00:00Russia's budget relies on oil and gas, which are mainly extracted in 10 regions.
00:05In order for Moscow to control this money, and not the regions where it is earned,
00:09the resource rent was gradually shifted to the federal level.
00:12The share of the mineral extraction tax that remained with the regions
00:15was reduced from 20% to 5% in 2005.
00:21And since 2004, all revenues from gas extraction have gone entirely to the federal budget.
00:28After all, a region that supports itself sooner or later starts asking uncomfortable questions.
00:34Subsidies create dependence.
00:36For the Kremlin, a poor region is often much more convenient than a wealthy and self-sufficient one.
00:42The second goal of centralization is to eliminate any alternative centers of power.
00:47In a true federation, an independent judiciary, local police, private property,
00:52and strong businesses are able to restrain the appetites of the central government.
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