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Russia Report: April 19, 2000

19 April 2000, Volume 2, Number 15
The semi-monthly "Nezavisimaya gazeta-regiony" published an article in its issue number 6 dated 11 April which argues that Russia's leading financial industrial groups which "have always held strong positions in Russian regions" are changing their priorities. Previously they were content to pursue economic aims such as acquiring profitable enterprises, but now they have a political agenda. Moreover, they are seeking to displace regional political elites, particularly on the left of the political spectrum, many of whom were "demoralized" by then acting President Vladimir Putin's growing popularity. The article doesn't mention any specific financial-industrial groups other than Gazprom, although it refers to an "Oleg Savchenko" as the leader of "another financial-industrial group." It reports that Gazprom head Rem Vyakhirev visited Volgograd Oblast during the recent presidential campaign, where Vyakhirev discussed not only Gazprom business but also campaigned for Putin with the regional elite. JAC

The State Duma's Budget Committee has recommended that amendments to the Budget Code suggested by the Putin government be passed in their first reading by the lower legislative house, "Vremya novostei" reported on 18 April. According to the daily, among other things, the proposed amendments would strip subjects of the Russian Federation of the right to take out loans from abroad and preserve this right exclusively for federal organs. Now expenditures and deficits of the regional and municipal budgets are financed exclusively through internal sources. However, according to the daily, that "pill is sweetened" by the fact that local authorities are allowed to oversee their own investment expenditures but also service and pay off their own debts. JAC

Omsk Mayor and Union of Russian Cities President Valerii Roshchupkin is proposing that the interbudgetary relationship between subjects of the Russian Federation and municipal establishments be reformed. He told reporters in Moscow on 14 April that an across the board reduction in municipal budgets is now taking place and the majority of taxes collected are being redistributed in favor of oblasts and republic governments and at the expense of city governments, Interfax reported. He cited as one example his own city of Omsk, where the city budget has been reduced "almost two times." As a solution to the problem, he suggested that the tax system be reformed so that each tax goes to one budget and is not shared by different levels of government. Such a reform would then "reduce the possibility for abuse by federation subjects." JAC

"Kommersant-Vlast" reported in its issue number 14 dated 11 April that a number of federal agencies are reducing the number of their offices in Russia's region. The weekly reported that the Central Bank is going to cut the number of its regional branches, while the Tax Ministry is going to reduce the number of its regional tax inspectorates and the State Customs Committee will slash the number of its regional customs offices. The weekly claimed that this is being done in order to give local governors less opportunity to misuse these federal bodies for their own purposes. JAC

According to data collected by the Fund for the Defense of Glasnost, the number of conflicts between media and local government has been rising steadily since the beginning of the year, "Versiya" reported in its issue number 14. In January 2000, the human rights organization recorded 63 cases, 123 in February and 139 in March. Among the cases in March was the bombing of the offices of the "Asbestovskie Vesti" newspaper in Sverdlovsk Oblast. According to "The Moscow Times" on 15 April, investigators are pursuing two theories: one that the bombing was an attempt to assassinate the paper's editor, who was running for the city's legislature, or revenge for articles about abuse of power by local officials. Also in March, government officials publicly threatened journalists twice and five times authorities withdrew editions of "Incorrect" publications, and four times printing companies refused to publish local editions. Boris Timoshenko, head of the Fund, told "The Moscow Times" that the number of conflicts always rises during election campaigns when media are controlled more tightly than ever both by election officials and government officials seeking to support a specific candidate. JAC

According to "Gazeta.Ru" on 13 April, Governor Leonid Gorbenko not only has problems with the federal media, which, led by independent NTV, has done "a fair amount to spoil" his image, but with the local media as well. Of the 120 media outlets in the oblast, only three are reported to be currently backing the incumbent, while the remaining 117 are against him. Citing unidentified independent sources, "Gazeta.Ru" reports that 70 percent of the electorate opposes Gorbenko's rule. Gubernatorial elections in Kaliningrad are scheduled for October. JC

