WEALTH AND POVERTY: THE URALS AND SOUTHERN DISTRICTS.

Even more than the Central and Trans-Volga districts, the Southern district is an amalgamation of very different regional economies. The southern part of this district includes the impoverished North Caucasus, where mountainous terrain, subsistence agriculture, very large informal sectors, stark poverty and the effects of federal “antiterrorist operations” in Chechnya dominate the economic picture. The average wage in Dagestan in May was only US$29–79 percent of which was required to purchase Goskomstat’s standard basket of 25 basic foodstuffs. (By contrast, only 38 percent of the average wage in Astrakhan was required to purchase this basket.) The unemployment rate in Ingushetia–which is flooded with refugees from Chechnya–at mid-year was 25.7 percent–three times the national average. On the other hand, the northern part of this district consists of the relatively industrial regions of Volgograd and Astrakhan (which are important oil refining and transport points), as well as the agro-industrial regions of Krasnodar, Stavropol and Rostov. In the first half of 2000, the northern regions accounted for 91 percent of the district’s industrial output and 85 percent of its retail sales. Overall, the southern district is Russia’s poorest. But thanks in part to Russia’s stepped-up military presence in Rostov, Stavropol and elsewhere, the southern district is one of Russia’s fastest growing. The 18 percent industrial growth recorded last year, and the 13 percent increase in retail sales registered in the first half of 2000, were the highest in the country.

The Goskomstat data indicate that the Urals district (the administrative center of which is in Yekaterinburg) is Russia’s wealthiest. Monthly wages there were at US$112 in May 2000, and averaged US$139 last year. These were well above the national averages of US$74 and US$78, respectively. Only 24 percent of the average wage in the Urals went to purchase Goskomstat’s standard basket of twenty-five basic foodstuffs in May (compared to 34 percent for Russia as a whole.) The Urals are also staging a strong recovery. Industrial output during the first half of 2000 grew by 20 percent or higher in Sverdlovsk and Chelyabinsk, while housing construction in Tyumen was up 26 percent. Real incomes in the Urals grew 25 percent during the first half of 2000, after rising 20 percent last year. The district’s strong economic performance reflects in part the sharp recovery of Russia’s metallurgical and machine-building branches, which dominate the industrial sectors in Sverdlovsk and Chelyabinsk. It also reflects the perpetual strength of Russia’s natural gas sector, which is based in Tyumen. But the strong performance also reflects the district’s small size and relatively homogeneous nature. The Urals district contains only 9 percent of Russia’s population, and of its four regions, only one–Kurgan–reports monthly wages below the national average. (Moreover, Kurgan only accounts for 9 percent of the district’s population, and 2 percent of its industrial output.) Its relatively small size and strong industrial base suggest that the Urals will be the easiest federal district to manage, at least in economic terms.

THE FAR EAST AND SIBERIA: DIAMONDS AND RUST.