A Tale of Two National Economies: Central vs. Distributed

Russia’s Economy Is Focused on the Core

Russia's Lopsided Economy Source

Russia’s Lopsided Economy

According to the latest available data from the Federal State Statistical Service, the Central Federal District accounts for 35 percent of the entire Russian economy. Located in this district, Moscow alone accounts for 21.7 percent of the entire Russian economy.

… The regime that rules from Moscow possesses a great deal of wealth in absolute terms, but it is not enough to govern the rest of Russia without a firm grip that will have to tighten as Russia burns through reserves and cuts more social spending. __ Source

Like the overall population of Russia, Russia’s wealth is grossly lopsided — and growing more so each year under President Putin. This dynamically worsening distortion has many repercussions for life in Russia for anyone living outside of Moscow.

Wealth in the US is More Distributed

US Wealth Distribution by Region Source

US Wealth Distribution by Region

What stands out in the map above is that while the U.S. certainly has regions that account for a greater share of the U.S. economy, overall, economic activity is much more spread out. The Southeast region, even without Texas, actually contributes the most to total GDP.

… almost every U.S. region has a major state economy. In Russia, the Central Federal District and a few far-flung oil-producing regions produce the country’s wealth. In the U.S., wealth is far more spread out. __ GeopoliticalFutures

Power — like wealth and population — is another highly concentrated feature of life in Russia, much more than in the US. Can you imagine a political maverick such as Donald Trump coming from out of nowhere in Russia, bucking the tsunami of both incumbency and elitist power of every kind to win the presidency by relatively transparent and constitutional means? It would be impossible in Russia, since in the motherland elections are foregone conclusions and natural outgrowths of the power structure as it exists.

Russia’s Closed Cities Represent a Hedging of the Bets

Not all Russian economic strength has been lavished on the core area of Russia. Closed cities and single-industry cities represent efforts to distribute Russian economic activity, very much like was done in the “Hunger Games” fictional world.

They are called “forbidden cities” and “closed cities”, a Soviet phenomenon that still exists today. In modern Russia, most of these cities are now open, or almost … They are called “ZATO” (closed administrative territorial entities). Surrounded by barbed wire, protected by armed guards, the entry of these secret areas is strictly forbidden to foreigners. Such prohibited cities are located in remote areas, without any official way to access them. To enter there, the Russians must have special permission. Moving out of these closed cities is also not easy, as you need a special document from the authorities. __ http://weirdrussia.com/2015/08/10/the-closed-cities-of-russia/

Closed Cities -- Nuclear Division Source

Closed Cities — Nuclear Division

Closed cities deal in a wide range of activities, from nuclear weapons research to illegal bioweapons research, to the dirtiest of industrial activity, to other projects thought to be best left in darkness.

Consider that the city you live in is officially a ‘closed city’, not allowing tourists without invitation. Consider living in one of the most polluted placed on earth. In reality such a city exists in Siberia, Russia. Norilsk, a city with 175.000 inhabitants, situated high above the Polar Circle, is an industrial city largely dominated by mining practices. __ Norilsk [Closed City]

More details on closed cities from Wikipedia
Some of the closed cities are designated as “fallback areas” or secondary centres of government in the case of the fall of Moscow and St. Petersburg.

Single Industry Cities Another Example of Russian Distributed Economy

The single-industry cities are another way in which the “eggs in Russia’s baskets” were distributed away from the centre. But as the economics of global production has changed, so have the future prospects for most of these single-industry cities.

Most of Russia’s single-industry towns are at risk of economic collapse that would cause massive social dislocation and see millions of Russians lose their livelihoods, Prime Minister Dmitry Medvedev was quoted as saying Wednesday.

Some 14 million Russians live in the 319 Russian towns that, in a holdover from the Soviet era, rely on one industry, and often a single factory, for their economic survival. Many of these require subsidies to survive, and Russia’s recession has worsened their plight. __ https://themoscowtimes.com/articles/russian-single-industry-towns-face-crisis-48457

Russia’s Oil & Gas Wealth Somewhat Distributed

Russia is critically dependent upon oil & gas revenues for its existence as an empire, as we know it. Recent global price reductions in oil & gas markets have driven the Kremlin to desperate measures in the attempt to maintain some measure of global relevance. But as ethnic Russians continue to move from the periphery to the centre, resource-rich regions will lose most of their ethnic Russian populations. As ethnic Russians fall into the minority, Moscow’s control over these resource-rich regions will inevitably decline.

More on Hyper-Centralisation in Russia

Some now are inclined to “call Russia ‘the Horde Turned Upside Down,” to the extent that there has been erected a similar power vertical but with a capital not in Saray but in Moscow.” However, it should be remembered that the Tatar tribute was about 10 percent; now, Tatarstan send “more than 73 percent of its taxes” to the federal treasury.

… “From weak regions,” Khakimov says, “a strong Russia cannot emerge.” Only if the regions are strong will the country flourish. And he offers the following “simple slogan” for the future “’Strong Regions for a Strong Russia.”
__ http://windowoneurasia2.blogspot.com/2016/11/russias-current-hyper-centralization.html

This approach is, of course, the opposite direction to that in which the Kremlin’s boat is currently sailing. Russia’s regions are being sucked dry in vampire fashion by an insatiable, bloated centre. As the strapped and flogged regions begin to understand more fully how much the central region depends upon their assets, they will inevitably begin to assert more power over these crucial assets. Independence-minded ethnic Russians in these regions are likely to increasingly join with non-Russians in pulling back from Moscow’s brutal control.

Meanwhile, as Russia is being whip-snapped by rapidly accelerating demographic and political forces, China will continue its inexorable ingress into the Far East. China will reclaim — with Putin’s reluctant blessing — the lands lost to Russia in recent historical times. But China is also likely to covertly encourage separatist movements in the resource rich areas of the Far East and other parts of Siberia. China needs water, land, oil & gas, coal, minerals (uranium, diamonds, gold etc.), lumber, and other wealth that soon-to-be former parts of Russia have to offer.


Russia’s involvement in Syria is getting far more complicated This whole escapade was planned to have been completed a year ago. But it is looking more and more like another bloody quagmire.

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