"The Moscow Times" reported on 15 April that "Sovetskaya Kalmykia," the newspaper whose editor Larisa Yudina was murdered almost two years ago, continues to publish articles critical of the regime of Kalmykia's President Kirsan Ilyumzhinov. Yudina's husband, Gennadii Yudin, told the daily that "Sovetskaya Kalmykia" comes out twice a month and is brought in from neighboring Stavropol Krai because local printing houses refuse to publish it. According to Yudin, the newspaper is the only alternative to other outlets friendly to the Ilyumzhinov government. Yudin puts out the paper with two local staff members and brigades of journalists from national newspapers who travel to Kalmykia to help put it out. Yudin also told the daily that a grant he has from the Ford Foundation will run out in September. JAC

Judges in the arbitration court of Primorskii Krai declared a hunger strike on 14 April to protest "oppression" by krai Governor Yevgenii Nazdratenko and sent an appeal to President-elect Putin, "Kommersant-Daily" reported on 15 April. According to the newspaper, 24 of 36 judges signed the appeal to Putin. Tatyana Loktionova, chairwoman of the court, is currently in Moscow as a collegium of judges decides whether she should retain her current position. Governor Nazdratenko has been seeking her removal. Last July, Loktionova accused Nazdratenko of interfering with the activities of the court for the past two years, and revealed that she and her colleagues are afraid for their own safety (see "RFE/RL Newsline," 2 August 1999). According to Interfax-Eurasia, in the appeal to Putin, the judges call on the new president to examine the situation in several regions in Russia, including Primore, where local authorities have been pressuring judges they find objectionable. JAC

"Versiya" reported in its issue number 14 that enemies of the governors in the krai "believe" and are presumably circulating a report that Nazdratenko is on a list of regional figures compiled by the Kremlin who will be targets for corruption probes after President-elect Putin's inauguration in May. Nazdratenko will reportedly be accused of selling off equipment belonging to the Russian Navy and misusing budget funds. Earlier in the month, Putin ordered the office of the General Prosecutor to investigate some 200 cases of embezzlement, tax evasion and other economic crimes in Smolensk Oblast (see "RFE/RL Russian Federation Report," 12 April 2000). JAC

The city election commission for St. Petersburg announced on late morning of 17 April that it had registered ten of the 13 candidates who submitted signature lists supporting their candidacies for 14 May gubernatorial elections in that city. Competing against incumbent Governor Vladimir Yakovlev will be the head of St. Petersburg's Yabloko branch Igor Artemiev, businessman Artem Tarasov, Audit Chamber Deputy Chairman Yurii Boldyrev, school teacher Sergei Klykov, St. Petersburg legislature deputies Andrei Korchagin and Sergei Andreev, St. Petersburg's Working Russia movement head Vyacheslav Marychev, and Olga Lisichkina, a senior specialist at the territorial directorate, Ekho Moskvy reported. State Duma deputy (Union of Rightist Forces) Yulii Rybakov had announced earlier that he would run for the governor's seat and he had submitted signatures to the commission by the 14 April deadline. On 12 April an aide of Rybakov's was attacked by unidentified men who grabbed a folder of signatures supporting Rybakov's candidacy, "The Moscow Times" reported on 15 April. JAC

Governor Nikolai Maksyuta told "Izvestiya" of 12 April that "urgent measures" will be taken to suppress skinheads in the oblast following an attack on a group of Indian students from the Volgograd Medical Academy. In that attack, the skinheads used bicycle chains and metal bars to beat the students, who sustained serious injuries. More than 700 students from abroad are currently studying at the Volgograd Medical Academy alone. JC

Having found that vote-buying took place during the 19 December elections to the oblast legislature, a municipal court has asked a local election commission to recognize as invalid the vote in the constituency where Mikhail Surov was elected, "Nezavisimaya gazeta-Regiony" reported on 11 April. Surov, who is the leader of the Vologda National Movement and has been dubbed the local Zhirinovskii on account of his nationalist rhetoric (see "RFE/RL Russian Federation Report," 12 January 2000), has appealed to the oblast court to overturn the lower court's ruling. Students testifying during the case admitted to having accepted 30 rubles ($1) and a free disco ticket but said they were asked to vote not just for Surov but also for incumbent Governor Vyacheslav Pozgalev in his bid to gain re-election, as well as for candidates for the State Duma and the Vologda mayoralty. According to the semi-monthly, the court failed to produce evidence that associates of Surov had engaged in vote-buying or that Surov alone had benefited from that activity. JC

