Local Governments Offer Better Compensation Packages

While the Russian Ministry of Finance is exploring every avenue to raise the salaries of federal officials, the regions have launched a drive to cut the defiantly high salaries of local public servants.

Under the Russian Budgetary Code, the salaries of officials in subsidized regions should not exceed those paid to federal functionaries. News agency Izvestiya found out that the poorer the region, the higher is the probability that local officials draw inflated salaries.

Law empowers the local authorities to set a remuneration level for local functionaries. By and large, that creates a great gap between the salaries of officials employed in the local government and those in a territorial federal agency of the same level and in the same region.

For instance, the head of a territorial body of a federal agency in the Vladimir region earns 3,420 roubles (US $118) a month against the 7,172 roubles (US$247) of a public servant in the region administration. At the same time, the Vladimir area has been receiving more than 1.5 billion roubles (US$50 million) annually in federal subsidies over the last years.

In Karelia, a republic in the North West of Russia, the salary of a deputy minister in the local government is 6,885 roubles (US$200), i.e. 2.5 times higher than that of a federal deputy minister. However, it is recognised that the federals may have higher fringe benefits.

Sometimes, the benefits may dramatically improve the basic salary. The 21,600-rouble-a-month basic salary (US$745) of Victor Balakin, the mayor of Izhevsk in Udmurtia, a republic about 1,000 kilometres east of Moscow, with all extra payments runs to a neat 130,000 roubles (US$4,480). This sum is made up of various bonuses and allowances like that for ‘special conditions of performance’, which alone is 200 % of the basic salary.

 By the way, the monthly salary of Alexander Volkov, president of Udmurtia, is slightly below 117, 630 roubles (US$4,055). For comparison, the average salary in Udmurtia is 4,200 roubles (US$150), which is 1,300 roubles (US$44.8) less than that at the national level.

Alexander Shokhin of Renesans Capital Investment Company says that many regional authorities have their own ways and means to pay extra to region-based federal representatives. So, in this respect the local governor inspires more hope in the latter than the Moscow-based bosses, adds he.

According to a source close to the government, a scale of remuneration for decision makers is in the pipeline. Under that scale, a department head is expected to be paid around $1500 a month. That is good news as it is common knowledge that low paid public servants cost the country too  much.
 
Georgiy Bovt

Translated by: ZM