After the Standard&Poors rating agency announced the technical default of the Novgorod region, the issue of regional bankruptcy became one of the most discussed topics. Today, in the next issue of the “Operational Monitoring of the Economic Situation in Russia,” fresh data on the economic situation of the regions was published. The Insider presents these data in the form of visual infographics (see below), and as can be understood from these data, the Novgorod region is still far from in the worst situation - after all, some regions already owe more than 80% of their annual income, and a number of subjects - over 100%. The Insider asked Natalya Zubarevich, director of the regional program of the Independent Institute of Social Policy (this is the one) to comment on the situation in the regions. Institute and prepared the regional part for monitoring).

— How difficult does the situation with regional debts look today?

— According to the latest data as of April 1, 2015, the total debt of regions and municipalities is 2.4 trillion rubles, which is a third of their budgets’ own revenues (i.e., without transfers). Including debt to commercial banks - 1 trillion. rub. As an anti-crisis measure, 310 billion has been allocated from the federal budget for this year to transfer debts to commercial banks into budget loans, the rates for which are much lower, and the debt to the federal budget is easier to roll over. However, the process of replacing debt to commercial banks with budget loans is slow, since the Ministry of Finance requires strict conditions to be met in order to receive funds for replacement: have a deficit-free budget and reduce employment in the public sector. On the one hand, the Ministry of Finance can be understood - you need to live within your means, but on the other hand, the regions are not to blame for the rapid growth of debt. Since 2012, they have been forced to comply with decisions taken by the Kremlin to increase salaries for public sector employees. Regional budget expenditures had to be increased. And since 2013, budget revenues began to sag - stagnation, and then an economic crisis.

In the first quarter of 2015, regional budget revenues increased by 11%, and expenses by only 4%; 55 regions were able to achieve a surplus. But the first quarter is not indicative; further, most likely, it will be worse. The fact is that the growth in income was ensured, firstly, by an increase in income tax by 8%. Companies paid it based on the results of 2014, and it was better for large businesses (which are the main source of income tax revenue). Secondly, transfers to the regions increased by a third (excluding Crimea). Most likely, they simply began to be listed earlier, and not in April-May, as usual. But the big question is, will the feds continue to issue transfers at an accelerated pace in the second quarter? After all, the budget law for 2015 plans to reduce them by 15%. If they gave earlier, this does not mean that they gave more overall for the year. The growth of budget revenues will also be hampered by the most important tax for the regions - personal income tax (personal income tax), revenues for which increased in the first quarter by only 3.8% (excluding Crimea). In April, wages in real terms decreased by 13%, so personal income tax receipts are unlikely to grow in the second quarter. The risks are increasing, and the first quarter, which ended better than expected, should not discourage us; it will get worse. And how the federal center will behave in this situation is not a question for me.

— But is the federal center even capable of shifting responsibility for the debts of the regions on a yearly scale at least?

In the first quarter of 2015, broader cuts in social spending began. Strongest on education

- The question is not worth it. The federal budget will not shoulder the debt of the regions, but it can throw in some money; moreover, with high inflation, the debt is partially eroded. The regions have to cut budget expenditures - and the population will already feel this. In 2014, most regions reduced spending on housing and communal services and the national economy, but in 2015 they were forced to comply with federal decisions to increase road construction, which again means additional costs. In the first quarter of 2015, broader cuts in social spending began. The biggest impact is on education – cuts in 26 regions (in 2014 – in 9 regions). Healthcare expenditures decreased in 21 regions, and if we count territorial compulsory medical insurance funds, then in 12 regions. Expenditures on social policy (social protection of the population) decreased in 16 regions (in 2014 - only in three). There is no way to reduce them before the gubernatorial elections, but after...

- But is it still too early to talk about regional default?

We cannot have a default of a federal subject for political reasons

We cannot have a default of a subject of the federation for political reasons. Colleagues from Standard & Poors called the Novgorod region's late payments on a loan to a commercial bank a default. This is a technical default. In our monitoring, we also used this word to highlight the group of the most problematic regions, but by putting it in quotation marks, there is no talk of real default and bankruptcy of regions and cities.

“But we have to somehow repay the debts to the banks, and it’s impossible to cut expenses endlessly.”

Some of the debt can be restructured into budget loans, some can be paid off by cutting expenses, in addition, an agreement can be reached with many banks - after all, our main creditors are Sberbank and VTB, that is, state-owned banks.

