’S TERRITORIAL REFORM:

SEVEN PATTERNS OF REGIONAL DEVELOPMENT IN THE ERA OF GLOBALIZATION

Andrey S.Makarychev

Nizhny Novgorod Linguistic University

The aim of this paper is to analyze institutional performance of seven federal districts of the Russian Federation as seen from the viewpoint of globalization. Are there any chances for the federal districts to join the club of international actors? How strong is their potential in terms of Russia’s integration to the world economy? What the world should learn from territorial reshuffle of the Russian regionalism? Are there any implications of Putin’s reform for international community? These are the basic questions I am going to address.

FROM SMALL REGIONS TO BIGGER ONES

Projects for enlarging the Russian regional units were a part of the political agenda in Russia throughout the 1990s. In particular, these ideas were developed by “EPICenter”, the “Yabloko” party think tank, that enunciated the perspectives of giving priority to the so-called “regional poles of growth” to become in the future the centers of “large lands” all across Russia. One of the strongest arguments was that most of the small subjects of the federation are economically weak, and hence unable to rebuild their economies and effectively find their niches in the world market. Yevgenii Primakov, the former Russian prime minister, was sympathetic to these views. There were some discussions about hypothetical perspectives of uniting St.Petersburg and Leningrad oblast, Tatarstan and Baskortostan, Khakassia and Krasnoyarsk krai, Chechnia and Dagestan, but no practical decisions were taken.

They first institutional way of integrating the larger regions was tried via eight inter-regional associations (North-West, Central Russia, Greater Volga, Black Earth, North Caucasus, Greater Ural, Siberian Accord, Far East and Trans-Baikal). They have appeared with the beginning of Yegor Gaidar’s reform and presently unite all the subjects of the Russian Federation (with an exception of Chechnya), yet only in November 1999 the Federal Law regulating their activities was introduced. During 1990s interregional associations had rather moderate political ambitions, and only attempts of charismatic governors to use them as tools in strengthening their political careers (as in case of Sverdlovsk oblast governor Eduard Rossel or Krasnoyarsk krai governor Alexander Lebed) contributed to raise of political credentials of these associations.

Having been established to promote interregional cooperation and increase positions of regions towards the federal center, interregional associations were trying to find ways to better lobby their interests against the center and advertise their economic potentials abroad. Associations were also one of the instruments for the federal government in its search for making Russian foreign policy more coherent - Kremlin insisted that each subject of federation should voluntarily give up some of its powers, including in foreign economic policy area, in favor of the associations. For example, in one of the most sensitive foreign policy issues, the Russian government wants Belarus to deal with the association instead of dealing with separate regions.

However, associations failed to achieve a necessary cohesion between their members and transform them into influential entities. They failed to turn into strong political actors and remained loosely bound units with a blurry legal status and multiple conflicts among the regions themselves. Having reached the high point under Prime Minister Yevgenii Primakov in 1998 (who invited some of the leaders of interregional association to participate in his government) the “big eight group” exhausted its lobbying potential and now stands in the periphery of Russian politics. In the field of external economic relations associations faced difficulties arising from their complicated configuration as well as from the individualistic policies pursued by governors of prosperous regions that preferred to establish personal ties to both federal center and foreign countries rather than to promote joint interests. Moreover, the member-regions present different stages of industrial performance (from agrarian till post-industrial).

Inter-regional associations were complemented by existence of special federal programs targeted on specific geographical areas. These programs had important international implications. Thus, “Siberia” program was meant to foster cooperation between Siberian regions of Russia and countries of CIS and Asia Pacific, as well as elaboration of common foreign economic strategy of Russia’s subject of federation. “Northern Caucasus” program was aimed at fortification of state borders, managing the inflow of refugees and migrants, providing ecological safety, etc.[1]

Another - and competing - way of interregional integration was put into practice by President Putin’s administrative and territorial reform of May 2000. Interestingly enough that the boundaries of federal districts do not coincide with the inter-regional associations, the fact that means that the President was not quite satisfied with the way they operated.

