- 2 weeks ago
Ever wondered why Russia's richest regions are still so poor? Dive into our deep-dive exposé on how Moscow centralizes power and resources, leaving the provinces struggling. Discover the hidden stories behind Russia’s economic model, local poverty, and what it means for the future! Hit subscribe for more revealing content and let us know in the comments what shocked you most! #Russia #Economy #Politics #Ukraine #Society
👉 This channel was created in collaboration with https://www.youtube.com/@costua
0:00 - Poverty and Resource Extraction in Russia
2:08 - Imperial Policies and Regional Centralization
4:29 - Economic Centralization and Regional Disparities
18:31 - Regions, War Financing, and Controlled Governance
23:13 - Limits on Regional Autonomy and Law Enforcement
29:14 - The Prospects of Russia's Disintegration
39:44 - Conclusions and Decentralization Lessons
We're now available on Spotify! Listen now https://open.spotify.com/show/033ygZMll1PIfydayeyRct
👉 This channel was created in collaboration with https://www.youtube.com/@costua
0:00 - Poverty and Resource Extraction in Russia
2:08 - Imperial Policies and Regional Centralization
4:29 - Economic Centralization and Regional Disparities
18:31 - Regions, War Financing, and Controlled Governance
23:13 - Limits on Regional Autonomy and Law Enforcement
29:14 - The Prospects of Russia's Disintegration
39:44 - Conclusions and Decentralization Lessons
We're now available on Spotify! Listen now https://open.spotify.com/show/033ygZMll1PIfydayeyRct
Category
🗞
NewsTranscript
00:00Tuva is the poorest republic in Russia.
00:03Vast, mountainous, and rich in coal, gold, and rare metals.
00:08And at the same time, it's one of the most impoverished regions in the country,
00:12with two-thirds of its budget coming from Moscow subsidies.
00:15I can tell you...
00:17When you see it with your own eyes...
00:19Yeah.
00:20First, Moscow drains resources from such regions for decades and keeps them in poverty.
00:25Then, this same poverty becomes a tool for recruitment.
00:28And here, this one went to...
00:30Well, is he not doing it for the money?
00:32But he is.
00:33Oh, for the money.
00:34And in September.
00:35For a man from an economically depressed region,
00:38an army contract and the death payout is more money than he would earn in his entire life.
00:44Two months ago, Parblontiev's brother died, her own brother.
00:46She was paid five million as his sister.
00:48She buried their father with that money.
00:49Units are staffed with fighters from poor outskirts and national republics,
00:54such as the notorious 64th Brigade from the Far East.
00:59These are the same ones who were stationed in Buccia, Irpin, and Hostomel.
01:03When the atrocities come to light, it's convenient to shift the blame onto the savages from the outskirts,
01:08rather than on Moscow, which planned and paid for all of this.
01:12Russia calls itself a federation, a union of equal federal subjects,
01:19where everything is decided from the center, and money from the regions also flows there.
01:24Three years ago, we released a video called
01:27Communities of Ukraine Live Better Than the Provinces of the Russian Federation.
01:31Why?
01:32Where we prove that the quality of life in the regions of our country
01:35is better than that of our neighbor, the occupier.
01:39In this video, we will break down exactly how Moscow squeezes resources
01:44from the occupied peoples of Russia and makes them paupers.
01:48Pay the money, and in return there will be silence.
01:52And all of this is part of the imperial policy
01:54that allows them to achieve the obedience of the subjugated peoples.
01:58Well, basically, they keep them on a wheel.
02:01And how can Ukraine use the desolation of Russia's provinces
02:05to break up the empire?
02:09Everyone has.
02:11Each of us now has three wishes.
02:14The first is for Ukrainian drones to find even more vulnerable spots of the enemy.
02:18Warehouses, logistics, oil refineries,
02:21everything that fuels the Russian war, including the occupiers themselves.
02:25Second, so that you can not only donate to this, but also earn money.
02:30Because money should work both for you and for the defense of the country.
02:33And third, so that Ukrainian miltech companies become the best in the world.
02:38Because if this war has proven anything,
02:40it's that the future of the battlefield is not being created somewhere in Silicon Valley,
02:44but here, in Ukraine.
02:46And now these three wishes can be combined through the Injured Miltech Fund.
02:51How does it work?
02:52You purchase certificates from the Injured Miltech Fund,
02:55and the fund invests these funds in corporate bonds of the Ukrainian defense company,
03:01One of the largest FPV drone manufacturers in Ukraine.
03:05Wiery receives working capital and can scale up.
03:08Production can be scaled up.
03:10Ukrainian defenders receive more modern unmanned equipment.
03:13And the fund receives coupon income from the bonds every 35 days,
03:17and reinvests it to increase the value of your investment daily.
03:21The projected average annual simple return of the Injured Miltech Fund over three years
03:26is 25 to 29% per year in Hrivnia.
03:30But it's important to note that you can only invest until December 31, 2026, inclusive.
03:36After that, the fund stops accepting investments.
03:39So this is a chance to support the Ukrainian defense industry,
03:43help scale Miltech, and earn money from securities at the same time.
03:46For investing, we recommend using the Injured app.
03:49It's faster and more convenient.
03:50It's available for iOS and Android.
03:53Why should you trust Injured?
