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Russia Report: March 17, 1999

17 March 1999, Volume 1, Number 3
After a meeting of the Governmental Council for Local Self-Government, which is headed by Deputy Prime Minister Vadim Gustov, Russian mayors declared their disappointment with Yevgenii Primakov government's policies, "Nezavisimaya gazeta" reported on 11 March. Omsk Mayor Valerii Roshchupkin, who is also the head of the Union for Russian Cities, said that current government policy represents a return to the old distribution system. "Unfortunately, the appropriate time for that has passed," he added. "What we heard today at the meeting we have already heard lots of times before." Krasnodar Mayor Valerii Samoilenko announced that mayors "intend to support Luzhkov during elections." Meanwhile, representatives from the administrations of 56 cities gathered in Novosibirsk on 11 March for the two-day annual meeting of the Association of Siberian and Far Eastern Cities, ITAR-TASS reported. Association head and Novosibirsk Mayor Viktor Tolokonskii told the agency that participants would examine practical issues associated with cities' smooth functioning, such as heating, water supply, and transportation systems. JAC

While playing down fears about the ability of large Russian companies such as Gazprom and managers of the country's nuclear missile system to cope with problems associated with the millennium bug (Y2K), computer specialist and Director-General of Lanit-Tercom Andrei Terekhov told Reuters on 11 March that local governments in Russia are dangerously unprepared. The breakdown of local computers could trigger interruptions in the provision of social services, heat, and electricity, he said. Meanwhile, in Khabarovsk, representatives from 10 krais and oblasts gathered along with a group of information technology specialists from Moscow to discuss the problem at a subcommittee session of the Far East and Trans-Baikal association, ITAR-TASS reported. One official noted that to resolve the Y2K problem, it is essential for local officials to first recognize that they have one. St. Petersburg may be the exception to the rule. There, city authorities announced a series of measures last October to combat the Y2K problem, for which 300,000 rubles ($13,000) in municipal funds was set aside, ITAR-TASS reported on 10 March. Also, Governor Vladimir Yakovlev has forbidden government-financed organizations to purchase computers and programs that have not been debugged. JAC

Altai Republic government chairman Semen Zubakin on 5 March dismissed his first deputy prime minister, Viktor Baraboshkin, for embezzlement, ITAR-TASS reported on 11 March. According to the agency, local investigators unearthed evidence that Baraboshkin illegally transferred 90,000 rubles ($3,900) to a private company's account. He also played a key role in guaranteeing the flight costs of a plane from Irkutsk that was later seized in Thailand for transporting illegal goods. JAC

The government of the Republic of Buryatia announced on 9 March that it will initiate changes in the republic's constitution in order to bring it into line with the Russian Constitution, "Izvestiya" reported on 10 March. Local legal experts have already found some 10 instances where the local constitution diverges from the federal basic law. When they complete their analysis, the constitution will be brought up for discussion at a session of the republic's legislative assembly. According to the newspaper, the Buryat authorities may be able to count on assistance from the federal Ministry of Justice, which provided legal help to the Khanty-Mansi Autonomous Okrug after the latter announced last year that it wanted to bring local legislation in line with federal laws. JAC

Local prosecutors launched criminal proceedings against 17-year-old Denis Koshevko for taking hostage 17 schoolchildren in the village of Zverosovkhoz, outside of Ulan Ude, on 11 March. Koshevko, who initially demanded money, guns, and a plane to Israel, surrendered to police after several hours. Before taking the children hostage, Koshevko had been placed on a local wanted list on suspicion of murder. JAC

The legislative assembly of the Jewish Autonomous Oblast passed a 1999 budget bill with a record 48 percent deficit on 11 March, Interfax-Eurasia reported. Last year, the budget deficit was 35 percent. While the oblast's budget deficits are increasing, the federal subsidies it receives are shrinking. In 1997, 364 million rubles ($16 million) were transferred and in 1998, 326 million rubles, but this year only 287 million rubles are planned. JAC

Admiral Vladimir Yegorov told ITAR-TASS on 12 March--the day Poland, Hungary, and the Czech Republic became members of NATO--that military forces in Kaliningrad Oblast will not be increased as a result of the Atlantic alliance's expansion. Neighboring Poland's entry into NATO "will not affect relations" between the Polish Army and Russia's Baltic Fleet, Yegorov commented, adding that those ties are "good, stable, and mutually beneficial." Kaliningrad Governor Leonid Gorbenko, however, was less upbeat. While stressing that the exclave will seek to preserve its good neighborly relations with Poland, Gorbenko told ITAR-TASS the same day that he foresees more problems for the region, particularly with regard to customs and border issues. Kaliningrad residents are mistrustful about the fact that NATO military structures are nearing Russia's western border, he maintained. JC

In elections held on 14 March, Oleg Pustoshilov and Anatolii Makarchuk were elected as the administration heads of Chernogorsk and Shirinskii Raion, respectively, Interfax-Eurasia reported the next day. Both were independent candidates and won more than 50 percent of the vote. Candidates for seats in remaining districts will compete in run-off elections at the beginning of April. JAC

