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Russia: Key Province Gets New Governor

By Laura Belin Valerii Shantsev took the oath of office as governor of Nizhnii Novgorod Oblast on 8 August, ending nearly a decade of service as vice mayor of Moscow. The ceremony took place soon after the region's legislature unanimously confirmed Shantsev's nomination at a special session. There was no time to waste; on the same day, the term of outgoing Governor Gennadii Khodyrev expired.

Intense speculation has surrounded the governor's post in Nizhnii Novgorod Oblast since March, when Khodyrev asked President Vladimir Putin for an early vote of confidence in his leadership. The regional parliament has since twice voted to ask Khodyrev to step down and not seek another term. A majority of deputies in the chamber, including some two dozen members of the Unified Russia party, vowed last month that they would refuse to confirm Khodyrev if Putin nominated him for another term.

Although Khodyrev had supporters within the presidential administration, some well-known local figures were also rumored to be under consideration for the job, including Federation Council member Yevgenii Bushmin and Yevgenii Lyulin, the speaker of the regional parliament and a protege of presidential envoy for the Volga Federal District Sergei Kirienko. Under Russian law, Putin was supposed to have nominated a candidate five weeks before Khodyrev's term expired, but that deadline passed without any decision by the president.

Shantsev's name first emerged as a candidate for the governorship a week ago, along with that of another Muscovite, LUKoil Vice President Vadim Vorobev. Although Kirienko backed Vorobev, according to "Vremya novostei" of 3 August, Putin chose Shantsev.

A Strange Choice?

At first glance, it was a strange choice. Shantsev has never lived in Nizhnii Novgorod. A Moscow resident since 1966, he joined the city government in 1994 and was elected vice mayor of Moscow in 1996. He became nationally known shortly before the June 1996 election, when he was burned by a remote-controlled bomb in an assassination attempt.

Shantsev has not tried to pretend that he is well-versed in Nizhnii Novgorod Oblast's political or economic affairs. In fact, after Putin nominated him on 3 August, Shantsev flew to the region's capital, Nizhnii Novgorod, and told local journalists that it was just his third visit to the city. The previous two trips were not related to governance; according to Shantsev, he once visited friends and once attended a hockey match, Channel 1 television reported on 3 August. (Shantsev was commercial director of the Moscow-based Dinamo hockey team in 1991-94.) Shantsev admitted that he has a "weak point" in that he does not know local conditions in Nizhnii Novgorod well, but promised to get up to speed quickly, TV-Center reported on 3 August. He also told journalists that he intends to appoint local cadres to his administration.

Shantsev once openly expressed ambitions to succeed Yurii Luzhkov as mayor of Moscow, but he appears to be ready to work in Nizhnii Novgorod Oblast for a long time. He announced on 4 August that he will need 10 years, or two full terms as governor, to solve the oblast's problems, Ekho Moskvy reported. quoted Shantsev as saying on 3 August that regions with economic resources comparable to Nizhnii Novgorod's have standards of living that are "1 1/2 times higher than in Nizhnii Novgorod Oblast, [and] we must understand the reasons for this."

Challenges Ahead

The new governor will have plenty of work to do. Nizhnii Novgorod was considered to be at the vanguard of Russian economic reform in the 1990s, but it has languished more recently, with incomes and wages below the national average. However, the region is a major industrial center, containing several important defense-industry facilities. Russia's leading nuclear-weapons research facility, Arzamas-16, is located in the oblast city of Sarov.

Shantsev has already promised to "develop the real sector of the economy and reduce bureaucratic barriers" in order to solve the problem of low average wages, which he described as the main problem facing the oblast, "Kommersant-Daily" reported on 5 August. Given Shantsev's background, greater participation in the local economy by Moscow-based businesses will likely be an integral part of this plan.

Boris Nemtsov, who was governor of Nizhnii Novgorod Oblast from late 1991 until early 1997 and is now a member of the Union of Rightists Forces (SPS) political council, expressed high hopes for Shantsev, not only because of his extensive managerial experience and "deep knowledge of the corridors of power in the capital," but because "he will succeed in attracting much more investment into the Nizhnii Novgorod Oblast's economy," reported on 3 August.

