"We know that Putin prefers the Korean model of political and economic development, but it is not known which Korea he means, the North or the South." This joke became popular in Russia because it reflects the ambiguities of Putin's policies. A specific nationalities policy has not been articulated, making it difficult to say precisely what nationalities line he is pursuing or would like to pursue. Moreover, the overall aims and strategic meaning of his policies have not been fully revealed. Similarly, there has been no attempt to tackle the problem of nationalities living outside their territorial formations. For instance, there is no law on ethnic minorities. At the same time Russia's most pressing problem has been maintaining the federation and responding to the challenges posed by movements seeking increased powers for territorial entities.

The best we can do is evaluate the impact of specific policies of the new administration -- the administrative reorganization, the second Chechen war, support for certain persons in the last round of gubernatorial elections -- on nationality processes in Russia.

The policy of the Federation Council -- in particular the removal of regional leaders and the creation of seven administrative areas with a governor-general at the helm -- is seen in the regions as a pressure tactic, so it is disliked by all the regional leaders. But most of the leaders of the republics do not exhibit their negative sentiments against Putin's policies openly. Instead, they secretly have allowed nationalistic movements to develop in their republics. The only example of open negative reaction to the Kremlin policies, until recently, was from the president of the Chuvash republic, Nikolay Federov, when the administrative changes were announced last May. The leaders of Dagestan served as examples of the other extreme: They wholeheartedly supported Putin's polices and welcomed his efforts to rebuild the hierarchy of power in Russia.

However, this was true only for the first months following the publication of the relevant Putin directives. With time, Russia's regional leaders began to be braver in their expressions of doubts concerning the correctness of Putin's policies. Even such a careful politician as the influential president of Tatarstan, Mintimer Shaimiev, today publicly questions the logic of creating seven administrative regions.(1) Remarkably, Dagestan's leader, Magomedali Magomedov, agreed to join the working group created by the Tartar leader to develop an alternative plan for policying the Russian administrative system, thereby indirectly supporting Shaimiev against Moscow.(2)

Apparently at this point the leaders of national republics have concluded that the idea of administrative super regions would not be long-lived. Moreover, it seems that this idea has met resistance from forces that are even more powerful than the regional and national leaders. Federal ministers are suspicious of attempts by the president's regional representatives to control the flow of finances from the center to the regions and refuse to recognize the representatives' role in coordination of the activities of their ministries' regional offices. The budget is allocated through the ministries, which by the disbursement or nondisbursement of funds can block the projects of the presidential representatives, who do not have their own budgets.

This kind of competition for power in Soviet times under Khrushchev's leadership led to the collapse of his favorite brainchild Sovnarkhoz -- the prototype of the present-day administrative regions. Under Sovnarkhoz territorial units would include three to four oblasts, republics or krays, which had very large territories and were poorly governed. But the administrative super regions of today are even bigger (they include 12-13 regions) and are unwieldy. In addition, the Soviet-era party discipline that supported the command hierarchy is gone. This alone condemns Putin's administrative system to failure.

The biggest influence on the development of the republics, including Dagestan, is exerted by the changes in the allotment of revenue going to federal and regional budgets. Earlier, the allocation was almost equal: 51% went to the center and 49% to the region. Today the federal share has increased to 63% while the regions' portion has dropped to 37%.(3)

The reaction to this change varies among republics. Three categories of republics and consequently three types of reactions to Putin's policies can be discerned.

1. In the first category are included the donor republics (those that gave to the federal budget more in taxes than they received from it), for example Tatarstan and Bashkortostan. These republics, possessing a well-developed oil industry, were able to increase the quality of life of their population to three to five times higher than in the rest of the country. It is understandable that the leaders of these republics are radically opposed to the attempts by Moscow to take and redistribute the wealth they have created.

2. In the second category are the republics that have created offshore zones on their territory (i.e., Ingushetia and Kalmykia). As a result of creating tax breaks for businesses registered in these republics, they created a flow of capital from other republics. Today, when the largest part of regional revenues is diverted to the federal center, the flow of money to offshore zones has dropped significantly. Naturally the leaders of Ingushetia and Kalmykia are not happy about this.

3. Representatives of the third category hold absolutely different opinions about the redistribution of means. To this category belong dependent regions which rely completely on federal subsidies to their budget. This includes most of the republics of the North Caucasus, but no one has learned to get as much from such dependency as the ruling elite of Dagestan headed by Magomedali Magomedov.

