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Russia Report: October 4, 2000

4 October 2000, Volume 2, Number 36
A significant proportion of Russian citizens don't know which federal district they live in, and even fewer know the name of the presidential envoy appointed to that district, according to a poll taken by the Public Opinion Foundation and reported in "Segodnya" on 29 September. In the Far East district, only 60 percent of residents know that this is where they live, while only 43 percent know that Konstantin Pulikovskii is their presidential envoy. In the Urals district, fewer than half have heard of the district and only 23 percent know of their envoy, Petr Latyshev. In the North West, 46 percent have heard of the district and 24 percent know that Viktor Cherkesov is their presidential representative. In the Volga region, recognition of district and representative is 45 percent and 55 percent respectively; in the Central region, 38 percent and 6 percent, and in the Southern district, 33 percent and 19 percent. In the Volga region, former Prime Minister Sergei Kirienko is the envoy which might explain why he is better known. "Segodnya" is owned by Vladimir Gusinskii's Media-MOST group. JAC

The Presidium of the newly created State Council held its first meeting on 29 September, chaired by Russian President Vladimir Putin. At the meeting, which last more than two hours, members of the presidium decided that the State Council itself will meet only four times a year to discuss two issues at a time, while the presidium will meet monthly, starting on 12 October, ITAR-TASS reported. Members of the Presidium were seated alphabetically to avoid arguments about the proximity of the chairs to the president, according to "Izvestiya" on 30 September. There are seven members of the presidium, each representing one of the seven federal districts. The members include Tyumen Governor Leonid Roketskii for the Siberian district, Tomsk Oblast Governor Viktor Kress for Urals district, Moscow Mayor Yurii Luzhkov for the Central district, Khabarovsk Krai Governor Viktor Ishaev for the Far East district, Daghestan's State Council Chairman Magomedali Magomedov for the Southern district, Tatarstan President Mintimer Shaimiev for the Volga district, and St. Petersburg Governor Vladimir Yakovlev for the Northwestern district. Putin told members of the Presidium that the State Council will not take precedence over the upper or lower legislative houses but will instead assist federal authorities in "tackling important issues," Interfax reported. According to Luzhkov, the issue of the State Council's constitutional status was not raised. Luzhkov also said that he thought the new body will be "much more efficient" than the Federation Council. Following the meeting, Tatarstan President Shaimiev said that he doesn't doubt that the despite the council's advisory status it will be a "very serious and influential organ." Tyumen Governor Leonid Roketskii said that "his hopes were completely fulfilled" and "it seemed to him that everyone [present] was satisfied," "Kommersant-Daily" reported on 30 September. He added that at the session regional leaders discussed with Putin the global problems of state construction, strategy for development of the government, state symbols, and development of organs of self-rule. JAC

Central Election Commission head Aleksandr Veshnyakov and members of his team have written a report on election laws at President Putin's request that suggests altering the way in which regional election commissions are formed, "Kommersant-Vlast" reported in its issue number 38. The report calls for the creation of a vertical chain of command between regional election commissions and the federal or central Election Commission. Each commission would be set up and disbanded by the one at the next level. At the oblast, krai or republic level, commission members can only be selected with the central commission's approval. If a consensus is not reached, the central commission makes the selection. The report also suggests that regional budgets should no longer fund local election commissions. If enacted, the proposal could seriously undercut the influence of regional leaders on local elections, since under current law, governors have the right to select one half of the members and regional legislatures the other half. In those cases where the governor has significant influence over the local legislature, he can wind up virtually dictating how elections are run in his region. JAC

In a meeting with his seven presidential envoys to the federal districts on 28 September, President Putin called on them to assist election commissions and help voters get objective information about candidates in the many upcoming regional elections, Russian agencies reported. According to "Segodnya," Putin put the envoys in a somewhat difficult position by cautioning them not to interfere with the authority of regional leaders while encouraging them at the same time to reinforce the vertical chain of command between the center and regions. ITAR-TASS reported that Putin told the envoys they must "find their own niche...without interfering in the affairs of regional heads on the one hand, and without destroying the chain of vertical power on the other hand." According to envoy to Siberia Leonid Drachevskii, Putin agreed to hold face-to-face meetings with each envoy every two months. JAC

Incumbent Krasnodar Governor Nikolai Kondratenko is planning to seek re-election, despite an earlier announcement that he would not because of health reasons, ITAR-TASS reported on 24 September (see "RFE/RL Russian Federation Report," 6 September 2000). According to the agency, the decision was taken at a meeting of the Otechestvo (not be confused with Moscow Mayor Yurii Luzhkov's Otechestvo) political movement, which Kondratenko heads. Kondratenko was not at that meeting; he had been out of the country observing the elections in Yugoslavia. "Kommersant-Daily" reported on 26 September that according to an unofficial conversation with an Otechestvo representative, it is possible that the governor will still refuse to seek re-election. In that case the movement will call on citizens to boycott elections. On the same day, at a press conference in Moscow, controversial television anchorman at Russian Public Television Sergei Dorenko refused to confirm or deny reports that he intends to seek the governor's seat in Krasnodar Krai as had been reported by a television station in Sochi. JAC