- So, it turns out that the debt is de facto shifted onto the shoulders of taxpayers?

Due to the reduction in regional budget expenditures for social purposes, the population's problems will indeed increase.

- All this still sounds very vague.

And don’t expect certainty, there is none. It is impossible to make a forecast in conditions of growing instability; there are many options for action. It is clear that we cannot have a default like Detroit. They will throw in transfers to soften the most difficult situation, but they will also force them to tighten spending faster. The proportions of “carrot and stick” are already different for regions. Manual control as usual.

- How does the situation of the real sector in the regions look in this context?

The situation is complex; the industrial decline in April accelerated to 4.5%, and in the manufacturing industry to 7.2%. In general, in January-April, 37 regions experienced a decline at different rates. Industrial growth continues in the regions where enterprises of the military-industrial complex are concentrated, some exporting regions, including those with new oil and gas fields - the Nenets Autonomous Okrug, Sakhalin, Irkutsk Region, Yakutia. The regions of the food industry have stopped growing, the effect of import substitution turned out to be short-term: firstly, the ceiling of effective demand interferes (people have less money), and secondly, import substitution requires investment, and in Russia they have been falling for the third year in a row and at an accelerating rate. The contraction in the effective demand of the population is shown by the dynamics of retail trade turnover - minus 7.5% in January-April, and the decline is typical for almost all regions of the country. More specifically, see the RANEPA monitoring, section on regions.

For the first time in Russian history, the Federal Treasury introduced external financial management in the regions.

The Federal Treasury took control of Khakassia's expenses.

For the first time in Russian history, the Federal Treasury introduced external financial management in the regions. Khakassia was one of the two subjects of the federation that fell under this innovation. The head of the Federal Treasury, Roman Artyukhin, said this in an interview with TASS. “The decision was made in relation to individual subjects. These are the Republic of Khakassia and the Kostroma region,” the official said.

Source:

The reason for the transfer of regions to treasury support was excessive debts, which significantly exceeded annual income. It is assumed that the Treasury will now control Khakassia's expenses and monitor their compliance with budget obligations.

At the end of 2017, Russian Finance Minister Anton Siluanov called one of the most problematic regions in financial management. “There are a number of regions with a rather difficult situation, largely due to the poor quality of public financial management. I will still name two regions: Mordovia and Khakassia, which need to seriously deal with their management decisions in order not to bring the region’s finances to ruin,” TASS quoted the minister as saying.

At the end of 2017, the state debt of Khakassia amounted to 24.65 billion rubles. The republic's revenues this year are planned at 26.37 billion rubles, expenses - 27.68 billion rubles, and the deficit - 1.31 billion rubles.

Over the past 15 years, the number of donor regions in the country has decreased from 20 to 13. There are even fewer municipalities and entities that could boast of a budget surplus at the end of last year (including Moscow, St. Petersburg, Leningrad region, Tyumen region, Sakhalin) . The policy of interbudgetary relations of the Ministry of Finance leads to the fact that it becomes unprofitable for the subjects to develop. It is much easier to receive financial assistance directly from the federal treasury than to increase the share of one’s own income: expand the tax base and strive to increase economic indicators.

The disproportion of regional budgets directly affects the quality of life and blocks Russians’ access to such basic social services as budget-funded places in universities and housing subsidies. According to the first deputy chairman of the State Duma for budget and taxes, Valentin Shurchanov, the polarization of regions occurred due to the fact that the Russian economy is based exclusively on natural resources - oil and gas. The rest of real production simply does not work: mechanical engineering and light industry are at a standstill today. Regions that do not have large metallurgy, oil and gas have become recipients. “How can the country be united if, for example, all pensioners (not labor veterans, but simply pensioners) of Moscow use the tram, bus, trolleybus, metro and even, if I’m not mistaken, commuter transport for free. But take any other region: not only ordinary pensioners, but also veterans do not have any benefits. You live in Moscow, which means you are a happy person. But in the regions, work or not, you will still live poorly. We must level out this situation,” the deputy is convinced.

According to data as of July 1, 2017, the volume of public internal debt of all subjects of Russia is 2.23 trillion rubles, and compared to the same period last year, this amount decreased by approximately 2% or 50 billion rubles.

The bulk of the debt comes from budget loans from other budgets of the Russian budget system. The regions have such debts - 48%, or approximately 1.06 trillion rubles. The second largest type of debt is loans from credit institutions and international financial organizations, just over a quarter of them (28%), amounting to 619 billion rubles. Another 20% (453 billion rubles) is accounted for by government securities. State guarantees account for 4% of regional debts, and other debts account for approximately 0.3%.

