Untimely proposal

On May 13, the heads of the Arkhangelsk Region, known for its shipyards and paper production, and the Nenets Autonomous District (NAO in Russian), a sparsely populated hydrocarbon-rich region, announced their intention to merge. Less than a week later, the working group set up to oversee the merger proposed to add the Komi Republic, a nominally autonomous territory with a sizeable Komi minority, to the deal. The three regions together would have a territory about 1.5 times the size of Texas, but are inhabited by a mere two million people, just about the population of New Mexico. But a week later, the Komi Republic declined to join.

The paradox of the NAO is that it is both part of the Arkhangelsk Region in terms of administrative division and an independent subject of the Russian Federation (since 1993), which grants it the right to have its own legislative assemble and senators in the Federation Council (the upper chamber of Russia’s Federal Assembly), as well as to run its own budget. Relying on a significant gas and oil industry, even as many of these revenues have been centralized in recent years, the NAO is one of Russia’s richest regions. In 2019, its budget revenue stood at 17.1 billion rubles, compared to 93 billion rubles in the Arkhangelsk Region with its population 25 times that of the NAO. However, the recent crash of global oil prices is expected to have a negative impact on the NAO’s finances, which provided an excellent pretext for putting the merger on the table.

Yury Bezdudny, the NAO’s governor, argued that his region needed an economic buffer, but he did not explain why a merger with the neighboring Arkhangelsk Region, under which he would permanently surrender control over revenue flows, is a better solution than taking out a loan from banks or turning to the federal government for support.

Moreover, the Arkhangelsk Region is relatively poor, with 26 billion rubles in debt. Last year it was rocked by protests against poorly communicated plans to build a landfill for Moscow’s municipal waste near the town of Shiyes. The rallies spilled over to the neighboring Komi Republic, and was growing into a potent movement against not only the regional but federal government. Eventually, an Arkhangelsk commercial court ruled that the landfill construction was illegal. But the Arkhangelsk governor, Igor Orlov, who supported the landfill construction and failed to rein in the dissent, essentially paid the price. His resignation was first reported last July, but he finally left his post only this April.

The restive region was given a new acting governor—Alexander Tsybulsky, who previously served as governor of the NAO, where Bezdudny was his deputy. At 40, Tsybulsky is one of the Kremlin’s so-called “young technocrats” that have been appointed to various Russian regions since 2017 as part of the personnel shakeup.

Against this political backdrop, a merger between the two regions allowing Arkhangelsk to get a comfortable fiscal bump seemed expedient. The growing interest in the Northern Sea Route could be another reason. The merged regions would oversee one-sixth of the route’s coastline, and the development of naval infrastructure would certainly be easier—and cheaper—if there were only one regional bureaucracy to deal with.

With that in mind, Tsybulsky and Bezdudny went forward with the merger idea and proposed to hold a referendum on the issue (as required by the Russian constitution) on September 13—the single voting day in Russia in 2020. But this initiative was met with public resistance in the form of new protests. On May 27, the two leaders conceded that the referendum needs to be postponed until next year.

But as recent history shows, delaying the referendum might not resolve other problems that similar regional mergers have revealed.

Elimination of Autonomous Districts 

In 2003-2008, as a result of mergers, the number of Russian regions reduced from 89 to 83, eliminating six of the ten autonomous districts (AOs in Russian), including six of the seven such districts with the largest shares of non-Russian ethnicities. The Komi-Permyak AO joined the Perm Region to form the Perm Territory; the Krasnoyarsk Territory absorbed the Taymyr and Evenk AOs; the Koryak AO merged with the Kamchatka Region to form the Kamchatka Territory; the Irkutsk Region absorbed the Ust-Ordynsk Buryat AO; and the Chita Region merged with the Aginsk-Buryat AO to form the Transbaikal Territory.

The scene for these mergers had been set by the collapse of the Soviet Union and the 1990s anxieties of further disintegration of the country, as regions rich in oil reserves and, in many cases, ethnically distinct, achieved a greater degree of autonomy. Separatism flared up in the North Caucasus, with the First Chechen War resulting in the humiliating defeat of the federal troops. Following the 1998 financial crisis and the Russian government default on foreign debt, some regions stared to openly defy Moscow as the federal center. Fear of a new “parade of sovereignties” was real. 

Getting rid of the AOs was just one of the many steps Vladimir Putin took to bring the regions to heel as part of building the “power vertical,” besides the establishment of the Federal Districts and presidential envoys in 2000s, the abolishment of gubernatorial elections in 2004, and the centralization of revenues that started in the 2000s and never stopped. 