In May 2000, with Putin as the new Russian President, the old idea of reshuffling the whole system of Russian regionalism obtained a more concrete design: according to the Presidential decree seven federal districts were created, each one to be run by a Presidential envoy. The new “super-regions” coincide closely with pre-existing military districts, and five of the seven appointees hold the rank of general. This makes one assume that security matters will be given a high priority in each of the newly created “fiefdoms”[2]. Though Putin himself calls these measures an administrative reform within the Presidential apparatus, it is quite clear that the consequences of these steps ought to have a major impact on the state of the Russian federation[3]. In case the new “viceroys” will eventually use the existing resources to control the districts, they might strengthen their political weight and become even more important actors than the states of the federation, both domestically and internationally.

There were several goals of creating federal districts:

n greater centralization and unification;

n undermining regional clan systems based on partonage and patrimonialism;

n elimination of inter-regional conflicts.

One of the advantages of the representatives of the President is greater communicability with the head of the state. Thus, Georgy Poltavchenko, the Presidential representative in the North West federal district have confessed that when he had been the representative of the President in Leningrad oblast, he had never seen Boris Yeltsin personally[4]. Nowadays President Putin keeps regular contacts with all of his seven representatives in the federal districts. What is more, the Presidential representatives have their say in nomination to public offices, control over federal subsidies and targeted federal programs in strategically important industries.

From the very beginning Putin’s reshuffle of the whole system of Russian regionalism provoked serious doubts in Russia’s expert community. Leonid Smirniagin, Sergey Borisov and other specialists had questioned the necessity to redraw the regional map of Russia along the lines determined by Putin. Basically the arguments are that the new administrative borders are arbitrary and ill-substantiated.

Presidential representatives were given good chances to restructure the territorial fabric of the society, but the hurdles are here as well. One of the problems is that the area of their responsibilities seems to be too broad - from supervision of the parties in the regions to “inventory” of specific industries. Piotr Latyshev put it quite ostensibly saying that there is no single episode in which he would have been unable to intervene[5]. Vladimir Putin however has ostensibly stated that his representatives are supposed not to administer the federal organs in the regions but only to coordinate their activities.

The process of making the regions’ legislation to come to terms with the federal laws also gives mixed record. Tatarstan’s President Mintimer Shaimiev, for example, still strongly adheres to the principles of sovereignty of this republic as a political entity associated with the Russian Federation[6], while the leaders of Udmurtia were quick to delete from region’s legislation all norms taking it away from Russia’s federal legal acts (“sovereignty” was swiftly changed to “autonomy”, the clause of Udmurtian citizenship was canceled, private property was guaranteed)[7].

The division of Russia in seven administrative districts created a new framework for international cooperation. With nomination of seven “governors general” regions are likely to become more dependent on the federal center in transregional and international projects than the subjects of the federation. The very existence of an additional bureaucratic structure between the center and regions would make international cooperation rather complicated.

Engaging newly created federal districts into the web of international cooperation is an uneasy task since they are not yet well established political institutions. Their future is still ill defined. Districts are still in search for their international identities.

In spite of this uncertainty, Presidential representatives have already undertaken certain steps to obtain some international credentials. All presidential representatives – being members of the Security Council of the Russian Federation – are heavily involved in resolving a plethora of security-related issues like protecting external borders, reviving military industries, undertaking counter-terrorist measures, upgrading transportation and communication networks, etc. The most telling example is Sergey Kirienko, the head of the Volga Federal District, who established a network of connections with international institutions to foster investments and credits.

The impact of the federal districts on Russia’s external relations might be traced in the following ways. First, it is hoped that presidential representatives would have to make heads of the subjects of federation more law-obedient in a whole spectrum of issues related to foreign economic relations. Secondly, since the concept of the federal districts is aimed at concentration of resources, the weakest subjects of the federation will be marginalized and will have to leave the sphere of active international relations. Thirdly, there might be more interdependency between the subjects of the federation constituting a single federal district in a number of specific areas like transportation networks, border security, migration policy, etc.

