Russia Report: February 20, 2002

In an article in "Izvestiya" on 17 February, political analyst Sergei Porshakov argues that as a result of a series of regional elections at the executive and legislative level, a number of elites at the regional level have experienced a transformation. "The generation of leaders of the old nomenklatura type, who came to power during the 'Yeltsin epoch,' is gradually leaving the political scene in large Russian oblasts," according to Porshakov. The new generation is "pragmatic" and acts with an eye on the federal center and presidential representatives. Driving this transformation, according to Porshakov, has been the expansion of large Russian financial and industrial groups into the regions. For example, the arrival in Irkutsk of Yukos and Russian Aluminum and then MDM-Group and TNK "has fundamentally changed not only the economic but also the political landscape of the region along the Angara River." In Stavropol Krai, according to Porshakov, 13 of the 25 deputies in the krai duma are either directors or chairmen of large to medium-sized firms. JAC

An unidentified high-level source in the presidential administration denied a recent claim by Krasnodar Krai Governor Aleksandr Tkachev that he had won President Vladimir Putin's agreement that any federal law on the buying and selling of agricultural land would not have to be implemented in his region, "Izvestiya" reported on 19 February. According to the daily, following a meeting with Putin on 16 February, Tkachev said that "we agreed with the president that the law on land will be adopted by the Federal Assembly, but it will not come into force on the krai's territory -- unless krai authorities decide. I insisted on this. A market for arable land should not exist in the Kuban for the next 10 years -- let our children and grandchildren take up this question." The anonymous Kremlin source said that such an "agreement" is "in principle impossible and absurd." Last February, President Putin told members of the State Council that Russia's regions should be "given maximum freedom in setting the land problem within the framework of the basic law" (see "RFE/RL Russian Political Weekly," 26 February 2001). JAC

The Finance Ministry will earmark more than 3.5 billion rubles ($114 million) for financial assistance for those regions experiencing financial difficulties in paying higher wages to state workers, Interfax-AFI reported on 12 February. First Deputy Finance Minister Aleksei Ulyukaev told the agency that the ministry conducted financial analyses of regional budgets for January that showed that some 15 regions are experiencing special difficulties. Of the 3.5 billion rubles, 1.5 billion will be transferred to Volgograd Oblast and 500 million rubles to Nizhnii Novgorod. Earlier, Finance Minister Aleksei Kudrin and President Putin accused certain unidentified regions of trying to blackmail the federal government in order to meet state workers' salaries (see "RFE/RL Newsline," 7 February 2002). JAC

The State Statistics Committee reported on 18 February that the level of wage arrears nationwide grew 9.6 percent to 32.829 million rubles ($1.1 million) as of 1 February from 1 January, ITAR-TASS reported on 18 February. Wage arrears due to underfinancing from the federal budget totaled 610 million rubles and were the cause of wage payment delays in 30 regions, according to the agency. The largest backlogs were recorded in the Tuva and Sakha (Yakutia) republics, Kamchatka and Irkutsk oblasts, and Primore and Krasnoyarsk krais. JAC

In an opinion poll of 1,446 residents of Chukotka Autonomous Okrug in late January, the Russian Institute of Sociology found that more than 96 percent of respondents had a positive assessment of Chukotka Governor Roman Abramovich's first year in office, ITAR-TASS reported on 13 February. Respondents said their most acute problems are old and uncomfortable housing, the rise of drug addiction and alcoholism, and lack of educational and recreational opportunities for children and teenagers. Last June, RFE/RL's special correspondent Mumin Shakirov also found that the overwhelming majority of residents in the village of Tavaivaan thought highly of the governor they elected in January 2001 and continued to display campaign posters of him in local shops (see "RFE/RL Russian Federation Report," 4 July 2001). Meanwhile, "Vedomosti" reported on 7 February that Chukotka's share of tax revenues in the consolidated budget rose by five times last year, while the tax collections in the okrug rose by more than 10 times. Abramovich is a major shareholder in Sibneft. JAC

The conflict between the city of Norilsk and Krasnoyarsk Krai flared anew on 13 February, when a meeting between Norilsk Mayor Oleg Budargin and Krasnoyarsk Krai Governor Aleksandr Lebed ended without results. Budargin told RIA-Novosti that Lebed has proposed cutting Norilsk's social spending threefold. Budargin explained that "we in Norilsk understand that the krai has economic problems, [but] we have already cut the city budget and reduced financing for kindergartens and schools, and we cannot do more." The city of Norilsk is the home of the headquarters of Norilsk Nickel, which provides about 70 percent of the krai's tax revenue. However, it is located in the Taimyr Autonomous Okrug, whose officials, particularly those in the okrug's duma, have recently begun seeking to free the city from its economic subordination to Krasnoyarsk (see "RFE/RL Newsline," 4 February 2002). Taimyr Autonomous Okrug Governor Aleksandr Khloponin is a former head of Norilsk Nickel. JAC