With presidential elections scheduled in Marii El at the end of this year, the incumbent, Vyacheslav Kislitsyn, is sparing no effort to ensure that voters in the republic are presented only with the "official" profile of the head of the administration. Thus, in mid-August, when "Sovershenno sekretno" published an article about Kislitsyn under the headline "Dictatorship of a Kulak," the president ordered the head of the local department of the Federal Postal Service to seize all copies of the newspaper shipped into the republic on the Moscow-Ioshkar-Ola train, "Resursy Marii El" reported on 24 August. The article accused Kislitsyn of criminal activities, including having links to the Chechen mafia, and of having repeatedly violated federal laws and the Russian Constitution. While the Moscow shipment of the offending edition was impounded -- and later destroyed--some private distributors nonetheless succeeded in acquiring copies and began selling them. However, those sales were halted by, among others, policemen who gave themselves out to be employees of the Criminal Investigation Department. "Guilty" vendors were fined 30 rubles ($1.10), and at least one of their number was detained. According to rumors circulating in Ioshkar-Ola, the local branch of the Federal Security Service was behind those reprisals, "Resursy Marii El" reported. JC

Sakha (Yakutia) declared 27 September, the tenth anniversary of its Declaration of Sovereignty, a public holiday and non-working day in the republic, Interfax reported. Sakha President Mikhail Nikolaev in a public appeal declared that the main step in the development of the republic in the 20th century was the establishment of its status as a sovereign government in the Russian Federation. Nikolaev also noted that "the future of Russia is in the pluralism of state construction of the regions." JAC

Addressing a meeting of the State Council Presidium in Kazan on 3 October, President Shaimiev proposed moving the date of the presidential poll back to March 2001, RFE/RL's Kazan bureau reported. Tatarstan's parliament had voted last month to bring the poll forward to 24 December, but Russian Central Electoral Commission Chairman Aleksandr Veshnyakov criticized that decision as a violation of federal legislation (see "RFE/RL Newsline," 25 September and 2 October 2000). Tatarstan's State Council will meet in special session on 9 October to vote on the date of the ballot. LF

Central Election Commission Chairman Aleksandr Veshnyakov accused Tatarstan's State Council of violating the federal election law by moving the republic's presidential election forward from March 2001 to December 2000, "Kommersant-Daily" reported on 30 September (see "RFE/RL Russian Federation Report," 27 September 2000). Asked whether Tatarstan President Shaimiev should seek a third term, Veshnyakov told reporters the previous day that this is "a very complex problem." In an interview with "Izvestiya" on 29 September, Veshnyakov noted that the possibility of a two-year transition period exists during which "it is possible for regional leaders who have served two terms to participate in regional elections." He also noted that the presidential election law in Tatarstan differs from federal legislation in two other respects: it sets the age restriction for candidates at 30 years, rather than 35, and it requires that a presidential candidate speak both Tatar and Russian (for a copy of the law see JAC

According to "Nezavisimaya gazeta" on 3 October, Prime Minister Nikolai Ganza may have suffered a setback in his bid to win the first-ever presidential elections in Udmurtiya. A successful local enterprise director who enjoys the support of the pro-Kremlin Unity, Ganza has succeeded in giving a significant boost to the republic's economy since taking over the premiership and is considered by some analysts to be a favorite in the 15 October ballot. But Ganza's premiership and presidential bid have been marred by a recent scandal. When two local newspapers published materials suggesting that he had proposed turning the republic into a "nuclear waste dump," thereby causing alarm among local residents, the premier angrily refuted those allegations as constituting libel and disinformation. He also threatened to fire Press and Information Minister Sergei Vasilev. Shortly thereafter, however, several newspapers published the text of a draft amendment to article 50 of the federal law "on the protection of the environment," which was submitted to the State Duma by 11 deputies and two members of the Federation Council, one of whom was Ganza. That draft in effect overturned the ban on importing radioactive waste from abroad and storing it on Russian territory. In an interview with the local newspaper "Den," Ganza tried to smooth over the affair by noting that the question of storing nuclear waste on Russian territory is already six years old and by pointing to the fact that Russia's lucrative contracts with foreign countries on building nuclear plants also provides for nuclear waste to be removed from those countries' territories. He also noted that in his capacity as a local enterprise director, he has done much to ensure that the republic remained free of nuclear waste. Meanwhile, Interfax reported on 2 October that Udmurtiya's Press and Information Minister Vasilev has been fired. According to the government press service, the reason for Vasilev's dismissal was "abuse of official position." No further explanation was given. "Nezavisimaya gazeta" is controlled by Boris Berezovskii. JC