In some cases the concept of cultural integration is being put forward. Sergey Kirienko, for example, noted that the territorial area of responsibility of Russia’s leaders, both national and subnational, is defined not by administrative borders but rather by cultural factors (he refers to the “area within which people think and speak Russian”[8]). In other cases (Southern federal district) “the larger regions” seek to contribute to peace enforcing and soothe the whole bunch of security-related matters.

SEVEN EMERGING REGIONAL STRATEGIES

Federal districts go through a period of differentiation. Relations between the federal center and seven federal districts are still being shaped. In terms of future developments much will depend of Putin’s assessments of the effects of the first year of reform. Personal credentials of the presidential representatives also matter. Thus, according to the expert survey of “Vlast’” weekly, the highest rating among the seven district leaders was awarded to Sergey Kirienko (VFD), followed by Viktor Kazantsev (SoFD), Piotr Latyshev (UFD), Viktor Cherkesov (NWFD), Nikolay Drachevsky (SiFD), Georgy Poltavchenko (CFD) and Konstantin Pulikovsky (FEFD).

Yet what is more important is that each of the federal districts has its own profile and orientations.

North-West Federal District (NWFD) is undoubtedly the most exposed to Western influences and gravitated towards international cooperation. It comprises territories that are parts of North West and Northern economic regions, as well as Kaliningrad oblast.

Territories of NWFD take active part in trans-border cooperation. Foreign countries (like Lithuania for Kaliningrad, Finland for Karelia, Norway for Murmansk oblast) give preferential treatment for Russia’s North West regions. From their part, “many Kaliningraders are more acquainted with the realities of life in neighboring Poland or Lithuania than with the rest of Russia”[9]. Komi Republic has one of the best records of international cooperation in Russia. All this makes Viktor Cherkesov, presidential representative in NWFD, pay special attention to working with foreign investors and international organizations.

Territories of NWFD were marked by the largest industrial growth during the second half of 1990s. One of the leaders within NWFD is Novgorod oblast widely referred to as one of few “Russia’s success story”. Its governor Mikhail Prusak is known as one of the most advanced provincial political leaders. Its experience of reforming international economic relations was borrowed by Leningrad, Kaliningrad, Karelia and other regions. Prusak was rather positive about strengthening the political and administrative powers of the central government, and some experts deem that “Putin administrative reform was designed along his lines”[10].

Pskov oblast bordering with Estonia is treated differently by the federal center. Presidential envoy in NWFD was rather critical to the governor Evgeny Mikhailov pointing that he is in charge of oblast’s economic backwardness.

The case of Kaliningrad always attracts special attention both in the West and in Russia. Domestically, the specter of alternatives for this region is rather wide - from direct subordination to Moscow and cancellation of all elections (as proposed by the Council for Foreign & Defense Policy) to transforming Kaliningrad to “Russian Hong Kong” (as envisaged by the Union of Right-Wing Forces)[11]. Internationally, many options are open as well - EU experts are in search for those solutions that might compromise between securing free movement of Kaliningrad’s residents on the one hand, and conditions to be implemented by EU applicants on the other hand.

Yet the practical problem is that Russia has rather been reacting than acting in the Baltic Sea region. The federal center is usually seen not as a facilitator but rather as the source of danger for trans-border cooperation[12]. For example, the regulation of the State Customs Committee issued in August 2000 stripped Kaliningrad oblast off the remnants of special economic zone privileges[13]. The problems were exacerbated in January 2001 with the decision of the Federal Customs Committee to tax all goods produced in Kaliningrad oblast and bound outside, including to mainland Russia. It provoked harsh criticism in the region.

