You Can Read In English About The Most Important Events In Kursk & Belgorod In 2000 A.D., On The Edge Of Millenium

YUKOS RM President Nikolai Bychkov signed an agreement on further cooperation with Belgorod Governor Yevgenii Savchenko on 6 December. YUKOS controls 80 percent of the petroleum products market in the oblast and said that there would not be any price increases in the near future.
The main area of cooperation will be refurbishing existing gas stations and building new ones in the oblast.
In 2001, the company plans to build 40 gas station/convenience stores in the oblast, including 15 that will be equipped to fuel cars with natural gas. Each station costs about $300,000 to build. Since much of the equipment for the new stations will come from Belgorod factories, YUKOS's total investment in the region will be about $50 million. The agreement includes plans to build additional pipelines in the oblast as well as other social, ecological, and commercial projects.
The oblast is interested in the deal because it will create additional jobs. The oblast, which is currently experiencing a boom in housing construction, will provide up to 100 apartments a year to YUKOS workers moving to the region from the Russian far north.

13 December 2000

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POLTAVCHENKO MEETS WITH MAYORS IN CENTRAL DISTRICT

On 28-29 November, Presidential Representative to the Central Federal District Georgii Poltavchenko met with mayors of the regional capitals and other large cities in his district, according to a Kursk Television (1 December) interview with Kursk Mayor Sergei Maltsev. After the general meeting, Poltavchenko met with each of the mayors individually. The press was not included in the event.
Poltavchenko's main purpose was gaining information from the mayors. He was particularly interested in the economic problems of the cities and the regions in general, interbudget relations between the oblast and city, the management of federal, regional, and municipal property, and the development of the social sphere in the big cities. Poltavchenko told the mayors that they needed to deal with two key problems: supplying heat and electricity to the cities, and making sure that city-owned enterprises were working.
Poltavchenko decided to discuss these questions with the mayors rather than the governors for several reasons. First, urban residents make up 35-60 percent of the population of regions (about 50 percent in Kursk). Second, urban-based enterprises are more profitable and therefore produce more tax revenue. Third, relations between the municipal authorities and the population are more direct than those of the governor with the population and the mayors deal with issues closer to people's lives. Finally, such meetings also demonstrated to the governors that the federal authorities could turn to other people in the regions besides the heads of the regional executive branches. Interestingly, Moscow Mayor Yurii Luzhkov also took part in the session. He is only executive in the Central Federal District who simultaneously has the status of governor and mayor.
The participants in the meeting decided to create a district council that includes the mayors of the oblast cities. The council will have consultative functions, acting like a "State Council in miniature." If the council in the central district is successful, similar bodies will be set up in other federal districts. Additionally, oblast associations of cities (for example, in Kursk, Belgorod, and Voronezh) adopted a decision to join the Association of Black Earth Zone Cities.
Kursk Mayor Maltsev spoke highly of Poltavchenko, saying that he was not interested in intrigues as are most Moscow bureaucrats.
Poltavchenko's meeting with the mayors was unexpected. He more frequently meets with governors and the heads of federal agencies. Local government is usually not included in this grouping. If Poltavchenko wants to work with the mayors to achieve his goals within the regions in his federal district, it will be easy for him to do so.

6 December 2000

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NEW KURSK GOVERNOR APPOINTS REPRESENTATIVE TO FEDERATION COUNCIL

Newly elected Kursk Governor Aleksandr Mikhailov has appointed Gennadii Shirokonosov as his representative in the Federation Council and the regional legislature unanimously confirmed the appointment. Shirokonosov, 56, will likely be extremely loyal to the governor. He spent most of his life in city of Shchigry, where the governor lived more than 30 years, and had a typical Soviet era career. Shirokonosov rose from the position of a worker to the director of the Geomash factory, with some service in the Communist Party ranks. His greatest accomplishment in 15 years as factory director was the creation of a profitable German-Russian joint-venture to produce drilling equipment for the oil and gas industry. As a factory director, he was generally very pragmatic and never became involved in politics beyond working on the campaign team of the governor.
He has known the governor personally for 10 years.

