Transcript Слайд 1 - Moscow State Institute of International

RUSSIAN REGIONS IN THE
WORLD ECONOMY AND THE
COORDINATION
IN RUSSIA’S FEDERAL
REFORM
Democracy is a device that
insures we shall be governed no
better than we deserve.
George Bernard Shaw
SUBJECT OR REGION?
“subject” is preferable in the context of our
research, since the term “region” has a very wide
range of definitions which often causes ambiguity.
 subject is a territorial unit of a state which is
located at the level underneath the ethnic state
level and is politically self-governed. A subject is
recognized by the constitution or legislation of a
state, which guarantees its autonomy, ethnic
identity, powers and organization.

The international activity of the
subjects
a system of multi-level interconnected
processes whose participants are state and
political institutions, commercial enterprises
and non-profit organizations, public and
political figures, social groups pursuing their
own goals and using different methods to
achieve them.
Influenced by many different factors:

the consequences of globalization
 the subjective characteristics of the regional
leaders which explain their motivation or political
authority.
 If we view the international activity of the subjects
according to a pluralist “open” definition, an
important role belongs to the commercial and
industrial associations, companies and non-profit
organizations which expect that their participation
in the international activity will bring concrete
results
Goals of conducting international activity
set by the authorities of the subjects:
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Protect the subject’s economic, political, cultural, etc. interests and
the realization of priority development tasks through participation
in international activity.
Political goals include the following: striving toward constitutional
recognition of national identity, attracting international support in
the subject’s opposition to the federal center (for example,
regarding the issue of distribution of powers between the federal
government and the subject), and finally, conducting activity aimed
at receiving the status of a sovereign state.
Support economic development targeted toward attracting
international financial resources, developing markets, creating joint
ventures, implementing advanced technologies for competitive
recovery of production, searching for materials, reducing burden of
working on foreign markets (e.g., opening foreign production
branches).

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Increase the volume of internal travel in the federal subject.
This goal is connected with attracting foreign investment, as,
first of all, it is necessary to create a competitive infrastructure
in the region and then put forth a serious effort in marketing
and advertising services on the international market.
Support the resolution of national foreign policy tasks,
including in situations in which there exist factors preventing
the development of international contacts on the national
government level or in cases in which the subjects’ vigorous
activity may cause an expected negative reaction of a foreign
state, while the federal government stays “excluded”

Support the democratization process in the world, as
it is democratization that the international activity of
subjects is based on.
 Unite the effort of subjects of different states in
realizing joint projects in economic, humanitarian and
social spheres, protecting the environment, preserving
cultural heritage, securing international solidarity.
 Coordinate regional development planning, especially
in realizing big projects in transport and
communications. Develop international relations with
the purpose of experience and information exchange
in the areas of politics and state building, planning,
research, technologies and others.
Three areas of international activity of regions

political,
 economic
 cultural
Declaration of European Regionalism mentions that
the sphere of the subjects’ international responsibility
(within the limits of their competency) is broader than
the three main areas (political, economic and cultural)
and also includes ecology, regional and national
planning, scientific collaboration.
Political scientists agree that the diplomacy of
subjects will receive further development and
will be characteristic of most states in the 21st
century.
International activity develops most intensively
in stable democratic states.
In many cases, the diplomacy of subjects begins
its legitimate development after the collapse of
ruling dictatorships.
Historical background of Regional
Incentives

After he was elected President in 1991, Boris Yeltsin
began to appoint presidential representatives in republics
and other territorial units. The status of those
presidential nominees was not defined in any law and
was regulated by presidential decrees.
 In 1994, President Yeltsin issued a decree confirming all
earlier appointments (before the 1993 Constitution
entered into force) to the office of presidential
representative in constituent entities.
 The same legal status of presidential representatives
remained until Putin's reforms in May 2000.
Administrative and Territorial
Division
89 administrative territorial divisions:
 twenty-one republics,
 six territories: kray,
 forty-nine oblasts (provinces),
 one autonomous oblast,
 ten autonomous regions (okruga ).
The cities of Moscow and St. Petersburg have separate
status at the oblast level.
Population size and location have been the determinants
for a region's designation among those categories.
The smallest political division is the rayon.
GLOBALIZATION
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INCREASES THE ROLE OF ECONOMIC POLICY IN
GENERAL AND THE ROLE OF GOVERNMENTS ON THE
INTERNATIONAL AREA
THE INVOLVMENT OD THE SUB-NATIONAL UNITS
BECOME A PART OF THE SOLUTIONS OF THE
PROBLEM
THE PARTICIPATION IN INTERNATIONAL ECONOMICS
BRINGS FORTH CERTAIN DIFFICULTIES IN THE
IMPLEMENTATION OF FOREIGN POLICY AT THE
FEDERAL LEVEL, AND
KNOWING THESE DIFFICULTIES IS NO LESS
IMPORTANT AS KNOWING THE BENEFITS AND
ADVANTAGES OF THE GROWING INTERNATIONAL
ACTIVITY OF MEMBERS OF A FEDERATION
PROBLEMS:

