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Russia Report: August 21, 2003

21 August 2003, Volume 3, Number 33
Although the government decided to delay any significant reforms of the housing and communal-services sectors until after the State Duma and presidential elections in December, the problems of that sector might not be so easily shoved into a dark corner. Two events brought new attention to that sector over the past week: the blackouts in North America and reports that Unified Energy Systems (EES) head Anatolii Chubais will occupy the number three spot on the Union of Rightist Forces (SPS) party list.

With a large swathe of North America in prolonged darkness, reporters asked Russian officials whether the same thing could happen in their country. Federal Energy Commission Chairman Georgii Kutovoi told Radio Mayak that the design and operation of the Russian system is fundamentally different than in the U.S., and he ruled out a disruption of electricity supplies that would affect such a large area. According to Kutovoi, Russian systems operators are not afraid to cut off consumers in one area in case of a sudden supply shortage in order to keep the larger system up and running. Similarly, local electricity suppliers have not been afraid to cut off entire cities and towns when energy bills have gone unpaid for months if not years.

As the CEO of EES, the company that oversees the entire network of local electricity suppliers, Chubais has been a lightning rod for criticism from disgruntled officials and consumers. Add to this the long-simmering resentment of Chubais's handling of large-scale privatizations in the 1990s during stints as head of the State Property Committee and as first deputy prime minister and it is little wonder that a recent poll conducted by the Public Opinion Foundation found that 51 percent of respondents said that they had a negative opinion of Chubais.

However, the fate of Chubais's party, the SPS, is unlikely to be a central issue in the upcoming campaign season. Even the most optimistic forecasts never projected the party getting more than 10 percent of the total vote. And, by December, if not earlier, most Russian voters will likely hardly give a second thought to the possibility of American-style blackouts. But the problems of the public-utilities sector will likely reassert itself as a campaign issue for a variety of reasons. One, voters care very much about whether they have the basics of life such as running water and electricity, and many are dissatisfied with the current levels of service being provided. And, two, there are any number of points along the supply chain where blame can be assigned and political points earned.

A poll conducted by ROMIR from 7 to 11 August of 1,500 Russians found that 54 percent of respondents were unhappy with the quality of their public-utility services, while another 30 percent would characterize the state of the services as "appalling," "Vedomosti" reported on 15 August. Only 14 percent of respondents approve of the government's intention to allow private businesses to participate in the communal-housing and public-utilities sectors. Despite their disgruntlement, the respondents do not appear to favor radical solutions. Half of the respondents in the survey do not support the creation by EES and Gazprom and other enterprises of the new company Russian Communal Systems (RKS), which will take over housing-service functions such as ensuring water, power, heat, and gas supplies, as well as television and radio access, garbage collection, and general maintenance.

When Chubais first announced the creation of RKS, a number of observers commented that he was taking up the issuing of reforming the housing and communal-services sectors for political reasons. Acknowledging these suspicions, Chubais joked during a visit to Krasnoyarsk last April, "The next [general] election is in December, by the way. And December is winter, in case someone has forgotten. Do you need someone to vote for you? We will support you...I promise that every transformer will vote for Unified Russia" (see "RFE/RL Newsline," 14 April 2003). In his more serious moments, Chubais has denied that EES subsidiaries' cutoffs of supplies of electricity or heat in the regions has had a political subtext.

While Chubais might really be above playing politics with supplies of heat and light during winter months, there are any number of local politicians in the regions who disagree. And they are more than willing to cry "politics" when the lights flicker, forgetting all about compliance or lack thereof with written agreements concluded with local suppliers. In fact, it is not impossible to imagine that they might throw the switch themselves and they could blame Chubais later. And if Prosecutor-General Vladimir Ustinov keeps his promise on 18 August to follow closely the situation in the housing and communal-services sectors and to use his powers to defend the rights of citizens, then local prosecutors' offices could become an additional tool to be deployed at election time. According to Ustinov, during the last heating season, more than 70 criminal cases were launched across the country connected to alleged cases of cutting off electricity to hospitals or other sources of life-sustaining equipment. With the ongoing legal assault on oil giant Yukos and Ustinov's promise, local prosecutors might feel increasingly emboldened to join the political fray with special vigor.