03:55Because it already has over 100,000 active accounts.
03:58Ukrainian real estate funds manage assets worth about 7.5 billion Hrivnas.
04:03And what about the investors' portfolio volume?
04:05With Injured, investments in government bonds amount to almost 3.4 billion Hrivnas.
04:11Injured investors' income from dividends and capitalization already exceeds 1.7 billion Hrivnias.
04:17And they have earned about 280 million Hrivnas, more from coupon payments.
04:22Details about investing can be found at the link in the description.
04:25The centralization of Russia after the year 2000.
04:29After Putin came to power in 2000, presidential decree number 840 was signed.
04:36About the plenipotentiary representative of the president of the Russian Federation in the federal district,
04:41this document divided the country's territory into seven large federal districts,
04:46in each of which the institution of presidential overseers, plenipotentiary representatives,
04:52and their subordinate offices was established.
04:55Putin's reform enlarged the regions and created a parallel chain of control.
04:59The Kremlin sought to remove the prosecutor's office, the Ministry of Internal Affairs,
05:04tax authorities, and other federal structures from the informal influence of governors,
05:08and to coordinate them at the supra-regional level.
05:11The experience of the Chechen wars was especially important.
05:14They demonstrated the lack of coordination between the army, internal troops,
05:19the Ministry of Internal Affairs, and other security agencies.
05:22Large territorial units made it possible to gather information, coordinate security forces,
05:27and transmit decisions to the center without relying on dozens of governors.
05:32So that regional elites could not influence the new control mechanism,
05:36the Kremlin made all personnel appointments the exclusive responsibility of the administration
05:41of the president of the Russian Federation.
05:43Deputies and assistants to the plenipotentiary representatives were appointed in Moscow,
05:48and in each federal subject, federal inspectors appeared,
05:51who essentially became the eyes and ears of the Kremlin.
05:55Their task was to monitor the governors daily and not allow the regions to go beyond the political
06:01discipline established by the center.
06:04The districts often had artificial borders.
06:07For example, the Ural Federal District unites economically and geographically different regions,
06:13Sverdlovsk and Chelyabinsk oblasts, which historically and culturally belong directly to the Urals,
06:19as well as the Kurgan oblasts, which is geographically beyond the Urals,
06:23as well as the regions of the Tumen trio,
06:26Tumen oblasts, Kansi-Mansi and Yamalo-Nanets autonomous districts,
06:32which territorially belong to western Siberia.
06:35The newly created Ural Federal District united regions with opposite economic models.
06:42Sverdlovsk and Chelyabinsk are old industrial giants focused on heavy engineering,
06:47ferrous and non-ferrous metallurgy, and the defense industrial complex.
06:52As of 2022, Kanti-Mansi and Yamalo-Nanets autonomous districts together provided
06:5970% of all oil, gas, and coal production in Russia.
07:04The Oxford Institute for Energy Studies calculated that in 2024,
07:08oil and gas revenues made up 23% of all revenues in the federal budget of the Russian Federation.
07:16The Institute calls them the largest single source of revenue for the state treasury.
07:21In the mid-2010s, their share was close to 50%.
07:25But this money did not go to the budgets of these regions.
07:29Instead, it went directly to the federal center.
07:33The region is harmed by production at outdated facilities,
07:36turning the surrounding areas into environmental disaster zones.
07:40In the main industrial centers of the southern Urals alone,
07:44annual emissions into the atmosphere reach half a million tons.
07:48Meanwhile, Kurgan Oblast is a depressed, predominantly agricultural region
07:53with a low level of urbanization.
07:55Agriculture remains one of the main sectors of the economy.
07:58And the share of the rural population, about 35%,
08:02significantly exceeds the average for the Russian Federation, which is 24.5%.
08:08About 30-40% of the regional budget's income
08:12comes from non-repayable transfers from Moscow, subsidies, and subventions.
08:17The RIEX agency consistently classifies the Kurgan region
08:21as an area with high investment risk.
08:25Instead of the Tumen Trio serving the development of neighboring Ural regions
08:29through horizontal economic integration,
08:33for example, direct financing of infrastructure projects,
08:36or purchasing Ural metallurgical and engineering equipment,
08:40the Kremlin has centralized all financial flows in Moscow.
08:44The main part of the mineral extraction tax and customs duties
08:48is collected directly into the federal budget,
08:51which deprives the regions of the opportunity to diversify their local economies.
08:57In the early 2000s,
08:58the Kremlin began a large-scale transfer of resource revenues from the regions to Moscow.
09:04Payments for the use of mineral resources were replaced by the mineral extraction tax,
09:09and along with this reform, local budgets lost an important source of income.
09:13The share of the regions in the budget system began to decline rapidly.
09:17The change in the distribution of revenues from hydrocarbon extraction was especially telling.
09:23Previously, they were divided in a 60-to-40 ratio,
09:27but now the proportion has been changed to 80-to-20,
09:31in favor of the federal government.
09:34The analytical publication Forum of Federations traces further centralization.
09:38The share of the oil extraction tax that remained with the regions decreased from 20% to 15%
09:45and later to 5% in 2005.
09:50Since 2004, revenues from gas extraction taxation have been fully directed to the federal budget.
09:57Customs payments also go to the federal budget.