Some people have taken a more negative view of this possible development. According to RTR state television on 3 August, local businesspeople have already expressed concern that they will not be able to compete with the influx of corporate money from Moscow that Shantsev is likely to bring to Nizhnii Novgorod. Aleksandr Prudnik, a senior associate at the Nizhnii Novgorod branch of the Russian Academy of Sciences' Sociology Institute, predicted that Shantsev's arrival would turn Nizhnii Novgorod into an "affiliate" of Moscow-based businesses, "Novye izvestiya" reported on 3 August. While such businesses have controlled the "the main economic levers" in the region "de facto" for some time, they would now be able to do so "de jure," Prudnik added, making the region "strictly accountable to the Kremlin."
Putin is said to have killed two birds with one stone, strengthening the Kremlin's hand in the capital as well as in Nizhnii Novgorod.

If members of the local political elite share such worries, they have kept them to themselves. After meeting with Shantsev during his visit to Nizhnii Novgorod on 3 and 4 August, influential politicians had nothing but praise for the man from Moscow. Legislature speaker Lyulin emerged from his meeting saying he would recommend that lawmakers confirm Shantsev as governor. Nizhnii Novgorod Mayor Vadim Bulavinov and the rectors of local institutes of higher education also expressed a high opinion of Shantsev after meeting with him, "Kommersant-Daily" reported on 5 August. Shantsev scored points with the regional political council of Unified Russia on 4 August, when he promised to assist that party in municipal elections scheduled for October.

Kirienko also joined the chorus supporting Shantsev, even though Putin passed over other candidates he had reportedly backed for the governor's post. Kirienko described Shantsev as "one of the most effective managers," who has a "brilliant organizational apparatus," REN-TV reported on 3 August. The next day, Kirienko termed Shantsev a "high-level professional" and asserted that "the president's choice is right, perhaps even ideal," according to on 7 August.

Those words are ironic, in light of Shantsev's close association with Luzhkov, whom Kirienko sharply criticized during his own unsuccessful campaign for Moscow mayor in 1999. In fact, an unnamed source close to Kirienko has already predicted that relations between the presidential envoy and the new governor will be difficult. "Kommersant-Daily" of 3 August quoted the source as saying that Shantsev is unlikely to have forgotten Kirienko's "aggressive campaign" against Luzhkov in 1999.

The Kremlin's Moscow Strategy

Kirienko's positive take on Shantsev may stem from the expectation that his arrival in Nizhnii Novgorod will severely weaken Luzhkov's grip on Moscow. This angle has dominated much of the political commentary about Putin's choice of Shantsev in the Moscow-based press. Shantsev has not only been the mayor's longtime right-hand man, but he was also viewed as a possible successor to Luzhkov, who has said he will not seek another term when his current term ends in December 2007.

"Vremya novostei" on 3 August interpreted Shantsev's nomination as a "strong warning" to Luzhkov, who has tangled with federal government ministers recently. The precedent of nominating someone from outside the region suggests that Putin might tap a St. Petersburg native, such as presidential envoy to the Central Federal District Georgii Poltavchenko, to replace Luzhkov.

For this reason, "Kommersant-Daily" suggested on 3 August that moving Shantsev to Nizhnii Novgorod marks "the end of the Luzhkov era" and will prove more significant for Moscow than for Nizhnii Novgorod itself. Similar analysis has appeared in "Izvestiya," "Novye izvestiya" and "Nezavisimaya gazeta": Putin is said to have killed two birds with one stone, strengthening the Kremlin's hand in the capital as well as in Nizhnii Novgorod.

The policy implications of Shantsev's departure from Moscow could also be substantial. Sergei Mitrokhin, the leader of the Yabloko party's Moscow branch, issued an open letter to Shantsev on 4 August urging him not to accept the job in Nizhnii Novgorod, reported. Mitrokhin's letter warned that vacating the post of vice mayor would incur "negative consequences for Moscow," since Shantsev symbolizes the continuity of Luzhkov's policy of strengthening the city's social-benefits system. Mitrokhin expressed concern that if someone from outside the capital is picked to replace Luzhkov in 2007, the new mayor might carry out federal policies of abolishing certain social benefits and forcing people to pay the full costs of education and health care.

For his part, Luzhkov has put on a brave face. His administration had no immediate comment on Shantsev's nomination. But the mayor told Channel One television on 7 August that Shantsev's nomination had been discussed with him and that he supported it. He also predicted that Shantsev would do better than previous leaders in dealing with the economic and social problems of Nizhnii Novgorod Oblast.

Outgoing Governor Khodyrev's future has yet to be determined. RIA-Novosti reported on 3 August that he had already turned down offers of two jobs: assistant to Kirienko (probably not a serious offer, given that Kirienko was a patron of Khodyrev's bitter rival, Lyulin), and member of the Federation Council.

See also:

Putin Takes Control Of The Status Quo Through Gubernatorial Appointments

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