It is still not clear what was meant by its “pilot region” status offered by the federal government to Kaliningrad. Yet what is clear is that border infrastructure in Kaliningrad is underdeveloped and needs urgent upgrade. It is still too early to judge what impact the new Kaliningrad oblast governor Vladimir Egorov (former chief commander of Russia’s Baltic Fleet) will have upon the future developments. On the one hand, as a high ranking military officer, he might prioritize hard security challenges for Russian exclave. On the other hand, some of his advisors are “young pragmatists” share pro-market and pro-liberal approaches and are close to the Union of Right-Wing Forces (SPS).

Regions belonging to NWFD share a number of common challenges. Among the most acute ones is simplification of customs procedures. Also important is to upgrade tourism infrastructure and lift some regulations discouraging international cooperation. For example, the Transportation Ministry established lengthy and time consuming procedures for foreign yachts wishing to travel in Russia which deprives St.Petersburg, Karelia and some other regions of much needed revenues[14]. There are good perspectives of agricultural tourism in NWFD as well yet little is done in this respect till now.

One of the major inhibitions for fruitful international cooperation of NWFD is crime: one of the most recent studies put this district on the top of the all-Russia rating covering the territorial distribution of corruption and criminal activity[15]. Leningrad and Arkhangelsk oblasts, as well as Karelia were mentioned among the most criminalized subjects of the federation.

Apart from economic cooperation, security issues could not be neglected in NWFD as well. “Kursk” submarine accident showed it quite overtly. Viktor Cherkesov has created Coordination Board for Security Management to include all regional chiefs in charge of military planning and emergency management. Its functions extend beyond purely defense issues to encompass also social and economic forecasts, law enforcement, etc.[16] He also stays in close touch with directors of military plants and factories located in the district.

Volga Federal District[17] (VFD) was created as agglomeration of the whole Volga & Viatka economic region complemented by some territories of Trans-Volga and the Urals economic regions. Sergey Kirienko with a good reputation of intelligent and well educated political leader[18] was nominated the Presidential representative.

Nizhny Novgorod is a political leader in VFD. Yet there are several regional centers claiming economic and financial leadership in the district. Thus, Vladimir Volkov, head of the government of Mordovia, referred to President Putin’s highest assessments of economic achievements of Perm oblast and Republic of Mordovia[19]. Other regions also hold high expectations. For example, Alexander Vorotnikov, Minister of Economics of Chuvashia, is anticipating that the budgeting system of this Republic will be introduced in all Russia by 2002[20]. Another region - Perm oblast - was praised by Sergey Kirienko as a “key region” due to its proximity to the Ural Federal District and transportation possibilities[21].

The mass migration is one of the most important factors that affect socio-economic and political processes in the VFD. There are two main sources of migration to the VFD: ethnic conflicts and Russia's vicinity and economic hardship. There is a number of negative implications of migration. First of all, refugees are a heavy burden for the local budget and social infrastructure. In VFD the total number of refugees nears 210 thousand. Second, refugees have often formed a social basis for crime and have been involved into criminal groups (sometimes inter-regional ones).

Rearranging the border with Kazakhstan is another top challenge issue for Sergey Kirienko. Border-related issues are closely intermingled with geopolitical, geoeconomic and security problems.

2400 km of Russia’s border with Kazakhstan go through VFD. Specificity of VFD external border is that it plays simultaneously two roles - communicative and defensive. From one hand, according to new Foreign Policy Doctrine of the Russian Federation, border with Kazakhstan - CIS member - is supposed to function as a tool of further integration of both countries. From another hand, areas bordering with Kazakhstan face the problems of contraband, poaching and illegal migration. With creation of a new administrative district the VFD became a border area and thus inherited the problems related to the cross-border crime, including the drug trafficking from Kazakhstan[22]. Valentin Stepankov, Kirienko’s deputy on law enforcement issues, was quite explicit in saying that non-protected border is the cause of illegal migration and religious extremists. In the meanwhile, because of weak border protection Russia loses raw materials, food, stolen cars and other contraband items[23].

