Accessibility links

Russia: Oligarch Abramovich Seeks Governorship In Remote Chukotka

  • Sophie Lambroschini

Chukotka, the remote and icy Bering-strait peninsula, is becoming a hot political area ahead of gubernatorial elections set for the end of the year. Russian business tycoon Roman Abramovich is running for Chukotka's governor, spurring speculation about his motives. RFE/RL's Moscow correspondent Sophie Lambroschini reports.

Moscow, 2 November 2000 (RFE/RL) -- At first glance, the remote far-eastern autonomous district of Chukotka hardly seems an inspiring locale for a young businessman looking to further his political ambitions.

During the winter months, the rocky peninsula is linked to Alaska through blocks of packed ice. Its territory, the size of France, is generally covered in permafrost and is so barren that, two years ago, 10,000 reindeer starved to death during the winter.

That, however, has apparently not dissuaded aluminum and oil tycoon Roman Abramovich. After being elected Chukotka's State Duma deputy a year ago, he is now running for the office of governor of one of Russia's poorest regions.

Abramovich's candidacy was registered on Monday (Oct 30) after collecting the obligatory 1,000 signatures. In a little under two months (Dec. 24), he will be seeking support from a majority of 44,000 Chukotka's registered voters.

Analysts differ in their explanations of Abramovich's motives. Some say his run for governor is merely the caprice of a multimillionaire looking for yet another challenge.

Sergei Markov of the Institute for Political Studies sees personal reasons as the most important motive for Abramovich's run for the Chukotka governorship. Markov says that as an extremely successful 34-year-old tycoon, Abramovich may simply be more intrigued by the challenge than by economic or other interests.

Markov says Abramovich is so rich that he can afford to see if he can make "something out of nothing."

"He's a bright, energetic young man. It's probably interesting for him to test himself in this new business, to help ordinary people and make a model showcase out of this lost corner of Russia."

Others see more down-to-earth economic reasons behind Abramovich's move into Chukotka, whose largely untapped riches of gold, tungsten, and oil could yield rich dividends. Konstantin Chernavin of the Zenit Bank -- which invests in gold mines in Chukotka -- says that Abramovich's connections could help to get much needed tax privileges for the area. That, says Chernavin, is the only way the Far North can be developed.

"Probably, there are lobbying possibilities here [for Abramovich]. In principle, from a purely economical point of view, the state should give the Northern regions maximum preferential [conditions] if it wants to develop them. And these preferences should not be in the form of subsidies or other budget money, but in the form of tax breaks or other advantages to attract investors -- not necessarily only foreign but Russians investors."

But Vadim Nikolayev, an expert on precious metals with Russia's Lanta bank -- which also invests in gold mines -- told RFE/RL that Chukotka needs very large infusions of capital. That, Nikolayev says, makes it not so attractive as it might at first seem.

Still other analysts see political reasons behind Abramovich's candidacy. They say he is trying to ensure his political and economic future as the Kremlin continues its efforts to break the strongholds of the Russian business tycoons known as "oligarchs."

Some believe Abramovich's successful run for Chukotka's single Duma seat was undertaken to provide him with parliamentary immunity from possible criminal prosecution. Abramovich is widely regarded as one of the oligarchs whose businesses flourished greatly -- and possibly unethically -- because of connections with Boris Yeltsin's Kremlin. Before becoming a Duma deputy last December, Abramovich officially headed Russia's major oil company Sibneft, and he is thought also to control a major part of the country's aluminum industry. Although Sibneft is the subject of a current tax-police investigation, the Kremlin's offensive against the oligarchs has so far largely spared Abramovich.

In his current Chukotka campaign, Abramovich is promising that he will turn the region into a Russian version of Alaska, the U.S.'s flourishing northernmost state. Pledges of better times coming from a well-connected businessman can only sound attractive to Chukotka's mix of native Eskimos, Ukrainians, Moldovans, and Russians -- all left over from Soviet-era grandiose, and failed, plans to conquer the Far North.

Half of the district's population has left in the past 10 years, and it is generally assumed that most of the of 70,000 remaining haven't left simply because they haven't yet found a way to do so. Journalists tell of advertisements in local papers in which apartments in Chukotka are offered in exchange for a plane ticket to Moscow. Gold production in the region has fallen by half in the past 10 years, and unemployment is rampant. State-subsidized oil deliveries are regularly late due to bad weather or mismanagement, leaving hundreds in the cold and dark.

Whatever motives they ascribe to Abramovich's candidacy, most analysts agree he stands a good chance of winning against his main opponent, incumbent Aleksandr Nazarov. They say Abramovich's candidacy is indirectly supported by some in the Kremlin and point to a recently launched tax-police investigation of Nazarov as evidence.

The investigation against Nazarov was announced at the same time as a court decision barring Kursk Governor Aleksandr Rutskoi from running for re-election in his region. Both actions have spurred speculation that the Kremlin is trying to block candidates for regional governorships that it finds undesirable.

But according to "Vremya MN," the Kremlin is actually split over who should win in Chukotka. The newspaper says Nazarov is favored by a Kremlin group known as the "Saint Petersburg team," made up of economists and former Federal Security Service personnel brought into the Kremlin by President Vladimir Putin. Abramovich, the paper says, is favored only the former Yeltsin-era Kremlin "family."