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Russia Report: August 23, 2000


23 August 2000, Volume 2, Number 30
PAN-REGIONAL ISSUES
GOVERNOR CAN'T GET A LINE TO THE CENTER.
In an interview with "Izvestiya" of 16 August, Tomsk Governor Viktor Kress complained that relations between regional leaders and federal officials have already changed in the wake of the reform of the federation launched by Russian President Vladimir Putin earlier this year. Previously, Kress said, he never had any problems in his relations with federal ministers, but now it is impossible to reach even a deputy minister by telephone. In Kress's opinion, the State Council, currently under discussion in Moscow, is essential so that governors not only are able to maintain established ties with the center but also can exchange opinions with their peers and discuss problems common to the regions. JC

NEWSPAPER PREDICTS TOUGH BATTLE OVER GOVERNORS' SEATS...
The gubernatorial elections coming up in the fall and winter are likely to be the most competitive in recent years, and their outcomes will be difficult to predict, "Segodnya" argued on 18 August. According to the daily, which is owned by Vladimir Gusinskii's Media-MOST, the Kremlin, at the initiative of the Security Council, has already selected several candidates that it will back. However, the daily notes, Kremlin support is no guarantee of victory, judging by its candidates' failures in the St. Petersburg and Moscow Oblast elections. In addition, Kremlin-backed candidates will have to fight not only against opposition forces in the regions, who are likely to resist against any incursions by outsiders into their affairs, but also against the Communist Party, for which it is very important to preserve and even expand its "red belt." "Segodnya's" coverage follows reporting in a number of central newspapers recently that the Kremlin will play an active role in upcoming regional elections (see "RFE/RL Russian Federation Report," 9 August 2000). JAC

...AS UNITY SAYS IT WILL BACK INCUMBENTS.
The political council of the pro-Kremlin party Unity met on 17 August and selected its candidates for upcoming gubernatorial elections, ITAR-TASS reported. According to Unity leader Sergei Shoigu, Unity will support mostly incumbent governors, such as Perm Oblast Governor Gennadii Igumnov and Khabarovsk Krai Governor Viktor Ishaev. He explained that Unity's criteria are based not on ideological "correctness but on real deeds of a candidate, his professionalism as well as the social and economic situation in a region." "Kommersant-Daily" reported the next day, citing unidentified sources close to President Vladimir Putin, that the Kremlin will "nominate" Viktor Surzhikov, the federal inspector of the former head of the FSB directorate in Vologda Oblast, for the governor's spot in Kursk Oblast. That daily repeated speculation by other newspapers that Kursk Governor Aleksandr Rutskoi and Kaliningrad Oblast Governor Leonid Gorbenko have reportedly been marked for removal by the Kremlin because, despite their loyalty, they are considered "unclean" (see "RFE/RL Russian Federation Report," 9 August 2000). JAC

PRIME MINISTER GIVES GOVERNORS-GENERAL RIGHT TO ATTEND CABINET MEETINGS...
Prime Minister Mikhail Kasyanov signed a decree on 16 August establishing the framework for cooperation between the government and the office of the presidential envoys in the seven federal districts, ITAR-TASS reported. According to decree, the envoys can be invited to attend meetings of the cabinet of ministers with the right of consultative voice and to participate in sessions of the government commissions and councils. The decree also orders that a subdivision be created at all ministries and departments to oversee coordination activities with the presidential representatives and that the deputy prime minister responsible for the regions, who is currently Viktor Khristenko, should meet with the governors-general at least once a month. The envoys also have the right to confirm all candidates nominated for positions in the territorial branches of all federal ministries and departments. JAC

...AS ENVOYS THEMSELVES ENVISAGE GREATER POWERS.
"Kommersant-Daily" on 16 August provided some background to the decree, reporting that some members of the government opposed a plan by deputy head of the presidential administration Vladislav Surikov to task presidential envoys with devising economic programs for their districts. According to the daily, in which Boris Berezovskii owns a controlling interest, at least some of the presidential envoys were already aware of Surikov's intention: Envoy to the Northwest District Viktor Cherkesov reportedly sent a document ordering the Finance Ministry to earmark 12 billion rubles ($432 million) in 2001 for the construction of a gas pipeline from Yamal to Arkhangelsk. However, next year's budget foresees spending of only 6 billion rubles for investment in all sectors. In its coverage of the decree the next day, "Segodnya" concluded that by empowering the envoys, the presidential administration is increasing its own power while diminishing that of the government and the prime minister. JAC