President Putin’s decree No. 705 urged the Federal Border Service to immediately tighten the control over the border with Kazakhstan. Ramil Mullaiamov, chief of South-Eastern regional department of the Federal Border Service, have said that this agency conducted an experiment with changing regular border-guarding troops to non-military units, yet it failed to bring positive results[24].

There is a number of border problems that we addressed by Sergey Kirienko:

n lack of federal resources for adequately protecting the border. In practice, these are regional administrations that provide frontier troops with housing, transportation, energy supply, and building or overhauling frontier posts.

n substantial increase of the geographical area to be covered by Volga Customs Department due to inclusion of Orenburg oblast to the VFD. According to Vladimir Egorov, Volga Customs director, one of the problems is that customs offices are located far away from border-crossing stations. The second troubling issue he addressed is the practice of recruiting customs officers among local population which increases possibilities for corruption.

n weak coordination between customs service, border-guards and railway authorities in preventing smuggling and other illegal actions.

n activities of Cossack units in border territories claiming to play more significant role in defending the border. This is a highly controversial issue. From one hand, the whole set of border-related matters can’t be solved without involving local population, including Cossacks as its most organized force. The Cossacks have their own - inherited from the past centuries - system of inspecting the borderland, which could compliment other security appliances (barbed wire, electronic alarm system, etc.). Yet on the other hand, by law Cossacks (as well as other self-ruled groups) are not supposed to participate in protecting the state border. Among factors that complicate interaction between the Cossack units and frontier-guards are widely spread among Cossacks nationalist and jingoist feelings, as well as numerous complains from the local population accusing the Cossacks in extortion.

Transportation. Sergey Kirienko is a strong proponent of “North – South” transport corridor to drastically increase the transit cargo volumes (from 8000 containers to 100000 in 2005) and provide the state budget with additional USD 1 milliard. Nizhny Novgorod, Saratov and Orenburg oblasts are among the most interested regions in this project.

District-level information policy is also important. Sergey Kirienko has announced his intention to form a “common information space” in VFD. In particular, he launched Internet-based contest among young and mid-career professionals who might be interested in working in his apparatus. Another important initiative was the Association of Investment Programs “Trans-Volga Perspective”. This is the first step in creation the interregional information network within VFD. “Trans-Volga Perspective” will include such information projects as “Investment Passport of VFD”, “Market for Investment Projects”, “Capital Market”, etc. Since there are more than 70 long-term targeted investment programs in VFD funded by international donors, the problem of their coordination is very acute.

Kirienko is also known for his commitment to support the networking of non-governmental organizations fostering horizontal integration local communities and specializing in culture, arts, ecology, social partnership, youth policy, sports, gender. These practices seem to correlate with the “global networking” concepts being developed and widely implemented in the West in the last decades.

Southern Federal District (SoFD) was created on the basis of Northern Caucasian economic region complemented by three Trans-Volga oblasts. SFD got the largest population growth yet went through the most drastic decrease of industrial output all across Russia.

SoFD is marked by clear domination of security issues with Chechia in its core. Viktor Kazantsev, presidential representative in SoFD, has to perform foreign and security policy functions. It was him who was in charge of convincing the PACE delegation visiting Chechnia in January 2001 that there is no human right abuses in this break-away region.

To effectively tackle security challenges, Kazantsev advocates the necessity of strengthening his apparatus. One of his first decisions was the creation of Territorial Board of Local Representatives of the Federal Agencies, viewed by some observers as a model of the district government.

Apart from security concerns, other matters are on the top of the agenda here. Among the high priority economic issues is restoring tourist infrastructure. There are about 15 thousand resorts in this area which could accommodate 25 million of people each year. According to government’s estimates, effective management of tourist industry in SFD might bring USD 1,5 billion per year[25].

