A way with a future

THE CENTER AND THE REGIONS FORM AN INTEGRAL ENTITY - TOGETHER THEY MAKE RUSSIA

Egor Stroev,,
Chairman of the Federation Council

        The necessity to develop and consolidate cross-sectional inter-regional links in Russia is self-evident. The eight inter-regional associations for economic interaction that were formed in the 90's fulfil this function. These associations consolidate all Russian regions and reflect the historically - developed regional structure of the Russian economy.
         The associations settle many of the problems that none of the regions are able to solve on their own. Very few differences arise, and when they do, they are settled in the process of work. The latter are usually reactions to the unfair budgeting of the regions. The fact that the center supports some of the regions while ignoring the needs of others results in social and political discrimination. This is the main concern of the federal subjects.
         Therefore, one of the main issues the regions are now facing is that of federal budgeting and the apparent unequal initial positioning of the regions.
         I am all for the two-channel system, where funds, say, for teachers and doctors, are first accumulated in the federal center and then forwarded to pay the salaries of only these categories of workers. This is how federal budgeting developed in Germany, and this is how it works in Spain and France.
         I am quite positive that the only way to improve the current situation is to closely monitor and control the flow of capital and to support the home producer in every possible way. Under free market conditions the state can not be a detached observer of the country's economic development. Neither can it take upon itself the responsibilities of a regional administration. It should co-ordinate and regulate the process, forming uniform rules for everybody. It should also create support for the home producer taking into consideration the economic situation in the country.
         We should not be apprehensive about the growing independence of the regions. This must, however, go hand-in-hand with the increase in self-reliability of the regions in matters of economic development, social welfare and self-administration. This will consolidate Russia and make it stronger.
         In order to equalize the regions' relationship with the center and to make them more self-sufficient, property relations must be further developed in the regions. I am referring in particular to granting federal subjects and municipal organizations the right to participate in the management of state enterprises. The center could also hand over some of the privatized companies' stock, which is now in federal ownership, for the regions to manage themselves.
         Relieved of these burdens, the center could target its efforts at more constructive activities. It could, for instance, solve strategic problems of the state's development, which would be very helpful, especially if it coordinated all the controversial issues with the regions. The authority of the center would not become weaker if it managed to settle all the disputes with the regions. The center and the regions form an integral entity. Together they make Russia.
         At the moment, no laws exist that are able to meet current demands. This has been holding back the development of normal federal relations. The structure of power is poorly defined. The vertical axis providing links between the centre and the regions has not been formed yet. The fact that this process has taken so long has resulted in lack of cooperation between the center and the regions.
         After declaring as our goal the development of the state along the lines of a federal model five years ago, we have so far made only the first step in that direction. We must now define, within the framework of the Constitution, the responsibilities and rights of the regions and those of the center.
         Whether Russia will take the next step or not depends on how soon a clear line can be drawn between the rights and responsibilities of the federal and the regional authorities.