10:00For example, in 2025, the Federal Customs Service transferred $71.6 billion there.
10:09With this money, it would be possible to finance the entire healthcare system of the Russian Federation
10:15for more than 8 years.
10:17Russia still formally remains a federation,
10:19but definitely not in terms of the financial autonomy of its regions.
10:23As of 2017, the Russian Federation ranked only 7th among 10 countries in the world with a federal system
10:32in terms of the level of income decentralization.
10:35At the same time, in terms of tax revenues, Russia was 2nd in this ranking.
10:40There was enough money in the system, but it was mainly Moscow that could manage it.
10:44According to the results for 2024, despite the growth in nominal wage incomes,
10:50the gap between the richest and poorest regions of the Russian Federation has not decreased,
10:55but has actually increased.
10:57The greatest benefits are received by residents of areas associated with raw material extraction,
11:02large cities, and the military-industrial complex,
11:05while poor and demographically weak regions continue to lag behind.
11:09In 2024, the highest salaries, just like before the war,
11:14are concentrated in the northern raw material regions and in Moscow.
11:18Chukotka – $2,320
11:22Yamalo-Nenets Autonomous Okrug – $2,056
11:26Moscow – $2,031
11:30In most regions, the average salary ranges from $450 to $1,125.
11:36At the same time, in the poorest regions of the North Caucasus,
11:40in Gushetia, Chechnya, Dagestan, Kalmykia, in Cabernetina-Balkaria and North Ossetia,
11:47about half of the population earns less than $385 a month.
11:54Rich Beggars
11:55Not all regions that feed the entire country have a high standard of living.
12:01We've repeatedly heard crazy stories about life in the Russian hinterland.
12:06You don't have a bathroom or a shared kitchen here.
12:08Everything is outside.
12:12This is a direct consequence of dependence on the federal center.
12:16For example, the village of Gazzele emerged thanks to the development of gas fields in Yamal.
12:21But later, it basically lost its economic foundation.
12:2480% of its housing stock has been declared unsafe.
12:28This includes the school, kindergarten, and clinic.
12:31There are heating problems here, and people have to walk around at home in felt boots.
12:35The floor is shaky. The windows are coming apart.
12:37That's the poetry of the wooden age.
12:38Larissa Seyblenikova has lived in this house for 20 years, and it was built back in the 70s.
12:43In winter, it's very cold here.
12:45Sometimes the owners of unsafe housing have to sleep in the kitchen with the gas on.
12:48Instead of restoring the settlement, the authorities are discussing its complete liquidation and the relocation of the population.
12:54Another village, Ust-Lizha, is located 70 kilometers from Usinsk, which is called the oil capital of the Komi Republic.
13:03There is no direct road between the village and the city.
13:07In the summer, a boat goes to Usinsk once a week.
13:10And in the winter, the connection with the outside world often depends on a helicopter.
13:16Formally, there is a road, but it goes in the other direction, toward Pachora.
13:20There is no public transportation there, and during periods when the roads are impassable, trucks and cars literally get stuck
13:27in the mud.
13:28Guys, I'm stuck on the bridge.
13:31I'm waking for help.
13:32I dug it out as best I could, but it's still hanging on the axle.
13:37In the oil-producing the Nets Autonomous Okrug, the village of Ust-Kara still has no centralized water supply or
13:45sewage system.
13:46Here, people get drinking water from the river, melt snow, or carry ice in bags.
13:51Electricity is generated by a diesel power station.
13:54During blizzards, power line brakes can leave the village without electricity for several days.
13:59Large household appliances are delivered here across the tundra on tracked armored vehicles.
14:04Transporting a snowmobile, for example, costs over $2,300.
14:10At the same time, in 2024, the gross regional product per capita, which equals the total value of goods and
14:17services, produced in the region, increased to $178,000, remaining the highest in the Russian Federation.
14:25That's about 11.2 times more than the average Russian amount of $16,300.
14:33Forbes also drew attention to the situation in Yakutia.
14:38The region produces more than a quarter of the world's diamonds, ranks among the leaders in gold, coal, and hydrocarbons,
14:45but is in 70th place out of 85 Russian regions in terms of quality of life.
14:50The mining industry accounts for about 58% of Yakutia's economy.
14:57However, 95% of the mineral extraction tax goes to the federal budget, and oil companies pay part of their
15:05taxes at their place of registration outside the republic.
15:09The Altai Republic, despite its unique geographical location and enormous recreational and tourism potential, ranks at the bottom in terms
15:17of citizens' income levels.
15:19In 2025, the average per capita monetary income here was 47.5,000 rubles per month.
15:27That's about $610, or only 63% of the average Russian income, $74,900.
15:37That's about $960.
15:40In terms of the ratio of median incomes to the local cost of goods and services, the republic ranked 82nd
15:47out of 85.
15:49The poverty rate is 12.3%, compared to the average Russian level of 6.7%.
15:57The republic also consistently ranks among the top 10 regions most dependent on federal funding.
16:05According to the independent commercial agency, T-Advisor, in 2024, non-repayable intergovernmental transfers accounted for approximately 67% of
16:16the budget expenditures.
16:19By the end of 2025, they reached 29 billion rubles, and were more than twice the region's own tax and
16:28non-tax revenues.
16:30It would seem that tourism should have pulled the region up, but the main player and the master of Altai
16:36tourism is the state bank.