END NOTE: Will Putin Seek Greater Control of Russia's Regions?
By Sophie Lambroschini, RFE/RL Moscow correspondent

During the lead-up to the 26 March presidential election campaign, Putin often alluded to the strengthening of federal authority over the regions' political leaders. In a book of interviews published last month, Putin said that Moscow should put an end to the different degrees of economic autonomy obtained by some regions during the presidency of Boris Yeltsin. He specifically referred to the need for federal institutions to retake control of Moscow's own regional tax, police and security-services branches, as well as regional judicial and privatization offices.

At present, Moscow's presence is often so weak in some regions that governors have the power in effect to determine many court decisions. The regional bosses are also able to offer privatization tenders not in accordance with federal law--but very much in their own interests.

Recently, there have been some signs of federal authorities' determination to increase their influence over local affairs. Boris Dobrushkina, the head of Moscow's tax police, was dismissed at the end of March. He was replaced by Aleksei Sedov, an ex-Federal Security Service (FSB) officer from St. Petersburg, as is Putin. Earlier, the head of the federal capital's police and prosecution office had also been dismissed.

Mikhail Krasnov is an analyst at the Center for Strategic Reform, a think-tank set up by Putin to elaborate a long-term strategy for Russia. He told RFE/RL that the president-elect's plan is to force regional bosses to implement federal legislation and put an end to differing local laws and practices: "[The reform is ] all about building a unified executive power. We need the authority to sanction [regional bosses who disobey federal laws]. For me, the [main] question is not allowing anyone to break federal laws. Whoever violates them must bear the responsibility for his action."

But independent analysts doubt whether Putin ever would dare to challenge outright the independent-minded regional governors--even though he may dream of restoring Moscow's central authority. Jean-Robert Raviot is a Russian-affairs analyst with the Paris-based Institute for Political Science. He told RFE/RL's Moscow bureau that "Putin and other Russian politicians--such as [former Premier Yevgenii] Primakov--see in the reform of the federation a way to re-establish a vertical [system of power, with Moscow at the top]. At the same time, [they believe, this reform] should also symbolize the reconstruction of the Russian state and its solidity."

Raviot believes that re-establishing tight central control over the regions is not in fact possible because the present loose system is far more in keeping with Russia's complex realities: "In reality, I think that [a thorough reform] is completely impossible because [post-communist Russia] has gone far away from [center-controlled] federalism. It's [also] impossible because the regions are so varied economically, their revenues and populations so different."

It was Yeltsin in 1991--his first year as Russian president--who intensified what Raviot considers Russia's natural centrifugal tendencies by encouraging the regions to take as much sovereignty--in Yeltsin's phrase--"as they could swallow." The regions' relations with Moscow were then based not on federal legislation but rather on a number of negotiated bilateral treaties. Russia's August 1998 economic crisis--with its slashing of the ruble's value--gave a further push to regional autonomy by making local self-sufficiency necessary for economic survival.

Raviot says that under Yeltsin the regions managed to build a loose federal system that actually works, and that--more often than not--the system helped maintain political stability in the vast country. He and other analysts conclude that Putin is probably too pragmatic-minded to press for a potentially destabilizing radical reform. Most likely, they conclude, the president-elect will try to negotiate his way to a more tractable federation.

The following table shows the cost at the end of January 2000 with the end of March 2000 for a selection of 25 basic food products in a variety of regions. In March, the basket of food products was most expensive in Magadan; Moscow was the sixth most expensive city, according to Interfax on 6 April. The food basket was the cheapest in Ulyanovsk. JAC

City_______Cost of Food Basket, in rubles
___________Jan. 2000_______March 2000__________% change








St. Petersburg__611.80_________628.70______________+3.0%

Source: State Statistics Committee as cited by Interfax