Transportation issues are also important, especially taking into consideration vicinity to oil extraction areas. Viktor Kazantsev initiated complex inspection of the Southern ports in Azov, Black Sea and Caspian Seas basins. Russia’s southern ports provide about 70 per cent of Russia’s sea cargo turnout. Kazantsev is determined to restore the federal control over the port companies and facilities through purchasing their shares and consequent acquisition of its control packages. He is also eager to ban privatization of oil tankers many of whom currently work under foreign flags. Viktor Kazantsev is also known for sending federal task force to Kalmykia republic empowered to inspect the way in which its government utilized biological resources (sea and river resources)[26].

Politically, Kazantsev’s authority is being questioned by one of the most autonomous local political leaders of SoFD, the President of Ingushetia Ruslan Aushev. He is very critical to Viktor Kazantsev and in fact refused to subordinate to his orders (“He has no constitutional powers... He might elaborate on issues but is in no position to give me directions”[27]). President Putin tried to distance from this conflict leaving it up to his envoy.

Central Federal District (CFD) is composed of Central and Central & Black Soil economic regions. It is the Russia’s leader in foreign investments (overwhelmingly due to the city of Moscow). Its advantage is that it keeps the lowest grades in crime and corruption rating. Presidential representative in CFD Georgy Poltavchenko is known as a moderate politician. He did not support the ideas of introducing extreme measures in economic spheres like “economic commissars”. He spoke out against undertaking special measures for attracting capital and know how assuming that “the market will fix it anyway”[28]. He said that before taking strategic decisions he would need some time to assess the situation.

It seems that Poltavchenko is not quite sure which exactly measures ought to be taken in specific situations - like that ones concerning border territories. Thus, authorities in Kursk complain that he had not yet visited this oblast which is important in terms of border relations with Ukraine.

What is clear already is that one of elements of Poltavchenko’s strategy is close interaction with the mayors of biggest cities located in CFD. To boost the political positions of the heads of municipalities he came up with the idea of creating the Council of Mayors as an advisory body. Reliance on mayors might be an effective strategy because large cities are the most advanced technologically and financially.

Far Eastern Federal District (FEFD) is the only federal district which was created on the basis of one single economic region. Despite meaningful resources (eight major ports, geographical proximity to Japan and China, availability of fishing fleet, etc.) this is explicitly the most crisis-driven region of Russia. The list of its economic troubles is perhaps the longest in Russia:

n FEFD has the Russia’s highest amount of debts to the federal budget which was one of basic reasons of permanent energy cuts;

n transport tariffs are the highest in Russia. The consequences are multiple: from economic isolation from European Russia till skyrocketing prices (FEFD is the most expensive part of the country);

n there is a North-South gap within FEFD which questions its cohesiveness;

n the district is highly dependent on the procurement policies of the Ministry of Defense;

n a number of attempts to create free economic zones have failed here (in Nakhodka, Sakhalin, Kuril islands);

n sharpening of border control difficulties gave rise to xenophobic attitudes about “international conspiracies”. Both local and federal authorities tend to view the Chinese immigration as menacing to national security[29]. This is perhaps one of the best illustration of the lack of clarity and conceptualization concerning internationalization of Russian regions: on the one hand, economists and politicians want to stop the outflow of the Russian capital abroad, but on the other hand they are unhappy about Chinese capital installing in Russia.

n conflicts between the subjects of federation are multiple (to give just a few examples, Irkutsk oblast was accused by neighboring Russian territories in selling energy to Mongolia, Primorsky krai authorities claimed that Sakhalin oblast makes poor use of Kuril islands, while Amur oblast accused Khabarovsk krai in pushing the federal government to clamp down on trade with China)[30];

n Imperfections of the federal legislation are also troubling. The practice of product-sharing agreements - which is vital for the FEDF - is far from being perfect. The same is true with regard to poor management of the sea resources[31];

n forecasts show that the population of the Far East will shrink faster than that of Russia because of net outmigration[32].

Trying to improve the energy crisis, presidential representative Konstantin Pulikovsky came up with the idea to obtain control over the financial flows within the district and its export-oriented industries dealing with wood processing, oil and gas sector, precious metals extraction[33]. Pulikovsky was in overt conflict with the former governor of Primorsky krai Evgeny Nazdratenko who was accused by the federal government in inability to cope with the energy shortcuts. Nazdratenko resigned in February of 2001 under strong pressure of Pulikovsky.

