26.03.09

The Kremlin spent the entire winter developing a computer program to warn about the situation in the regions. Newsweek has written about this. The program was delivered the week before last. When they started testing it, a problem arose. The preliminary version showed a map of Russia all in the same color, whereas the problem regions should have been given another color. It turned out that many colors are unsuitable. Green was allegedly not suitable for regions where everything is fine -- because of associations with Islam. Red and orange were not suitable for problem regions -- for understandable reasons. In one of the later versions, according to Newsweek's information, the whole of Russia was colored beige while the problem regions were colored terra-cotta.

The economic crisis in Russia is entering its next acute phase: There is less and less money in local budgets. As a result anti-crisis management boils down to the following: The Finance Ministry is still rewriting the federal budget while vice premiers are manually resolving the regions' day-to-day problems. At present there is no other anti-crisis strategy in the White House and the Kremlin. Vladimir Putin and Dmitriy Medvedev do not want to change anything and intend to simply ride out the difficult times, officials and experts alike say.

So the authorities have focused all their attention on the regions. Revenues in the regions are falling even more rapidly than the state's revenues -- the main taxes go directly into the federal treasury. And a new phase of mistrust is setting in in relations between the center and the regions, which only a year ago looked clear and transparent. The governors are increasingly frequently contriving to exaggerate the situation in their dialogue with Moscow -- in order to obtain more money. And the Kremlin suspects them of deception. Essentially a campaign to totally monitor all aspects of regional life has been launched in Russia. And everybody is nervous.

Last week Putin chaired a meeting of the Regional Development Commission in Novokuznetsk. The regions are currently being given 300 billion rubles over and above the already planned transfer payments. The average budget of an oblast like Ryazan or Ivanovo is around 30 billion rubles. The regions have earned around half of this themselves; the remainder has been sent to them from Moscow.

The decline in revenues into budgets at every level in Russia is around 30%, a high-ranking government official says, whereas the decline in Europe is only half or one third of that figure. Approximately one third of regions, the same source continues, currently lack the resources even to sustain the budget network -- to put it crudely, to pay for public-sector workers' wages and gasoline for ambulances. 300 billion rubles means the possibility of getting through to the autumn without having to switch off lights and gas and close schools.

A campaign is a campaign. While Putin was speaking in Novokuznetsk, the Regional Development Ministry was publishing a report on its website about the socioeconomic situation at the local level. This government report is a signal that Moscow is keeping an eye on the situation. A source in the government says that the Regional Development Ministry kept secret the main indicator -- an assessment of the effectiveness of organs of power: It was not made public, but it was communicated to Putin and Medvedev. The governors are taking fright: The Kremlin is making it clear that heads will continue to roll one after the other in the future too.

A source close to the Kremlin describes how the actual computer program for warning of crises operates. It incorporates around 60 permanently updated parameters like analysis of items in the local press, the level of unemployment, and Putin's and United Russia's ratings. If one third of the parameters worsen it means that there is a "pre-crisis situation" in the region. If more than half of them worsen it means there is a "crisis" and it is time to intervene. The program has been installed on the computers of Medvedev, his chief of staff Sergey Naryshkin, and Naryshkin's first deputy Vladislav Surkov.

For Surkov this is a problem, the Kremlin source says. Previously he himself reported on the situation in the regions. Now everybody is receiving the same information. It has been historically the case that specifically Surkov and the Kremlin Domestic Policy Administration, of which he is in charge, have selected the majority of gubernatorial candidates. Now everything has gotten confused, and the above-mentioned Naryshkin is already actively involved in personnel issues. When Sverdlovsk Governor Eduard Rossel was urgently summoned to Moscow two weeks ago, it was Naryshkin who discussed his prospects with him.

Regional development ministry boss

Viktor Basargin will work out every month where is the worst place in Russia to live.

Not so long ago Medvedev removed four governors at the same time, and experts are still trying to guess who will get their marching orders next week. Medvedev is adding fuel to the flames. "The crisis... is exposing irresponsible, weak, and incompetent leaders. It is necessary to get rid of such leaders," he warned the Council of Legislators last Friday (13 March). Observers in the regions say that governors are already weary of the constant pressure.

Rossel himself, according to some reports, was within a whisker of being removed. Sources familiar with the situation in Bashkortostan are again talking about the inevitable imminent departure of Bashkir leader Murtaza Rakhimov -- Newsweek wrote about his prospects a year ago. Chelyabinsk Government Petr Sumin will also leave his job, a source close to the Kremlin feels. Because of the chaos in the Sochi (Winter Olympics) construction sector, Krasnodar Governor Aleksandr Tkachev has been granted a stay of execution -- like Rossel, he has until the autumn. All these are leaders of powerful and until very recently totally successful regions.

The nervous situation is exacerbating the political situation in the regions. Political analyst Mikhail Vinogradov explains that rumors of dismissals often come from the localities and are currently lodging in fertile soil -- because nobody has the full picture in front of them. "It is not the case that we are living in a distorted environment but officials have everything straight in their heads. The policy is equally unpredictable for officials," Vinogradov says. Vinogradov himself has just issued his latest rating of governors' survival prospects. At the very bottom of the list come the above-mentioned Rakhimov, Rossel, and Sumin and Murmansk Oblast leader Yuriy Yevdokimov, who fell out with United Russia in the Murmansk mayoral elections.

But who should replace them, and is it worth doing so? The logic that previously prevailed was that it was best to install an official from Moscow in a region. There are almost no such people left. With the deepening of the crisis in Russia difficulties have arisen in terms of personnel mobility: There are fewer and fewer people wishing to opt for promotion -- whether to governor in a region or a minister in Moscow does not matter. A promotion means responsibility, and the prime minister and the president are demonstrating that they mean business. Newsweek knows of cases where Moscow officials leaving their jobs have refused to accept a gubernatorial post as a golden parachute.