29 November 2000

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NEW KURSK OBLAST GOVERNOR MAKES ANTI-SEMITIC REMARKS

Kursk Oblast is suffering a relatively difficult transition from the governorship of Aleksandr Rutskoi to that of Aleksandr Mikhailov, who won the 9 November election. His inauguration is scheduled for 18 November, and the new governor already has relinquished his former posts as State Duma Deputy and First Secretary of the Kursk Oblast Committee of the Communist Party of the Russian Federtion.
In addition, personnel and policy changes are underway. "Rutskoi's whole team will have to leave office, we have warned them of this," said Mikhailov.
During his final few days in office, Rutskoi is doing what he can to make the life more difficult for his successor: On 1 November, he doubled the salary of oblast doctors and teachers. It is unlikely, however, that this order ultimately will be enforced.
The enmity between the two governors was never more apparent than on 7 November, the Day of Reconciliation. On this holiday, Kursk Communists celebrated the anniversary of the 1917 October Revolution and the revolution in Kursk which, according to their boasts, occurred on 5 November - the day that Mikhailov was elected governor. During demonstrations and meetings, speakers bellowed phrases such as "Hateful Rutskism Has Gotten the Axe" and "The Yoke of Rutskoi Has Been Thrown Off" from the tribune. The most joyful demonstrators were the exultant elderly, who were thrilled that their efforts to ensure a Communist future for their children and grandchildren had finally succeeded. The
demonstrators, who rallied around the governor's residence, called for Mikhailov to "Put a halt to the removal of property from the administration under the cover of night." The whole affair resembled nothing so much as a scene from a Soviet film depicting the 1917 Revolution.
During the demonstration, participants paid special attention to two statements by Mikhailov: "The Soviet Atlantis has not yet sunk" and "We have won the battle against international Zionism. Boris Berezovskii, while he was still a State Duma deputy, told me more than once that he wouldn't give us Rutskoi, he wouldn't give us Kursk Oblast. We have taken Kursk Oblast back from Berezovskii and Rutskoi."
This latter theme was further developed during Mikhailov's first interview as governor-elect with Moscow's Kommersant (9 November) newspaper. "Vladimir Vladimirovich [Putin] twice sent his personal representative to meet with me...
this is a woman, she is Putin's personal psychologist. She has played a key role on his team, and together we determined the main elements of our collaborative work... Kursk Oblast, keep in mind, has solved the problem not only of Kursk Oblast and who will win there... Do you know what the All-Russia Jewish Congress is? You know what Rutskoi is, and behind him was Boris Berezovskii. And we beat them here. I think that this is symptomatic and speaks to the fact that Russia today is freeing itself of all the filth that has accumulated over the last 10 years. We are allies with the president, not rivals. Vladimir Vladimirovich, by the way, is Russian through and through. As am I. But Rutskoi's mother, for those who don't know, is a Jew -- Zinaida Iosifovna."
In other words, Mikhailov believes that Putin supported him in order to help the governor-elect defeat the Zionists, Rutskoi and Berezovskii, in the election. The same day that Kommersant published its interview with Mikhailov, the Interfax news agency issued a commentary from "a highly placed member of the presidential administration." In response to Interfax's request that he comment on Mikhailov's statements, the representative said, "This is complete nonsense, from the reference to a nonexistent personal psychologist to all the ensuing absurdities." The commentator also denied that there had been any contact between the presidential administration and Mikhailov.
On 11 November, Komsomolskaya Pravda newspaper covered the reaction of the Russian Jewish Congress (in all likelihood the organization to which Mikhailov referred). The organization announced that it has never participated in any election campaign, and that "we consider Mikhailov's allusions to some sort of 'collaborative' relationship with Russian President Vladimir Putin and the 'freeing' of the country from Jews to be a serious political provocation." KPRF leader Gennadii Zyuganov also spoke up, advising his fellow Communist to do his job and stop investigating other people's family background.
On 10 November, in response to the Mikhailov interview, Kommersant published an interview with Rutskoi with the remarkable title "As a Person, I Would Punch Mikhailov's Face In." Rutskoi correctly considers the
governor-elect's comments a "kindling of interethnic enmity" and promised to file suit against him.
The questions of "Who Is To Be Blamed?" and "What Is To Be Done?" were formulated in Russia back in the 19th century. Today it is the executive branch of government that must respond to them, especially if its members have been elected by a dissatisfied electorate. At one time, it was Rutskoi's job to answer these questions. His answer to the first question was: "The local elite is to blame." While his answer to the second question involved battling with the establishment, he never followed through on his promises. As a result, the local elite is still in place, and Rutskoi is gone.
Mikhailov believes that he has found his own answer to the first question. When one's position of power is precarious, naming an enemy can serve to unite people. The farther away the enemy, the easier it is to unite a large group of people against him.

15 November 2000

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COMMUNIST MIKHAILOV DEFEATS KREMLIN'S FSB MAN IN KURSK

As Russian Communists prepared to mark the 83rd anniversary of the Bolshevik Revolution, their comrade, State Duma Deputy and Kursk Oblast Obkom First Secretary Aleksandr Mikhailov, won the 5 November runoff in the Kursk Oblast gubernatorial campaign, convincingly defeating the Kremlin's candidate, Chief Federal Inspector Viktor Surzhikov, once the head of the Federal Security Service in the region.
Mikhailov won more than 55 percent of the vote, while Surzhikov took less than 38 percent, according to preliminary returns. Turnout was relatively high for the region at over 47 percent, down about 5 percent from the first round.
The battle between the two main contenders was relatively sluggish since the main fight had been to remove incumbent Governor Aleksandr Rutskoi from the race. Four days before the voting the Supreme Court refused to overturn the oblast court decision eliminating the incumbent. According to Rutskoi, these events are a "flagrant violation of Russian law" and a "flagrant violation of the voters' rights." Rutskoi declared that he will appeal the Supreme Court's decision to its presidium. The charges against Rutskoi originally were filed by Surzhikov and Kursk Mayor Sergei Maltsev. Earlier Rutskoi had said that he did not believe that the Kremlin had been involved in the attempt to remove him from the campaign, but now he says that he believes that these assertions are true.
Rutskoi had hoped that many of the voters would vote "against all," but only 6 percent did so. Surzhikov energetically sought to win over the voters who had supported the other candidates in the first round (Sergei Maltsev, Nikolai Greshilov, Vladimir Stekachev, and Vyacheslav Klykov) and these candidates supported him. They declared that only Surzhikov will "deliver us from the plague of corruption," "will prevent Kursk from being lost," and be "a manager concerned with day-to-day work rather than politics." If all the voters who had supported the four candidates listed above in the first round had backed Surzhikov in the runoff, he would have won the race. While Surzhikov won 15 percent more in the second round, it was not enough for victory.
In contrast, Mikhailov conducted a confident and quiet campaign. He had good reason to be confident. First, Kursk Oblast has a stable Communist electorate that is active at the polls. Its base is the rural population from the less developed northern and eastern parts of the oblast, where 65 percent of the population is over 55 years old. Mikhailov won convincingly in these areas by clearly identifying himself with the Communist Party. He often addressed voters as "We Communists" and "We patriots." Second, the Communist Party used all of its resources to help Mikhailov. Party leader Gennadii Zyuganov came to the region and campaigned with Mikhailov in six rural raions and the large cities of Zheleznogorsk and Lgov. Communist State Duma member Nikolai Ivanov headed Mikhailov's campaign team and Communist members of the Oblast Duma and Kursk City Assembly participated in the campaign effort.
Third, the Communists ran an excellent campaign, striking themes that were in line with popular sentiment in the region. Their posters included clear slogans and were professionally printed. The television commercials were also of
very high quality and professionally produced. The message of the red flag, hammer and sickle, and slogans "For victory" and "Mikhailov will not cause harm," an obvious reference to Rutskoi, were clear to everyone. The campaign appealed to emotions rather than logic. Three days before the election, Mikhailov announced that he was confident
of victory and that he intended to work with Surzhikov in his capacity as chief federal inspector in Kursk Oblast. Mikhailov's term will last five years. He was born on 15 September 1951 in the Kursk Oblast village of Kosorzha and graduated from the Kharkov Institute for Railroad Engineers. After working in the railroad, he switched to Communist Party work, and since 1991 "has sought to restore the position of the Communist Party in Kursk Oblast," as he puts it.
This work represents the new governor's political background.
Mikhailov takes office on 19 November and will likely quickly fire the current oblast government and form a new one with a majority of Communist Party members. The Kursk Oblast Duma will now has a Communist majority and it will likely soon meet to adopt a new oblast charter in line with federal norms (in September and October, the body was unable to achieve a quorum because of protests by the Yedinstvo faction). The regional legislature will itself be reelected on 14 January 2001.
Kursk's relationship with the federal government will change. Mikhailov will now name a representative to the Federation Council, most likely a Communist. Federal Inspector Surzhikov will monitor the activity of the oblast authorities with special care and interest, in the spirit of the current presidential administration. Mikhailov will work to improve the region's relations with the president. On 6 November he told NTV that "Putin is not Boris Nikolaevich Yeltsin, objectively we are allies with Putin."

