MP: Astrakhan Region Headed for Deep Social Catastrophe
Rosbalt
November 18, 2016

Astrakhan is among the regions undergoing a social catastrophe, argues MP Oleg Shein, who sits on the State Duma’s Committee for Labor, Social Policy, and Veterans Affairs. As the MP told our correspondent, both federal and regional authorities are to blame for the situation.

“Astrakhan Region is currently undergoing a fiscal disaster due to the fact the regional budget has collapsed. This year, it has been slashed by 15%, from 38 to 33 billion rubles. Next year, the regional authorities have proposed cutting the budget by another eight billion rubles. Accordingly, the budget will have shrunk by about 40% in two years. Already this year, financial aid to the poor has been completely eliminated, and subsidies for parents paying fees to kindergartens have been canceled, causing kindergarten fees to increase by one and half times. The upper grades have been eliminated in a number of schools. Schools have gone from eleven grades to nine grades, and this has caused overcrowded classes in the remaining schools. Payroll has been reduced by 7% for public sector employees: doctors, teachers, and cultural workers. Actually, 7% is the average figure; large numbers of people have had their salaries cut much more considerably. So the region really is headed downhill, and the regional government sees no ways of heading off the disaster,” said Shein.

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“The regional authorities—and there is some truth to this—explain what is happening by referring to the loss of tax revenues from the oil industry. Several years ago, the State Duma—or rather, the United Russia party—freed Lukoil from paying taxes on its oil rigs in the Caspian Sea. This year as well, United Russia has voted to transfer the profits from oil production in the Caspian, the income tax revenue, from the regional budget to the federal budget. The regional authorities were really counting on the money, but they have ended up with nothing.  But there is a second reason: their completely devil-may-care approach to drafting the regional budget and the loss of the local tax base. Sometimes, the regional government has literally abetted hostile takeovers of local companies, as, for example, happened to the local company Bassol, which supplies 60% of the salt to the Russian market and now pays taxes outside of Astrakhan Region. Paradoxically, the regional government welcomed this,” said Shein.

The MP said that despite its socio-economic difficulties, Astrakhan Region was also marked by high levels of corruption and the waste of money on mega projects like a musical theater and so on.

According to a rating compiled by the sociology department at the Russian Federation Government Financial University, Astrakhan was among the Russian cities with populations of 500,000 or more where the lowest indices for quality of life had been recorded. According to Astrakhanstat, during the period from January 2016 to August 2016, the real disposable income of Astrakhan Region residents was 89.4% of what it had been during the same period last year.

Translated by the Russian Reader. Thanks to Valentin Urusov for the heads-up