REGIONAL BOSSES SEEK SOFT MONEY.

New arrangements are being established for consultation and cooperation between the federal government in Moscow and the leaders of Russia’s regions. On December 3, First Deputy Prime Minister Aleksei Bolshakov met with representatives of the seven interregional associations that group together almost all of Russia’s 89 federal subjects (Siberian Agreement, Great Volga, etc.). The agenda seems to have been overwhelmingly economic. (Itar-Tass, December 2-3) It was agreed to conduct three cycles of regular federal/regional consultations. Every quarter, Prime Minister Viktor Chernomyrdin will meet with representatives of the regional leaderships. Once a month, there will be a meeting of a working group co-chaired by Bolshakov and Konstantin Titov (who was reelected as governor of Samara on December 1). One of Chernomyrdin’s deputies will also meet monthly with the leaders of a specific region.

These new arrangement make sense politically but may be dangerous for economic policy. Politically, the regions are flexing their muscles as gubernatorial elections throughout the country confer popular legitimacy on regional bosses who previously were appointed by the president. Both the federal government and the regional leaders need to devise some framework within which to tackle common problems. The economic danger is that the regional leaders, by and large, want the federal government to provide more subsidies and import protection for Russian producers. These new pressures to relax financial discipline come at a time when the 1997 budget has still not been approved, and when calls for a more interventionist industrial policy are coming from all sides, even from the hitherto reform-minded economics minister, Yevgenii Yasin (see above).

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