ALL REGIONS TO BE MADE EQUAL BEFORE THE FEDERAL TREASURY.
Finance Minister Kudrin told reporters on 18 August that expenditures on financial support for the regions is slated to soar to 208.727 billion rubles ($7.5 billion) or 2.69 percent of GDP earmarked in the 2001 budget, compared with 121.517 billion rubles or 1.88 percent of GDP in this year's budget. According to Interfax, Kudrin explained the increase was linked to the government's decision to centralize the collection of VAT. Governors, especially those from the so-called "donor" regions, are unhappy with the arrangement, "Kommersant-Daily" reported on 22 August. According to the daily, they "simply don't believe that federal officials will give the regions back what they promise." The newspaper suggests that this fear might have some basis in reality since Deputy Finance Minister Yevgenii Bushmin told regional leaders on 21 August that VAT proceeds would not be sufficient to finance benefits for children, veterans, and invalids, as was previously announced and that therefore the government will have to repeal privileges of some 19 billion rubles or look for additional revenues from regional budgets. Samara Governor Konstantin Titov reportedly complained to Bushmin that soon there will be no more donor regions in Russia and Bushmin responded that that was precisely the idea: "Samara will be on the same level as Moscow and Mordovia, and so forth." Also on 21 August, Deputy Finance Minister Tatyana Golikova outlined expected revenues under the 2001 budget, ITAR-TASS reported. She told reporters that total revenues for the consolidated 2001 budget will be 2.073 trillion rubles, while revenues for the federal budget will be 1.193 trillion rubles and 879.8 billion rubles for regional budgets. She added that the distribution of spending powers between the federal and regional budgets will be 52.8 percent in the federal budget's favor and 47.2 percent in the regions' favor. According to "Kommersant-Daily," governors believe that in reality the split is 70-30 because the center is taking all VAT proceeds. JAC

REGIONS BRACE FOR HIGHER PUMP PRICES?
The Russian Fuel Union announced on 21 August that fuel supplies are low in 10 of the 22 regions the group monitors, "The Moscow Times" reported on 22 August. The areas with low supplies include Yaroslavl, Saratov, Kursk, Rostov-on-Don, Voronezh, and Tomsk. Last summer, prices doubled in some cities, rising to at least 12 rubles (43 cents at today's exchange rate) per liter, and the government introduced quotas for the domestic fuel market. Russian Fuel Union head Sergei Borisov said he does not rule out a scenario in which prices soar by another 15 percent, precipitating another crisis. However, Steven Dashevsky, oil analyst at Aton brokerage, told the daily the recent 10 percent hike in gasoline prices was expected and there is no reason to expect a crisis: "We expect a maximum rise of 15 percent. There will be stagnation in prices following that." According to newspaper, drivers from other regions have been spotted in Moscow filling up cans of fuel to take back home. JAC

ALTAI
WOMAN ATAMAN NOT YET IN THE CARDS.
A movement for female Cossacks has been founded in Altai Krai, Interfax-Eurasia reported on 18 August. The new movement will be headed by Lyudmila Maslyukhova, the wife of a Cossack businessman, and will focus on problems of Cossack culture, songs, dances, and traditional Cossack cuisine. The Ataman for the krai's Cossack society, Yurii Belozertsev, told the agency that despite the entrance of women into the ranks of the Cossack organization, they will not receive the traditional ranks and titles. "We will not yet have a female Ataman," he commented. JAC