As Russian President Vladimir Putin said at the State Council held in Ulyanovsk last Friday, Russian regions will be freed from the debt trap by restructuring debts on exclusively preferential terms. The regions will thus have almost half a trillion rubles left.

“From January 1, 2018, we are launching a program for restructuring accumulated budget loans, designed for seven years. Moreover, in the first two years of the program there are maximum preferential conditions: regions will need to pay only 5% of the debt annually. In this way, the subjects free up money and have additional resources to solve socio-economic problems, to solve problems related to the creation of new jobs, to improve the standard of living of citizens,” the Vesti.Russia portal reports the words of Vladimir Putin at the State Council in Ulyanovsk.

The President noted that in 50 regions the debt exceeds half of their own income, and in eight regions it is higher than their own income, and called this an “absolutely critical level.” In some regions they took from taxpayers what they had to pay in the next and even subsequent years - but how to live the next year? - the head of state was surprised, calling this method of farming, to put it mildly, controversial.

This shows how much the measure taken by Vladimir Putin will be noticeable not only for the regional authorities, but also for businesses, from which these taxes are actually taken in advance. Ordinary citizens will feel the full consequences of the decision when, in regions with high debt burdens, schools, clinics and roads begin to be built again, beyond aspirations.

It is not officially customary for us to link certain actions of the authorities with elections, but in any case, the timing for such an extraordinary step, a little over six months before the presidential elections, was chosen politically well. Taking this step, as it turns out, was necessary. The fact that the main issue of the State Council was transport (the development of passenger transportation) only emphasized the extreme nature of the measures taken on a completely different issue. However, they will certainly also improve the transport provision of the regions.

Let's figure it out!

The governor of the successful Kaluga region noted that for him Anatoly Artamonov means 15.7 billion rubles of freed up resources. Other governors vied with each other to list what the funds would be used for: the creation of new hospitals, clinics, kindergartens, new engineering and transport infrastructure.

Putin somewhat cooled their ardor, saying that it was necessary to separately deal with the question: “Why was it necessary to borrow money at huge rates from commercial banks? Previously, they referred to the fact that the Ministry of Finance does not give, and it is supposedly expensive to borrow from state banks.”

"Is it so? Is this always justified? We spoke with the management of Sberbank and decided to reduce the rate on commercial loans. Not everyone applies for this reduction, the question arises: why? Maybe it would be beneficial for some regional leaders to pay a high rate? Who benefits from this? Why are they doing that? “I will look carefully at these examples,” the president threatened.

But he immediately hid the stick and pulled out another carrot, asking the Minister of Finance not to create difficulties for the regions, which he, according to Vladimir Putin, had already prepared. The program for restructuring budget loans will be adopted in the next few days.

Payments are no longer attractive to anyone

Mordovia's debt amounts to 176% of its budget revenues, says Alor Broker analyst Kirill Yakovenko. It is obvious that neither Mordovia nor other dated regions can and will not be able to cope with the debt problem on their own. “The scheme proposed by the president, in my opinion, looks appropriate and useful at least for solving this problem. The only question is the question of implementing any good and useful idea, but here everything depends on the official,” he noted.

But maybe it would be worthwhile to bankrupt chronic debtors? Debts generated as a result of the issue of bonds that are in free circulation account for about a quarter of the total volume of debts, explains Kirill Yakovenko, another quarter are debts to commercial (state) banks, and half are debts to the federal center. The formal bankruptcy of any region, default, would not be a solution to the problem from the point of view of the state.

The main “pain” of the regions’ situation, he says, is that the higher the debt of a subject, the more often it refinances it through loans from the federal center in order to pay it back to it. As a result, a cycle of circulation of budget funds has formed, which do not participate in any way in the implementation of priority programs at the federal and regional levels, and this is a vicious circle, the analyst says. The state debt of the regions in the first half of 2017 amounted to 2.2 trillion rubles, and in the entire pre-crisis year of 2013 - 1.7 trillion.

It is interesting, Kirill Yakovenko continues, that the average level of debt burden of the regions now does not exceed 36.4% of the regions’ income, which is very good indicators. But our country is large and varied: by the beginning of 2017, the debts of 25 regions exceeded 85% of income, and in eight of them - 100%. By the end of the year there should have been 20% of such regions. Moreover, even those who had previously reduced it began to actively borrow. For example, last year the Kamchatka Territory reduced its debt burden by 33.7%, and in the first half of the current year it increased it by 45.2%.