Court bailiffs in Primorskii Krai have seized part of the real estate belonging to the administration of the city of Nakhodka, Interfax-Eurasia reported on 12 February. Three buildings -- including one belonging to the city's mayor -- and an automobile were taken. According to "Kommersant-Daily" the same day, the property was seized because the city lost a lawsuit to the firm Alfa-Eko-M, to which it owed 175 million rubles ($5.7 million) for fuel deliveries. The daily reported that it is possible that property seized will be auctioned off in order to pay the debt. The office of the Nakhodka mayor claims that it received a pledge from then-Primorskii Krai Governor Yevgenii Nazdratenko to guarantee the debt; however, current Governor Sergei Darkin has refused to honor all of the commitments made by his predecessor. JAC

The liquidation of one of Rostov Oblast's largest coal-mining companies, Rostovugol, could throw 12,000 people out of work, "Vremya MN" reported on 14 February. According to the daily, the interdepartmental commission for socioeconomic problems in the coal-producing regions, which is headed by Energy Minister Igor Yusufov, decided that the only legal means of extinguishing the company's 11-month backlog of unpaid wages to its workers would be to liquidate the company. However, local officials report that the social situation in the regions "has become red hot." Rostov Oblast Governor Vladimir Chub has already signed a decree designating 25 million rubles from the oblast's budget to the company. JAC

Ekho Moskvy reported on 17 February that there have been attacks by skinheads in both St. Petersburg and Moscow. In Moscow, a 10th-grade Azerbaijani student was beaten up by five unidentified men with shaven heads. Meanwhile, in St. Petersburg, about 200 skinheads went on a rampage on Prospekt Kultury, beating up passers-by and smashing shop windows and advertising billboards. According to the city's MVD authorities, the youths were not drunk or under the influence of drugs. JAC

An international seminar on the "Integration of Roma Communities in Modern Society" has opened in the city of Samara, "Nezavisimaya gazeta" reported on 18 February. More than 60 representatives of Roma communities and public organizations in Moscow, St. Petersburg, the Komi Republic, the Urals region, Volgograd Oblast, and a number of countries in East and Central Europe and the CIS, were in attendance together with government representatives from the Baltic states. In addition, representatives from the Council of Europe, the Moscow Helsinki Group, and Russian governmental organizations, such as the MVD, participated. At the four-day meeting, delegates were expected to discuss civil rights for Roma, among other issues. JAC

Incumbent Tuva Republic President Sherig-ool Oorzhak is expected to win elections for the head of the republican government scheduled for 17 March, "Vremya MN" reported on 13 February. The republic changed its constitution, abolishing the post of president, so that Oorzhak could run for a third consecutive term without violating any rules against third terms for a president, according to the daily. Almost all of the republic's political elite is taking part in the election; eight candidates have been registered including the chairman of the republican parliament, Sholban Kara-ool; Kyzyl Mayor Aleksandr Kashin; former republican Election Commission Chairman Nikolai Ondar; First Deputy Mayor of Kyzyl Viktor Busatyi; head of the republic's legal department, Vyacheslav Darzha; Trading House M director Stanislav Pivovarov; and chairman of the administration of Tis-khem Viche-ool Shyyrap. According to EWI's "Russian Regional Report," on 6 February, Mezhprombank head Sergei Pugachev, who was recently named to represent the republic in the upper house, recently traveled to Kyzyl where he offered Oorzhak financial backing for his campaign. According to the weekly, "most observers believe that Pugachev's deep pockets will assure Oorzhak's victory." JAC

"Kommersant-Daily" reported on 19 February that a fierce contest for leadership of the Buddhist community in the Tuva Republic is underway due to the upcoming 17 March election for the head of the republic. At the last extraordinary congress of the Buddhists of Tuva, a new Xambo Lama, Khelin Lobsan Tubten, was elected -- the third in the last two weeks. Local observers believe that Vladimir Orus-ool, who is a local legislator and supporter of the existing presidential administration, was behind Tubten's appointment. In the opinion of many, according to the daily, the proteges of Orus-ool seized power in the Buddhist community because Buddhist priests have considerable authority in the republic and the political leanings of the new Xambo Lama could influence the vote of practicing Buddhists. JAC

OIL BOOM IN EVENKIA MAY BRING WEALTH, BUT TO WHOM, AND AT WHAT COST?

By Jolyon Naegele and Jeremy Bransten

One of Russia's poorest and least developed regions -- the Evenk Autonomous Okrug in central Siberia -- is experiencing an oil boom. The vast region extends over an area nearly as large as Turkey but has barely 20,000 inhabitants, 8,000 of whom are indigenous Evenks. In recent years, the okrug has rated near the bottom of the list of Russia's 89 regions in terms of investment potential. "Kommersant-daily" suggested two months ago that Evenkia is one of at least seven economically plagued regions that would qualify for bankruptcy if Russia's Finance Ministry goes ahead with a proposal to declare certain regions bankrupt.