8 November 2000

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RUTSKOI CONTINUES TO PROTEST REMOVAL FROM RACE

Kursk Governor Aleksandr Rutskoi is continuing to protest the decision of the Kursk Oblast Court to remove him from the gubernatorial campaign for electoral law violations just 13 hours before balloting was set to begin.
Rutskoi initially tried to round up support at home, but had little luck. While Vyacheslav Molokoedov, a member of the Kurchatov City Duma, did attempt suicide to protest the court decision, few others shared his enthusiasm. Fortunately Molokoedov survived the attempt, but his effort did not have an impact on Rutskoi's case.
On local television, Rutskoi charged that the electoral commission had ensured that the minimum number of voters had turned out by including ballots from people who had not actually voted. He called on residents who had not voted to go to the commission to see if someone had voted for them. On the morning of 24 October, about 8,000-9,000 Rutskoi supporters stood in line outside of the voting precincts andelectoral commissions. But these non-voters were not able to see if they had "voted" by studying the voter registration books. These books, which record who participated, had already been sent to the territorial branches of the electoral committee. The books could only be opened following a special decision of the oblast committee. When they were finally examined, no falsifications were found, though the number of protesters who actually could verify their status was significantly smaller than the crowds that had initially appeared.
After failing to make any headway in Kursk, Rutskoi headed to Moscow. Unfortunately for the governor, at its 25 October session, the Federation Council did not support Rutskoi, who compared the events in his region to a coup in a banana republic. However, the upper chamber did appeal to the Supreme Court to examine the Rutskoi case before the second round of the elections on 5 November. There are two reasons for the senators relatively cold response to Rutskoi.
First was the speech of Oblast Duma Chairman Viktor Chernyh, who articulately described Rutskoi's legal violations in a half hour talk. Second, the other governors did not want to fight with the Kremlin when many of them are soon up for election.
Rutskoi's last hope is the Supreme Court. There the famous lawyer Dmitrii Steinberg will defend him. His best argument is that the court decision removing him came after absentee voting had already started, meaning that about 4,000 voters may have voted for Rutskoi before he was disqualified. The court's decision is expected soon.
The presidential administration claimed that it did not play a role in removing Rutskoi from the election. However, its choice for Rutskoi's replacement is clear: Viktor Surzhikov, the Federal Security Service general who is also the federal inspector in the region (Vedomosti, 24 October). Surzhikov has the clear support of the presidential representative to the central district, Georgii Poltavchenko. Poltavchenko said that Rutskoi violated the electoral law and that the federal authorities did not influence the court's decision. According to Gleb Pavlovskii, the head of the Foundation for Effective Policy and a close advisor of Presidential Chief of Staff Aleksandr Voloshin, the removal of Rutksoi was Poltavchenko's work (Vedomosti, 25 October). In the first round Communist State Duma Deputy Aleksandr Mikhailov won 39.52 percent of the vote and Surzhikov took 21.58 percent.

1 November 2000

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RUTSKOI OUT, KURSK RUNOFF IN TWO WEEKS

After the Kursk Oblast Court eliminated incumbent Governor Aleksandr Rutskoi from the gubernatorial race on 21 October, voters sent two of his opponents into a runoff set for 5 November.
Kursk Oblast Chief Federal Inspector Viktor Surzhikov and Kursk Mayor Sergei Maltsev - both themselves candidates for the post of governor - filed simultaneous suits against Rutskoi. During the judicial hearings, these two cases were combined into one, as both candidates had charged Rutskoi with abusing his official position, misreporting his personal property (real estate and cars), and violating legislation on campaign conduct. While considering Surzhikov and Maltsev's claims, the oblast court failed to address those of Rutskoi himself, who had filed a complaint against his two opponents, as well as State Duma Deputy and KPRF Kursk Oblast Committee Secretary Aleksandr Mikhailov, on similar charges of improper campaign conduct.
All these complaints were filed on the morning of 20 October, less than 48 hours prior to the opening of the poll booths. Oblast Court Chairman Vladimir Zolotarev expressed his bewilderment at these eleventh-hour developments.
That same day, Chairman of the Kursk Oblast Electoral Commission Yelena Yarovaya confirmed that the oblast court's decision on this matter would be carried out, despite the time crunch. "If any of the candidates are removed from the electoral registry, ballots will be changed accordingly," she said.
The court's decision was handed down 21 October at 6 pm, a mere 14 hours prior to the opening of the poll booth. Most voters only learned what had happened they received the ballots, and saw that Rutskoi's name had been crossed out. The local administration, on the other hand, operated with a high degree of efficiency. Under the pretext of a bomb threat, local police and security forces cordoned off the Kursk television broadcast center, blockading all broadcasting areas. As a result, the first media outlet to report on Rutskoi's removal from the ballot was Radio Rossii, followed by ORT and NTV. In an interview, Rutskoi said he uspected that court ruling had Kremlin backing and ould lead to civil disobedience or boycotting of the elections.
On 23 October, Segodnya and Moskovskii Komsomolets published articles stating that Rutskoi had been punished as a warning to the other governors, a claim all but confirmed by Federal Electoral Commission Chairman Aleksandr Veshnyakov during a press conference in Moscow.Rutskoi himself views recent events as a conspiracy between his opponents, the oblast courts, local police, and Moscow. He says that he became aware of the federal hand at work after he was unable to reach the president, the prosecutor general, or the chairman of the supreme court by phone (Gubernskie vesti, Kursk TV, 23 October).
The only person to pick up the phone was Presidential Administration Chief Aleksandr Voloshin, who expressed his sympathy and promised to call Rutskoi back. It appears that Rutskoi overestimated his own worth to the oblast. He was betrayed by his inner circle, whose members flattered him out of all proportion to reality. The governor's ratings, as calculated by Rutskoi's own campaign, promised him no less than 49 percent of the vote - in other words, immediate victory in the first round. Despite Rutskoi's prediction of civil unrest, in actual fact nosuch protests or demonstrations took place.
Similarly, the elections were not boycotted, with 51.7 percent of the eligible population (60 percent in agricultural raions and 35 percent in cities) turning out to vote. This figure was actually higher than the norm. However, no one candidate received the requisite number of votes (50 percent plus one vote) to win the election.
According to preliminary returns, the Communist Mikhailov is clearly in the lead (with 39.5 percent), followed by Chief Federal Inspector Surzhikov (21.5 percent). No other candidate received more than 10 percent of the vote, although 12.3 percent voted against all candidates. In accordance with oblast law, it is expected that the run-off election will take place on 5 November, two weeks after the first round. The candidate who wins the most votes will become governor. While Mikhailov and Surzhikov battle it out, Rutskoi has announced that he will file an appeal with the Supreme Court to declare the elections invalid.