KALININGRAD
LUKOIL SETS ITS SIGHTS ON ADMIRAL FOR GOVERNOR.
LUKoil has made clear whom it will be backing for governor this fall in what "Vremya novostei" of 16 August described as a "demonstrative anti-gubernatorial" PR-action. Whereas in the past LUKoil's newly launched tankers have been christened by governors' wives of the regions after which those vessels are named, in the case of the "Kaliningrad" the oil company invited the spouse of Commander of the Baltic Fleet Vladimir Yegorov to do the honors in smashing the obligatory bottle of champagne on the side of the tanker. Yegorov is considered to be incumbent Governor Leonid Gorbenko's main rival in the upcoming ballot, and, as LUKoil head Vagit Alekperov made clear after the christening ceremony, the admiral is the oil giant's preferred candidate for the governor's seat. LUKoil is currently setting up a "super-holding," composed of fuel companies from Russia's northwest and possibly from the Baltic States, in a bid to collar a 30 percent share of Kaliningrad's oil market. Gubernatorial elections in the exclave are scheduled for 5 November. JC

LOVERS OF GERMAN BEER TAKE HEED.
The number of goods that can be imported into the exclave free of customs duties is set to decline over the next five years. Last week, a federal government resolution went into effect whereby the volume of most products designated duty-free must decrease by at least three to five times annually until 2005, "Kommersant-Daily" reported on 19 August. The resolution covers goods such as meat and dairy products as well as beer (most of which comes from nearby Germany). According to the Moscow newspaper, the resolution is aimed at making the exclave self-sufficient as regards provisions. Meanwhile, the quota for the import of cars on which levies are waived is to remain the same over this period. JC

KRASNOYARSK
HOMELESS SENIOR CITIZENS WINDING UP ON THE STREETS OF SIBERIAN CAPITAL.
Homeless senior citizens are increasingly visible on the streets of Krasnoyarsk, RFE/RL's correspondent reported on the 12 August edition of "Korrespondentskii chas." The elderly have lost their apartments and homes for a variety of reasons, such as lost documents or illness. One 74-year-old woman who has lived on the streets for seven months moved to the krai from Belarus. She purchased an apartment and lived there for some time with her oldest daughter, but once her money ran out, her daughter threw her out. According to Yulii Baladinoi, director for the center for medial and social help of the Sovetskii raion, the city simply does not have the facilities or social services to cope with the flood of homeless and helpless elderly, whose ranks he estimates at more than 2,000 persons. JAC

SAMARA
TARKHOV CONTESTS ELECTION RESULTS.
Former Chairman of the Samara Council of People's Deputies Viktor Tarkhov has filed suit with the oblast court contesting the results of last month's gubernatorial ballot in Samara, "Kommersant-Daily" reported on 19 August. Konstantin Titov won re-election in that ballot, gaining 53 percent of the vote in the first round, compared with 29 percent backing for Tarkhov. But according to Tarkhov, the ballot was marred by massive violations of the election law, which were recorded by, among others, specialists from the Russian Institute of Election Law invited to Samara by the regional branch of Unity. Those specialists found that nine of the commissions formed to oversee the gubernatorial ballot had allowed violations of the election law, including vote falsification and ballot-stuffing. Even before the 2 July vote, Titov's opponents had accused the former governor of using unfair tactics to secure his re-election (see "RFE/RL Russian Federation Report," 12 July 2000). JC

TATARSTAN
SHAIMIEV CALLS FOR STRONG REGIONS AND STRONG CENTER.
Tatarstan President Mintimer Shaimiev told reporters on 18 August that he remains undecided on whether he will seek another presidential term, RFE/RL's Kazan bureau reported. Shaimiev also commented on upcoming 10th anniversary of Tatarstan's Declaration of Sovereignty on 30 August 1990. Shaimiev noted that the last decade has yielded many positive results and that Tatarstan's economy was once below average and now ranks fourth in the federation in terms of production volume. In an interview with "Ekspert" published three day later, Shaimiev declared that he does not oppose a strengthening of the "center": "I have always talked about the necessary balance of a strong center and strong regions." Later, he noted that "the weakening of the governors is a weakening of Russia," because weak regions do not make for a strong Russia. JAC

TOMSK
LOCAL CHECHENS COMPLAIN OF DISCRIMINATION.
The head of the Chechen diaspora in Tomsk Oblast has appealed to local authorities to defend members of his community against nationalistic acts by other residents of the oblast, Interfax-Eurasia reported on 22 August. According to the Chechens, many of whom have been living in the area for more than 10 years, they have recently faced discrimination based on their nationality; in particular, some have been beaten up by other Tomsk residents who served in the army or militia in Chechnya. JAC