A lesser evil has grown into a greater one

Regional budget deficits are a traditional and very acute problem, admits Mark Goikhman, leading analyst at TeleTrade Group. In recent years, during the crisis, tax and other revenues to territorial budgets have sharply decreased due to a decline in economic volumes. Costs are steadily increasing, primarily due to inflation.

The transformation of regional debts into a “pyramid” is facilitated by extremely high rates on loans, primarily bank loans, with commercial interest. In the first half of 2017, 31.6% of the regions’ public debt, according to the Ministry of Finance, was made up of bank loans. Their share grew sharply in the crisis year of 2014; it then rose to 44.6% (compared to 35.1% in 2012). The need for such attractions from banks, as well as the justification of regional expenses, must be considered on a case-by-case basis. Corruption motives on the part of regional leadership and collusion with commercial banks are quite possible.

But it is also true, says Mark Goikhman, that given the acuteness of the federal budget deficit, it was difficult for the territories to get cheap loans from it. Budget loans accounted for 31.9% of regional debt in 2012. And in 2014, their share decreased to 30.8%. And only with gradual subsequent stabilization, the share of borrowings from the Center increased to 40.3% in 2016 and 45.9% in the first half of 2017.

Bank loans were largely replaced by budget loans. According to the principle of “choose the lesser of two evils.” But now this “lesser evil” is growing to such an extent that local budgets are unable to pay off their debts to the center. Therefore, restructuring and deferment of repayment reduces the severity of the problem, concludes Mark Goikhman. But, on the other hand, with the development of such relaxations, there is a danger of dependent sentiments and a decrease in responsibility for the quality use of borrowings.

Maxim Kalashnikov
Let's open the website of the Ministry of Finance of the Russian Federation and find out that if on May 1, 2012, before the May devastation decrees, the debts of the regions amounted to 1161 billion rubles, and the debts of municipalities - 194 billion rubles, then by February 1, 2015 they grew respectively to 2092 and 306 .5 billion – that is, 1.8 and 1.6 times! Can you imagine how to pay 2.4 trillion rubles if the annual income of a typical debtor region - the Kostroma region - is only 13 billion?
The first six months of 2015 - according to the Ministry of Finance of the Russian Federation, the total volume of public debt of all regions of the Russian Federation increased in the first six months of this year by 1.5% and amounted to 2.121 trillion rubles.

Now the money that was wasted in Sochi would be useful in solving the crisis of regional budgets. And the equally senseless expenses for the APEC summit in Vladivostok - $13 billion - would also come in handy. Or for the upcoming football games in 2018 - there are still at least 20 billion dollars of expenses from the treasury of all levels and loans from state banks. Because it’s a no brainer that these Olympic football expenses will never pay off.

What is the financial collapse of twenty regions? This is a threat of massive non-payment of salaries to public sector employees, a disaster for local healthcare, a catastrophe with housing and communal services and heating seasons. This is a threat of riots in at least part of the country with a population of about 30 million souls. This means that the Kremlin will have to introduce external management of the regions and look for huge amounts of money for their maintenance. In addition to the maintenance of Crimea, as well as the unprofitable autonomies of the North Caucasus, Abkhazia, and South Ossetia. There is no escape from the inevitable costs of saving the destroyed Donbass. Moreover, against the background of falling world oil prices and Western sanctions, which have already deprived the Russian Federation of 2.6 trillion. rubles of federal budget revenues for 2015. All that remains is to organize collective prayers at Sochi stadiums: maybe funds will flow from them?
full text -
http://www.apn-spb.ru/publications/article20583.htm

