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Russia Report: October 6, 1999

6 October 1999, Volume 1, Number 32
Former Prime Minister Viktor Chernomyrdin, who also heads Our Home Is Russia (NDR), appeared to nip in the bud any prospects of a union between the NDR and the interregional movement Unity with his remarks to reporters on 4 October. He said that the Unity "does not have ideology whatsoever. [It] has only [media magnate] Boris Berezovskii." He added that the NDR could not "accept the conditions" for an alliance that Unity offered. In an interview with "Kommersant-Daily" on 2 October, Unity head Sergei Shoigu denied that Berezovskii played a role in the movement's creation and insisted the original authors of the idea were himself, the presidents of Ingushetia, Tatarstan, and Bashkortostan, and the governor of Irkutsk. Chernomyrdin's comments followed the release of a statement by Unity that it will not form an alliance with NDR because the latter group is imposing unacceptable preconditions. According to the statement, Unity has two principles that it cannot relinquish: it must fight for the maximum number of regional representatives in the State Duma and it cannot follow any ideology. JAC

As of 4 October, Unity had managed to sign up seven small organizations: the Movement for Supporting Independent Deputies, the All-Russian Union for Supporting and Promoting Small Businesses, the three movements Prosperity, My Family, and Generation of Freedom, as well as the People's Patriotic and Russian Christian-Democratic Parties, according to "Vremya MN" of that day. A newspaper close to Moscow Mayor Yurii Luzhkov, "Moskovskii komsomolets," reported on 29 September that the Kremlin is using a variety of measures to pressure the NDR to join the newly formed Unity movement. According to the daily, Kremlin officials threatened a blockade of leading television channels and a cut in financing to regions whose governors are in the NDR and are resisting the alliance. JAC

The web site has published a table of the political affiliations of a selected number of governors. According to the table, the Group of 39 regional leaders who signed the original appeal that led to later formation of Unity included the presidents of the republics of Altai, Buryatia, Komi, Daghestan, Marii El, Sakha, Tuva, Khakassia, and Chuvashia as well as the governors of Primorskii, Stavropol, Khabarovsk krais; Arkhangelsk, Astrakhan, Belgorod, Ivanov, Kaliningrad, Kamchatka, Kemerovo, Kursk, Magadan, Murmansk, Novgorod, Omsk, Orenburg, Penza, Perm, Rostov, Saratov, Sakhalin, Sverdlovsk, Smolensk, Tver, Tomsk, and Chita Oblasts; and Koryak, Nenets, Taimyr, Chukotka, and Evenk Autonomous Okrugs. However, "Sovetskaya Rossiya" claimed on 2 October that reports that three governors who belong to the Communist Party's For Victory election bloc signed the appeal that launched Unity are inaccurate. It said that reports by "Nezavisimaya gazeta" and other publications that the governors of Stavropol, Kemerovo, and Tula signed the appeal of 39 were designed to create a split in the Communist Party. In an interview with "Segodnya" on 5 October, Novgorod Governor Mikhail Prusak said that he had no idea that a new political bloc was being formed when he agreed to add his signature to the statement. According to "Vremya MN" on 4 October, among the several regional leaders confirming their participation in Unity at its congress on 3 October were the governors of Omsk, Kursk, and Tver Oblasts, Primorskii Krai, and Chukotka Autonomous Okrug as well as the president of Kalmykia. JAC