attempts of sub-national members to go beyond
foreign economic activity and international cultural
cooperation to their interference in the solutions of
purely foreign political issues
 non-coordinated activity of sub-national units in the
international arena also creates a certain threat for
any federation, since it can lead to chaotic
fragmentation of the foreign policy and noncoordinated positions
 important to find an optimal combination of federal
interests and the interests of regions
WTO MEMBERSHIP
 STRICT TERMS
CHANGES IN
RUSSIAN INDUSTRY
 HOW 89 REGIONS REACT TO THE
ENTERING WTO?
 DO REGIONS NEED FEDERAL AID TO
MEET THE CHALLENGES?
Reasons for the development of the
subjects’ international activity
 development
of democracy
 the spreading of subsidiarity principle
in the relations between different
levels of power.
 the international political situation
Russian regions profile
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Mining regions. Tyumen, Komi, Yakutia, Magadan, Buryatia,
Khanty-Mansiisk, Yamalo-Nenetsky District, Sakhalin and
others. Attracting investments to these regions depends on
progress in signing of production Sharing Aggreements (PSA).
The legal basis for such agreements has been worked out in
principle, and a number of examples is available of successful
operations of foreign companies both in joint ventures, and on
the basis of PSA.
Urbanised industrial regions: have, in various combinations,
heavy and light industries, the traditional and science-intensive
military-industrial complex. (Nizhny Novgorod, Samara,
Yekaterinburg, Perm, Chelyabinsk, Krasnoyarsk, Tomsk,
regions of the Non-black earth centre, Udmurtia, Kuzbass).
The major intellectual and industrial potential of these regions
makes it possible to rely to a certain extent on successful
development of a number of sectors and districts. Some of
them in 1997 can become the Тlocomotives of RussiaУ


The trading and industrial pattern is typical for regions with
major ports (Murmansk, Archangel, the Primorye Territory,
Kaliningrad) as well as for the two capitals: todays capital Moscow - and St.Petersburg which was the capital of the
Czarist Russia. The capitals also have the science-intensive
military-industrial complex, traditional heavy industries.
Concentration of financial capital and new business activities
are typical of them. These regions choose openness, external
expansion based on their financial resources and geographical
locations.
Agri-industrial regions with the balance of industries and
agriculture (the Non-black earth center, major part of the Volga
River basin, South Russian regions, Don, Kuban, Stavropolye,
Kurgan, Orenburg, Omsk, Novosibirsk, Irkutsk). The bulk of
the Russian population resides there. A significant part is
played in the industrial structure by small and medium-sized
enterprises, mainly in processing agricultural produce.
RUSSIAN LEGISLATION
Not all legislation is adopted now in Russia at the
federal level. Article 76.4. of the Constitution
provides that, outside of the jurisdiction of the
Russian Federation and the joint jurisdiction of the
Russian Federation and the governmental subunits
of the Russian Federation, the republics,
territories, regions, federal cities, autonomous
regions and autonomous areas shall establish their
own legal regimes, including the adoption of
legislation and other regulations, a scheme much
like that of the US.
Article 71.
.
The jurisdiction of the Russian Federation shall include:
 the adoption and amendment of the Constitution of the Russian
Federation and federal laws and supervision over compliance with
them;
 …
 …
 establishment of the system of federal bodies of legislative,
executive and judiciary power, procedure for the organization and
activities thereof; formation of federal bodies of state power;
 federal and state property and management thereof;
 determining the basic principles of federal policy and federal
programs in the field of state structure, the economy, the
environment, and the social, cultural and national development of
the Russian Federation;
 establishment of the legal framework for a single market; financial,
monetary, credit and customs regulation, emission of money and
guidelines for price policy; federal economic services, including
federal banks;