TVER
BARKASHOV BACKS DOWN OVER BARRED MEETING.
In a rare show of unanimity, both the city and oblast authorities issued orders last month not to allow the local branch of the Russian National Unity (RNE) movement to hold an open meeting in the oblast capital, "Veche Tveri" reported on 25 July. The city leadership strictly instructed officials not to allow the RNE to hire any public premises, while the oblast administration gave similar instructions to its employees. Strong opposition to the proposed meeting also came from several social organizations, World War II veterans, and the oblast's intelligentsia. RNE leader Aleksandr Barkashov himself is reported to have taken the decision to cancel the meeting in Tver. JC

UDMURTIYA
NO SHORTAGE OF WOULD-BE FIRST PRESIDENTS...
No fewer than 22 people have been nominated to take part in the 15 October elections for the republic's first president, Interfax reported on 16 August, following the deadline for submitting nominations. Those presidential hopefuls now have until 14 September to collect the necessary signatures. They include local parliamentary speaker Aleksandr Volkov, deputy speaker Pavel Vershinin, and Prime Minister Nikolai Ganza, as well as four local managers, three pensioners, and two housewives. Two potential candidates, however, have no chance of being registered since they are under 30--the minimum age for taking part in the presidential election, under republican law. JC

...WHILE ONE HOPEFUL ALSO SEEKING TO RUN IN MARII EL.
Meanwhile, another potential candidate in the Udmurtiya ballot, Dmitrii Berdnikov, has simultaneously applied to run in the presidential elections in nearby Marii El, which are also scheduled to take place in October, "Izvestiya" reported on 18 August. Berdnikov, the head of the Kazan-based movement Against Crime and Lawlessness, is no stranger to elections: last fall, he took part in the mayoral ballot in Moscow as well as the elections to the State Duma. According to "Izvestiya," there is no provision in federal law preventing a citizen from taking part in more than one ballot at any given time. JC

ULYANOVSK
HOW TO BOOST THOSE SUBSCRIPTION FIGURES.
More than two-thirds of "subscribers" to "Narodnaya gazeta," the organ of the oblast administration and local legislature, receive that newspaper in part payment of wages, the website regions.ru reported, citing "Simbirskii kurer." Of the so-called subscribers, 70-75 percent are agricultural workers whose labors are rewarded with "official" reading materials instead of rubles, 10-15 percent are organizations funded from the oblast budget, and the remainder--a mere 10-20 percent--are individuals. JC

VOLGOGRAD
MAJOR POLLUTERS TO RECEIVE HEAVY FINES.
As air pollution levels have soared in the city of Volgograd this summer, specialists have established that many of the city's major industrial complexes have been cutting back on ecological measures in a bid to save funds, "Vremya MN" reported on 16 August. Checks at an aluminum factory and the Krasnyi Oktyabr steel plant revealed that equipment to counter air pollution was not working at all, while at the LUKoil-Volgograd Oil Refinery--which has repeatedly been found guilty of excessive air pollution--emissions of dangerous substances exceeded permitted norms by up to 10 times. The situation has been exacerbated by extreme high temperatures and the absence of wind. The chairwoman of the city ecological committee, Svetlana Kosenkova, told the Moscow daily that the directors of the companies that are major pollution offenders will shortly be handed down heavy fines. JC

REGIONAL INDEX

Who's Not Working And Who's Not Getting Paid. The following table shows the level of wage arrears to state sector workers in regions as well as regional unemployment rates. Generally, analysts believe these rates understate levels of unemployment. In terms of wage arrears, the State Statistics Committee reported in mid-August that the level rose nationally in July to 40.5 billion rubles ($1.5 billion) from 39.4 billion in June. JAC

Geographic________________Wage _________Unemployment

Unit______________________Arrears_________rate (percentage)