23 October 2000

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KURSK LOWERS ELECTRICITY, BREAD PRICES BEFORE ELECTIONS

On 6 October, the Kursk Oblast government decided to lower electricity prices for regional industrial enterprises by 14 percent. The decision affects about 600 Kursk enterprises and will cost approximately 65 million rubles a year.
From the electoral point of view, this step is a brilliant move for Governor Aleksandr Rutskoi. It will win the support of the owners and managers of these factories. The only question is where the money will come from. Most likely Rutskoi will have to take it out of the oblast budget. On 10 October the government also voted to lower bread prices an average of 10 percent across the region. Again, the government will deal with the costs of this measure only when the elections are over.

11 October 2000

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KURSK OBLAST ADMINISTRATION ISSUES ULTIMATUM ON ENERGY CRISIS

Until this August, the issues of electricity and heat were not at the top of the Kursk Oblast agenda. Thanks to its nuclear power station, Kursk Oblast enjoyed an energy surplus and even supplied electricity to Bryansk, Orel and Belgorod oblasts, as well as to Ukraine and Belarus. The oblast also hosts important gas and oil pipelines.
Despite this favorable climate, in mid-August consumers across the oblast faced short, but wide-spread, blackouts. Whole raions, including industrial enterprises, hospitals, educational institutes, and telecommunications centers, were cut off from their electricity supplies. Kurskenergo, the local electricity provider, cut power to private citizens who had been paying their bills on time and in full.
While the crisis lasted only two hours, the energy suppliers succeeded in their goal of frightening and angering the local population. The oblast government demonstrated remarkable efficiency in solving the problem, immediately forming a task force to facilitate utility payments. While questions on current debt were quickly resolved, those regarding older debts - some stretching as far back as five years - remain.
New problems arose on 1 September, when the federal wholesale energy market decreased supplies to Kursk Oblast by 50 megawatts, making it all the more obvious that, with a smaller energy pool, debtors will have to be cut off. The main energy debtors, as was revealed during the meeting of the oblast task force, are organizations operating under the aegis of the federal government: the military, border and customs guards, fire fighters, and educational
institutions. Their combined debt exceeds 100 million rubles. This sum is roughly what Kurskenergo owes the federal budget. In 1999, such a situation would be easily resolved: the Russian government, with mediation by the governor of the region in question, would simply arrange for mutual debt cancellation.
This year, however, the Russian government has rejected such practices.
The situation is further complicated by the fact that Unified Energy System (RAO EES) and the Russian government have provided Kurskenergo with differing instructions on whom to cut off first. The organizations slated for cuts by Anatolii Chubais are, according to a letter from the federal government signed by Prime Minister Mikhail Kasyanov, not to be cut off under any circumstances. Whose side should Kurskenergo take? This was the question the oblast task force attempted to answer during its recent meeting, chaired by Governor Aleksandr Rutskoi. According to the state-owned Kursk television and radio company, on 1
September Rutskoi suggested sending an ultimatum to Moscow that would say: "Don't play dumb (ne valyaite duraka)." It appears that such a letter would need to be sent both to UES and to the federal government. However, Rutskoi himself says that such an ultimatum is only a temporary measure, and that realistic mechanisms for paying for electric energy on time and in full must be found.

