Publication: Monitor Volume: 6 Issue: 160

Goskomstat, Russia’s official statistical agency, released data in early August on economic trends in Russia’s eighty-nine sub-federal regions during the first six months of 2000. These figures do not include gross regional product data, which have not been released since 1998. But the information provided on growth in industrial output, retail sales, housing construction, real incomes, inflation and unemployment nonetheless provide a broad picture of regional economic trends. These figures show a continuation of Russia’s strong economic recovery which was apparent in the regional data for 1999 as well (Goskomstat Sotsial’no-Ekonomicheskoye Polozhenie Rossii, 1999, January 2000).

Content aside, the form in which these data are presented is also noteworthy. Until now, regional economic data had been reported according to the Soviet-era taxonomy in which Russia’s eighty-nine sub-federal regions were grouped into eleven geographic “macro regions.” The data for mid-2000, however, group the regions into the seven federal military districts which President Vladimir Putin has recast as a new administrative structure to oversee the regional authorities. This new classification system, which further underscores the importance of Putin’s new federal districts, should make it easier for the seven “governors general” to monitor economic trends in their jurisdictions. It could also make it easier for Putin to evaluate the governors’ economic performance.

These data indicate that Russia’s economic recovery is strongest in the Northwestern district, the administrative center of which is located in Saint Petersburg. Industrial output and housing construction in this district grew by 21 and 26 percent, respectively, in the first half of 2000. These rates were more than double the national average. The Northwest’s 6.2 percent unemployment rate was Russia’s lowest, well below the 8.0 percent national average. Northwestern ports like St. Petersburg and Arkhangelsk have benefited from strong growth in shipping, while the extractive, timber, paper and metallurgical sectors in Karelia, Komi, Vologda and Murmansk have profited handsomely from the weak ruble and high commodity prices. By contrast, Russia’s economic recovery was weakest in the Trans-Volga district, the administrative center of which is located in Nizhny Novgorod. Retail sales in this district actually declined in the first half of 2000, compared to the 8 percent increase recorded for Russia as a whole. Here rapid growth in some of the district’s smaller regions (Udmurtia, Penza) was offset by slow growth in the larger regions (Nizhny Novgorod, Bashkortostan). Although it contains 22 percent of Russia’s population and produces about a quarter of its industrial output, the Trans-Volga district only received 4-5 percent of Russia’s foreign investment during 1999 and the first half of 2000. Instead, some 32 percent of Russia’s foreign investment went to Moscow city and Moscow Oblast during this time.