Siberian region’s crisis: Unpaid salaries, failing services

Khakassia’s budget collapse leaves public workers and schools without pay

Khakassia, a Siberian region, is grappling with a severe budget crisis. Public sector workers have gone without salaries for weeks, while key services face dire funding shortages. The financial predicament stems from plummeting tax revenues and heavy losses in the coal industry—once the region's economic mainstay.

The crisis reached a boiling point on January 12, when Khakassia's acting governor, Valentin Konovalov, acknowledged the issue of unpaid wages during a government meeting. Konovalov, appointed by President Vladimir Putin in 2023 following his predecessor's resignation, now oversees a region where even high-ranking officials missed their December pay. Ministers, agency heads, and civil servants are among those affected.

The collapse of coal revenues has exacerbated the situation. In the first nine months of 2023, tax income from the industry dropped by 20.5%. By October, coal firms in Khakassia had racked up losses of 10 billion rubles, with net losses reaching 5.1 billion rubles for the year. Many mines have scaled back production or shut down entirely, largely due to a steep decline in exports to eastern markets. Local districts are also feeling the pinch. The acting head of Askizsky District confirmed there's no money left to pay government employees. Nearly 30 schools and kindergartens have had their accounts frozen over unpaid debts, leaving them unable to cover food, heating, or fuel. Other crucial institutions—including a forensic bureau, psychiatric hospital, blood center, and emergency services—are similarly struggling to operate.

The regional treasury's depleted coffers have left salaries unpaid and essential services at risk. With coal profits drying up and no immediate relief in sight, Khakassia's financial emergency shows no signs of abating. Schools, hospitals, and government offices now face daily disruptions as the crisis intensifies.