That may all be about to change, however, now that Russia's second-largest oil company, Yukos, has discovered oil under Evenkia's taiga and is building a pipeline to transport it to markets in Russia and abroad. Russian President Vladimir Putin signed an agreement last year with Chinese President Jiang Zemin for Russia to deliver some 25 million tons of oil a year to China. And last April, Yukos's Moscow-based director for development, Boris Zolotarev, a native of the sub-tropical Krasnodar Krai, won a slim victory in elections for governor of Evenkia. Many voted for Zolotarev in the belief he would bring jobs to a region plagued by unemployment for almost a decade.

According to Evenk electoral commission officials cited in the newspaper "Segodnya," the poll was one of the "dirtiest" in the region's history. Zolotarev's main rival was struck off the ballot and barred from campaigning just five days before the election, only to be reinstated at the last minute. Yukos's Moscow-based international spokesman, Hugo Erikssen, told RFE/RL that the fact that Zolotarev won the Evenk gubernatorial elections -- joining other captains of industry at the political helm of Russia's resource-rich north -- is a positive sign, indicating Russia's economic progression. Erikssen noted: "I think it is quite natural that at the stage of its economic development that Russia is in now, that the population is looking for candidates with another background than the one traditional Soviet leaders had. And industrial leaders can provide a lot of the expertise and the will and the decisiveness that is needed to bring these regions out of very serious economic problems. And the question of conflict of interest is an issue that can be raised in any country. And that is something that has to be taken care of by legislation."

Yukos announced in December that following its acquisition of the Eastern Siberian Oil Company last year, it has been "providing aid to the Evenk peoples of the Evenk Autonomous Okrug and to other numerically small peoples of the Far North." Yukos thus took control of Eastern Siberian's 25-year licenses for geological exploration and development of two oil and gas deposits discovered in Evenkia in 1982. Yukos's website says the start of oil production is planned for the third year of the fields' development, with the maximum output level of 3.4 million tons of oil a year to be achieved in the seventh year of the trial production. By 2005, an oil pipeline should be built to Evenkia's regional center, Tura.

In a speech in Moscow during a visit by UN Secretary-General Kofi Annan in November, Yukos's chairman of the board, Mikhail Khodorkovsky, noted that on 12 October Yukos had signed a framework agreement on cooperation with the UN Office for Project Services, or UNOPS. As their first project, they had chosen what he termed "the comprehensive development" of the Evenk Autonomous Okrug. In Khodorkovsky's words, "We're talking about the entire region, the economic and social underdevelopment of which is absolutely staggering." He said Yukos has deployed specialists to work with the district's administration on the development of the project and that an advance party of UNOPS experts would soon be on their way to Evenkia.

There are concerns, nevertheless, that the Evenk environment and the region's indigenous population are both at risk from Yukos's activities. Although Zolotarev and Yukos are creating jobs in Evenkia, there are questions whether many Evenks will be hired to fill them. Most Evenks lack professional experience and adequate education.

Pavlina Brzakova is a Czech doctoral candidate in anthropology at Charles University in Prague. She recently returned from her seventh expedition to Evenkia in the past decade. "There is a strong administration. Zolotarev is trying to reduce the number of civil servants, although this is the only opportunity for working here other than being in a [drilling] expedition," she noted. "There are some seasonal jobs. That means in the hunting season going a few kilometers to one's [native] territory, to hunt. But that's all there is." Brzakova says Zolotarev has begun to finance cultural programs promoting what she describes as "Evenk revivalist tendencies." But Brzakova says there is another trend developing in Evenkia -- laying off local people from the administration, which she says poses a threat to the indigenous population.

Yukos spokesman Erikssen says it is natural that outside managers and workers will continue to be brought in if Evenkia turns into a major oil producer. But he says local people -- among them the native population -- will be able to benefit if they so choose. Erikssen said, "It is obvious that if there is significant production of oil eventually in Evenkia that will result in a tremendous boost in revenues for the local budget, which the local authorities and the peoples in the area will have to decide how they will want to spend. And I hope that they will be intent on spending that in a way that will contribute to job creation. But it is obvious that, even at the exploratory stage, there will be working opportunities not only for oil men flown in from other parts of Russia but also for the local authorities to help organize opportunities for the local population. And I see a tremendous opportunity for them. It's there for them to grasp." Russian oil industry officials -- speaking on condition of anonymity -- are less diplomatic. Many say they are shocked by the level of alcoholism they have witnessed on visits to Evenkia. Jobs for Evenks at drilling sites, they acknowledge, will be few and far between.