16:38The Manzarac Resort and the Gorno-Altaisk Airport are controlled by Spearbank, headed by German Gref.
16:44The bank has invested over 130 billion rubles in Manjarac from 2012 to 2025.
16:53For local residents, the new resort in Altai turned out to be more of a threat than an opportunity.
16:58Part of the neighboring village has already been resettled, and the land was bought out under the mechanism of comprehensive
17:03territorial development.
17:04In fact, this mechanism left residents with no right to refuse.
17:08When the village council refused to transfer the land on the outskirts for development, the problem was solved differently.
17:14They began to eliminate the village councils themselves, switching the region to a single-level management system.
17:21All these stories share one common feature.
17:24The Russian model of centralization breaks the connection between the place where wealth is created and the place where it
17:30is managed.
17:31Resource taxes, corporate profits, and strategic decisions are concentrated at the federal level or in the headquarters of large companies.
17:40Meanwhile, the expenses remain at the local level.
17:43Unsafe housing, lack of roads and water supply, pollution, diseases, and depopulation.
17:49After the fiscal centralization of the 2000s, the region's own tax base narrowed, and even resource-rich entities became dependent
17:59on transfers from Moscow.
18:01Hence, the infrastructure typical of the Russian periphery is selectively built.
18:06A pipeline, an industrial railway, or a service road is laid to the deposit.
18:12But a neighboring village may go decades without regular transportation, water supply, or sewage systems.
18:19Here you go. These are the footbridges people have been using for a hundred years.
18:23Infrastructure is built not to develop the area as a place to live, but to ensure resources can be shipped
18:29out without interruption.
18:31How do the regions finance the war in Ukraine?
18:34The centralization of Russian regions makes it easier to finance the war.
18:38The federal center directs funds obtained in resource-rich regions to defense and the security apparatus,
18:44without separate approval from the territories where these revenues were generated.
18:48At the same time, centralization does not exempt the regions from direct military expenses.
18:53In addition to the money taken into the federal budget, they finance payments to contract soldiers,
18:59assistance to military families, treatment of the wounded, equipment, and support for the occupied territories.
19:05The signing bonus consists of a federal amount of 400,000 rubles,
19:10and a regional supplement, which each governor sets and pays from their own budget.
19:15The amounts are enormous.
19:18In St. Petersburg, the regional part reached 4.1 million rubles.
19:24That's $52,500.
19:27In the Kanti-Mansi Autonomous Okrug, it's $45,500.
19:33In Tatarstan, it's $32,000.
19:36In Moscow, it's $24,300.
19:40That is, the regions are actually competing with each other to mobilize their own people to the front.
19:46At the same time, the size of the bonus depends not only on the wealth of the region.
19:51It is influenced by established recruitment plans, a shortage of volunteers, political pressure, and short-term budget capabilities.
19:58During 2020 to 2025, several regions sharply reduced payments due to budget problems.
20:04According to the estimate of Janus Klüge, an economist at the German Institute for International and Security Affairs,
20:11at its peak, federal and regional one-time payments cost about 2 billion rubles per day, $25.6 million.
20:19Moreover, about three-quarters of this amount fell on the regions.
20:23The regions form and equip named units.
20:27Tatarstan created Algu, Timur, and Batir,
20:30and by a separate decree, assigned their fighters a regional payment of 360,000 rubles.
20:36And on top of that, there's a bounty schedule for destroyed equipment.
20:39$300,000 for a downed plane.
20:42$200,000 for a helicopter.
20:44$300,000 for a tank.
20:46Bashkortostan raised the Shai Muratov and Dostavalov battalions.
20:50Together, more than 800 people.
20:53In total, more than 40 such named battalions have been created in Ukraine by Putin's personal decision.
21:01Forty-two regions have taken responsibility for specific occupied cities in Ukraine
21:06and are paying for their so-called reconstruction.
21:08That is, they are consolidating the occupation using their own budgets.
21:13Donetsk and Luhansk are personally overseen by Mayor Monastir.
21:17Luhansk by Sobyanin.
21:18Mariupol went to St. Petersburg,
21:20and Governor Beglov said he would maintain the city at the expense of the regional budget.
21:24The total funding need was estimated at 3.5 trillion rubles.
21:29Even the poorest subsidized regions are being forced to sponsor occupied cities,
21:34despite devastation at home.
21:36In 2024, the Magadan region decided to allocate 200 million rubles annually from the regional reserve fund
21:45for construction and utility facilities in Zydanivka, Donetsk region, and neighboring occupied settlements.
21:51For comparison, the budget deficit of the city of Magadan itself for 2023 was 222 million rubles.
21:59And more than 6 billion out of 10.5 billion rubles of its revenues came from non-repayable receipts.
22:07In 2023, the authorities of Ingushetia announced that they would spend over 46 million rubles
22:14on replacing the water supply system, repairing the pumping station,
22:18and repairing the roads in occupied Molochansk-Zaporizhia region.
22:22At the same time, the head of Ingushetia himself admitted that the republic's water supply networks
22:27are worn out by almost 80 percent,
22:29and water supply is its biggest utility problem.
22:32The publication Meduza notes that the administration of the president of the Russian Federation
22:37described the system as voluntary, but effectively compulsory.
