THE “GREATER VOLGA” ECONOMIC ASSOCIATION

The “Greater Volga” economic association

By Ilya Malyakin

An article entitled "New Blood is Flowing into Moscow Like the ‘Great Volga’" appeared in the influential Moscow newspaper Segodnya in March 1997. In it, Andrei Kolesnikov examined the promotions to the federal government of Nizhny Novgorod governor Boris Nemtsov and Samara mayor Oleg Sysuev. According to Kolesnikov, the elevation of these provincial leaders meant that Russia’s 89 regions would from now on make their presence felt on a nationwide scale. The fact that both the new ministers came from the Volga region was evidence, Kolesnikov wrote, of the lobbying power of the "Greater Volga" association, which includes Astrakhan, Nizhny Novgorod, Penza, Samara, Saratov, Ulyanovsk and Volgograd Oblasts and the Republics of Tatarstan, Chuvashia and Mordovia. Kolesnikov concluded his piece with a ringing declaration: "The ‘Great Volga’ is already flowing into the Moscow River, and splashing against the Kremlin walls."

"Inter-regional economic associations" first attracted attention in Russia back to the summer of 1991, when "Siberian Accord" was created. Uniting several Siberian regions, Siberian Accord wrested a number of economic privileges from the Russian government. These put the members of the association at such an advantage that observers began to speak, only half in jest, about the emergence of a "Siberian Republic." The Siberians’ example was followed over the next couple of years in other parts of Russia, with the result that now all of Russia’s republics and regions except for Chechnya belong to one of eight inter-regional associations. The borders of these associations largely coincide with those of the "economic regions" familiar from the Soviet era. Some of these associations grew out groups that pre-dated Siberian Accord’s appearance on the scene, but it was the Siberians who gave the process its first impulse and demonstrated the potential benefits for this kind of cooperation.

Initially, the "Greater Volga" economic association united twelve Russian provinces, but the Republics of Kalmykia and Mari-El have since left. Its activities focus on six main areas, each of which has a corresponding committee — ecology, energy, agriculture, industrial policy, regional legislation, and issues relating to the development of small business and entrepreneurship. The last committee was set up a good deal later than the others, in April 1995. Since April 1997, the association has been headed by Anatoly Guzhvin, governor of Astrakhan Oblast. Its vice-president is Aleksandr Kharitonov, speaker of the Saratov Oblast Duma.

The association’s leaders do not generally say much about its activities in their speeches. Kharitonov did tell a press conference last March that Greater Volga was "one of the few associations that are doing something." But he gave no concrete examples of activity, other than vague references to "joint lobbying efforts."

Formally, at least, Greater Volga does have something to tell outside observers. Its best-known project is the "Volga Revival" economic modernization program. When this program was endorsed by the Russian government in the spring of 1995, its total cost was put at 276 trillion rubles, of which 15 percent was to come from federal funds. In addition, the association drew up plans to create a single food supply market, a common agrarian policy, and plans for cooperation in the area of transportation. In spite of all this, the existence of Greater Volga goes almost completely unnoticed within the Volga region, and even specialists can form an idea of it only from meetings, hearings, and other activities which often appear to have been staged purely for show.

This is not really surprising. Unlike Siberia or the Urals, where regional economic associations play a major role in determining the political and economic landscape, the Volga region has never seen itself as a single whole. The Greater Volga association, like most such associations in Russia, was formed without a clear understanding on the part of its members of why such an association was necessary and what role it should play in relations between its members. Instead, the association seems to have been ritualistically imposed on top of other processes going on in the Volga region, and often conflicts with them. No mechanisms were created to resolve these contradictions — apparently because the need for them never dawned on the founders of an organization dedicated more to form than to content.

