How seriously should we take Putin’s promises of a “new elite” emerging from the participants of the war in Ukraine, based on the experiences of the past year? Will artificial intelligence solve the problems of regional and local governance in Russia, and what drives the use of AI in politics? Read below for some thoughts on this and an assortment of regional political developments from the past weeks.

The “new elite” – revisited

As the war against Ukraine is continuing, the question of when contract soldiers and mobilized men will be able to return from the front and what they will do once that happens. Regions have been instructed to fund retraining programs, business incubators and psychological helplines for veterans, but these programs will require substantial funding, which already overstretched regional budgets are understandably reluctant to provide as long as there is only a trickle, and not an avalanche, of people returning. But there is also the promise of war participants becoming Russia’s “new elite”, made by Vladimir Putin more than a year ago and repeated by several officials since. Over the past year the appointment of officials with “special military operation” credentials has become a way to signal loyalty to and request attention from the Kremlin. However, on the whole, very little has come of these promises in spite of the federal and regional programs set up to operationalize them.

The promotion pipeline is very narrow. Of more than 65,000 applicants in the federal program called “Time of Heroes” so far, only 168 have been admitted. The overwhelming majority of them are not mobilized servicemen but career soldiers or former public officials – Novaya Gazeta counted only three mobilized men in the first year of the program. 83 of these people graduated last year, but a year later, only about half of them (45 if one believes Vladimir Putin) have been appointed to various federal and regional positions. With some notable exceptions – such as Urals presidential plenipotentiary Artyom Zhoga and Tambov governor Yevgeny Pervyshov – most of them have served in positions with little political clout, typically overseeing youth policy and policies affecting returning war participants (as the publication Vyorstka remarked, this is intentional). Those who hold other positions had typically been part of the administrative elite before their (real or pretend) service in the war. Georgy Andreev, the recently appointed minister for enterprise, trade and tourism of Yakutia, had been deputy minister prior to going to the war; Pervyshov himself had been a Duma deputy and mayor of Krasnodar.

In May the Kremlin reportedly set key performance indicators related to the employment of former war participants to regional governments. According to these, regions will have to find training and employment for 30-60 people a year, depending on their means and size.  Regional variants of “Time of Heroes”, typically programs with names that include some lousy, lazy wordplay on “CBO”, the Russian abbreviation of the “special military operation”, have roughly followed these benchmarks: e.g. 35 places were offered in Buryatia and Volgograd, 50 in Kaliningrad and 70 in the more populous Bashkortostan.

But these are very low numbers. Of the estimated 700,000 military personnel involved in the war, only 137,000 have returned (according to the government’s numbers) but even so, the number of applications to the federal and regional programs have been overwhelming. In regions typically one out of ten or fifteen people were selected. In the federal program the ratio is one in four hundred. Through the Presidential Academy of National Economy and Public Administration (RANEPA) and Rosmolodyozh, the state agency for youth, the federal government has earmarked 562 million rubles for the education of roughly 5,000 people in 2025 – but this is just a sliver of the expected total bill. Not only will this cover less than 1 percent of those expected to return from the war, regions will also have to make sure to find employment for them, which in practice will mean creating public sector jobs or pressuring local employers to hire war participants who went through regional training programs.

The situation is similar for those trying to break into the elite via United Russia’s “primary election” process. While this year, according to the official data, 827 war participants will stand for office in regional and municipal elections – significantly more than the 304 who did last year – the vast majority of them will run for municipal offices with little influence or monetary resources. Only 23 (of 58 initial candidates) will run for mandates in regional parliaments, an important conflict resolution ground for regional elites who have successfully pushed back against pressure from above to share their positions with more war participants. Note also that this happens at a time when the usual candidates running for these offices – local businessmen, institutional leaders, etc. – are increasingly hard to find because the risk-benefit calculation associated with the job has changed radically. Privileges (e.g. traveling or opening a bank account abroad) have been cut, all while, over the past year, regional and municipal officials have faced extensive corruption crackdowns.

In 2024, following the votes, a handful of war participants received appointments after the election, but these positions depend on the goodwill of established elites – and similarly to “Time of Heroes” appointees, elected veterans have not really had the opportunity or the capacity to make meaningful contributions to legislation.

The fact that the numbers are low, however, does not mean that the trickle of appointments is insignificant. If the federal and regional governments are unable to create the circumstances for the successful reintegration of hundreds of thousands of war participants (or fail to coerce businesses to do so), while at the same time they continue the mantra about veterans becoming the new elite, with some handpicked appointments, the tension between rhetoric and reality may very easily prompt returnees to demand their ostensible rights or take matters into their own hands.

