Four Russian governors resign in Kremlin purge as Western sanctions bite

Kremlin was removing weak governors amid deteriorating economic outlook, Moscow think tank chief says

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Four Russian regional governors resigned on Tuesday as the country braces for the impact of economic sanctions.

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The heads of the Tomsk, Saratov, Kirov and Mari El regions announced their immediate departure from office, while the head of the Ryazan region said he would not stand for another term.

Elections are to be held in all five regions in September.

Although Russian regional governors are elected, they are politically subordinate to the Kremlin. Several of the incumbent governors represent areas where the ruling United Russia bloc received low vote shares in last year’s parliamentary elections.

Unpopular governors are regularly removed from office, often submitting their resignations in clusters in the spring.

Ilya Grashchenkov, head of the Center for Regional Policy Development think tank in Moscow, said the Kremlin was removing weak governors amid deteriorating economic prospects for the country, driven by Western sanctions.

Grashchenkov said: “There is a need to restructure the economy, especially in regions where Western economic influence has been significant. These governors must be replaced by younger alternatives.

Russia is facing the deepest economic contraction in nearly three decades as pressure from sanctions imposed by the United States and its allies mounts, according to an internal finance ministry forecast.

Gross domestic product is expected to shrink by 12% this year, more than the 8% drop expected by the Economy Ministry, according to people familiar with the estimates who spoke on condition of anonymity to discuss internal deliberations. The government has not released a public forecast since the invasion of Ukraine.

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The Department of Finance issued a statement on Tuesday saying the forecast report was inaccurate. “The preparation of official macroeconomic forecasts does not fall within the authority of the Ministry of Finance,” he said, noting that he “expects that the measures taken by the government and the Bank of Russia will allow to mitigate to a large extent the negative consequences of sanctions and ensure stable economic development.

A contraction of 12% would put the economic pain on par with the turmoil of the early 1990s, when Russia’s Soviet-era economy tipped toward capitalism with a contraction not seen since the war.

“The main negative points are the oil embargo, the abandonment of Russian gas by the EU, as well as the increase in the departure of foreign companies,” said Natalia Lavrova, chief economist at BCS Financial Group in Moscow. . “All of this will likely expand gradually, with a lot of negative carryover into 2023.”

Excluding these factors and based only on current sanctions, it projects a contraction of 10.8% in 2022 and around 5% in 2023.