Sources say that Vice Premier Aleksey Kudrin currently has a monopoly on financial policy. Another influential vice premier, Igor Sechin, manages assets. Specific problems at the local level -- construction projects, fuel oil, food products, dismissals, are the responsibility of First Vice Premier Igor Shuvalov. "A rapid-response anti-crisis mechanism," a government apparatus official explains. In the context of great political and personnel lethargy the Kremlin and the government are left with only one option: to take on more and more themselves and try to resolve any minor issues of regional life from Moscow.

Appointment: working collective farmer

There is a personnel famine in the country. Even the minister of agriculture took a lot of looking for White House veteran Aleksey Gordeyev was sent to become leader of Voronezh Oblast in February, and candidates to replace him were selected back in the winter. But by the beginning of last week the situation surrounding the appointment of a new minister of agriculture had become dire. Generally speaking it is not the done thing to turn down proposals coming from Vladimir Putin. But, as ill luck would have it, the candidates -- governors of wealthy agrarian regions -- suddenly started saying "no" one after another.

The recently compiled presidential personnel reserve list did not help. It includes Deputy Minister of Agriculture Andrey Slepnev, and he was installed as acting minister after Gordeyev's departure but was not made minister. According to some reports, Putin would not seriously consider Slepnev's candidacy because he is still not 40 years of age. But experienced officials themselves refused to move to a more responsible area of work.

Not everything in agriculture is hunky dory. The sowing season is imminent but its results -- unlike last year, when a record harvest was gathered in Russia -- is already not going to be a triumph. The crisis is hitting the countryside with full force. The price of imported equipment has soared, borrowing has been frozen, and farmers who are now having to settle up for loans raised as part of the much-hyped national project are on the brink of ruin.

In the end Yelena Skrynnik, head of the Rosagrolizing state leasing company, was appointed minister. The decision was spontaneous. This is also evidenced by the fact that Skrynnik does not figure in the personnel reserve.

Governors do not want to go to Moscow to get promoted. The first to refuse the post of minister was the main contender -- Belgorod Oblast Governor Yevgeniy Savchenko. According to Newsweek's information, back in early December he had a meeting with Putin at which he gave his agreement. It was decided to revisit the issue of Savchenko's relocation to Moscow in February. But in February all December's economic predictions were already being seen as overoptimistic, and a relatively successful region -- particularly when compared with its neighbors -- suddenly became a very attractive place to work.

For several days there was a discussion among the prime minister's staff of the candidacy of another successful governor -- Anatoliy Artamonov from Kaluga. According to Newsweek's information, he also refused, and things did not even get as far as a summons for a conversation with the Prime Minister. The next person who did not become minister was Krasnodar Kray Governor Aleksandr Tkachev, although his position in the Kray currently looks rather weak. According to Newsweek's information, Tkachev was thinking seriously about whether or not to agree when the premier's staff withdrew the invitation to relocate to Moscow without explaining why. The Agriculture Ministry -- a very big department -- was left with no leadership for almost a month. That kind of thing had never happened before.

Two weeks ago now several sources in the government were claiming simultaneously that the problem had been resolved. Putin was on the point of simply appending -- after a comma -- the post of minister of agriculture to the title of agrarian Vice Premier Viktor Zubkov. In the same way as Vice Premier Aleksey Kudrin simultaneously works as minister of finance. In that case no real changes would have been required, Zubkov would have continued to work at the White House rather than at the Agriculture Ministry and would have handled the general development of the sector, while current issues would have been handled by a deputy -- the above-mentioned Andrey Slepnev, for example.

According to certain information, an edict relating to Zubkov was already prepared. But at the last moment Putin and Medvedev decided that this was a bad idea. The minister of agriculture has to be able to travel the country a lot, particularly during the sowing and harvesting campaigns, that is, between March and October. Gordeyev used to go on 50 business trips a year. Zubkov would not have been able to combine constant visits with the enormous number of meetings and quantities of paperwork in the White House. And Yelena Skrynnik became the minister.

The last shall become first

The economic crisis in the world is broadening, and the country's industrially developed regions are leading the way in terms of the rate of decline. Rich oil and gas provinces, Yugra and Yamal, are losing tax revenues because of the falling price of fossil fuels. According to experts from the Regional Development Ministry, they lead the risk group.

• Regions where more than five anti-crisis rallies took place in December 2008: Amur Oblast; Sverdlovsk Oblast; Nizhny Novgorod Oblast; Perm Kray; Ivanovo Oblast; Yaroslavl Oblast; Moscow Oblast; Moscow City; Krasnodar Kray; Adygea Republic
• Regions assigned to the risk group from the viewpoint of social consequences: Khanti-Mansiysk Autonomous Okrug; Yamalo-Nenets Autonomous Okrug; Chelyabinsk Oblast; Sverdlovsk Oblast; Lipetsk Oblast; Kemerovo Oblast; Omsk Oblast; Ryazan Oblast; Smolensk Oblast; Irkutsk Oblast; Murmansk Oblast; Transbaykal Kray; Khabarovsk Kray; Krasnodar Kray; Udmurt Republic
• Regions where the results for 2008 showed a decline of more than 10% in industrial production: Chuvash Republic; Republic of Tatarstan; Volgograd Oblast; Ivanovo Oblast; Kemerovo Oblast; Kostroma Oblast; Kursk Oblast; Lipetsk Oblast; Omsk Oblast; Orel Oblast; Sverdlovsk Oblast; Chelyabinsk Oblast; Yaroslavl Oblast.

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Source: Russkiy Newsweek