The situation at the end of summer 2015.
At the beginning of July 2015, the number of regions in which the volume of public debt exceeds the volume of their own income increased to fourteen. At the beginning of 2015, there were ten such regions.
RIA rating data
http://riarating.ru/regions_rankings/20150728/610664922.html
So, here are the top ten leaders in the race to ruin.
This is the Republic of Mordovia, where the ratio of public debt to own budget revenues was 173%, North Ossetia - 119.8, Kostroma region - 115.9%, Smolensk region - 110.4%, Republic of Karelia - 108.9%, Chukotka Autonomous Okrug - 108 .3%, Republic of Khakassia - 108.1%, Karachay-Cherkess Republic - 107%, Transbaikal Territory - 105.6%, Astrakhan Region - 105%, Udmurt Republic - 101.4%, Belgorod Region - 101.3%, Saratov region - 101.2% and the Republic of Mari El - 100.4%.
In the Krasnodar Territory, even despite a reduction in the debt burden by 2.2 percentage points to 90.5%, the situation remains tense.
Although "RIA-rating" notes that the regions' debts to commercial banks are no longer growing, it is mainly the regions' debts to the federal center that are growing. If at the end of 2014 the most significant share (42.5%) accounted for commercial loans, then by July 1, 2015 it decreased to 37.7%. But the share attributable to budget loans, on the contrary, increased over six months from 31% to 36.9%. There are fewer government securities in the total volume of regional public debt against the backdrop of unfavorable stock market conditions - their share decreased from 21.2% to 19.5%, and government guarantees - slightly more (their share increased from 5.3% to 5.9%).
According to the results of the first half of 2015, in 51 Russian regions the level of public debt is 50% higher than the volume of annual tax and non-tax budget revenues, among 33 of them it is higher than 70% of their own revenues. At the beginning of 2015, there were 46 and 26 such regions, respectively.

A low level of debt burden - below 10% of tax and non-tax revenues - is observed only in nine Russian regions. Their composition has remained almost unchanged over the past six months. These are the Nenets Autonomous Okrug and the Sakhalin Region, which do not have public debt, the Tyumen Region, the city of St. Petersburg, the Altai Territory, the Khanty-Mansiysk Okrug - Yugra and the city of Moscow. They were joined by two new regions: the city of Sevastopol, which has no public debt, and the Republic of Crimea, which has a small debt.
According to experts from the Rating Agency RIA Rating, in the second half of the year, the growth rate of public debt in the regions of the Russian Federation against the backdrop of a stagnating economy and problems with filling budgets with taxes will accelerate, and at the end of the year, not all of them will be able to maintain the current positive changes. The structure of public debt will gradually change due to an increase in the share of budget loans and a reduction in borrowing through debt instruments and commercial loans. However, due to limited budget funding, one should hardly expect a complete replacement of commercial loans. RIA Rating experts expect that by the end of the year the total public debt may increase by 25-30%. For a number of regions, the situation with debt burden may worsen significantly. At the same time, there is no point in dramatizing the consequences of a high debt burden despite the severity of the situation in a particular region. First, the debt is distributed over time. Secondly, regions in a critical situation will always be able to count on help from the federal center. At the same time, individual technical delays in payments cannot be ruled out.
Standard & Poor's assessment at the beginning of summer:
“...By “extra-high” we mean the volume of debt payments that exceeds the average, that is, 33.5% of the region’s income.

In 47 regions, the amount of debt exceeds half of all revenues. Only regions with huge oil and gas rents - the Tyumen, Sakhalin regions, and the Nenets Autonomous Okrug - can afford to live without debt.
Experts note that regional authorities will be forced to sharply reduce social spending in order to pay debts. At the same time, the federal center will not allow declaring regional defaults for political reasons..."

Maxim Kalashnikov: in order to avoid social explosions, Moscow will have to write off the regions’ debts to the Russian Ministry of Finance. For these debts are her fault, the consequences of her policies. Otherwise - no matter how we are reassured - regional socio-economic collapses are possible.
With the fall in the Rating of the...

While the Russian economy is rushing after the falling economy of Ukraine...

AiF decided to figure out whether it was worth waiting for the bankruptcy of entire provinces and how this could affect their population.

Salaries on credit

Today, money is divided between the center and the regions in the same way as in another family the wife divides her husband’s money: you give me your salary, and I will give you money for lunch every day. Most of the taxes collected locally (including the most “fat” ones - VAT, mineral extraction tax, and personal income tax) are collected by the federal center. The region usually receives no more than 30% of fees (organizational property tax, transport tax, etc.). And these fees need to cover expenses - and here are major repairs, and roads, and salaries for state employees... There is not enough money for everything, we have to beg back from the center. He allocates subsidies (transfers) to the provinces, but for specific purposes. That is, don’t just beg, but justify why you need a business lunch when you can get by with a bun with kefir.

As a result, it turns out that even regions rich in natural resources do not have enough funds. To make ends meet in their budgets, provincial authorities are forced to go to a commercial bank for a loan.