7 September 2000

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KURSK OBLAST GOVERNOR RUTSKOI IGNORES ARCHRIVAL

Kursk Oblast Governor Aleksandr Rutskoi did not attend the inauguration of Major General Viktor Surzhikov as head federal inspector of the newly created Central Federal District on 17 August. Surzhikov is likely to be Rutskoi's most dangerous rival in this fall's upcoming gubernatorial elections.
Rutskoi was far from the only honored guest made conspicuous by his absence. Presidential Representative to the Central Federal District Georgii Poltavchenko was also nowhere to be found - highly unusual behavior on the part of the presidential representative who personally introduced head federal inspector Vladimir Gerasimenko - Surzhikov's new colleague and his equivalent in rank - at the latter's recent inauguration in Belgorod. It was left up to Oblast Duma Speaker Viktor Chernykh to introduce Surzhikov, which he did with great enthusiasm, emphasizing the crucial need for cooperation between the Oblast Duma and the new head federal inspector.
Despite the non-attendance of some key figures, Surzhikov's inauguration was nonetheless a standing-room-only event. Among those present were the recently appointed Kursk Oblast Prosecutor General Aleksandr Babichev, Head of the Oblast Department of Internal Affairs (and long-time opponent of Rutskoi) Aleksei Volkov, and Kursk Mayor Sergei Maltsev. Various other Oblast Duma and City Assembly deputies attended, along with heads of raion administrations and local departments of the FSB, MVD, and border and customs guards.
Surzhikov is no newcomer to the region. Many government officials and journalists remember him from his days as head of the Kursk Oblast FSB and presidential representative under Yeltsin.
In a press conference following the inauguration, the new head federal inspector studiously avoided making any definite statement on whether or not he would run for governor of Kursk Oblast in October. A week later, on 24 August, the public found out that Suzhikov had notified the oblast electoral committee of his intention to run. Local media were quick to interpret this turn of events as evidence that Surzhikov's introduction back into the region as head federal inspector is merely the first step in a campaign to consolidate opposition
against Rutskoi. It seems clear that the federal executive branch will not support Rutskoi's candidacy in the upcoming gubernatorial elections.

30 August 2000

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BLACK EARTH ASSOCIATION AGAINST EES RESTRUCTURING

On 14 June, a coordinating council of the fuel energy complex in the oblasts belonging to the Black Earth Association (Belgorod, Orel, Kursk, Lipetsk, Voronezh, Tula, Smolensk, and Tambov) met in Kursk. The purpose of the session was to discuss the program the board of directors of Unified Energy System (EES) has proposed for restructuring the holding. The EES board, headed by Anatolii Chubais, approved the program for the reorganization of Russia's electricity provider back in April. The program calls for liquidating regional energy systems ("energos") and turning EES into a company that provides electricity lines connecting producers and consumers. EES power stations will then become independent joint stock companies.
The interregional associations in Siberia, the Urals, and Central Russia have held similar sessions to discuss the restructuring . As acknowledged in the report EES representatives presented in Kursk, the restructuring program met sharp criticism in all three associations. The unifying criticism among the associations is that the program leaves too much unclear regarding the economic basis of the restructuring plan. Representatives of the regions in the Black Earth Association also expressed multiple objections to the provisions of the restructuring program. Chairman of the coordinating council, Kursk Deputy Governor Vladimir Yerokhin, who chaired the session, as well as representatives from regional administrations and the energy structure (Kurskenergo, Belgorodenergo, etc.) bombarded the EES representatives from Moscow with dozens of questions. They argued that there was no need to rush the restructuring the way that privatization, which was also conducted by Chubais, had been rushed.
They stated that it is necessary to work through the program, "sound out" every point in the document, and listen to the opinion of specialists who know the problem from the inside. These suggestions, of course, expressed hostility towards Chubais.
Yerokhin stated that one cannot allow the mistakes from the period of rushed privatization to be repeated. After a heated debate, the session's participants adopted a decision stating that the reorganization program correctly defines the fundamental problems of Russia's current electricity suppliers: the collapse of the system's effectiveness and development, the high
tariff burden for consumers, chronic non-payments, and insufficient investment for restoring fundamental production funds. The primary goals of the proposed reorganization, according to the initiators, are to form a financially stable holding company, increase the company's capital, ensure conditions for attracting investment, and provide reliable energy supplies to paying customers.
The decision also stated that the reorganization program does not give proper attention to the preparation period, such as adopting the necessary laws and standard acts on energy, and taking into account both the interests of socially defenseless strata of the population and tariff policies, which ensure the continuing activity of and investment in energy. The federal Ministry of Energy supported the position of the Black Earth regions. In particular, Deputy
Minister of Energy Vladimir Kudryavyi, in enumerating the arguments against the program, stated, "How is it possible to restructure the system this way?!"
Clearly even the two leading bodies in this issue, the Ministry of Energy and EES, have been unable to reach a mutual understanding. The EES Moscow representatives promised to study all of the proposals offered by participants in the coordinating session and bring them to the working committee on the restructuring proposal.

21 June 2000

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LAW-BREAKING DEPUTIES LEAVE KURSK LEGISLATURE

Seven members of the Kursk Oblast Duma, who also illegally hold various positions in the oblast's executive branch, have now resigned their seats in the legislature. Federal law denies
employees of the executive branch the right to simultaneously serve in the legislature. As members of the regional legislature, the deputies took orders from Kursk Governor Aleksandr Rutskoi rather than serving the interests of their constituents.
These deputies should have resigned from the legislature when the governor appointed them to executive positions. However, Rutskoi appointed them regardless of whether they actually did resign, flagrantly violating federal law. Furthermore, until now he did not implement a court decision which declared the executive-branch appointments of three of the deputies illegal.
The deputies apparently resigned at Rutskoi's order as a concession to Putin's attempts to implement federal laws in the regions. However, in the case of Anatolii Popov, one of the seven deputies and Rutskoi's father-in-law, serving in the administration violates federal laws prohibiting nepotism.
Despite his difficulties obeying the law, Rutskoi recently proposed to Putin that he put a moratorium on all elections and then simply reappoint the existing governors to their offices. Rutskoi faces elections in the fall.
The resignations will have little impact on the legislature, which will be reelected in December 2000. However, the remaining 34 deputies will have to be more conscientious in their work since the minimum number of members required for a quorum is 30.

7 June 2000

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KURSK: BETTER TO ELIMINATE FEDERATION COUNCIL

On 23 May Kursk Governor Aleksandr Rutskoi told the TV station Takt that he supported all of Putin's initiatives except one. He agreed with Vladimir Zhirinovsky, who said that it is
better to have a unicameral parliament than form the upper chamber on the basis of elections.