Headed by Iran's ambassador and plenipotentiary to Russia, Medhi Safari, an Iranian delegation visited Kirov Oblast for a two-day official visit, "Izvestiya" reported on 11 March. Featuring prominently on the itinerary of the group, which included the Iranian military and defense attaches, were visits to the oblast's military-industrial complex. According to the daily, Kirov Governor Vladimir Sergeenkov favors promoting arms exports and using the revenues for dual-purpose, high technology production. JC

Nizhnii Governor Ivan Sklyarov, addressing a meeting last month of local government heads, said that in 1998, Nizhnii Novgorod was among the top 10 regions in terms of economic development, with overall production increasing by 3 percent, "Nizhnegorodskie Novosti" reported on 16 February. Had it not been for the interruption of supplies of raw materials and problems experienced by power stations, he argued, Nizhnii Novgorod, according to its economic indicators, would be at the same level as Tatarstan and Samara Oblast. Sklyarov attributed part of this success to the establishment of "good working contacts" with the Primakov government, which, he said, resulted in more than 1 million rubles ($43,000) being returned to the region. He predicted a 5 percent increase in overall production and possibly a 20 percent rise in agricultural output this year. JC

In an interview with "Nezavisimaya gazeta" of 4 March, Mikhail Prusak slammed the emergence of new parties and movements, such as Samara Governor Konstantin Titov's proposed regional bloc "Golos Rossii," as an "absolute bluff." Commenting that such formations are being created by the 1 percent of the population that has links to power and money, Prusak argued that a multiparty system is still not taking shape in Russia. Last month, Prusak handed to Prime Minister Primakov a 30-page document on overcoming the country's socio-economic crisis, which he co-authored with former State Secretary Gennadii Burbulis. That document backs Primakov's proposal that regional leaders be appointed, rather than elected. It also advocates, among other things, stricter state regulation of the economy and the revision of interbudgetary relations to the advantage of the regions. JC

Vitalii Nomokonov, director of the Far East Center for Fighting Organized Crime, said that "gangster groupings" from Primorskii Krai are actively carving up the oil and gas business of Sakhalin into spheres of influence, "Kontinent" reported in its March issue. Attracted by the investment boom expected once projects to develop the region's offshore oil and gas reserves are fully operational, organized crime figures from the neighboring region, such as Yevgenii Vasin, nicknamed the "Jam," have been traveling back and forth to Komosomolsk na Amur. His "associates" reportedly control regional criminal groupings as well as the firms Femida, Fisher, and others that manage fishing, trade and legal services, as well as oil and gas extraction on the island. According to the journal, the crime rate in Sakhalin is already twice as high as the national average. JAC

Bread prices in Samara Oblast increased 25 percent to 35 percent on 15 March, Interfax-Eurasia reported. White bread cost 4.5 rubles (20 cents) a loaf and rye 3.4-5 rubles. The increases were driven by the soaring cost of grain, whose price has increased by 70 percent so far in 1999, compared with the same period last year. Rostov Oblast witnessed a similar price hike for bread in late February. JAC

The town of Verkhnaya Salda has more than 100 residents out of a population of only 30,000 who have been identified as HIV positive, Interfax-Eurasia reported on 14 March. According to regional health authorities, all of those infected are drug addicts. The virus first started to spread, the agency reported, after a family of drug addicts all infected with HIV moved from Ukraine. JAC

Imports to Sverdlovsk Oblast climbed 34 percent in 1998, totaling $1.5 billion. Among the goods shipped in were foodstuffs, medicine, and industrial equipment, "Rossiiskaya gazeta" reported on 5 March. Trade turnover in the region increased 5.2 percent in 1998, compared with the previous year, totaling $4 billion. The value of the oblast's exports, however, fell to around $2.5 billion, partly because of the drop in the world prices for metals. Sverdlovsk exports steel, ferro-alloys, copper, and aluminum. JAC

In an interview with the local newspaper "Krasnii Sever" of 24 February, Vologda Governor Vyacheslav Pozgalev made clear his opposition to Prime Minister Primakov's proposal that regional leaders be appointed. Pozgalev, who was elected in 1996, commented that he understands the center's "nostalgia" for the old command system, "when it was easy to manage the regions insofar as the appointed governors defended the interests of the central authorities before those of the regions." Such a practice, he argued, can result in "serious mistakes." For this reason, governors must be elected in order to win the confidence of the population and be held accountable for their own actions, according to Pozgalev. JC

With the blessing of the archbishop of Volgograd and Kamyshin, a new course is being introduced in schools throughout the oblast: "The Rudiments of Orthodox Culture." According to "Izvestiya" on 10 March, the course aims at teaching the younger generation Christian values as well as acquainting them with Russia's historical legacy and the deeds of outstanding representatives of Russian Orthodoxy. JC