The perspectives of FEFD joining the system of “open regionalism” practiced in South East Asia are still understudied. There are no signs that this issue got a high profile in Pulikovsky administration. The expert in the regions nonetheless discuss different options of FEFD future strategies. Among them are:

n reliance on government funds and federal center benevolence;

n export specialization which would require new legal and institutional arrangements (concessions, preferences, etc.);

n playing “Chinese card”, i.e. giving priority to economic cooperation with China;

n multilateral development strategy - with Japan, both Koreas, Mongolia and North East regions of China as basic partners[34].

Ural Federal District (UFD) was formed on the basis of parts of Ural and Western Siberian economic regions. UFD share in national industrial output is two times higher than its share in Russia’s population, which speaks for its strong economic potential. Presidential representative Piotr Latyshev claimed that UFD might become a “model region” for reshaping Russian federalism. To strengthen his conceptual background, he established the Center for Economic Forecasting, and launched the project of building common information space within the district.

One of the strongest regional leaders within UFD is Eduard Rossel, the governor of Sverdlovsk oblast. His discord with Piotr Latyshev over budgetary policy issues was covered by media. However the opposition to Latycshev is mostly of technical, non-political nature.

Siberian Federal District (SiFD) is located in the territories of Western Siberian economic region and the bulk of Eastern Siberian economic region. Foreign investment mainly go to gas, oil and aluminum sectors of Western Siberia[35].

Perhaps one of strongest challenges of globalization for SiFD is growing gap between European and Siberian parts of Russia. Thus, organizers of Baikal Economic Forum held in Irkutsk in September 2000 complained that there was no real interest shown from the central government to this important area[36].

SCENARIOS

Putin’s territorial reform had augmented the number of subnational actors and expanded the number of options for each of them, including those related to coalition building. The number of variants of future developments had also increased. Four of them could be distinguished (restoration of unitarism as the least feasible option is discarded in this analysis).

Option 1: increased importance of the federal districts. Staying in tune with explicitly liberal economic policy (as exemplified by German Gref, Andrey Illarionov, Alexei Kudrin, Viktor Khristenko, Sergey Kirienko and other pro-market reformers), the federal districts have a chance to take advantage of concentration of resources, rationalization of economic management, and greater compatibility between national and subnational legislation. Another beneficiary of this scenario might be municipal authorities, in fact the only potential allies of the presidential representatives in their tug-of-war with the governors. At the same time, the influence of the subjects of federation and inter-regional associations will go down under this pattern of development.

Option 2: regain of influence by the subjects of federation. This might be the case should the federal center decide that the federal districts had accomplished their missions and therefore could be put aside. This variant might be accompanied by growing activism of inter-regional associations as the most feasible instrument available for the governors in their opposition to the powers of presidential representatives.

Option 3: growth of influence of the inter-regional associations as alternative to the federal districts. This option might be based on the grass-roots initiative of the subjects of federation, but their importance is subject to regulation from the federal center.

Option 4: gradual process of enlarging the subjects of federation through merging the neighboring provinces. In this case the regional elites will be split: the most loyal regional leaders will undoubtedly support Putin, while others will challenge him. Enlarged regions might challenge both inter-regional associations and federal districts.

CONCLUSIONS

One year after Putin’s reform there is still no consensus among policy makers as to its long-term effects. There is a long list of uncertainties with regard to future destinies of the federal districts.

First, it is still unclear how far the federal districts are to go. From Sergey Kirienko’s perspective, federal districts are rather political instruments of the President than autonomous political institutions[37]. Nikolay Fiodorov, the president of Chuvashia, on the contrary, argues that the federal districts will inevitably evolve into new subnational governments. Another concept posits that there is in fact “double federalism” in Russia: one tier comprises 89 subjects of the federation, while the second one is composed of seven federal districts.