24 May 2000

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BELGOROD BUSINESSMEN FIGHT TAX HIKE

The relatively peaceful relations between the Belgorod Oblast authorities and the local business community could be shattered with the introduction of a tax rate hike. On 27 April, the members of the oblast legislature voted to increase the inflation coefficient for the
imputed business income tax from 1.2 to 1.4. Thirty-one (of 35) deputies participated in the vote and only two opposed the rate increase. The main advocate for the increase was Oblast Duma Budget Committee Chairwoman Olga Kitova.
The legislators' desire to fill the regional government's coffers means that the region's small and medium-sized businessmen will have to raise prices on their goods. The higher taxes will bite into the buying power of local consumers. According to the Consumers' Union, the tax increase will cause prices to go up 6-8 percent in May (Vecher, 29 April).
At the same time, wages for hired labor are also rising and the businessmen must find money to pay these salaries. Unfortunately, many businesses are barely surviving and their closure would mean the loss of jobs, increased unemployment, and increased social tension.
The Guild of Merchants and Industrialists charged that the decision of the deputies is ill-considered and hurts the interests of storekeepers and consumers. In May Guild is planning to hold a conference of local businessmen to examine questions associated with tax collecting and small business in general.
For the time being the Guild called on its members to protest against the legislature's actions during the traditional May Day demonstrations.
Will the law actually be adopted? Now it depends on whether Governor Yevgenii Savchenko signs it.

5 May 2000

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OPPOSITION SET TO BATTLE RUTSKOI IN KURSK

The events of the first few days of April in Kursk Oblast can be viewed as nothing less than a rehearsal for the upcoming elections in the region--gubernatorial in October and oblast duma in November. On 3 April a special 16-page color special edition of Kurskaya pravda, detailing the governor's activities from 1997-1999 was published with a print run of 70,000 copies, more than double the standard 30,000 print run of the typically black-and-white, four-page publication. Prior to publication, on 30 March the issue appeared on the Rutskoi website. According to the newspaper, everything in the oblast is going along splendidly and there are no problems.
Rutskoi's opponents in the duma responded to this special edition three days later by holding a press conference in the new oblast duma building. The organizers' method for ensuring that journalists participated in the event is noteworthy--the police offered escort services to newspaper editors coming from raion centers. Reports on ORT's Vremya (6 April) stating that Kursk cops are more dangerous than bandits enraged the police and thus the Kursk Oblast Department of Internal Affairs (UVD) Chief General Aleksei Volkov decided to
help the duma in its fight against Rutskoi (for more information on the relationship between Rutskoi and the Kursk police, see EWI Russian Regional Report, 9 February 2000). The editors naturally informed the oblast Press Ministry of the press conference, and as a result, three deputy governors, Anatolii Popov, Viktor Kryukov, and Vladimir Yerokhin, put in an unexpected appearance.
Chairman of the Kursk Oblast Duma Viktor Chernykh read from the letter he had sent to President-elect Vladimir Putin, State Duma Speaker Gennadii Seleznev, and Federation Council Chairman Yegor Stroev. The letter outlined three reasons for requesting that an independent committee be sent to Kursk immediately to investigate the governor's activities. The arguments are that Rutskoi has abused his power to benefit himself, his family, and close friends; pursued policies leaving the oblast on the verge of economic bankruptcy, and defended the criminal activities of his inner circle and other high-placed oblast officials. The letter was signed by the majority of the oblast duma deputies as well as a large number of parties and social organizations.
Immediately after Chernykh finished reading from the letter the three deputy governors jumped up and created a two-hour long scene. They paced up and down the hall uttering statements such as, "This is where the political defamation of the governor is taking place, put this down in the minutes," and "We need to be guided by the Constitution and the Kursk Oblast Charter." It was an amusing spectacle. After two hours the deputy governors were tired and as soon as they were seated Oblast Duma Deputy Nikolai Yefremov rose and shaking sheets of paper, announced, "These are the secret official notes of the FSB on Rutskoi's criminal activities. They have already been sent to Moscow." This statement incited a new wave of emotion that continued until the end of the day. Judging by this event, Rutskoi's opposition plans to conduct its electoral campaign by digging up dirt on the governor and appealing to federal executive and legislative agencies to take action against him. More importantly, the opposition has secured the support of the procurator and the police. Rutskoi's strongest opponents are local businessman Nikolai Greshilov and former Kursk Oblast Prime Minister Boris Suraev. However, Rutskoi also plans to appeal to Putin for Moscow's support. Clearly the federal authorities will have a significant influence on the results of the elections, particularly because there is an even balance of power in the region. Which side Kursk Mayor Sergei Maltsev supports will be of great importance because he recently won 220,000 voters in his election.

12 April 2000

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NEW RELATIONS WITH THE KREMLIN

Kursk Governor Aleksandr Rutskoi was clearly pleased that Putin had won more than 50 percent of the vote in Kursk Oblast. Communist candidate Gennadii Zyuganov was surprised that he failed to repeat his 1996 performance in which he scored over 50 percent, and even accused Rutskoi of falsifying the results on national television (Russian Television, 26 March).
Rutskoi believes that Putin's strong showing in Kursk improves his chances for cooperation with the president and may mean presidential support for the governor's reelection bid in October. Rutskoi had very bad relations with President Yeltsin, but now there are new people in the Kremlin. In Kursk's neighbors, Belgorod and Voronezh, Putin won a smaller share of the vote, and in Bryansk and Lipetsk, Zyuganov won more votes than the acting president. Thus, Rutskoi looks quite good by comparison.

28 March 2000

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KURSK BANK FACES DIFFICULTIES IN US AFTER BANK OF NEW YORK SCANDAL

Kurskprombank is the only independent bank in Kursk Oblast, since all the other regional banks operating there are branches of Moscow banks. It has an impressive list of international customers in the region, including ICN Pharmaceutical, Sun-Interbrew, Exide Electronics and several others.
Until recently, its main foreign banking partners were Deutsche Bank and the Bank of New York (BONY) where it had corresponding accounts. However, the money laundering scandals surrounding BONY had a major impact on the Kursk bank.
BONY managers decided that they would cut their ties with Russian banks fearing that continued contact could further compromise them.
After losing its ties with BONY, Kurskprombank decided to seek a relationship with another bank willing to provide similar services. It sent letters to five American banks. Two outright said that that they were not interested and three simply did not response in the course of three months. Kurskprombank Department Head Anatolii Malinov described this situation in an interview with Kurskii vestnik (22 March) without naming the banks. He thinks that the American banks are concerned about the presidential elections, the threat of a Russian default, and the BONY scandal and hopes that conditions will improve in the future. However, for the time being, Kurskprombank's American customers must work through Deutsche Bank.