The voters could find themselves caught in the middle of these struggles. And with the local and national media hampered by new legislation to limit their coverage of elections, residents might be able to read little more than news of what they can observe with their own eyes -- that they have no water, no light, or no heat (see "RFE/RL Media Matters," 18 August 2003). They might not have the vital facts regarding the political-party affiliation of the head of WhatiskEnergo or about when or how local officials failed to keep a pledge to pay local energy suppliers.

Meanwhile, a village called Vyshki in Ulyanovsk Oblast has been without running water for more than a month -- during the summer heat and the height of harvest season, "Simbirskii kurer," No. 119, reported. But villagers appear not to be putting their faith in their local officials, prosecutors, governor, Chubais, or even President Vladimir Putin. One elderly resident told the newspaper: "Our only hope is God. Yesterday I prayed all day that it would rain." (Julie A. Corwin)

Over the past two years, the number of rich people in Russia has increased by a factor of 2 1/2, according to annual research conducted by KOMKON, "Izvestiya" reported on 19 August. At the same time, the number of people living in extreme poverty has fallen by 50 percent, while in the regions it has dropped by more than 30 percent. According to sociologists at the firm, the number of people in Moscow who can afford to buy their own apartments has risen from 1 percent to almost 3 percent in 2003. Previously, one in 10 could afford to buy new refrigerators and washing machines, and now the ratio is one in five, according to the daily. However, 38.3 percent of Muscovites spend all of their wages on food and clothing, while the nationwide average is 38.5 percent. This is the only category in which Muscovites and the rest of the country are in sync, according to the daily. JAC

Russia's grain harvest as of 1 August was 71.2 percent lower than the amount produced the previous year by the same day, Interfax reported, citing the State Statistics Committee. Crop production has declined in many regions. In Krasnodar Krai, production is 3.26 tons per hectare, compared with 4.78 tons last year. In Stavropol Krai, the rate has dipped to 2.45 tons per hectare, compared with 3.4 tons last year. According to Saratov television, the harvest was more than 40 percent less than expected in seven raions in the oblast, Regnum reported. JAC

Voronezh Oblast Governor Vladimir Kulakov has accused farmers of understating their final yields in order to sell more grain at higher prices later, reported. According to statistics gathered by his staff, the grain harvest is only a little less than last year, but is "decent" just the same. According to Kulakov, the black earth in the oblast is unique, and the low levels of crop productivity being recorded simply cannot be correct. According to, the price of bread in the oblast has risen by 20 percent over an unspecified time period. Before being elected governor in 2000, Kulakov was the head of the oblast's FSB directorate. JAC

Amur Oblast officials and their Chinese counterparts agreed in the Chinese city of Heihe to take measures to boost visa-free tourism, ITAR-TASS reported on 17 August. Chinese officials agreed to issue new foreign passports over the next 20 days that are designed only for border-region tourism. The holders of these special passports will not be able to travel outside of Amur Oblast. On 15 August, Federation Council representative for the Chukotka Autonomous Okrug Aleksandr Nazarov told Ekho Moskvy that Russia "will have to attract Chinese manpower to the [Russian] Far East." He explained that many plots of land have been left abandoned following the collapse of the Soviet Union, and there is shortage of manpower there today. "We will have to use [migrant] labor -- there is no way out," he concluded. On the same day, Xinhua news agency in Beijing quoted the Chinese Foreign Ministry as warning Chinese travelers to Russia to watch out for their personal security, bring a minimal amount of cash and valuables, and not to go to remote areas at night. JAC

Interior Minister Boris Gryzlov has sent a warning to his subordinate in Bashkortostan, republican Interior Minister Lieutenant General Rafail Divaev, saying that Divaev is not performing his job satisfactorily, RFE/RL's Tatar-Bashkir Service reported on 11 August, citing and RosBalt. Gryzlov's letter complains about the "serious neglect of duties in organizing the management of ministry bodies and departments" and "the declining influence of the republican ministry in the republic's regions" that was revealed in a recent probe of the Bashkir ministry by the federal Interior Ministry. Gryzlov also charges that Divaev and his deputies "directed their activities at fulfilling orders from the republican authorities that often contradict federal legislation." As a result, the ministry became "involved in settling business and political disputes between regional and federal bodies." JAC