the federal budget; federal taxes and levies; federal funds of regional
development;
 federal power grids, nuclear energy, fissionable materials; federal
transport, railways, information and communications; space activities
 foreign policy and international relations of the Russian Federation,
international treaties of the Russian questions of war and peace;
 foreign trade relations of the Russian Federation;
 defense and security; defense production; determining procedures for
the sale and purchase of arms, ammunition, military hardware and
other equipment; production of fissionable materials, toxic substances
narcotics and procedure for the use thereof;
 defining the status and protection of the state border, territorial waters
the air space, the exclusive economic zone and the continental shelf o
the Russian Federation;
 …
 federal conflict of laws;
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…
…
…
Article 72.
The joint jurisdiction of the Russian Federation and the subjects of the Russian
Federation shall include:
 ensuring compliance of the constitutions and laws of the republics, charters,
laws, and other regulatory legal acts of the territories, regions, federal cities, the
autonomous region and autonomous areas with the Constitution of the Russian
Federation and the federal laws;
 protection of the rights and freedoms of man and citizen, protection of the rights
of ethnic minorities; ensuring legality, law and order, and public safety; border
zone regime;
 issues of the possession, use and management of the land, mineral resources,
water and other natural resources;
 delimitation of state property;
 management of natural resources, protection of the environment and ecological
safety; specially protected natural reserves; protection of historical and cultural
monuments;
 general questions of upbringing, education, science, culture, physical culture and
sports;
 coordination of health issues, protection of family, motherhood, fatherhood and
childhood; social protection including social security;
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implementing measures to combat catastrophes, natural disasters, epidemics and
eliminating consequences thereof;
establishment of the general guidelines for taxation and levies in the Russian
Federation;
administrative, administrative-procedural, labor, family, housing, land, water and
forestry legislation; legislation on the sub-surface and environmental protection;
cadres of judiciary and law-enforcement agencies; the bar, notariate;
protection of the original environment and traditional way of life of small ethnic
communities;
establishment of general guidelines of the organization of the system of bodies of
state power and local self-government;
coordination of the international and external economic relations of the subjects of
the Russian Federation, compliance with the international treaties of the Russian
Federation.
2. The provisions of this Article shall equally apply to the republics, territories,
regions, federal cities, the autonomous region and autonomous areas.
Article 73.
 Outside of the jurisdiction of the Russian Federation and the
powers of the Russian Federation on issues within the joint
jurisdiction of the Russian Federation and the subjects of the
Russian Federation, the subjects of the Russian Federation
shall exercise the entire spectrum of state power.
 Art. 76.6 of the Constitution provides: "In the event of a
contradiction between the federal law and a regulatory legal
act of a subunit of the Russian Federation issued in accordance
with part 4 of this Article, the regulatory legal act of the
subject of the Russian Federation shall apply."
Few fundamental federal laws designed to consolidate
political, financial and economic positions of Russia's
regions and municipalities.
PUTIN’S REGIONAL REFORM
May 2000, President Putin made significant
changes to the federal system in Russia.
 seven federal districts to encompass all of the
89 constituent units of the federation.
 seven "Plenipotentiary Presidential
Representatives" to be accountable to the
President for the interests of the central
government in each of the districts.
Regional reform
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The administrative integration of Russian regions will
contribute positively if the decreasing number of regions
(‘subjects’) leads to policies that would better take into
account these regions’ competitive advantages.
Reasonable decentralization of the decision-making
process with a recognition of the international interests of
the states along with the leading role (but not the
monopoly) of the federal level in the field of external policy
The establishment and development of relations with
foreign partners by sub-national units must lie within the
common foreign political strategy of the federal state
The joint coordination and correlation of external activities
MAIN AIMS OF THE REFORM

the inconsistency between constituent entities'
laws and federal laws. In many cases this results
from a lack of coordination between the federal
centre and regions in the drafting of regional laws;
 the proper use of federal budget money,
transferred to constituent entities to cover certain
expenses, needs to be ensured by a federal body.
Tasks, assigned to the
Presidential Representatives
1.
2.
3.
4.
5.
organizing activities in their respective federal districts
to ensure that domestic and foreign policies are
implemented by the local branches of federal
departments;
monitoring the local implementation of federal-level
decisions;
ensuring that the President's personnel policy is
respected;
reporting regularly to the President on national security
issues as well as the political and economic situation in
the federal districts;
recommending measures to be taken by the President
concerning local matters.
Several priorities:
1. the North Western federal district: seeking external
2.
3.
4.
5.
investment and executing infrastructure projects;
the Southern and Far Eastern federal districts: executing
social and economic development projects;
the Central federal district: improving citizens' economic
security and fighting economic crime, as well as supporting
entrepreneurial development;
the Ural federal district: the same priorities as the Central
district, but in the Urals the Representative's staff also deals
with the development of specific economic sectors and
regional financial-industrial groups;
the Volga federal district: the Representative is trying to
make this district a "laboratory of innovation" with new
technologies.
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1.
2.
3.
INTERNATIONAL RELATIONS OF
RUSSIAN REGIONS BECAME A
COMPONENT OF THE FOREIGN
ECONOMIC POLICY
THREE ASPECTS:
the promotion of exports to foreign
markets;
encouragement of incoming visiting
foreign tourists;
the attraction of new investments from
abroad
Interaction with national governments