28 March 2000

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KURSK LEGISLATURE VOTES NOT TO FINANCE PRO-GOVERNOR NEWSPAPER

In discussing the region's 2000 budget, the Kursk Oblast Duma focused considerable time on expenditures for the media. This theme is not surprising since this year Kursk's residents will be heading to the polls at least three times, for Russian presidential elections this spring, Kursk gubernatorial elections in the fall, and oblast duma elections in December. The issue of control over newspapers in this situation is very important. Whoever controls the media wields considerable power.
One of the main issues discussed was why the newspaper "Kursk," which has a clear bias in favor of the governor, receives subsidies from the oblast budget. Kursk Oblast Duma Chairman Viktor Chernykh stressed that the media did not give sufficient coverage to the legislature. He said tat the activities of the deputies should appear on the pages of all state media, including oblast and raion media. Oblast duma deputies recalled that they never approved the establishment of "Kursk" and that "Kursk" was the only oblast newspaper that
printed the word governor in capital letters. Deputies Anatolii Popov and Vladimir Yerokhin, who are also deputy governors, felt that their colleagues' attack on "Kursk" was an attempt to "suffocate an unbiased newspaper." Yerokhin further explained that the governor had proposed giving copies to 6,000 veterans and pensioners who could no longer afford the subscription. However, his duma colleagues did not share his sympathy for the paper.
Ultimately, the deputies voted against giving "Kursk" any financial support from the oblast budget. If "Kursk" continues publication, it will be with other resources. Additionally, the newspaper Kurskaya pravda, which was founded in part by the Kursk Oblast administration, has had its financing reduced by 30 percent.

15 March 2000

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SAVCHENKO'S INFLUENCE INCREASES WHILE RUTSKOI'S DROPS

Over the past two weeks Kursk Governor Aleksandr Rutskoi's influence in Kremlin circles has clearly been on the decline while Belgorod Governor Yevgenii Savchenko's authority is increasing. This development was apparent at the 26 February Yedinstvo congress when Rutskoi shocked the delegates by pointing out that the party's program was as empty and meaningless as the Soviet Union's 1 May slogans. The hall fell silent and party leader Sergei Shoigu rebuked the governor. Rutskoi was insulted, as his observations were essentially correct. Yedinstvo's program is surprisingly empty. Behind the pretty words there is not a single serious political thought.
Moreover, Rutskoi did not manage to carry out Acting President Vladimir Putin's order that the Yedinstvo party organizations in the regions be headed by "ordinary people" instead of officials. In Kursk Rutskoi recruited his father-in-law, Deputy Governor Anatolii Popov, to head up the campaign. The Kursk delegation to the congress was also top-heavy, including Rutskoi, presidential representative to Kursk Leonid Bashkeev, deputy governors Popov and
Gennadii Varfolomeev, and two Kursk State Duma deputies from Yedinstvo - Aleksandr Fedulov and Vladimir Bykov. Such a delegation did not counter assertions that Yedinstvo is a party of nomenklatura officials.
Rutskoi's imperious claims became too noticeable and they clearly limited the governor's authority. Rutskoi's problem is that he continues to consider himself a federal level politician--no less than a vice-president. If he is right regarding Yedinstvo's program, he is sorely mistaken about his own standing.
Belgorod's governor took a more appropriate position in relation to Putin. The restructuring proposal Savchenko prepared with Novgorod Governor Mikhail Prusak and Kurgan Governor Oleg Bogomolov (see EWI Russian Regional Report, 1 March 2000) on widening and reforming state power obviously played to the hearts of many in the Kremlin. After 25 February, when the open letter was published in Nezavisimaya gazeta, several Belgorod newspapers reported that Savchenko had received numerous proposals to work in Moscow, even in ministerial positions (Vecher, 1 March). On 3 March Savchenko confirmed the validity of such reports.
However, he made it clear that he preferred to remain governor. The logic of such a decision is obvious -it is better to be the governor in Belgorod and have support from Moscow than to be a temporary minister in Moscow and not have firm backing.

9 March 2000

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CENTER APPOINTS PRO-RUTSKOI TAX AUTHORITIES IN KURSK

The meeting of the Federal Ministry of Taxes and Collections Collegium held in Kursk Oblast led to noticeable changes in the activities of the tax inspectorate and tax police.
Head of the tax inspectorate in Kursk Oblast Viktor Dolgikh was removed from his post in favor of Aleksandr Bogoyavlenskii, who had been working as a deputy governor. In political terms the dismissal and appointment is good news for Aleksandr Rutskoi on the eve of gubernatorial elections.
The changes reflect Minister Aleksandr Pochinok's dissatisfaction with his subordinates in Kursk Oblast in 1999. The increase in tax collections in Kursk was 50 percent compared to 68 percent in Russia as a whole. Kursk enterprise tax debts of more than 6 billion rubles exceeded the oblast budget for 2000.
Eighty percent of these debts (4 billion rubles) belong to the oblast's 20 largest enterprises (of the 73,000 organizations that pay taxes in the region). The Kursk Nuclear Plant owes nearly a billion rubles to the budget. Another problem is that enterprises pay their taxes through "problem" banks such as SBS-Agro. This money, naturally, does not go to the federal treasury, but remains under the bank's control. In the beginning of March 58 million
rubles in taxes were already tied up in this way. The governor was also very displeased with the tax police's practice of confiscating property for unpaid taxes. For example, Rutskoi was irritated that local collective farms could not use machinery they had recently purchased.
Bogoyavlenskii's main goal now is to crack down on tax evaders. "We have caught up with tax cheats utilizing problems and loopholes in the law, and now we plan to finish this," Kursk's head tax collector announced. Regarding abolishing barter and mutual debt cancellation, the tax inspectorate expects to collect up to 70 percent of local taxes from the real sector of the economy in the form of real money. Before 1 April the tax inspectorate plans to work on restructuring the 6 billion ruble debt and sign an agreement on debt repayment with the corresponding organizations. To ensure ongoing payments to the budget,
the debtors have been freed from possible criminal prosecution regarding their previous tax evasion.