The slogans accompanying the mergers were similar to what we are hearing today: more investments, better opportunities for economic development. But these were mostly just words. In a 2010 in-depth study, the Institute of Contemporary Development (INSOR), a government-affiliated think tank, found that if the purpose of the mergers was to help underdeveloped territories, it was not achieved. Instead of being pulled ahead by economic “locomotives,” the poorer AOs absorbed by bigger regions were removed from the federal agenda; enhanced governability did not materialize, and the specter of ethnic strife raised its ugly head. According to a 2018 study by the Moscow State Institute of International Relations (MGIMO), the common post-merger sentiment in these regions could be described as “deceived hopes.” The 2008-2009 global economic crisis also made it difficult to properly evaluate the economic value of these mergers. 

The mergers were not uniform. Much depended on the actual negotiating power of local elites. Some AOs were converted to sub-districts (rayon) within the new region, others retained district status. Districts, like the former Taymyr and Evenk AOs, preserved a greater degree of self-rule (e.g. their own assemblies). The former Koryak AO preserved oversight of socio-cultural issues on its territory and was awarded one-fifth of the seats in the Kamchatka parliament—a larger share than if taken proportionally to its population size. But the Komi-Permyak AO, the first AO to be merged with a larger region, and home to the highest proportion of non-ethnic Russians, lost most of its former powers. 

Unlearned lessons

Some ideas about further mergers seemed outlandish and were never realized. For example, Leonid Ivanchenko, former deputy chair of the State Duma’s committee on regional policy, wanted to end up with just 35-40 regions. The above-mentioned 2010 INSOR study also referred to plans to merge the Krasnodar Territory and the Republic of Adygea; Moscow and St. Petersburg with their respective regions, the Amur Republic and the Amur Region, et al.

More recent ideas to form the Kazan-Ulyanovsk-Samara “metropolitan area” or to create the Povolzhye Republics on the Volga River were rejected by Rustam Minnikhanov, the president of Tatarstan. While these mergers came with prospects of harnessing more political control for the Tatar elite, this would have taken place in a federal subject where Tatars would have been outnumbered, while Minnikhanov’s industrious networking has de facto already allowed him to expand his influence.

Boris Gryzlov, former Duma chairman, suggested merging resource-rich and subsidized regions in 2010. A possible merger of the poor Primorsky Territory and the resource-rich Sakhalin was brought up during Putin’s 2018 end-of-year press conference, but received only lukewarm support. Following almost two decades of relentless centralization of revenues, the president could have reasoned that it made less sense to smoothen money flows between adjacent territories bypassing Moscow as the middleman.

However, as the case of the Tyumen Region (also known as the Tyumen Matryoshka, or nesting doll) shows, some ethnic and economic issues can be resolved without a merger. The Tyumen Region used to contain two ethnically distinct AOs—the Khanty-Mansi Autonomous District (KhMAO) and the Yamal-Nenets Autonomous District (YaMAO), both rich in oil and gas reserves. In the 1990s this setup led to power struggles that were resolved by Sergei Sobyanin, an ambitious politician from the KhMAO, who currently serves as Moscow’s mayor. Elected as governor of the Tyumen Region in 2001, he used oil money to modernize Tyumen and created a permanent vehicle to perpetuate the process, which became known as the “matryoshka” arrangement. The two AOs agreed to give up their mineral extraction tax revenues and part of their corporate tax revenues to Tyumen in return for limited political independence. The arrangement was later renewed,even though the mineral extraction tax is now redirected to the federal government, making the setup less rational. But abandoning the arrangement is now unlikely, while merging the three regions could inflate the political risks, because almost two decades of bankrolling Tyumen, KhMAO, and YaNAO has fostered a lot of resentment toward the “mother” region.

The lessons of 2000s could be relevant to the merger of the Arkhangelsk Region and the NAO, when and if it is carried out. But it is not only the mistakes of earlier territorial reforms with their conceptual deficiencies, questionable benefits, regional elites factor, and other risks that resonate in 2020. The motives of the proponents have not changed much. The latest proposal in Russia’s north seems to offer a short-term, “sticking-plaster” solution to existing fiscal and political imbalances—a ticking time bomb in several regions. But this merger, and possibly others, will also take place in the context of Russia’s ongoing constitutional reform, which reflects a renewed—or persistent—fear of regional self-government and separatism, and which will redefine the roles of two institutions in which the regions are represented: the Federation Council and the State Council.

It looks like the next merger will take place when the current crisis is over and the regional leaders have had their opportunity to “shine,” after the president’s apparent withdrawal from managing regional politics. Keep your eyes on Shiyes and Naryan-Mar—local protests or elite feuds could be indicative of future political trajectories in the country.