17:09 Jul. 30, 2016
Anatolii Baronin shares his opinion on reasons behind Kremlin's recent territorial reshuffle
The decision of the Russian authorities to disestablish the 'Crimean federal district' and merge it with the Southern federal district is a predictable Kremlin operation, through which Moscow leaders want to get round some of the international sanctions and improve control over the distribution of embezzled budget funds.
On July 10, 2015, the Russian government officials announced the forthcoming liquidation of the Crimea ministry. The decision was taken due to the fact that the ministry had been created as a temporary measure, whereas the administrative, legal and economic integration had been completed at that time. Then the Russian newspaper Vedomosti reported that following that decision the presidential mission to Crimean territory could also be terminated, and the peninsula itself could be included into the Southern federal district, joining the Rostov, Astrakhan, and Volgograd regions, Krasnodar Krai, the republics of Kalmykia and Adygea. Thus, the decision to merge Crimea with the Southern federal district means the completion of internal Kremlin-designed procedure aiming to absorb the peninsula.
The significance of this decision should not be overestimated. The concept of federal districts is not stipulated in the Russian constitution, which indicates its secondariness in the territorial and state system, the basis for which is still the division of Russia into subjects of federation. The establishment of federal districts meant the introduction of a new, supplemental managerial level to improve the centre's control over the vast and split-up Russian territory. This add-in helped to strengthen the administrative hierarchy through the establishment of an institution of responsible federal controllers over various geographical blocks of Russian region. That is why the fact that Crimea has been deprived of its federal district status is significant only in the context of its integration into another federal district, that is, the conveying of control functions over the peninsula to the Southern federal district. Thus, the work with Crimean regional elite will not be conducted within the peninsula as a separate federal district, but by the presidential envoy of the Southern federal district, allowing Moscow to structure local elites.
Russia's President Vladimir Putin and Dmitry Ovsyannikov, appointed Sevastopol's so-called acting governor, during a meeting at Moscow's Kremlin. (Getty Images)
In addition, the control over the regional elite will be changing towards stimulating their activities to serve the centre's interests. The governance over election processes and personnel policy on the regional level does not belong to the presidential envoys' official functions, but in principle results from them if there is a task to improve controllability, that is, to clear the regional authorities from 'inappropriate' elements. This is followed by a number of causal relations which lie at the root of the decision to merge Crimea with the Southern federal district.
Control over financial resources
In 2015, the Russian government, according to a TASS report, decided to punish the Crimean authorities for the inefficient use of budget fund. The government instructed the Ministry of Economic Development and Ministry of Finance to make recommendations to punish the Crimean authorities after the freezing of federal budget funds allocated for the region's development. Then, Sergey Aksyonov suggested that the so-called republican authorities be given mandate to spend the federal budget funds without consent from the federal agencies, drawing the analogy with the same powers of the Russian president. The Kremlin was obviously surprised at this initiative, which led to a contrary decision restricting the use of Crimea's budget funds under the Southern federal district's government. In 2015, four of the five dismissed ministers of Aksyonov's so-called government were accused of lobbying corrupt schemes or embezzlement. For example, transport minister Anatoly Tsurkin was fired because he could not organize a well-functioning ferry line, while the enterprise Crimean Sea Port controlled by him was not meeting the deadlines and was using public funds with law violations. The same reason for dismissal applied to resorts minister Elena Yurchenko, industrial policy minister Andrey Skrynnik, tax inspection chief Nikolai Kochanov. Thus, Moscow reacted to Aksyonov's attempts to build his own hierarchy in Crimea like in Chechnya with high corruption level, lowering Crimean authorities' federal status and their access to resources.
A graffiti featuring Russian President Vladimir Putin near a railway station in Sevastopol, Crimea. (Getty Images)
Moscow's decision clearly shows the wish to build its own power vertical in Crimea and eliminate conflicts, for example , between the group of Sevastopol governor Menyailo and presidential envoy Belaventsev, and the group of the ex-speaker of the legislative assembly Alexey Chaly. That is why it is logical to expect the further office appointments in Crimea will be from non-Crimean personnel. There is a high possibility that under the governance of ex-prosecutor Ustinov as presidential envoy in the Southern federal district, more officials will be fired.
In 2014, there was RUB 123 billion worth of transfers sent to the Crimean federal district. The amount of the 2015 transfers was RUB 120 billion. The programme ‘Social and Economic Development of the Republic of Crimea and the City of Sevastopol by 2020' provides RUB 708.05 billion worth of funds to finance Crimea, which is almost USD 13 billion, USD 12 billion from which is budget-funded. Thus, the high level of budget costs requires stricter control over resources from the federal centre, which can be achieved only when distancing the new Crimea elite from the distribution system on the regional level.
Trying to escape sanctions
Crimea's merging with the Southern federal district, according to Moscow's plan, will allow the Kremlin to be more flexible when evading sanctions imposed over economic operations with the annexed peninsula, by manipulating the jurisdiction of business entities. The possibility of expanding the sanctions towards the whole Southern federal district is rather small.
In addition, the operation to eliminate Crimean federal district makes easier solving logistics and supplies issues. The inclusion of Crimea to the Southern federal district can also mean Russia's temporary refusal to construct a land transport corridor to Crimea from the separatist-held territories of Donetsk and Luhansk regions. Crimea's energy and transport projects with the Krasnodar Krai will now be done within one federal district facilitating control over them.
This opinion article by Anatolii Baronin first appeared on UNIAN.