AI vs ОЙ

There is very littlethat is worth saying about last month’s St. Petersburg International Economic Forum. The event once celebrated as Russia’s answer to Davos has certainly lost its luster over the past couple of years as sanctions and the general toxicity of the Russian economy have kept foreign investors away, and, in spite of the presence of a couple of token Americans – among them a little-known musician and the obligatory crypto entrepreneur –, this year’s forum was not the glorious showcase of Western companies eager to return to Russia, either.

Even several Russian regions scaled down their representation at the forum considerably, signaling that there was perhaps not a lot of return to be expected on the investment necessary to maintain a significant presence at the event. One of the things that those who did go did to pass the time was talking about how regional governments are using artificial intelligence in governance, both AI and “technological sovereignty” being reliable buzzwords of the times, especially in Russia. The war and Western sanctions have, of course, dealt a blow to Russia’s AI development plans, which even before that, in the words of Anna Nadaibadze, faced a clear gap between rhetoric and reality. However, state-owned firms that are spearheading the development and adoption of artificial intelligence models in Russia, are eager to show off their work.

In Sakhalin and the Perm territory, for example, authorities are saying that they use AI to help identify illegal landfills, essentially by having an AI look at drone footage. Similarly, a combination of drones and AI are being considered in several regions to feed analysis into the “Lesokhranitel” system to help predict the spreading of wildfires, a growing problem in the spring and summer months, especially in Siberia and the Far East. In the Chelyabinsk and Voronezh Regions AI has apparently been used to help plan and predict road traffic and detect potholes, again, by having a model analyze a wealth of CCTV footage in near-real time.

Nizhny Novgorod has a use case remarkably reminiscent of Soviet times: to enforce legislation pertaining to public spaces, e.g. smoking bans, to have an AI detect undesirable behavior and prompt a loudspeaker to remind people of the correct way to conduct themselves. The region has apparently also used AI to manage waiting lists for health care institutions, while the Moscow Region has been using AI to augment its system of recording and answering citizen complaints.

“Gubernatorial dashboards” were also mentioned at the forum, at a meeting chaired by deputy prime minister Dmitry Grigorenko, the government’s overseer of digitization. This system, announced in January, according to its creators, allows key statistics and progress towards benchmarks, set by the federal government, to be displayed on what sounds like a big screen. As I mentioned then, the dashboards sound similar to the one serving mostly decorative purposes at the federal government’s Coordination Council. Yet, as of June, 43 regions were hooked up to the system with plans to add all by the end of this year. Along with several other federal efforts from the past years targeting data collection and aggregation, the thinking seems to be that if human data collectors and local aggregators – who can manipulate data – can be sidelined, governance will be both more efficient and truer to the guidelines set by the Kremlin. And while Grigorenko mentioned “increased transparency” as one of the goals of the project, it is difficult to see how they are planning to achieve this with closed-door meetings, and at a time of the government withholding an increasing amount of formerly public data.  

Perhaps the most sinister mention of AI in the context of public policy has come from Pskov governor Mikhail Vedernikov who has recently said that the region could use it in its electoral process, without elaborating how. Given that the use of “remote electronic voting” (essentially, online voting) has arguably allowed the authorities to use the same means of electoral engineering and manipulation as they had before, but with a higher degree of efficiency, one can only wonder what artificial intelligence may bring to the electoral process in Pskov. (Reporters Without Borders has also recently expressed concern about how Roskomnadzor, Russia’s media and social media monitoring agency that works in lockstep with the Federal Security Service, has been using AI to aid censorship.)

This, by the way, also highlights the problems with the above (incomplete) list: civil AI uses are either offshoots of where AI funding actually goes (in the military, while civil AI research funding has been cut in recent years) or good-looking band-aids on persistently mismanaged issues where merely adding technology is unlikely to help. Take illegal landfills, for instance, an existing and important problem, where the issue has not been the lack of identification, but, as I highlighted in a recent piece for Riddle, a lack of motivation to close them and a lack of viable alternative solutions (in a recent example, activists reported to Vyorstka that a waste processing plant built next to Nizhny Tagil in the Sverdlovsk Region for 6 billion rubles was barely working, with garbage trucks routinely bypassing it on their way to a landfill). The problem is similar with health care waiting lists and complaint monitoring, where the authorities are simply proposing to use a machine to replace missing human operators and make citizens feel like they are being listened to and cared about. And, of course, to collect data.

As regards AI-powered drones, as Ksenia Buksha pointed out on RussiaPost, this is the main direction in which AI has been developed in Russia, with the ongoing war and the need to analyze stolen data more efficiently on the authorities’ mind. Notably, the government cut the funding of Russia’s civilian drone development program. But even for AI-powered military drones, as Buksha points out, Russia needs to import foreign microchips via the gray market, that is, at a hefty premium and with all the risks associated with relying on foreign tech, be it Western or – what decision-makers probably fear even more – Chinese.   