"Izvestiya" reported on 29 September that 17 regions in Russia have introduced measures restricting the export of grain beyond their administrative borders, according to data from the Agriculture Ministry. While each region's restrictions are different, they all violate federal law and force local farmers to sell their grain cheaply, according to the daily. For example, in Kursk Oblast, the regional fund pays local farmers 2,000-2,500 rubles ($78-$98) a ton for wheat, compared with the current world price of $110-120 a ton. A similar situation is occurring in Novosibirsk, Voronezh, and Bryansk Oblasts and the Republic of Buryatia. The imposition of grain embargoes can also disrupt trade in other goods. According to the daily, when Krasnodar violated an earlier agreement to supply Bashkortostan with wheat, Bashkortostan responded by stopping its fuel exports to Krasnodar, which then experienced a gasoline crisis. Meanwhile, RFE/RL's correspondent in Tambov reported on 25 September that local law enforcement officials estimate that 50,000 tons of higher quality grain were sold outside of the border, despite a ban on such exports. Local residents have witnessed a steep rise in the price of bread since the spring: A loaf of black bread that cost only 80 kopeks in April now costs 3 rubles and 80 kopeks. According to the local statistical agency, a family of four is paying some 17.60 rubles a day for bread or more than 500 rubles a month, which is an average month's wage in the region. In the Jewish Autonomous Oblast, the average price of a 650-gram loaf of bread jumped 24 percent in one week, from 4 rubles 50 kopeks to 5 rubles and 60 kopeks. JAC

Following a discussion with Russian President Boris Yeltsin on 4 October, Prime Minister Vladimir Putin reported that the two men discussed, among other things, regions that have "clamped restrictions on the movement of commodities, primarily food products" Putin noted that such actions "harm not only the economic space of Russia but also local producers, who are unable to take their goods to other regions," according to ITAR-TASS. Putin said that Yeltsin asked the government "to analyze the situation and to take corresponding measures." On 1 October, Putin announced that a national commission will be established to coordinate efforts of Russian regions to keep current on the payments to the Pension Fund. According to Putin, some regions continue to delay payments; Kemerovo Oblast, for example, owes 8 billion rubles ($314 million). JAC

Moody's Investors Service concludes in a report issued on 29 September that the credit outlook for Russia's regions is bleak: Of the 11 regions they rate, only three, the city of St. Petersburg, Krasnoyarsk Krai, and Samara Oblast, have not restructured or defaulted on their debts. Moody's predicts that one region, Nizhnii Novgorod Oblast, will be unable to continue to service its Eurobond debt, while the cities of St. Petersburg and Moscow will face enormous pressure to make Eurobond repayments over the next two years. Nizhnii Novgorod failed to make an interest payment to its Eurobond-holders that had been due on 3 October (see below). Samara Oblast is one region whose economy continues to function comparatively well and is posting a small budget surplus this year. Moody's gives Samara, the cities of Moscow and St. Petersburg, and Yamal-Nenets Autonomous Okrug a rating of Caa1 on its long-term foreign currency debt. Sverdlovsk, Nizhnii Novgorod, and Moscow Oblasts, and the Republics of Komi and Tatarstan received a lower rating of Caa3, while the republic of Sakha, which witnessed a large drop in federal government subsidies in 1998, earned a Ca. Moody's concludes that "any improvement at the federal level would lead to an improvement in the credit outlook of the comparatively stronger regions." JAC

Chelyabinsk Governor Petr Sumin has proposed setting up a "Urals" faction in the next State Duma, Interfax-Eurasia reported on 28 September. According to Sumin, who was speaking at a session in Chelyabinsk of the Council of the Urals Economic Association, such a group could bring together up to 43 parliamentary deputies elected in single-mandate constituencies in the regions surrounding the Urals. Sverdlovsk Governor Eduard Rossel, who is also the president of the association, remarked that the Urals regions have paid a total of some 8 billion rubles to the center this year and that next year the center's "appetite" will be even bigger. Since the association opposes any such increase, it will seek to work closely with Duma deputies from the Urals, he added. JC

The former Mayor of Birobidzan Viktor Bolotnov announced his candidacy for the State Duma in the single mandate district in the Jewish Autonomous Oblast, Interfax-Eurasia reported on 29 September. Bolotnov was arrested last June for allegedly taking bribes and is now residing in a prison cell. Provided he gathers the necessary number of signatures to support his candidacy, Bolotnov will face six other candidates. JAC