In its issue of 29 September, "Komsomolskaya pravda" argues that while State Council Chairman Aleksandr Volkov appears to have the best administrative and financial resources with which to conduct a campaign for the 15 October presidential elections, his election platform may be to blame if he does not win at the ballot box. Volkov's focus on social policy and promises of a "better life" reflect neither the main problems of the republic nor the interests of its electorate, according to experts cited by "Komsomolskaya pravda." The Moscow daily suggests that those candidates who have the economic know-how necessary to effect "real change" in the industrialized republic, as well as enjoying close ties to the federal center, have the best chance of winning the election. In particular, "Komsomolskaya pravda," which is owned by Vladimir Potanin's Interros Group and LUKoil, points to Ganza's achievements in the economic sphere since he became premier: whereas earlier some 70 percent of all deals in the republic were carried out in barter, now cash transactions account for almost 92 percent of all deals. Ganza appears to have accomplished that feat (not without federal Deputy Prime Minister Ilya Klebanov's assistance) by offering enterprise directors tax breaks and the partial restructuring of debts to the federal budget in return for ensuring that more cash transactions are implemented. JC

Divide And Conquer?

By Julie A. Corwin

President Putin's federation and tax reforms -- whether by design or by default -- appear to be introducing some new divisions and new alliances among Russian regions. Prior to Putin's reforms, speakers in the Federation Council insisted in virtually a single voice that Moscow divide tax revenues evenly between the federal center and the regions. But recently, they have split on this and other issues, with rich regions on one side of the divide and poor ones on the other.

This year, the government has asked for a more than a 50 percent share of tax revenue, insisting that all revenues from the value-added tax be sent to Moscow. In return the government has promised to establish a compensation fund which will even out economic conditions around the country. The donor regions, who contribute more to the budget than they get back in return, have objected vociferously to the plan and have promised to reject the 2001 draft budget.

Krasnoyarsk Krai Governor Aleksandr Lebed, for example, has questioned the wisdom of giving Moscow-based officials more discretion over financial flows to the regions, implying that this is a return to the bad old days of the centrally planned economy. Meanwhile, the head of one donor region, Tyumen Oblast Governor Roketskii lashed out at the economic policies of some recipient regions, criticizing their practice of dispensing privileges such as free transport and subsidizing the prices of certain foods--practices, he said, that even some donor regions cannot afford (see "RFE/RL Russian Federation Report," 19 July and 20 September 2000). But the heads of 16 regions that are highly subsidized told the Federation Council's Budget Committee last week that they will support the budget.

The assault on their revenues has united the leaders of the donor regions despite those leaders' diverging political views. According to "Vremya Novostei" on 28 September, Novgorod Governor Mikhail Prusak, who was once a vehement Putin supporter, is now accusing the government of outright "deceit." "When passing the second part of the Tax Code, we were promised that the 50/50 split in tax revenue distribution would be retained," Prusak said. "Now we are told that the budget takes into account the new Tax Code, which we ourselves passed. The government has conveniently forgotten its own promises."

It is possible that the unity among the donor regions will be short-lived as the government makes a new round of promises -- not only of cash but also of political access. Roketskii, who was selected one of seven members of the presidium of the new State Council, already appears to have tempered his objections, at least judging by the comments of his spokesman in an interview with "The Moscow Times" on 30 September. Sergei Zhuzhgin told the daily that the oblast's budget will suffer significant losses, "but the federal government has good reasons for centralizing funds." He continued "Before, a lot of this money was stolen or disappeared. With such a large amount of money, corruption was endemic." Despite any short-term pain, the tax changes are ultimately a step in the right direction, he said.

Of course, one reason for the oblast's understanding attitude might be that the federal government has promised Tyumen officials that they will be reimbursed for shortfalls in the local budget caused by this year's radical revision of tax flows. On 29 September, St. Petersburg Governor Vladimir Yakovlev received a similar promise -- in writing. According to ITAR-TASS, Yakovlev signed an agreement with Finance Minister Aleksei Kudrin about the repayment of federal debts to St. Petersburg. St. Petersburg, like Tyumen, is another donor region that is facing a huge hole in its local budget where tax revenues used to be.

Since federal budget expenditures were routinely underfulfilled in the past, the federal government presumably has a number of debts to other donor regions. Will they all be repaid across the board or will this be another situation in which the finance ministry officials have discretion to reward and punish regional officials? Sergei Ryzhenkov, an expert on regional politics at the Institute for Humanitarian-Political Research, suggests that politics will continue to play a dominant role: he told "The Moscow Times" that "unfortunately a lot depends on politics, not on what is written in some economic tract about the budget." He then added that different regions come out as favorites as the budget process unravels, and which ones are winners won't be evident for at least another year.

In the meantime, the federal government has managed to weaken the regions as a unified front at a crucial point in the budget process. In the future, if the compensation fund scheme is implemented and some donor regions find themselves with significant shortfalls in their own budgets and pet programs go unfunded, their resentment of both Moscow and recipient regions may grow into a political challenge to the new order under Putin. But this new division between the regions clearly provides the Russian president with some new political possibilities to play one group off against another and thereby move forward his own agenda.