Also-happeneds

• Municipal reform: Conflicts in Siberia and the Far East over federally mandated municipal reforms have continued. In particular, in Khakassia the region’s communist governor Valentin Konovalov once again used his veto to block the version of the reform adopted by the region’s United Russia-dominated legislature. The governing party will likely overturn Konovalov’s veto (although it is notable that not everyone in the United Russia group supported it), but the governor is throwing everything he can at the issue, even publishing an op-ed in a local paper, in which he calls the conflict over the bill a matter of conscience, and is, once again, appealing to village dwellers. Another question hanging over Konovalov’s head is when and how the Kremlin is going to up the pressure on him to resign, with an honorable path back to Moscow also in the cards: the governor has recently been elected to the presidium of the Communist Party, which will likely soon face a leadership election to choose the successor of the ancient Gennady Zyuganov. Meanwhile, in both the Republic of Altai and in Buryatia various forms of protests have continued against the local versions of the reform.
• Nationalizations continue: over the past weeks, the authorities continued the nationalization of important privately held companies. Apart from Moscow’s Domodedovo Airport, which was nationalized by a court order in June, Yuzhuralzoloto, Russia’s third largest gold producer, and Dagnefteprodukt, a Dagestani oil company, were taken into state ownership over the past weeks, and since the eruption of a diplomatic conflict between Russia and Azerbaijan, the possibility of the Kremlin stripping Azerbaijani Russian businessmen from assets has been raised. Both the Yuzhuralzoloto and the Dagnefteproduct case have a regional political angle as well. The former company belongs to Konstantin Strukov, an influential regional lawmaker in the Chelyabinsk Region; one of Strukov’s business partners, Sergey Evteyev, who himself stands accused in the case has since announced that he was not going to run for a seat in the regional assembly. The owner of Dagnefteprodukt, Magomed-Sultan Magomedov, was state secretary of the republic, before his dismissal for suspicion of corruption in the case that also saw the company seized. Since then his relative, Makhmud Amiraliev, the head of a district in the region, has also been detained. According to recent estimates, the Russian authorities have seized over $50 billion worth of assets over the past three years; the latest wave prompts the question of to what extent nationalization can and will be used in regional political score-settling by the security services. Investigators also continued arresting and questioning regional officials over the past weeks in various corruption cases, including the deputy mayor of Krasnoyarsk (whose boss is already in custody) and the former deputy head of the National Guard who is accused of bribery in the Kemerovo Region.
• Higher utility prices: On July 1 utility prices across Russia have risen by 11.9 percent on average, but reportedly by significantly more in some regions. This is higher than the official rate of inflation. A similar indexation is planned for next year. The authorities are justifying tariff hikes with the necessity to invest money into decaying utility infrastructure, which has caused an increasing number of accidents and service disruptions over the past years, even as plans to allocate federal funds to fix infrastructure have been scaled back. Higher prices with no meaningful improvement in the quality of service have also prompted protests in several regions over the past years. The federal authorities are trying to direct the anger over price hikes to service providers, with the Prosecution announcing a probe into utility companies and Duma deputies asking the Federal Antimonopoly Service to investigate price hikes.
• Police shortages: In June Tatarstan’s regional legislature requested additional funds from the federal government to increase the salaries of police officers and to provide housing assistance to them. Since then, other regional parliaments have supported the appeal. The war has exacerbated shortages of police officers across the country: at the end of 2024 almost 20% of positions were unfilled, while regional governments with increasingly overstretched budgets have found it difficult to compete with the army and the defense industry for manpower. It remains to be seen whether the federal government can and will allocate more money to regions to spend on this issue, but the appeal highlights the role of relatively privileged regions in putting problematic issues on the federal agenda (during the recent adoption of the reform of municipal governance it was also Tatarstan that spearheaded the resistance against the mandatory scrapping of village councils).
• Two interesting studies were published over the past month by government institutions about regional economies. In June the Central Bank released a paper analyzing the multiplier effect of government spending on regional economies in the Central Russian Federal District. While many of the findings are unsurprising – e.g. poorer regions are more sensitive to both positive and negative spending shocks – but there are still interesting takeaways. The study found, for example, that since 2022 the multiplier effect of social spending – that is, targeted subsidies, but also war-related payments – has grown significantly due in part to a bigger weight of increased consumption in regional economies. Another study, published in July by the Audit Chamber, looked at the use of infrastructure credits, an instrument set up in 2021 to provide cheap, long-term loans to regions for specific infrastructural improvements selected by the government, and fiscal transfers for regions to invest in housing and utilities. This study found that there are severe shortcomings – project revisions due to cost overruns, failure to implement projects as planned, etc. – negatively affecting the use of these funds. While part of this is due to the vested interests and corrupt incentives baked into the system, war-related circumstances, such as inflation, high interest rates & a shortage of money in regional budgets certainly seem to complicate things further, preventing the achievement of development goals.