The fact that there has never been any effort to resolve conflicts between members within the framework of the association is not because no such conflicts exist. On the contrary, there are many of them. One has only to think of the territorial dispute between Kalmykia and Astrakhan Oblast over the territory transferred from Kalmykia to Astrakhan in 1943, when Stalin deported the Kalmyks and abolished their region: this dispute flared up again as recently as 1992. Most recently, tension has arisen as a result of the claim by the leadership of Saratov Oblast to territory across the border in neighboring Volgograd Oblast.

Nor does Greater Volga function as single market. Almost all the regions belonging to the association follow a policy of restricting imports and exports of certain products. This enables them to protect their region’s producers from competition and regulate supplies to local markets. These "economic security measures," some of which violate Russian law, are directed against their next-door neighbors — fellow-members of the association. In these circumstances, it is hardly surprising that Mari-El and Kalmykia have pulled out of the organization, and that several others have reduced their participation to a minimum.

The association can nonetheless not be dismissed as an empty ritual enacted in a show of "Volga unity." Samara Oblast governor Konstantin Titov has extracted the most benefit from the Greater Volga. He served for two terms as the association’s president, and left office in 1996 because the association’s charter stipulated that the presidency must be rotated. Guzhvin was his hand-picked successor and the post of vice president, now occupied by Kharitonov, was introduced at his recommendation. This reinforced Titov’s leadership within the organization. Samara, which Titov turned into the virtual capital of the Greater Volga region, retains its dominant role and houses the association’s executive directorate and its committees on energy, small business, and budget policy. Samara’s position was further strengthened when the Volga-Kama Bank gained the status of inter-regional bank of reconstruction and development and the power to coordinate the activities of authorized banks of Greater Volga members.

Under Titov, Samara assumed an almost mythological status as the association’s capital. This, plus the fact that Samara, unlike several other members of the association, is a net donor to the federal budget, allowed Titov to portray himself as a strong regional leader. Such myths, which form the basis of local ideologies and enable leaders to project a certain image in the eyes of Moscow and potential business partners, are typical for the Russian provinces.

Nizhny Novgorod’s image as "Russia’s third capital" created no problems within the Greater Volga. Boris Nemtsov’s ambition was to be a politician on the Russian stage, and made no claims to the leadership of the Volga region in which, in fact, he did not play a great role. Therefore, his presence in the Russian government cannot be attributed to Greater Volga’s lobbying activity. Nor does the strength of leaders such as Tatarstan’s president Mintimer Shaimiev and Ulyanovsk Oblast governor Yury Goryachev challenge Samara’s claims to regional leadership. Their policies hinge on setting their regions apart from the surrounding political and economic space, not on competing with their neighbors.

The only real conflict within the association has emerged relatively recently, with the appearance on the scene of Saratov governor Dmitri Ayatskov. By adopting the slogan "Saratov is the capital of the Volga region," Ayatskov challenged Samara’s predominance. Confrontation between the two oblasts and their governors intensified when Ayatskov tried to use Greater Volga to enhance his influence on the federal stage. The rivalry was exposed when, during the "book scandal" at the end of last year, Titov and Ayatskov were both mentioned as possible replacements for First Deputy Premier Anatoly Chubais. This was a sign less of Greater Volga’s lobbying power than of its weakness, since it became obvious that the association was rent by internal rivalry. Ayatskov backed down quickly, however, as soon as he realized that the position of his competitor in Samara was impregnable.

Greater Volga will retain its power to lobby the federal center on behalf of its participants as long as the center continues to have an interest in maintaining the myth of a stable state, internally united, with orderly relations between the Kremlin and the regions and between the regions themselves. But this image is a myth. The reality is that hidden conflicts threaten to undermine the old relations. These may appear still to work, but they are poorly adapted to Russia’s new economic and political conditions. The problem is not so much that there is no replacement for them, but that regional leaders do not yet appreciate that the need for such a replacement exists.

Translated by Mark Eckert

Ilya Malyakin is chief editor and political expert at the Volga Information Bureau, an independent news agency in Saratov.

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