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Crisis strains relations between federal centre, regions - Russian deputy PM

Moscow, 29 March: According to Deputy Prime Minister Sergey Sobyanin, relations between the centre and the regions are going through a period of crisis.

"I think the federation, provided that we do not leave the regions in the lurch or turn away from them, will emerge stronger from the crisis and will have a better understanding of tasks at hand," the deputy prime minister said on the "Vesti Nedeli" programme on the Rossiya TV channel.

He recalled that "as regards the revenue part of (the budget) the regions have lost no less than the centre, i.e. between 20 and 40 and in some regions up to 50 per cent of their revenue". "Well, on average across the country we think the figure will be 25-30 per cent. But taking into account that the biggest part of their budgets are running expenses - salaries, payments for utilities and medicines - that account for a third of revenue that they are losing, it is very painful for them. And, of course, the federation will help. We not only have not cut subventions and allowances to the budgets - we have even increased them by a third compared with last year," the deputy prime minister said.

According to him, "this amounts to a total sum of R1,200bn". "This is a big sum and we hope that it will allow us to balance the budget. Of course, it will be difficult in the regions since, essentially, the regions are bearing the brunt. Particularly in the regions which had small revenues in the past and this circumstance is hanging over them; plus a whole number of regions have old debts they have to repay, interest rates are very high at present, so this is difficult to do. It is a difficult situation also for those who used to have high incomes because they were spending on a large scale, including on social support for the population, and had grand plans - these are mainly raw material regions, metallurgical and processing regions - their losses are the biggest. For them, too, it is a colossal endurance test," Sobyanin stressed.

He believes the regions should get used to normal rather than super-high prices. "This is a somewhat different psychology and a different interpretation of budget and socioeconomic policy in the regions. Institutional reforms should be carried out that we have been talking about for a long time - in health care, education, housing maintenance and utilities that should be effective, without losing their quality. Spending should be effective," the deputy prime minister explained.

According to him, Moscow is striving to ensure that the "Russian programme for overcoming the crisis is not just a government programme but a common programme that regional and local authorities, public organizations and parliamentarians alike regard as their own". "It is very important to ensure that there is consensus in society as regards the measures which are being taken in the country," Sobyanin said.

He stressed that the "existing resources in the country are limited, therefore they should be used effectively" and "given not to those who shout the loudest and complain but to those who really need them and in the circumstances cannot objectively survive without the federal centre. And simply to build up running expenses and ineffectively use one's budget funds and at the same time demand assistance from the federation is not the best way out," the deputy prime minister said.

He confirmed that "as for the regions and the governors who are not coping with the situation not for objective reasons but because of their incompetence, appropriate conclusions will be reached rather than help be provided to them". "Both the president and the prime minister have been talking of this. Hence, the conversation with them is tough but fair," Sobyanin believes.

In his opinion, heads of regions should "change their attitude and start working according to a new objective reality, during a difficult period when revenues are falling and when the volume of regional gross domestic product is falling". "It is very difficult to change one's attitude and realize that one is in a new situation and that this situation is not for five minutes and not for a day or two, and that it may last for years. But I think that when we talked with our colleagues in the Ural Federal District, I think most of them have already done their rethinking," the deputy prime minister said.