_________________________(million rubles)



Russian Federation__________39366______________8.0



Central District______________5639______________6.2

Belgorod Oblast________________248______________6.8

Bryansk Oblast_________________313______________9.7

Vladimir Oblast_________________220______________7.4

Voronezh Oblast________________903______________6.4

Ivanovo Oblast_________________204______________10

Kaluga Oblast__________________119______________7.6

Kostroma Oblast________________194______________6.9

Kursk Oblast___________________468______________7.0

Lipetsk Oblast__________________286_______________7.1

Moscow Oblast_________________526_______________6.5

Orel Oblast______________________97______________5.6

Ryazan Oblast___________________183______________7.1

Smolensk Oblast_________________158______________9.3

Tambov Oblast___________________290_____________7.1

Tver Oblast______________________242_____________7.2

Tula Oblast_____________________552______________6.6

Yaroslavl Oblast_________________135______________5.1

Moscow City____________________505______________3.4



Northwest District______________3098______________8.3

Karelia Republic__________________122______________9.1

Komi Republic__________________1622_____________10.2

Arkhangelsk Oblast________________425______________9.0

Nenets Aut. Okrug_________________2_______________10.3

Vologda Oblast___________________111_______________7.3

Kaliningrad Oblast_________________25_______________10.2

Leningrad Oblast__________________146_______________9.6

Murmansk Oblast__________________143______________10.4

Novgorod Oblast__________________50________________7.9

Pskov Oblast______________________97_______________8.5

St. Petersburg City________________358________________6.4



South District__________________3481______________10.4

Kalmykia Republic_________________79_______________16.1

Krasnodar Krai___________________673________________8.8

Stavropol Krai____________________429_______________11.4

Astrakhan Oblast___________________83_______________7.9

Volgograd Oblast__________________582_______________7.3

Rostov Oblast___________________1065________________10.6



Volga District____________________7183_____________7.1

Bashkortostan Republic_____________1320_____________8.0

Marii El Repubic__________________294_______________7.1

Mordovia Republic________________259_______________7.7

Tatarstan Republic________________1087_______________6.3

Udmurtiya Republic_________________317______________7.5

Chuvashiya Republic_______________244______________7.8

Kirov Oblast______________________383______________7.0

Nizhnii Novgorod Oblast_____________537______________4.7

Orenburg Oblast___________________718______________8.9

Penza Oblast_____________________454_______________7.3

Perm Oblast______________________362_______________7.5

Komi-Permyak Aut. Okrug___________28_______________4.2

Samara Oblast____________________227_______________8.6

Saratov Oblast____________________552_______________6.1

Ulyanovsk Oblast__________________427______________5.6



Ural District______________________4768______________7.7

Kurgan Oblast_______________________324______________9.9

Sverdlovsk Oblast__________________1319_______________7.6

Tyumen Oblast___________________1800________________7.8

Khanty-Manii Aut. Okrug____________192________________8.1

Yamalo-Nenets Aut. Okrug__________1400________________8.1

Chelyabinsk Okrug_________________1324_______________7.0



Siberia District____________________7968______________9.5

Altai Republic________________________64______________9.6

Buryatia Republic_____________________516_____________12.7

Tuva Republic______________________209_______________13.8

Khakasia Republic__________________287_______________8.8

Altai Krai___________________________770_______________7.8

Krasnoyarsk Krai___________________1259________________9.5

Taimyr Aut. Okrug____________________16________________6.0

Evenk Aut. Okrug_____________________42_______________5.0

Irkutsk Oblast______________________1066_______________9.8

Ust-Ordinskii Aut. Okrug________________30_______________7.3

Kemerovo Oblast____________________1595_____________8.2

Novosibirsk Oblast____________________567_____________9.7

Omsk Oblast________________________1002_____________8.9

Tomsk Oblast_______________________298_____________10.4

Chita Oblast_________________________335_____________11.7

Aginsk Buryat Aut. Okrug______________13______________12.7





Far East District______________________7129____________9.5

Sakha Republic________________________2081___________10.0

Primorskii Krai_________________________1370___________8.5

Khabarovsk Krai________________________825____________8.0

Amur Oblast___________________________839___________9.9

Kamchatka Oblast_______________________492__________14.0

Koryak Aut. Okrug_______________________158___________6.5

Magadan Oblast_________________________470__________12.8

Sakhalin Oblast__________________________528__________11.5

Jewish Aut. Oblast________________________48__________10.4

Chukotka Aut. Okrug_____________________476___________7.5

Source: PlanEcon, Washington, D.C.

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