Local authorities failed to make an interest payment to Nizhnii Novgorod Eurobond-holders that had been due on 3 October, Interfax-Afi reported the following day. A total of $4.375 million was to have been paid out on that date. Reuters reported on 30 September that bond-holders had been expected to vote on the first part of the oblast's rescheduling proposal, which would delay this month's interest payment for two months, at a 28 September meeting in London. Owing to the lack of a quorum, however, that meeting was adjourned until 13 October--the last possible date (following a 10-day grace period) on which the payment can be made. An oblast representative told Interfax-Afi that Nizhnii Novgorod does not have the money to pay the interest on the bond and that if creditors do not agree to a two-month postponement, there will be a default. The oblast's rescheduling proposal foresees extending the term of the bond by four years, until 2006, and putting all further interest payments on hold for three years. JC

The Primorskii Krai legislative assembly adopted a new law on gubernatorial elections on 28 September, Interfax-Eurasia reported. The law establishes that if the candidate with the most votes does not have at least 35 percent of the total votes cast, then a second round will be held. Governor Yevgenii Nazdratenko had vetoed an earlier law that required two rounds in any instance. The law also set the election to occur at the same time as State Duma elections. JAC

Residents of the apartment house in which the Federal Security Service (FSB) planted a dummy bomb as a part of a security training exercise are to take the FSB to court over the incident, "Kommersant-Daily" reported on 29 September. According to the newspaper, the city authorities support the residents in that venture, despite the fact that the FSB has assumed full responsibility for the incident and apologized for any inconvenience. JC

Yurii Shutov, a member of the St. Petersburg Legislative Assembly who has been in custody since February on suspicion of arranging several high-profile contract killings, is to run in the 19 December State Duma elections from St. Petersburg District No. 209. Both former Prime Minister Sergei Stepashin and Duma speaker Gennadii Seleznev have already announced their intention to compete in that district. Shutov is suspected of having been behind the murder of, among others, Dmitrii Filipov, the board chairman of both Bank Menatep St. Petersburg and the Tobolsk Petrochemical Plant. Interfax-Eurasia reported on 1 October that his candidacy is being supported by the nationalist Russian All-People's Union of Sergei Baburin. "The St. Petersburg Times" reported on 5 October that Dmitrii Yakubovskii, a Moscow lawyer who spent four years in jail for stealing ancient books and manuscripts from the Russian National Library, will also run in District No. 209. The newspaper cites analysts as suggesting that the candidacies of Filipov and Yakubovskii are an attempt by Governor Vladimir Yakovlev to take votes away from Stepashin, who is regarded as the favorite in that race. JC

Vyacheslav Pozgalev has announced he will resign his post as governor on 18 December--one day before gubernatorial elections and the State Duma ballot are scheduled to take place, "Izvestiya" reported on 29 September. The rationale for that move is a legal technicality. The gubernatorial elections have been brought forward from 6 October 2000, but the law stipulates that an early vote may not be held earlier than nine months before the incumbent's term in office expires. Since the 19 December ballot will exceed this stipulation by 17 days, Pozgalev is to leave his post on the eve of voting and run in the elections as a private individual. JC

VOLGOGRAD: COMMUNISTS LOSE GROUND IN CITY COUNCIL BALLOT. Incumbent Volgograd Mayor Yurii Chekhov, who is also head of the local branch of Fatherland (Otechestvo), has been re-elected, gaining some 38 percent of the vote in the 3 October mayoral ballot, Russian media reported. Yevgenii Ishchenko, a 26-year-old State Duma deputy, garnered 29 percent support, beating into third place the Communist Party of the Russian Federation candidate, Sergei Agaptsov (20 percent). Former Governor Ivan Shabunin won only 6 percent of the vote. In elections to the city council, which took place the same day, the Communists saw their share of seats reduced by half, thereby losing their 17-seat majority in the 24-strong council, "Izvestiya" reported on 5 October. According to the newspaper, a large group of independents have won seats in the municipal legislature. JC
by Jan Cleave

Residents of Russia's Far East tend to be non-conformist and "anti-nomenklatura" in their voting preferences. Above all, those characteristics have benefited parties such as Grigorii Yavlinskii's Yabloko and Vladimir Zhirinovskii's Liberal Democratic Party of Russia (LDPR).

And because voters in the Far East tend to favor not separatism but the preservation of Russia's integrity and a strong center, individuals such as Moscow Mayor Yurii Luzhkov could find a strong resonance in that part of the country.