22:41The territories for most governors' patronage were determined from above,
22:44through presidential representatives.
22:46And the regional leaders were made to understand that they needed to get involved.
22:52The scheme allows the Kremlin to shift part of the financial burden from the federal budget,
22:58to spread out the expenses so they aren't shown as a single sum,
23:02to tie the governors and regional elites to responsibility for the occupation,
23:06and to turn aid to the occupied territories into a test of political loyalty.
23:12Who actually controls the budgets?
23:15The money is centralized, but the regions are run by local politicians elected by the people.
23:21However, in modern Russia, this is more of a facade than a real mechanism of power.
23:26An example is the blocking of Yevgeny Roisman's election in Sverdlovsk Oblast.
23:31First, he was the incumbent mayor of Yekaterinburg, an extremely popular local politician,
23:36who won the regional center's election in 2013, despite the Kremlin's wishes.
23:42In 2017, he announced his intention to run for governor of Sverdlovsk Oblast from the opposition
23:49Jabloko Party.
23:51To register as a candidate, Roisman needed to collect 126 signatures from municipal deputies.
23:58However, the team of acting governor, Yevgeny Kuvoshev, set the administrative machine in motion at the very beginning of the
24:05campaign.
24:07The pro-government administration forced almost all the deputies in the region's districts to sign for Kuvoshev and several hand
24:15-picked candidates.
24:17Roisman was forced to withdraw from the elections.
24:19The municipal filter is impossible to pass.
24:22And if a candidate is not approved by the administration of the president of the Russian Federation,
24:27they won't be allowed on the ballot, using the dependence of municipal deputies on the power vertical.
24:33A governor elected under such a scheme actually becomes not a lobbyist for their region, but an overseer from Moscow.
24:41By the mid-2000s, governors still possessed a unique source of legitimacy.
24:46They were elected directly by citizens in free elections, which forced the central government to make compromises.
24:52However, the first step towards destroying the federal balance was the reform of representation in the Federation Council.
24:59As a result of which, governors and heads of regional parliaments lost their seats in the upper house of parliament,
25:05and therefore their direct influence on the adoption of laws at the state level.
25:10The final dismantling of the electoral system took place in the fall of 2004.
25:16The Kremlin used a large-scale tragedy, the terrorist attack in Beslan, which was a response to the Second Chechen
25:22War,
25:23as a pretext for centralizing executive power.
25:25It was after the start of the war that Putin promised to wipe out Chechen terrorists in the outhouse.
25:31We'll wipe them out even in the outhouse, after all.
25:34That's it, the issue is settled once and for all.
25:36They allegedly violated the sovereignty of the Russian Federation,
25:40but this became a pretext for tightening the screws.
25:42Direct popular elections of the heads of Russian regions were cancelled.
25:46The president of the Russian Federation personally selected the candidate for the position of regional head.
25:51Regional leaders became Kremlin appointees, accountable only to the president, not to the people who used to elect them.
25:58At the same time, the Kremlin built a system of coercive oversight over the regions
26:02through the regional offices of the Federal Security Service.
26:06Unlike many classic federal models,
26:08where regional law enforcement agencies are integrated into the local system of government
26:13or are accountable to local authorities,
26:15Russian law enforcement agencies operate with complete autonomy.
26:19The head of the regional FSB is appointed exclusively by a decree of the president of the Russian Federation
26:24upon the recommendation of the FSB director.
26:27The governor has no legal authority to influence personnel policy,
26:32operational activities, or the funding of the agency.
26:35The economic security departments of regional offices conduct full monitoring of all government procurements,
26:41the distribution of budget transfers, and the licensing of natural resources.
26:46An operational file is kept on every governor, their deputies, and mayors,
26:51which can be turned into a criminal case at any moment by order from Moscow.
26:56For example, the arrest of the governor of Sakhalin Oblast,
27:00Oleksandr Koroshavin, became a high-profile case.
27:03He was closely connected with the local elites
27:05and did not always align with the economic interests of Moscow.
27:08During his rule, a significant portion of the taxes from the Sakhalin II oil and gas project
27:14remained in the region.
27:16After the governor was replaced, the balance shifted in favor of the federal center.
27:22Small and medium-sized businesses in Russia operate under constant legal uncertainty,
27:27where any entrepreneur can find themselves caught up in a criminal case overnight.
27:31This is illustrated by the story of a 94-year-old entrepreneur from Irkutsk.
27:37In 2024, she received a government subsidy of 350,000 rubles to open a cosmetology office,
27:45rented a space, purchased equipment, and reported to the social protection authorities.
27:50In January of 26, six armed officers from the Department for Combating Economic Crimes, OBEZ,
27:57broke into her apartment.
27:59Search, equipment seizure, interrogation, and confrontation.
28:03An accusation of fraud in obtaining benefits.
28:05The reason?
28:07The grounds were transfers between her own cards, alimony, and assistance from relatives,
28:12which the investigation recorded as hidden income.
28:16If money was credited to the account, it meant the person was not low-income,
28:21and supposedly received state aid by deception.
28:25In a real federation, regional courts, local police, and property rights are independent
28:30pillars that restrain the center and protect people locally.
28:34That is why a federation is stable.
28:37If you are pressured from above, you go to an independent court, rely on the law, and on
28:42local authorities.
