Regional Disparities Have Escalated in Russia - Moscow and St. Petersburg Are the Dominant Economic Engines
A new study reveals that the war in Ukraine has exacerbated economic disparities between Russian regions, with Moscow and St. Petersburg emerging as the main economic powerhouses.
The ongoing conflict in Ukraine has intensified the economic disparity between various regions of Russia, with Moscow and St. Petersburg increasingly establishing themselves as dominant forces in the country’s economy. This finding comes from a study conducted by the Peterson Institute for International Economics, which analyzed economic developments across Russia’s regions. It suggests that these two cities are becoming more pronounced as leading economic centers, significantly overshadowing the rest of the country.
According to Iikka Korhonen, a researcher from the Bank of Finland who participated in the study, there have been no new sources of export revenue emerging for Russia. Instead, a large proportion of the country's tax revenues continues to stem from the raw materials sector, particularly oil and gas production alongside regions significantly benefiting from the defense industry. This concentration of economic activity raises concerns about sustainability and the long-term viability of other regions that remain underdeveloped.
Russia, spanning a vast area and consisting of 83 regions inhabited by over 143 million people, faces a stark contrast in economic prosperity. The study highlights how the richest cities in Russia are not only economically advanced but also pivotal in the country's overall economic structure. The animation accompanying the study visually illustrates the locations and outputs of these wealthy cities, emphasizing the growing divide and potentially setting the stage for further social and economic challenges within the nation.