The leader of Dagestan never raised the question of sovereignty; even in 1991 when such declarations were common, he always demonstrated his loyalty to the federal center. The price paid by Moscow for this loyalty has been very high. Makhachkala became adept at shaking down the federal budget for all kinds of additional finances by using as leverage its geopolitical position and proximity to Chechnya. When the second military campaign against Chechnya began, President Putin stated many times, "Dagestanis have the right to special treatment."(4) To confirm this "special relationship," Dagestan received 500 million rubles in 2000 alone.(5) In addition, fate itself seems to be helping the republican elite to squeeze more out of Moscow: Even periodic fluctuations of the level of the Caspian Sea create the need for multimillion-ruble expenditures to Dagestan.

However, these multimillion-ruble infusions did not help Dagestan due to the region's unprecedented (even by the standards of the North Caucasus) level of official corruption and the uncontrolled influence which shady organizations wield in all areas of life. This is hardly new. Dagestan was granted multimillion-ruble packages to compensate the region for losses incurred during the 1994-96 war in Chechnya. A considerable portion of these funds was stolen. According to a report by the Accounting Chamber (Russia's counterpart to the US General Accounting Office), the Dagestan government's account in Eurobank (Paris) included about $30 million for which local officials could not provide adequate explanation.(6) The officials could not explain why the Republic of Dagestan had this account or from where the funds had come. It seems likely that the funds came from the budget, although the actual details may never be known: An investigation by the Accounting Chamber was passed to the procurator, where it has languished. The report was presented to Russia's procurator general's office in 1998, but has not resulted in an investigation or any administrative punishment. Nor is any investigation likely. Once armed groups from Chechnya invaded Dagestan in August 1999, it became rude to speak of the budgetary crimes of local elites. Now everything is written off by reference to the war or to the hated "Wahhabis."(7)

Moscow deliberately closes its eyes to the financial manipulations of the local leadership, as long as Dagestan continues to treat the Kremlin as the only guarantor of stability and order in the republic. In this way, Putin's reorganization harms the richer republics -- by undermining their initiative and enterprising spirit -- and the poorer republics -- by freezing them in an almost feudal system of governance and by encouraging official corruption.

Moreover, these policies promise to weaken further the already insignificant role of municipal authorities, since -- as compensation for loss of power on the federal level -- the regional leaders are to receive a free hand in their dealings with the municipalities. The situation of local self-government has worsened even more as a result of the redistribution of revenue going to federal and regional budgets: Throughout Russia, the municipal portion of the local budgets was cut by almost half, from 32% to 17%, although expenses did not decrease. As a result of the budget deficits, many cities have no money to pay for electricity, gas and coal, and spent months without heat or power during the winter of 2000-2001. Municipalities cannot afford to repair buildings. As a result, the number of accidents is growing; for instance, an increasing number of gas explosions have claimed hundreds, if not thousands, of lives. However, the papers only get excited when the blasts are blamed on terrorists.

The Russian government is fooling itself into believing that regions thus controlled will be easier to rule because they will become more pliant. In reality, the opposite is true. With less money in the regional and municipal budgets, and less responsibility vested in their leaders, less can be demanded of them. It should be expected in the near future that the residents of the regions increasingly will direct their displeasure toward the Kremlin. For the non-Russian peoples, this will translate into a growth of anti-Russian sentiment because federal rule, from which all the ills stem, is perceived as Russian rule.

The current Chechen war also has contributed to this sentiment. The Kremlin claims that, by starting the war, it has prevented the fragmentation of Russia, but the leaders are not correct. If the Russian Federation had accepted Chechnya's independence, this would not have brought on the "domino effect" -- that is, the departure of other republics from Russia. The destitute and criminal-infested Chechnya did not infect or inspire anyone; its relationship with its neighbors before the war worsened every day. Since the beginning of the war, however, solidarity with Chechnya has grown on three levels: 1) the solidarity of all non-Russian nationalities, including Volga Tatars and Siberian Yakuts; 2) Islamic solidarity; and 3) the solidarity of all offended nationalities.

With the beginning of the war, practically all Caucasians, including members of nationalities that traditionally do not like the Chechens, started to experience some of the same pressures as the Chechens: For the majority of the Russian population, all Caucasians have one face -- they are all "dark" and "terrorist." The Chechen war demands a separate article; however, one can say that it does constitute the most painful and complicated aspect of Russian's nationalities policy.

In the long term the biggest challenge is coping with the changing ethnic composition of the population.(8) In almost all of the republics of the North Caucasus, Russians already constitute the minority. In the Far East and in Siberia, Russians are only the minority in Tuva, but their percentages are shrinking in Buryatia and in Yakutia. According to the prognosis, in 10-15 years the number of Chinese in Russian regions of the Far East and Siberia will reach about 10 million, and then they will become the ethnic majority in Russia's largest geographic region.