28:43In Russia, however, all these pillars are built into a single vertical structure,
28:48looking not down to the citizen, but up to the Kremlin, the Economic Crimes Unit, the
28:54Riot Police, the tax authorities, the Investigative Committee, the local judge.
28:58These are not checks on power, but its instruments.
29:02An independent local business, a self-sufficient farmer, a regional industrial giant, are potentially
29:08separate centers of power.
29:10An independence at the local level is dangerous for the empire.
29:18If Russia is an empire, then is it destined to share the fate of all empires?
29:23Is it economically realistic for Russia to be divided into separate states?
29:28The Forum of Free Peoples of Post-Russia is a platform that brought together representatives
29:33of various republics and regions who signed a declaration on decolonization.
29:37The Kremlin has built a system in which a prosperous metropolis extracts resources from subordinate
29:44colonies and spends them on imperial ambitions and war.
29:48The key topics of discussion at the Forum are de-imperialization, demilitarization, deputinization,
29:55and, separately, the economic future of post-Russia.
30:00Many strong regions are actually donors.
30:03They give more than they receive.
30:05Resource-rich regions like Tumen North, Tatarstan, Saka.
30:10They themselves have a resource base that, if independent, would stay at home instead of being sent to Moscow.
30:18There is the historical precedent of the USSR, which was also considered indivisible until 1991.
30:25Empires fall apart because the political center collapses and then the economy restructures itself
30:31according to the new borders.
30:33It is likely that huge losses at the front and the inefficiency of the dictatorship
30:37will lead to the collapse of the Kremlin's vertical power structure.
30:41In addition, regional identity is forming in some republics.
30:44For example, in the Comey Republic, the situation is developing along the lines of a conflict
30:50between the center and the region, where the struggle for environmental safety
30:53has become a catalyst for national and civic awakening.
30:57The siphoning of strategic natural resources—oil, gas, diamonds, and timber—to the federal center
31:03is happening against the backdrop of chronic underfunding of the region itself,
31:07which receives only symbolic fractions of the income in return.
31:11For example, in 2023, the federal center received approximately 79.4% of the revenues,
31:20while the regional and local budgets retained about 20.6%.
31:25This inequality in the distribution of wealth has become the foundation for the growth of
31:30protest movements, particularly after the events around the Scheiss station, when people
31:36came to see themselves as political actors.
31:39Scheiss is a small railway station in the south of Arkhangelsk Oblast, near the border with
31:45the Comey Republic. In 2018, local hunters accidentally discovered a construction site
31:51in the middle of the forest, about which the authorities had hardly informed the public.
31:56It turned out that they were planning to create a large landfill there for waste that was supposed
32:00to be brought by rail from Moscow. And this?
32:04Our land! Our land! And we won't give it away. Not to the Muscovites, not to anyone.
32:10The agreements between the regional authorities and Moscow were made without open public discussion.
32:15Along with economic exhaustion, there is a systematic displacement of local cultural identity.
32:21Despite the formal status of the Comey language as a state language,
32:25it is effectively shut out of administration, education, and professional life.
32:30And when activists use it to communicate with law enforcement or the courts,
32:35the authorities perceive it as an act of political defiance.
32:39I want to remind you, dear friends, that Russian is our state language, the language of inter-ethnic communication.
32:48And it cannot be replaced by anything. It is the natural spiritual framework of our entire multinational country.
32:59Everyone should know it.
33:02However, skeptics point out that most Russian regions are subsidized and live on federal transfers.
33:08The Caucasus, the south of Siberia, and a significant part of central Russia have been receiving subsidies for decades.
33:14Without Moscow, which redistributes income, they risk being left alone with their own poverty.
33:20After all, there are only about 20 donor regions in Russia out of nearly 90 federal subjects.
33:27There is another problem, geography.
33:30Many of the richest regions are located deep inside the continent and have no access to the sea.
33:35Siberian oil and gas reach world markets through pipelines that pass through the territories of dozens of other countries.
33:41If these territories are turned into separate states, practical questions immediately arise.
33:47Who controls the pipelines and who pays for the transit?
33:51And what should be done if exports depend on political relations with a neighbor?
33:55This isn't an unsolvable problem, but it's not a minor one either.
34:00For a technical example, just look at Tatarstan and Bashkortostan.
34:03Both republics are landlocked and have historically been part of the unified Volga-Ural oil and gas system.
34:10Tatarstan produces significant amounts of oil.
34:13In 2025, the republic produced 34.45 million tons, which is about 6.7% of all Russian production, which
34:24amounted to 512 million tons.
34:28Out of the total volume, 6.87 million tons were produced by small oil companies in the region.
34:38However, most of this oil cannot simply be loaded onto a tanker and sold directly to the buyer.
34:44The oil from Tacneft is delivered to the main pipeline system of the state monopoly Transneft,
34:51where it is mixed with crude from other producers and turned into the common export blend Urals.
34:58One of the key hubs of this system is located near Almatyevsk.
35:02It is from there that the Druzhba oil pipeline begins, which then passes through the Samara region,
35:08the western regions of Russia, Belarus, and other countries.
35:12Other routes lead to the ports of Primorsk and Novorossiysk,
35:16hundreds and thousands of kilometers away from Tatarstan.