These are the conclusions of a study by Sergei Chugrov of the Moscow Institute for the World Economy and International Relations that was published last month by the German Institute for East European and International Studies.

While Chugrov stresses that his analysis is not intended to offer a prognosis for the State Duma elections scheduled for December, it nonetheless highlights voting tendencies during parliamentary elections this decade that may also be reflected in the upcoming ballot.

Chugrov recalls how in the 1993 parliamentary vote observers were surprised both by the success of the LDPR and by the fact that in some Far Eastern regions support for the Communist Party of the Russian Federation (KPRF) was half the national average, while that for Yabloko was double what the party achieved nationwide. In European Russia, on the other hand, the Communists received mainly high percentages of the vote and Yabloko's results were "significantly more modest." Only the LDPR registered comparatively uniform results in most regions throughout the federation.

Two years later, in the 1995 ballot to the State Duma, voter support in the Far East for the KPRF and the ruling Our Home Is Russia (NDR) tended to be below the mean for Russia as a whole, while backing for Yabloko and the LDPR was largely above the national average. Yavlinskii's party scored its biggest success in Kamchatka, gaining 20.8 percent of the vote (compared with 6.8 percent nationwide) to beat out all other parties. And it was no coincidence, according to Chugrov, that the LDPR again did well in Magadan Oblast and Primorskii Krai (garnering 22.5 percent and 20.5 percent, respectively, compared with 11.1 percent nationwide), while the KPRF and the NDR achieved results below their national averages.

While noting that there are exceptions to these voting patterns (namely Amur Oblast and the Republic of Sakha), Chugrov asserts that a significant proportion of voters in the Far East are against the nomenklatura, whether old or "new": they oppose the Communists as the old, compromised nomenklatura; in 1993, they voted against Russia's Democratic Choice; and in 1995, they voted against the NDR. Those voters, he argues, tend to prefer parties that have not been in power and are therefore considered not to belong to the nomenklatura.

As Chugrov points out, economic reasons inevitably play a role in a party's--and/or politician's--showing in any given region: Yavlinskii's success in Kamchatka can be attributed to that region's dynamically growing economy, while the nationalist Zhirinovskii could be expected to do well in a less-developed region such as Magadan.

But Chugrov argues that non-conformist voting tendencies in the Far East cannot be explained by economic reasons alone; rather, those tendencies are also rooted in historical and socio-political factors. The area, he notes, is one that came to be inhabited by Cossacks, hunters, traders, the banished, people avoiding military service, and Orthodox believers fleeing religious persecution--a population that at first glance appears heterogeneous but, bound by common interests, offers a "unified protest and dissident potential." It is also an area, he continues, where serfdom did not exist and where the main geographical factor is the enormous distance from the center; combined with the fact that the region lies at a "crossroads of world cultures," that distance made it difficult for an official ideology to take root. And during the Soviet period, non-conformist and protest inclinations were strengthened by the hundreds of thousands who were banished to the area.

The non-conformism of the Far East stands in contrast to the "more traditional and conformist way of thinking" of a large part of the population of European Russia, Chugrov asserts. At the same time, he notes that the Far East is not striving to secede: according to Chugrov, the "muffled" threats of secession frequently heard from the area are to be viewed, above all, as political statements of discontent intended to persuade Moscow to "free up money." Like many other federation subjects, he continues, the Far Eastern regions want to be able to dispose of tax revenues as they deem fit, receive subsidies from the center, and simultaneously maintain the right to act as they please.

Moreover, Chugrov argues, voters in the Far East are wary of the influx of Chinese migrants into the region and want a strong center that will protect them from "outside threats" as well as offer material assistance. Within this context, Chugrov considers the popularity of Zhirinovskii in the Far East--where his support in the 1996 presidential elections was roughly double the backing he received nationwide--to be attributable less to his opposition to the authorities and more to his program's emphasis on Russian unity and a strong center. And insofar as support for Zhirinovskii can be seen as primarily a vote against separatism, "a man like Luzhkov with his open protest against Yeltsin and...with his slogans about the unity of the country" could also attract the Far Eastern voter, according to Chugrov.