In Volzhskii, the second largest town in Volgograd Oblast, the local dairy has halved milk rations for infants in a bid to force the city authorities to pay their debts for supplies to hospitals and kindergartens, "Izvestiya" reported on 11 March. The dairy had threatened to take similar action last fall, but when a local enterprise paid three months' taxes in advance, the authorities were able to clear their debt, thereby averting the need for such action. The daily commented that it is unclear whether "sponsors" will be found now. In the meantime, some parents are refusing to accept the halved rations, saying they are insufficient to nourish their children. JC

The legislative assembly of the Yamal Nenets Autonomous Okrug adopted a special resolution protesting the law on natural gas supply passed earlier by the State Duma in the second reading, ITAR-TASS reported on 15 March. Sergei Kharyuchi, deputy chairman of the Yamal legislature and president of the Association of Small Nations of Siberia and the Far East, told the agency that the law in its present form strips regions of the right to select which company or companies will develop local gas fields on the basis of a competitive tender. According to Kharyuchi, the law centralizes the control over natural resources, giving Moscow the right to decide which gas fields should be developed and how. JAC

Official Moscow took up the chronic problem of unpaid wages to teachers and other state workers again in March, with Russian Prime Minister Yevgenii Primakov calling for stronger central control over local spending. Deputy Finance Minister Viktor Khristenko suggested in a cabinet meeting on 11 March that monies intended for state workers' wages bypass local authorities completely, thus removing any temptation on their part to redirect the funds for what they might perceive as a more urgent need, such as fuel. Since such a policy would directly violate local authorities' constitutional right to spend money as they see fit, Khristenko suggested that the policy first be discussed with the Duma and Federation Council, "Vremya MN" reported. However, according to the daily, Prime Minister Primakov instructed the Finance Ministry to go ahead even if the governors do not agree, adding that if they do not like it, they can challenge the policy in the Constitutional Court.

Primakov, who assumed office six months ago promising that state workers would be paid in full and on time, has been frustrated in his quest by the misallocation of federal budget monies at the local level (see "RFE/RL Newsline," 9 December 1998). And with regional governments continuing to pass budgets with deficits as high as 30 percent to 50 percent, the problem seems likely to continue.

Small progress was made at the beginning of 1999 in reducing the debt backlog. According to Khristenko, the debt to workers paid by local budgets dropped 9 percent as of 1 February from 1 January to 11.6 billion rubles ($502 million). Still, only six regions in the country have paid wages in full. In five regions--the Republic of Adygei and Belgorod, Samara, Saratov, and Kaliningrad Oblasts--wages have been delayed for 10 days. In 11 regions, delays have lasted less than a month and in 27, slightly more than three months. Altai Republic continues to be the biggest deadbeat, having accumulated seven months of back wages. There is also reportedly a wide variation in how state workers are paid within regions. For example, in the cities of some regions workers get paid on time, while rural residents have not seen any money for years.

At the local level, union leaders are requesting greater transparency as one possible solution, "Izvestiya" reported on 12 March. They complain that information about transfers from Moscow is not reported in local newspapers and therefore it is hard to track how money is being spent--or in many cases wasted. Earlier, Education Minister Viktor Filippov suggested local commissions be established with area teachers and federal representatives who would actively track federal money transfers with the assistance of the local press. However, few regional presses are in a position to conduct serious investigative reporting into oblast fiscal matters, since many of them operate with either overt or covert local government supervision.

In the meantime, strikes by teachers and medical workers--intended to draw attention to the system, which routinely neglects to pay them for weeks if not months at a time--may actually prolong it. As Education Minister Viktor Filippov observed recently, governors want teachers to strike because such protests allow them to use the magic passwords for unlocking new money from the center: "increased social tension." JAC

Aleksei Lebed, governor of the Republic of Khakassia, in response to the question of whether the country is being governed adequately given that President Boris Yeltsin is sick, Prime Minister Primakov on vacation, and Security Council Secretary and presidential administration head Nikolai Bordyuzha hospitalized. ("Kommersant-Daily," 10 March 1999):

"No. Today power in the country is not only completely inadequate, but the president himself is not even personally acquainted with the internal situation of the country. Earlier, I had naively hoped that with the new [Primakov] government all that would change, and authorities would finally turn their attention to the people. But that hasn't happened. There is no budget, negotiations with the IMF are frozen, [Deputy Prime Minister Valentina] Matvienko promises Omsk that Moscow will pay up wages, all the time knowing that there is no money to do so and nowhere from which it could be gotten. The president is sick, but besides him no one has the authority to decisively handle the situation in Chechnya. � In this country there is no power capable of commanding respect."

Vasilii Bondarev, secretary of the Security Council of Stavropol Krai and local Cossack chieftain, on the situation in his region, which borders Chechnya ("Novye izvestiya," 10 March 1999):

"In this raion, most recently there has been a great deal of tension. After the last visit of [Interior Minister Sergei] Stepashin, we came to the conclusion...that we would simply have to protect ourselves. Therefore, we formed militias made up of local residents. � Almost everyone in this raion is armed, not of course to the same degree as on the other side of the border. But if, God forbid, something happens, they will be able to defend themselves."