35:20Therefore, an independent Tatarstan would still remain dependent on transit through neighboring territories.
35:25It would have to negotiate access to pipelines, tariffs, guaranteed throughput volumes,
35:30maintenance and security of the infrastructure, as well as compensation for mixing oil of different
35:35qualities. Any conflict with a neighbor or the pipeline operator could limit exports
35:40and force a reduction in production. Bashkortostan would find itself in the opposite,
35:45but no less dependent situation. The Republic has one of the largest oil refining complexes in Russia.
35:52However, local production is not enough to fully meet refining needs. According to a 2020 study,
35:59the volume of oil refining in Bashkortostan exceeded its own production by about 56%.
36:06Ufa plants received raw materials not only from local fields, but also from western Siberia,
36:12Udmurtia, and Permcraya. That is why, in the event of political disintegration, the most practical
36:18solution could be a common energy space in the form of a confederation or an interstate agreement.
36:23It would have to maintain unified dispatch control over the pipelines, non-discriminatory access to their
36:30capacities, agreed transit tariffs, income distribution mechanisms, and independent arbitration.
36:36Without such an agreement, interdependent infrastructure can quickly become a tool of political pressure.
36:42The issue of public support for independence remains no less debatable.
36:47In many potential new states, ethnic Russians are the majority,
36:51and real support for separation exists more among activists than in society as a whole.
36:57Radio Liberty cites the official census result. The number of people who identified themselves as
37:03ethnic Russians decreased from 111 million in 2010 to 105.6 million in 2021.
37:12According to this census, the total population of the Russian Federation was 147.2 million people,
37:20including occupied Crimea and Sevastopol. About 72% of the population identified themselves as ethnic
37:27Russians. At the same time, the publication explains in detail why the reliability of the census raises
37:32serious doubts. According to a survey by the Independent Levada Center, 42% of respondents said they
37:39did not participate in the census at all, and ethnicity was not specified for almost 16.5 million people.
37:46Historical data also do not allow us to claim that there has never been a demand for separation.
37:50At the 1912 referendum in Tatarstan, about 62% of participants supported the formula for the
37:59republic as a sovereign state. Although the very concept of sovereignty was interpreted by different
38:03groups as ranging from broad autonomy to independence. The collapse of the Russian
38:08federation is unlikely to repeat the relatively peaceful dissolution of the USSR in 1991. Since the
38:14modern subjects of the Russian federation lack established institutions and legitimate regional
38:19elites, there is no single political nation in Russia. There is only a population governed by the state.
38:25If the central authority disappears, the process of fragmentation will be chaotic, gradual,
38:30and extremely violent. This may not lead to the emergence of democracy, but rather to the appearance
38:35of aggressive totalitarian micro-regimes and attempts by neighboring states to absorb defenseless
38:41post-Russian territories. Economically, only certain strong resource-rich regions could be
38:46self-sufficient. And that's exactly why the Kremlin is so terrified of any regional autonomy and keeps these
38:53territories on a short financial leash. A confederation could theoretically be a compromise,
39:00but it is more suitable as a transitional or contractual arrangement rather than a guaranteed,
39:05stable final form. In a confederation, regions or member states retain significantly more sovereignty
39:11than the subjects of a federation, and only limited powers are transferred to the common center,
39:16such as defense, foreign policy, customs area, transportation, and part of financial coordination.
39:22Legally, it is a union of almost independent political entities, weaker than a federal state,
39:28but more integrated than a regular international alliance. Regions without a massive demand for
39:34separation could remain in the common economic and security space, but would gain real control
39:39over budgets and internal policy.
39:44Conclusions
39:46Centralization in Russia serves three specific purposes for the Kremlin – control over money,
39:51control over politics, and control over people. The Russian budget relies on oil and gas,
39:57which are mainly extracted in ten regions. In order for this money to be controlled by Moscow,
40:02and not by the regions where it is earned, the resource rent was gradually withdrawn to the
40:07federal level. The share of the mineral extraction tax that remained with the region
40:12in 2005 was reduced from 20% to 5%, and revenues from gas extraction have been going entirely to the
40:21federal budget since 2004. After all, a region that supports itself sooner or later starts asking
40:27inconvenient questions. Subsidies, on the other hand, create dependence. For the Kremlin, a poor region
40:34is often much more convenient than a wealthy and self-sufficient one.
40:37The second goal of centralization is to eliminate any alternative centers of power. In a true federation,
40:43an independent judiciary, local police, private property, and strong businesses are able to restrain
40:49the appetites of citizens. In Russia, they have been integrated into the power vertical.
40:54The head of the regional FSB is appointed by the president, the governor in fact as well,
41:00and a candidate who has not received approval from the presidential administration risks not even
41:04making it onto the ballot. As a result, there is a gap between the place where wealth is created
41:09and the place where it is managed. This is just Ustkara without a water supply. And…
41:15So how do you dispose of the wastewater yourself then? It goes right under the room. Under the room?
41:20Yes. Right into the ground? All this waste? Yes. It all reeks from under the floor and fills the room.
41:26I can imagine. The region with the highest GRP per capita in Russia, which is 11 times higher than
41:32the national average, is no exception. This is how the system normally works.
41:3730 don't have sewage. 40 don't have hot water. And 21 don't have any water supply at all.