Unfortunately for the Evenks, the message from Moscow is clear. President Putin has said oil exports should continue to be a priority for the Russian economy. As for the environment, one of the Putin administration's first acts was to dissolve the State Committee on Ecology and the Federal Forest Service. Their functions were transferred to the Ministry of Natural Resources, removing independent environmental monitoring functions and placing those responsibilities within an agency whose mandate is resource extraction.

Czech anthropologist Brzakova says an infusion of investment will certainly benefit the region, although concerns about a possible ecological catastrophe remain. She says there is a widespread perception in Evenkia that Governor Zolotarev, who had no ties to Evenkia when elected, other than being a Yukos executive, was only motivated to run for the position because of the potential for financial profit. She says that, considering the thoughtless way Siberian oil expeditions in the 1970s and '80s treated the local environment, concerns about the negative impact of Yukos's activities on Evenk society and on the environment may well be justified. Henri Myrttinen, an expert on ecological and social issues, analyzed the impact of Russia's Siberian oil development while working for the Finnish Environment Ministry. He believes that there has been a quite obvious "shift away from environmental concerns towards an exploitation of natural resources."

Other regions in northern Russia already have been devastated by uncontrolled development. For thousands of years, the Khanty nomads lived in the swampy taiga of western Siberia, maintaining a traditional lifestyle that revolved around hunting, fishing, and reindeer herding. But in the 1960s, when oil was discovered in the region, everything changed. Thousands of wells were drilled, polluting the water table. Tens of thousands of kilometers of pipeline were laid, cutting off reindeer migration routes. New cities were built, and more than a million outsiders moved in to fill jobs generated by the mushrooming oil industry.

Today, the Khanty are a tiny minority on their own territory. Save for a few individuals still living in the wild, most have been conned into signing away their land rights in exchange for a snowmobile or a few cases of vodka. Myrttinen told RFE/RL that oil booms seldom benefit native peoples, who lack the technical skills and education to take advantage of new job opportunities. He explained that "most of the time, the jobs that are created are not created for the local community but rather for experts who come from abroad, from other parts of Russia or also from other countries." Instead, native peoples must bear the consequences of the environmental destruction oil exploration often entails. According to Myrttinen, "that track record has been extremely poor in Russia. There have been numerous major spills. One of the largest ones was in the Komi Republic, in the early 1990s, which was a massive oil spill. But almost on a daily or weekly basis, there have been minor oil spills because of the poor condition of the pipelines. Also, during the drilling stage, [the] prospecting stage, there are a lot of negative environmental impacts through these activities."

The Komi spill, near the town of Usinsk, occurred in 1994 when more than 100,000 tons of oil from a leaking pipeline burst through a containment dike onto the frozen tundra, contaminating an entire river system that provided the sole source of food for local communities. The scale of the Komi disaster can be understood by comparing it to the notorious Exxon Valdez tanker spill in southern Alaska, which -- although it garnered far more global attention -- actually resulted in a release of only a quarter of the oil spilled near Usinsk. Yukos spokesman Erikssen, who is Norwegian, acknowledges Russian oil producers' checkered histories, but says his company has adopted new standards that will ensure that the mistakes of the past are not repeated in Evenkia: "You don't have to be an expert to know that the track record of the Soviet oil industry with respect to the environment was dismal. But what you also have to acknowledge [is] that the most advanced Russian oil companies -- and Yukos is definitely one of them -- have a completely different attitude towards environmental issues. And we have just made a decision to upgrade the environmental services that we have, and we are investing large amounts of money in upgrading pipeline facilities, [in] buying the latest in high-tech [equipment] that will allow us to reduce to the absolute minimum the impact that this might have on the environment."

Siberian oil expert Myrttinen is not sure the issue can be so easily brushed off. As in a classic "company town," the fact that Evenkia's political executive, elected to safeguard citizens' interests, maintains close ties to the region's main business raises questions about whose interests he will really be looking out for. "It's not only the environmental impact, the environmental issues which are at stake," he said. "Questions such as press freedom on a local level, on a regional level, are affected, as the oligarchs own a lot of the local media. As the governors, they're supposed to make sure that there is a certain amount of press freedom. But on the other hand, they own most of the media, so I think there's a conflict of interest there." Myrttinen says it will be extremely difficult, on a local level, to criticize the oil and gas industry, which he says has been functioning as a state within a state, on a local level, in many northern regions.

Nevertheless, the arrival of Zolotarev and the buildup of Yukos's presence have resulted in an end to widespread, long-term electricity blackouts thanks to the import of heating fuel and electric generators, benefiting everyone. But social support for the indigenous, formerly nomadic population is still in short supply.

Jolyon Naegele and Jeremy Bransten are RFE/RL correspondents based in Prague.