Bashkir Interior Minister Divaev, 52, has headed the ministry since February 1996. Gryzlov ordered him to address the problems with his ministry before October, RFE/RL's Tatar-Bashkir Service reported on 11 August. In June, Tax Minister Gennadii Bukaev appointed a new tax minister for the republic, Aleksandr Veremeenko, who is one of Bashkir President Murtaza Rakhimov's chief political opponents (see "RFE/RL Newsline," 30 June 2003). On 7 December, the republic will hold a presidential election simultaneously with the State Duma ballot. JAC

Krasnoyarsk Krai Election Commission Chairwoman Lyudmila Timofeeva told Regnum on 15 August that she fears that voter turnout for the 7 December State Duma election could be low in the krai because of the "black public relations" during the gubernatorial election last year. According to Timofeeva, during that election the mass media divided into two warring camps. Meanwhile, in the city of Norilsk in neighboring Taimyr Autonomous Okrug, "Russkii kurer" reported on 15 August that the 26 October repeat mayoral election promises to be divisive. According to the daily, acting Mayor Lev Kuznetsov, who was formerly a right-hand man to Krasnoyarsk Krai Governor Aleksandr Khloponin, has proven to be a talented administrator, and local political analysts believe his chances of being elected are high, if he decides to run. At the same time, the winner of the first round of mayoral elections last April, trade union leader Valerii Melnikov, remains popular. "In the eyes of Norilsk residents, he remains the 'people's avenger,' who battles with oligarchs and was ill-served during the last elections," the newspaper wrote. JAC

The Communist Party in Novosibirsk Oblast has decided to back Vestfalika shoe factory head Mikhail Titov as its candidate in the 7 December gubernatorial election, Regnum reported on 18 August, citing "Novaya Sibir." According to the newspaper, the party's oblast branch made the decision, but did not publicize it widely, causing some local politicians and analysts to speculate about the lack of fanfare. However, Titov told a recent press conference in Novosibirsk that Obkom First Secretary Viktor Kuznetsov personally suggested that Titov run. Titov added that rural residents in the oblast "categorically do not accept the policies of the current oblast leadership." Last March, the oblast branch of the SPS announced that it will back incumbent Governor Viktor Tolokonskii, reported on 11 March. At the time, State Duma Deputy Aleksandr Fomin (SPS) said Tolokonskii had strengthened his ties with Moscow over the past few years, and that the Kremlin will not back another candidate in the election. JAC

The director of an initiative group to create a new regional public movement called the Union to Save Pskov Krai, Yelena Pokkas, told reporters in Pskov on 12 August that "the merger of Pskov Oblast with other oblasts into one federation subject has no economic basis and does not correspond to the interests of the territory," Regnum reported. She added that "the federal authorities treat the oblast disdainfully, and for its 1,100th anniversary fewer resources were earmarked than the Railways Ministry sent for the repair of an old railway station." According to Pokkas, the new union will hold its first public action on the border of Pskov and Leningrad oblasts on 23 August. JAC

St. Petersburg Deputy Governor Anna Markova, a candidate in the city's 17 September gubernatorial election, told RosBalt on 14 August that reports she recently participated in a local meeting of skinheads are "acts of black public relations directed against her." She said she only learned of the meeting through reporters and that she has no connection to the gathering. Also on 14 August, two young men with hammers broke into the St. Petersburg headquarters of the human rights organization Memorial, Ekho Moskvy reported. The young men reportedly identified themselves members of a society in support of Colonel Yurii Budanov, a Russian army officer who was recently convicted of murdering a young Chechen woman (see "RFE/RL Newsline," 28 July 2003). They beat up three Memorial activists and stole several computers. Meanwhile, "The Moscow Times" reported the same day that the Federal Security Service (FSB) has stymied the St. Petersburg group's efforts to prove that during the Stalin terror campaign security services dumped the bodies of up to 30,000 victims at a site in Leningrad Oblast (see "RFE/RL Newsline," 1 October 2002). JAC