It is believed that the federal government made life difficult for the provinces by demanding in May 2012 that salaries for public sector employees be increased to the average for the constituent entities of the Russian Federation. Although Leonid Davydov, head of the expert council of the Civil Society Development Fund, believes that this burden is for the benefit of governors: “For some regions, increasing salaries for teachers and doctors is vital, otherwise there will be too much staff turnover in the regions. But the authorities there must find the right angle to implement the May decrees.” Judging by the debts growing like a snowball, not everything is in order with the “point of view” of the regional elite. Some are trying to cut social programs, others are getting into debt.

Alexey Ostrovsky, governor of the Smolensk region, LDPR nominee, honestly admitted that his region is on the verge of bankruptcy. “It is no longer possible to continue the policy of lending and increasing the region’s public debt,” he explained to us. - Either the revenue side of the budget will increase due to tax revenues, or, if this does not work out, we will turn to the federal center, including the leadership of United Russia. The appeal to the party in power is not accidental. Not so long ago, deputy governors were assembled in the capital twice. 1st Deputy Head of the Administration of the President of the Russian Federation V. Volodin And Deputy Secretary of the General Council of United Russia O. Batalin explained to them the need to implement the “May decrees” at any cost. Yes, myself V. Putin made it clear to the governors that they would not be able to save on salaries: “There is not enough money for everything - and there will never be enough. The question is not the availability of funds, but their rational use.” As usual, there is trouble with use.

They don’t save on themselves

Regional officials are ready to fall into disgrace by saving on citizens, but not on themselves, their loved ones. “The Yaroslavl Regional Duma voted for a budget with a deficit of 6.5 billion and a huge debt - now it is 20 billion, and by 2016 it will exceed 40 billion and equal to budget revenues. And the funds for paying interest and principal will be comparable to the region’s road fund,” said AiF Boris Nemtsov, regional Duma deputy. - In order to save at least something, the authorities decided to cancel school breakfasts for junior grades. The savings amount is 200 million. At the same time, they found money for personal cars for the government and deputies - the garage costs 90 million a year. And the authorities did not spare 103 million for the information and image policy program.” B. Nemtsov suggested that his colleagues keep children’s breakfasts, and close the garage and the image program: “Due to the total deficit of regional budgets, the campaign to abolish personal transport for officials, without even discussing the make and cost of cars, should become all-Russian.”

It is unlikely that other regions will support it. Although there really is something to cut. For example, in the Volgograd region, spending on management this year will amount to about 3 billion rubles. This is 1/10 of the state debt of the regional budget. And in the Chelyabinsk region, which lacks 12 billion in the 2014 budget, they do not skimp on the governor’s movements. So, at the end of August he flew on a charter flight to Khabarovsk for a meeting with the president. On the government procurement website you can see that the voyage cost the regional budget almost 4.5 million rubles. A regular air ticket Chelyabinsk - Kh-Abarovsk costs about 30 thousand.

Will you learn to earn money?

According to the Budget Code, the maximum public debt of a region cannot exceed 100% of the budget. Some are doing really badly (see infographic). By the way, the first bankrupt city (not yet a region) actually already exists: this is Luga, Leningrad region. There, the administration managed to owe 12 million in debt with a population of just under 40 thousand. In October, the administration’s accounts were actually frozen and external management was introduced. Oddly enough, the people only benefited from an accidental bankruptcy: if they had not intervened in the situation from above, the townspeople risked facing the winter in the dark and with cold radiators. This is due to the debts of public utilities: one Luzhsky Vodokanal owes energy companies more than 81 million rubles.

Infographics: AiF

The question arises: why are the authorities unable to earn money and resort to loans, the interest on which eats up billions of budget funds? This largely depends on the quality of management. And it is directly linked to the professionalism and lack of corruption of officials, he believes Natalya Zubarevich, professor at Moscow State University, expert in the field of social and political geography: “The Accounts Chamber can carefully check regional budgets, but there is always the risk of having a stupid governor. The problem is whether you can change this stupid governor.” By the way, the Ministry of Finance is now preparing proposals to increase the responsibility of the “stupid” - up to and including resignation. It is proposed to introduce sanctions when the regional budget debt figure approaches 10% of its revenue.

According to L. Davydov, in the event of bankruptcy of the region, there should be no social upheaval: salaries to public sector employees will still be paid first. True, the region's property could easily go under the hammer. Analysts are confident that in order for regions to achieve growth and collect taxes normally and earn money for all their expenses, they need to carry out their own investment programs, because no business will come to a territory without roads and infrastructure. Otherwise, entire provinces could actually repeat it.