However, the main demographic danger for Russians is in the Povolzh region. Today, Russians have become the minority in Chuvashia, and are no longer the largest ethnic group in Tatarstan and Bashkortostan. By 1989, in Tatarstan and Bashkortostan Russians constituted less than half of the population but continued to be the largest ethnic group in comparison to the other nations. However, there is little doubt that in this decade the Tatars are rapidly becoming the largest group in both republics, in which case Russians will be regarded as an ethnic minority there.

The growth of the Tatar population is due not only to a high rate of natural increase (the Bashkir's rate of increase is even higher) but also to migration. The majority of the tens of thousands of Tatars who arrived in Russia from the other countries of the CIS after the collapse of the Soviet Union settled in these republics. Overall, observers note a process of "gathering" members of titular nationalities into "their" republics, which includes the Tatars.(9) This process reflects not only the absence of opportunities for national and cultural development (such as education in the national language) outside the territory of the republic but more pressing conditions: In one's own republic one feels safer, calmer. This speaks to the general growth of ethnic self-identification and a radicalization of inter-ethnic contradictions.

Tartar and Bashkiri nationalists increasingly speak of uniting and creating one Povolzh federation.(10) If such a federation were to be formed in the very middle of Russia, it could simply split the country into two poorly connected pieces.

The threat of the disintegration of the country could steer policymakers toward two radically different political doctrines to form the basis of the Russian government. First, is consolidation of a multicultural society. Unfortunately, the idea of a multicultural society is absolutely foreign to the powers that be. That is why the government is using a different political doctrine and mechanism to consolidate Russian society: consolidation accompanied by a growth of Russian nationalism.

The last gubernatorial elections did not leave any doubt that the Kremlin is exploiting Russians' nostalgia for the Soviet Union and nationalistic sentiments, and hopes to receive support in the regions from former Soviet officials and generals. It is hard to imagine that such heroes of the Chechen war as General Viktor Kazantsev, now presidential representative in the southern regions, General Konstantin Pulikovsky, representative in the Far East regions, and especially General Vladimir Shamanov, the ruthless and the most violent general in both Chechen wars, who now serves as governor of Ulianovsk oblast, will provide liberal economic policies. Rather, it is quite natural to imagine that they will be the most visible carriers of xenophobia, anti-Western sentiment, Soviet militarism and imperialism. Therefore, it is not strange that in Russia now xenophobia is growing, suspicion toward the West is growing, and imperialistic sentiments are growing. Nationalistic consolidation requires the image of an external enemy -- be it "worldwide Islamic terrorism" or "world imperialism."

If nationalism and imperialism become firmly established in Russia they could halt temporarily the disintegration process. But then Russian chauvinism will surely stimulate the backlash of the national minorities. Of course, strategically, this is a dead-end path for democratic development. In my opinion, the mood of Russian nationalism and imperialism are not predetermined or irrevocable. The negative tendency has not been fully realized; therefore, Russia has time to prevent it. However, the more amicable possibilities cannot be achieved by following the present course set by the Putin administration, but rather by plotting a new course.

(1) Marina Kalashnikova, "Putin wants to have a powerful government, like Tatarstan's. President Mintimer Shaimiev offers an alternative to the system of presidential representatives," Nezavisimaya gazeta, 12 February 2001.

(2) Ibid.

(3) Aleksandr Ivanschenko, Vladimir Rychkov, Aleksei Salmin, "Forward into the past or back to the future?," Nezavisimaya gazeta, 18 January 2001.

(4) "RF President Vladimir Putin emphasized that 'the Dagestani nation has a right to special approach,'" Interfax, 29 December 2000.

(5) Gadzhi Gamzaev, "Dagestani nation perceives special approach," Nezavisimaya gazeta, 29 December 2000.

(6) Account Chamber Report No. 33, 24 November 1998.

(7) Den'ga Khalidov, "The politics of budgets: experiences of the past and new challenges," Rossiya (Moscow) No. 125, 19 October 2000.

(8) On the main features of this process, see Human Development Report 1997. Russian Federation (UNDP, Human Rights Publishers, 1997), Chapter 11.

(9) Ibid..

(10) This statement was first used on 8 April 1997 in Kazan by the chairmen of the executive committees of the Tatars' World Congress and of the Bashkir World Congress ("kurultia"), Indus Tagirov and Niyaz Mazjidov. See "(11) Socio-political Situation in Russian Regions," Vestnik CEPRI, No. 2 (58), April 1997 (Moscow: Ethno-Political and Regional Studies Center, 1997).

In the summer of 2000, leaders of the Tatar National Center (Tatarsky Obchestveni Cehter, TOC) proposed the creation of a confederation, "Idel-Ural," of three republics -- Tatarstan, Bashkortostan and Chuvashia. ITAR-TASS, 26 August 2000.