Kaliningrad Proves Failure of Power Vertical

Developments in Kaliningrad clearly demonstrate that the “power vertical” built over the past decade — a system for permitting unchecked bureaucratic abuses — is not only failing to effectively manage the regions but is, to the contrary, itself the cause of serious social and political conflicts that are making the system increasingly unstable. What’s more, the boundless appetite of monolithic state capitalism — the economic foundation of that “vertical” — has already exceeded the limits of what even the most long-suffering Russians can tolerate.

The paralysis of state systems and the limitless greed shown by officials for monopolistic businesses are manifested most severely on the periphery of the country — in Kaliningrad and Vladivostok. There, the population and the business community pay a much higher price than the national average for maintaining parasitic bureaucracy and monopolies. This is a result of their geographic remoteness and, in the case of Kaliningrad, the fact that it is a distant exclave surrounded by foreign countries that are EU member states.

The economic crisis hit Kaliningrad harder than most other regions. Protectionist measures, including prohibitively high import duties on foreign-made automobiles instituted by the Cabinet of Prime Minister Vladimir Putin, have damaged an important segment of the local economy. Measures for the standardization and centralization of federal laws enacted in the 2000s eliminated the economic privileges that the region once enjoyed and that had attracted investors engaged in the large-scale production of goods intended for the Russian market, including televisions and refrigerators. Now those businesses have closed and their workers have joined the ranks of the unemployed. At 10.9 percent, the unemployment rate in Kaliningrad is significantly higher than the national average. Some 120,000 of the region’s about 1 million inhabitants are currently out of work.

A rapid deterioration of the economic situation and a swift rise in the cost of living have sparked rallies in the region, with the largest demonstration drawing 12,000 protesters to the center of the city of Kaliningrad on Jan. 30. Their main political demand was the ouster of Putin and Kaliningrad Governor Georgy Boos. The governor’s ratings fell to a record low, with only one-third of the people supporting him and two-thirds opposing him.

To his credit, Boos rose to the occasion. He initiated a real dialogue with the opposition and civic organizations, included their representatives in political consultative councils, and created 14 joint working groups for developing solutions to the most pressing problems in the region. The groups’ proposals are to be presented to the public by Tuesday. Boos also fired a deputy governor and head of the regional health department, against whom criminal charges for fraud have been filed. Furthermore, opposition members have been given the right to speak on local television.

If this dialogue between the authorities and society results in a reversal of unpopular decisions and politicians fulfilling their commitments, further large-scale demonstrations will be averted. Otherwise, the people are ready to continue their protests.

The crisis in Kaliningrad shows how years of work by pseudo-institutions have led to an overall paralysis. The institutions have all failed miserably, both politically and professionally, and proven themselves incapable of establishing a dialogue with the public or of reaching effective compromises between various interest groups. Regional and local legislatures, the Public Chamber and the media have played the role of uncomplaining puppets in the hands of officials who had lost all vestiges of credibility in the eyes of the people. As a result, their work is now being carried out by parallel consultative bodies that were created hastily during the current crisis.

Even if goodwill prevails between the regional authorities and the public, the people of Kaliningrad will soon be faced with intractable problems that were created by the federal bureaucracy, which is responsible for 90 percent of their complaints. It is Moscow, not Kaliningrad, that sets prices for gas and electricity in the region. It is Moscow that makes senseless rules governing customs and border controls that result in endless hours of waiting and humiliation. It is Moscow that introduced new customs duties for automobiles requiring individual buyers to pay the same fees as businesses. It is Moscow that backdated the law so as to exact millions of dollars in fines from the region’s residents. It is Moscow that eliminated incentives for investors, thereby killing the region’s industrial base. It is Moscow that requires that imported and exported goods go through customs procedures twice. It is Moscow that requires Kaliningrad residents driving their own cars to pay customs duties to enter Russia, making it simpler for them to drive to Lithuania or Poland instead. Is it therefore any surprise that Kaliningrad residents — suffering from the absurd policies of the federal authorities and comparing them with the more progressive realities in neighboring EU states — express a growing anti-Moscow sentiment?

Moscow does not care about the more distant regions and the peculiarities of life there, nor is it capable of formulating competent policies for their development. To the contrary, in its zeal to standardize and centralize everything and to maintain complete control, Moscow ever more frequently creates insurmountable obstacles for regional development and for establishing a normal way of life for residents.

The federal government has no coherent strategy for Kaliningrad, and it does not understand the uniqueness of the region. Neither the presidential administration nor the federal government has a special department or at least a deputy prime minister who could deal comprehensively with the complex issues of the Russian exclave in the EU. There is no political will in Moscow to link the region’s special situation and role to EU-Russia relations, to insist on a visa-free regime for Kaliningrad residents or to reflect the problems of the region in new EU-Russia agreements. Other questions important for the region also remain unresolved, such as granting special federal status to Immanuel Kant State University in Kaliningrad, the creation of an international youth center on the Baltic coast, and the use of huge tracts of federal lands in the region.

Rather than searching for meaningful solutions to the region’s problems, Moscow continues to search for the “instigators” and “ringleaders” behind the mass protests. United Russia member and State Duma Deputy from Kaliningrad Yevgeny Fedorov went so far as to say, “Now everyone knows that only two forces oppose Putin: the people of Kaliningrad and the Americans.”