SWITCHING: The Fatherland-All Russia (OVR) faction in the State Duma has changed its name to Fatherland-Unified Russia (OER), first deputy faction leader Konstantin Kosachev told reporters on 15 August. Kosachev also announced that three deputies from the People's Deputy group in the Duma -- Vasilii Galyushkin, Rafael Gimalov, and Lev Yarkin -- will be joining the OER faction, RosBalt reported. The OER faction now has 57 members, making it the third-largest grouping in the Duma.

22 August: Campaign officially opens for St. Petersburg governor race

26 August: Russian government due to present draft 2004 budget to the Duma

29 August: Auction will take place for the 23.35 percent stake in Peterburg television now owned by Leningrad Oblast

29-31 August: President Putin will visit Italy

31 August: Second round of presidential election in Karachai-Cherkessia will be held

Late August: Campaign for 7 December State Duma elections officially begins

Late August: Six-way talks about North Korea's nuclear program will take place in Beijing

September: President Vladimir Putin will address a UN General Assembly session in New York and will visit the presidential retreat Camp David in the United States for talks with U.S. President George W. Bush

September: Second Russian-U.S. Energy Summit will take place in Moscow

September: Saudi Arabian Prince Abdullah will visit Russia

1 September: State Duma's fall session opens

6 September: State Duma Speaker Gennadii Seleznev's Party of Russia's Rebirth will hold a congress in Moscow

6-7 September: Yabloko party will hold congress in Moscow

7 September: Sverdlovsk, Novgorod, and Omsk oblasts will hold gubernatorial elections

7 September: Murmansk will hold mayoral election

7 September: Moscow-based exhibition of Federal Security Service archival materials relating to the 1922 expulsion of the intelligentsia will close

8 September: Union of Rightist Forces will hold congress in Moscow

9 September: First plenary session in State Duma

10 September: Special party congress for Communist Party of Russia

Second half of September: CIS summit in Yalta

14 September: Volgograd will hold mayoral elections

19 September: Mikhail Gorbachev's Social-Democratic Party of Russia will hold a party congress in Moscow

21 September: St. Petersburg and Leningrad and Tomsk oblasts will hold gubernatorial elections

23 September: The first European-Pacific Ocean Conference will take place in Vladivostok devoted to improving dialogue among intellectuals in European countries and the Pacific region

24 September: Federation Council will hold its opening session after summer recess

29 September-3 October: The Third World Conference on Climate Change will take place in Moscow

30 September-2 October: The Second All-Russian Sociological Congress will take place at Moscow State University

October: Second Civic Forum will be held, according to presidential Human Rights Commission Chairwoman Pamfilova

1 October: Thirty-three percent salary hike for budget-sector workers will go into effect, pending the passage of legislation being revised by a conciliation commission

1 October:Monthly minimum wage to be raised to 600 rubles ($19.80), according to Federation Council Sergei Mironov

October: President Putin and German Chancellor Gerhard Schroeder will meet in Yekaterinburg

5 October: Presidential election to be held in Chechnya

6 October: British court to consider Russia's request to extradite tycoon Boris Berezovskii

9 October: The commission for administrative reforms chaired by Deputy Prime Minister Boris Aleshin will submit its proposals to the government, according to "Izvestiya" on 14 August

23-26 October: First anniversary of the Moscow-theater hostage crisis

25-26 October: Russian Forum on the development of civil society will be held in Nizhnii Novgorod

26 October: Repeat mayoral elections will be held in Norilsk

29 October: 85th anniversary of the founding of the Komsomol

5 November: President Putin will visit Italy for the EU-Russia summit in Rome

19 November: Deadline for investigators working on the case against Yukos security official Aleksei Pichugin

7 December: Bashkortostan will hold presidential elections

7 December: Novosibirsk will hold gubernatorial elections

7 December: State Duma elections will be held