Russia lacks the financial resources to improve living standards in the Arctic: A case of the Sakha Republic

Abstract

This paper focuses on the Sakha Republic in the Russian Far East as one of the Arctic regions. Russia's Arctic policy gives priority to improving the living standard and quality of life of Arctic inhabitants. I examine the feasibility of Russia's Arctic policy in the context of economic and social situation in the Sakha Republic and fiscal capacity of local governments, which are responsible for the provision of social public services. The Arctic region is an important ‘donor’ for the Russian economy, which can bring abundant tax revenues to the state budget. However, it has not been considered enough if this wealth contributes to the sustainable development of Arctic societies. This paper provides an overview of Russia's Arctic policy, followed by an analysis of the socio-economic situation in the Sakha Republic after the collapse of the USSR. Then, local public service provision and its finance is analyzed based on the fiscal statistics of the Republic. I conclude that local governments face difficulties in enhancing their public services due to a lack of financial resources and absence of decision-making autonomy, because of centralization in the past decades.