The level of the subjects’ partnership with the
federal government is defined by their
constitutional organization, which also defines
the bases of their interactions in external
relations. Historical traditions of partnership
and subjects’ counseling with the federal
center also have a great importance for the
successful internal politics of a national state.
Forms of international activity of subjects
1.
2.
3.
Including subjects’ representatives in the composition of
national delegations in case of events such as official visits of
foreign delegations, meetings and negotiations with foreign
leaders, preparation of international agreements, activities of
international organizations and state-level conferences.
In federal states where subjects are represented in supreme
organs of legislative power (for instance, in the upper chamber
of the parliament), they have a real mechanism for influencing
state policy, including that in the sphere of external relations.
The authorities of the federal subjects, as far as their own
competencies go, try to create more attractive conditions for
foreign investors and encourage promotion of domestic
products onto the world market by using financial and
organizational means. State coordination of the subjects’
external economic relations may be directed toward forming
structure of imports and exports which would reflect the
strategic priorities of their economic development.

Signing and realization of international
agreements
 Participation in the activities of
international unions
 Activity of foreign legations
 Delegation exchange, participation in
international activities
 Presentational activity
Other forms of international
cooperation:
international inter-parliamentary connections,
cooperation in the spheres of education and
staff training, research, culture, and
environmental protection.
 tourism sphere is a substantial source of
budgetary recharge and creation of jobs for
many states and subjects.
socially-oriented programs are also created in
the process of international integration.
Organizations involved:
The Ministry of Foreign Affairs of Russia
is responsible for coordinating the external relations of federal
subjects and ensuring the division of rights between the subjects
and the federal government.
Department of Connection with Federal Subjects,
Parliament and Public Organizations (DSPO)
developed a number of typical agreements of the federal
subjects with their foreign partners as well as recommendations
on reception of higher level foreign delegations in the federal
subjects and the drafting of international agreements and a
variety of other materials on issues of international links and
external economic relations of the federal subjects.
MFA has branches in the federal subjects
Regional Openness
 Institutional
 Functional
Regional “openness”: 4 types
1.CENTRAL REGIONS:

Cultural and political centers, concentration of financial
resources, power and developed infrastructure
2. “BORDER” REGIONS

Situated on the sate borders of the country

Developed infrastructure (transport)
3. “EXPORT” REGIONS

Main industries producing export commodities
4. INTROVERT REGIONS

lack of the necessary experience of economic management in
free market conditions.

As a whole, the development of external economic
relations, mostly based upon trade and attracting
foreign investments, is often the most important and
actively developing component of the international
activity of federal subjects. In many countries, there
has appeared a tendency to gradually re-orient the
economic relations of the subjects toward foreign
countries, thus damaging internal trade. This is
especially characteristic of border areas, as well as for
the subjects which produce highly competitive
industrial or agricultural products or possess natural
resources demanded on world markets.

Substantial regional variation in internationaltrade participation within Russia: e.g., the
capital cities of Moscow and St. Petersburg are
major centers of international commerce, while
the Mordovian, Adyegey and Tyva Republics
are almost completely isolated from world
markets.
REGIONAL DISTRIBUTION OF
FOREIGN INVESTMENT
10 main regions (%)
Moscow
Omsk Region
4%
5%
5%
Sverdlovsk Region
4% 4% 2% 2%
St.Petersburg
Chelyabinsk Region
52%
8%
14%
Sakhalin
Moscow Region
Tatarstan
Tyumen Region
Krasnoyarsk Region
Legal base for regional foreign trade
and investment
•
Federal Legislation
 Constitution
 Federal Laws
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
Legislation of Russian Regions
Regional Laws (mainly investment regulations)
International Legal Documents and Norms
International Agreements mainly on cross-border
or regional cooperation)
Federal Laws
1.
2.
3.
Federal Law of the Russian Federation on
Basis of State Regulation of Foreign Trade
activity (2003)
Federal Law of the Russian Federation on
Coordination of International and Foreign
Trade Relations of the Subjects of Russian
Federation (1999)
Federal Law of the Russian Federation on
International Agreements of Russian
Federation (1995)