Secondly, even within Kremlin there is no clarity with regard to the new structure of regional powers. President Putin himself in fall 2000 suggested that the government should think about dividing the spheres of regional responsibilities. In his words, financial minister Andrei Kudrin could become in charge of Siberia while vice premier Viktor Khristenko could take care of the Far East (the only argument was that Khristenko is the head of Russian-Japanese commission on trade and commercial matters). It is not clear how this approach is correlated with the functions of seven presidential envoys in the federal districts.

Thirdly, relations between presidential representatives and the governors are far from being settled. For example, Samara oblast governor Konstantin Titov declared that he does not consider himself as a political subordinate to presidential representative in VFD. Mikhail Prusak, the governor of Novgorod oblast, argues that there is no need at all in presidential representatives in NWFD[38]. Some governors (for example newly elected Vladimir Egorov of Kaliningrad oblast) prefer to communicate on foreign and security issues directly with the federal government by-passing presidential representative in the district.

Fourthly, equally uncertain is relationship between the federal districts and pre-existing inter-regional associations of economic cooperation. Those associations didn’t cease to exist. What is more, it is likely that some governors could keep treating them as alternative pattern of integration and communication with the federal government. “Larger Ural” and “Siberian Accord” for example are rather active in promoting their agenda in economic issues skipping presidential representatives. It might be that competition between the federal districts and the inter-regional associations will sharpen in the near future. The federal districts might eventually loose this competition due to lack of adequate resources and well trained personnel (it is quite symptomatic that the federal representatives invested a lot of time and resources to ban Alexander Rutskoy from running for Kursk oblast governorship and Evgeniy Nazdartenko from staying the governor of Primorsky krai, but no adequate and timely substitutions were found in both cases).

Fifthly, further reshuffles in Russia’s regional map are being debated. Boris Nemtsov, one of the leaders of the Union of Right-Wing Forces, had proposed to form a special federal district for Chechnia. Saratov oblast governor Dmitry Aiatskov deems that instead of seven federal district the President ought to create from 30 to 50 ‘big regions” each of them to include several subjects of federation or even some other post-Soviet republics[39].

Till now President Putin is still in the process of weighting “pros” and “cons” and contemplating about the next moves in response to challenges of regionalization. However some preliminary conclusions drawn from Putin’s experiment might easily be projected onto the sphere of comparative politics. First, today’s regionalism in Russia is extroverted rather that introverted phenomena. In this paper I have demonstrated that the federal districts established basically for solving domestic matters quite soon have started the process of positioning themselves in wider international ambit. Federal districts are “regions-in-the-making”. They move from passive objects of Kremlin’s policy to an active subject capable of articulating their interests and policies.

Secondly, regionalism constitutes an open-ended phenomenon. Federal districts are social and political constructions. They might be constructed and deconstructed. Discussing regionalism - assessing its strength and weakness and drafting its perspectives - means participating intellectually in its construction or deconstruction[40].

Thirdly, we may discern certain levels of regionality. Federal districts were created as “regional spaces” (initially they were purely geographic units existing only in presidential decree). Next they were transformed into administrative units each of them marked by exceptional loyalty to the federal center. Those administrative structures gave birth to “regional complexes” as political units, cemented by common interests and solidarity. Actually some of these political units are on their ways to “regional societies” (looking for stronger social integration and cohesiveness). Some districts are in search for their international identities (Sergey Kirienko, for instance, adheres to the concept of cultural integration within VFD).

Presumable formation of “regional societies” in the federal districts is an important landmark because if Putin’s reform is to develop basically within administrative and political elite boundaries, it is doomed to failure (and subsequent deconstruction). Trying to assess the state of the progress of new territorial division of the country, one should keep an eye on the advancement of civic society institutions. The reform will fail unless there is no clear indication that it stimulates better business conditions, strengthens middle class, fosters openness and transparency - all what is much needed for smooth and effective international cooperation.

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