41:45There's enough money for pipelines, drilling rigs, and export terminals. But not for developing
41:51the areas where these resources are extracted. Now a restroom is made of brick. It used to be
41:56wooden. There are separate stalls for students and teachers. The facilities are located dozens of
42:00meters away. It's very inconvenient. So after the resources are exhausted, what is often left behind is
42:06not new cities and enterprises, but decline and dilapidated housing. Like in Gazal, where about
42:1380 houses have become uninhabitable. And in Gushetia, which is funding the repair of the
42:19water supply system in occupied Molachansk, has about 80 percent wear and tear in its own networks.
42:26And ultimately, poverty turns into a resource for the state itself. The poorest regions suffer the heaviest
42:32losses in the war. Because for a resident of Tuva or Buryatia, a contract payment can exceed the
42:38earnings from many years of work. It seems to me that the only successful poverty reduction
42:44program from Vladimir Putin is the war he started in Ukraine. At the peak of the campaign,
42:51the regions were spending about two billion rubles a day on one-time payments to contract soldiers,
42:56with about three quarters of these funds coming directly from regional budgets. As a result,
43:02a kind of double war tax emerges. First, the region pays taxes to Moscow, which finances the military
43:09actions, and then additionally pays from its own budget for contracts, named battalions, and patronage
43:16over the occupied territories. This explains the logic of the entire system of the Russian model of
43:23federalism. Is the collapse of the Russian federation possible? The main risk is that
43:28Russia has neither established regional institutions nor legitimate elites. There is only a population
43:34controlled by the state. Therefore, the collapse of the Russian federation is unlikely to repeat the
43:39relatively peaceful scenario of 1991, and the more likely outcome will not be a series of democracies,
43:45but chaotic fragmentation. However, more important than any prediction is the Kremlin's own fear.
43:50A regime that recognizes the form of free peoples of post-Russia as an international terrorist
43:56organization, along with 172 subdivisions, and opens criminal cases for discussions about federalism,
44:04is a regime that does not believe in the strength of its own structure.
44:08The Kremlin is afraid that any self-sufficient region, business, or farmer will become a separate
44:13center of power. Today, Ukrainian communities have more financial independence and influence over
44:20their own development than a Russian republic, which on paper is a subject of the federation.
44:26The Ukrainian decentralization reform of 2014-2020 did exactly what the Kremlin would never agree to.
44:34It left a significant portion of resources where they are earned. Communities received 60% of the personal
44:42income tax, as well as the full single tax, property tax, and land fee. More than 1,400 communities
44:50established direct budget relations with the state, which they did not have before. As a result,
44:57local budget revenues increased from 68.6 billion hrivnias in 2014 to 514 billion in 2025, a 7.5-fold
45:07increase.
45:08Already in the first year of the reform, the share of local expenditures on housing and communal services
45:13increased from 1.9% to 4.5%, and for transport and roads, from 1.4% to 2.3%.
45:23And this structure
45:24withstood the war. In 2025, despite the occupation, destruction, and the withdrawal of military,
45:30personal income tax, local budgets received 514 billion hrivnias. That's almost 14 more than the
45:37previous year. But the main effect is not even financial. It's political. The mayor of a Ukrainian
45:42community is elected by the residents and is accountable to them, not to Kyiv. In February 2020,
45:48this turned out to be a factor in survival. When the connection with the center was cut off,
45:53the communities had their own budgets, their own powers, and their own legitimacy to make decisions
45:57independently to organize defense, evacuation, humanitarian aid, and critical infrastructure
46:03support. The war has partially reversed this process. The share of local budgets in the
46:08consolidated budget revenues decreased to 15.7 in 2024 and to 14.6 in 2025. About 70 communities today
46:19receive a basic subsidy. This is a problem that Ukraine will have to solve after the war ends. But
46:26there is a fundamental difference between the Ukrainian and Russian models. Ukrainian centralization
46:32is forced, temporary, and openly discussed in society. Russian centralization, on the other hand,
46:38is not a consequence of the war. It is one of the mechanisms for conducting it. While Ukrainian
46:44communities received money and authority during the reform, Russian regions have been losing both for
46:49decades. Moscow took away resources, political influence, and the right to make decisions,
46:56leaving dependence and loyalty as the main conditions for the survival of local authorities.
47:02And perhaps that is why Russia is waging war against Ukraine using the same methods it has used
47:08for centuries to build relations with its own regions. And what do you think? Is the scenario of Russia's
47:14collapse realistic? Or are its regions too dependent on Moscow to exist independently? Write your thoughts
47:21in the comments. Friends, we have an ambitious goal to reach 200,000 subscribers on the channel by the end
47:29of 2026.
47:32You might be watching us for a long time and not even realize that you haven't subscribed.
47:39Subscribe to our channel and tell your relatives and friends about it. Also, give us a like and leave a
47:46comment under this video.
47:49We thank all donors, patrons and sponsors on youtube. Every contribution you make helps bring
47:55Ukraine closer to economic prosperity and well-being. After all, we are not just making videos,
48:00but educating voters who will choose real reformers. Help us with this. The link to support the price of the
48:07state is in the description. This video was created with the support of the National Endowment
48:13for Democracy. Ned. Ned may not share the views and opinions expressed in the video.
Comments