Russia’s Tambov region has the best governance in Russia, according to a rating by RAEX Rating Review, the company said on June 17.

Russia’s regions are making progress as competition for investment between intensifies and at the same time the subsides from the central budget have been slashed by a cash strapped Ministry of Finance. But the profile is mixed with approximately a third of the total 83  Russian regions doing well, a third threading water and the last third subsisting on hand outs from the central government.

The Ministry of Finance is also cracking down on regional debt, which came close to causing a crisis two years ago. The ministry took "manual control" over the most indebted regions in April, but there are only five regions with real problems in the “red” category. The majority (38 regions) are in the “green” category and allowed to manage their own debt while the rest are allowed to borrow, but have to check their plans with the ministry.

The top 20 regions included in the RAEX ranking is more focused on the investment potential of regions and are able to attract large investors, plan the budget with high quality and provide the population with social services.

Other regions in the top five include the agricultural powerhouse of Voronezh, the oil region Yamal-Nenets, the wine producing Krasnodar and the agricultural Chuvash republic.

The Russian capital of Moscow does surprisingly bad and is only ranked in 60th place in the governance risk’s ranking. Regions are dragged down the rankings if they fail to uphold the rule of law or follow through on arresting and prosecuting corrupt members of the administration.

The dismissal of the governor due to “loss of confidence” also has a negative effect on the position in the ranking, RAEX said. In the last few years in Russia, for example, the head of the Sakhalin Oblast, Alexander Khoroshavin, the governor of the Kirov Oblast, Nikita Belykh, and the head of the Novosibirsk Oblast, Vasily Yurchenko were fired.

The full ranking of the most attractive regions for investors is available here.

Ranking of regions with minimal governance risk (according to RAEX for 2018)
Rank	Name	Position in the investment risks main ranking
1	Tambov Oblast	6
2	Voronezh Oblast	8
3	Yamalo-Nenets Autonomous Okrug	33
4	Krasnodar Krai	2
5	Chuvash Republic	31
6	Sakhalin Oblast	28
7	Leningrad Oblast	4
8	Komi Republic	62
9	Khanty-Mansi Autonomous Okrug — Yugra	24
10	Nenets Autonomous Okrug	67
11	Amur Oblast	45
12	Penza Oblast	16
13	Tyumen Oblast	14
14	Astrakhan Oblast	63
15	Kaliningrad Oblast	34
16	Novgorod Oblast	26
17	Republic of Tatarstan	7
18	Ryazan Oblast	13
19	Kursk Oblast	9
20	Murmansk Oblast	66
Source: RAEX Ratings