9 March 2000

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PUTIN PICKS NEW REPRESENTATIVE IN BELGOROD

Putin has named Vladimir Gerasimenko the presidential representative in Belgorod, making Gerasimenko the third person to fill this post in the course of two months. In December 1999 Boris Kuznetsov was appointed to the post, replacing Sergei Kisin, who had served as the presidential representative since 1993. Kuznetsov was, and remains, the residential representative to Voronezh Oblast (where he has announced plans to run for governor), and thus was serving simultaneously as representative to two regions.
Gerasimenko previously headed the oblast government, but was released from his post for no apparent reason following Belgorod Governor Yevgenii Savchenko's reelection in May 1999. Since his dismissal Gerasimenko has been active on the region's political scene, becoming the head of the Belgorod branch of Otechestvo. Following Otechestvo's dismal performance in Belgorod's State Duma campaign, Gerasimenko became the head of the local Sberbank branch and took a directorial position at the Belenergomash factory.
It is unclear why Putin nominated the local leader of Otechestvo, which is considered the political enemy of the presidential administration, to serve as his representative. However, relations among regional political figures do not depend on political inclinations and sympathies in Moscow, but are rather determined by personal loyalty. Gerasimenko's dismissal from the oblast government could suggest that he had difficult relations with the governor and thus could serve as a good point man for Putin to counter Savchenko. However, perhaps Putin's appointment of Gerasimenko was meant to support rather than
restrict Savchenko's power. There are rumors floating within the governor's administration that Savchenko plans to leave his post early. If so, then the governor would want to place his own people in key positions. He may plan to return to power after a term (the governor cannot hold more than two consecutive terms), taking time to serve in Moscow perhaps as the agricultural minister or on the State Council of Russia and Belarus. Gerasimenko's appointment could be good for Savchenko if, following the presidential election, gubernatorial posts stop being elected positions. The new president could then appoint Savchenko for a third or fourth term.

9 February 2000

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RUTSKOI FAMILY BACKS PUTIN

Since 10 January, Kursk Governor Aleksandr Rutskoi's administration has sponsored an organization to support the election of Vladimr Putin as Russia's next president. Presumably the agreement between Rutskoi and First Deputy Presidential Chief of Staff Igor Shabdurasulov (who visited the region in December) is that Rutskoi will support Putin in the presidential elections and then Putin will support Rutskoi in the gubernatorial elections (see EWI Russian Regional Report, 14 December 1999). Rutskoi's father-in-law, Deputy Governor Anatolii Popov, who handles Rutskoi's public relations, is in charge of the campaign. This office has branches in every raion of the oblast.
As a public servant, Popov does not have an official position in the Putin campaign, but claims to support him "as a citizen," paraphrasing Putin's famous line about his support for Yedinstvo (Kurskaya pravda, 19 January).
It will not be easy for the team to collect signatures in support of Putin, because far from all Kursk residents will support him in the presidential campaign. According to a survey conducted by the local technical university, many say that "he was palmed off on us." The anti-Rutskoi opposition Kurskoe Yedinstvo is trying to wage a propaganda war in the newspaper Kurskii vestnik against Putin, but so far without much success.
Rutskoi's support for Putin has already had practical results. The federal government has begun financing two projects which have great significance for Rutskoi's reelection. The first is the Kursk Arch project, which Rutskoi initiated and personally designed. The governor hopes to complete this pompous ensemble, which includes the arch, a chapel, museum, and park, by the 55th anniversary of the end of World War II on 9 May 2000, to secure the support of elderly voters. Putin promised that he would participate in opening the complex
when he was still prime minister. The second project is the reconstruction of a church that was destroyed by fire. The federal government sent 12 million rubles for these projects in January and work is proceeding around the clock. Another 85 million rubles is expected shortly. Thus, Putin has support in Kursk Olbast, but it is not universal.

2 February 2000

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KURSK: INTERNET USERS MATCH NEWSPAPER READERS

In Kursk there are about 30,000-40,000 Internet users among the oblast's one million population. This number is about as many as subscribe to the region's largest newspaper. Most of them are under 50 years old. About 120-150 companies in the oblast are on line.
There are three service providers. Service began in 1996 by the Kursk Center for New Information Technologies, with funding from the US government sponsored Eurasia Foundation. Its main customers are school and research organizations.
In 1997, the British-Russian joint venture Sovtest began providing service using satellite links. It now provides the fastest and most reliable service. In addition to providing Internet service, it sells computers and communications equipment. Its main customers are successful private firms.
In 1998 the newly created communications monopolist Elektrosvyaz began offering Internet service. Its control of all communications systems, high quality, and low prices allowed it to quickly attract a large number of clients. It was the first to offer 56k V.90 modem connections and linked the city's telephone stations with fiber optic cable. Now it is the leading service provider. Among its advantages is its ability to offer Internet services throughout the oblast.
Almost every newspaper in the region uses e-mail and most journalists have access to the WWW. The richest newspapers have their own web sites, including Drug dlya druga, which puts all of its information on-line immediately. The newspaper Khoroshie novosti puts up most of its content, but with delays of a week or more. Kurskaya pravda 's site is still under construction. Other papers are mostly filled with ads.
Governor Aleksandr Rutskoi opened his website in December 1999. The site has information in English and Russian and is aimed at attracting investment for a list of projects ranging from $6 million to $85 million. The web site of the Oblast Duma is exceptionally useful and gives
more information about the regional legislature's activities than do local newspapers and television. The oblast authorities have not passed any restrictions on the use of the Internet. The Kursk mayor's site, in contrast, is more than a year out of date. Local companies mostly use the Internet to advertise their services and prices. Generally the sites are of poor quality and the information is out of date. An exception is the Kursk branch of the Vesso-Link paging company which offers on-line paging services. The Kursk firm Akkumulyator offers product and price information, as well as investment opportunities in its chemicals division. A reasonably full list of Kursk firms is available at странице "Весь интернет Курска".

26 January 2000

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KURSK: LACK OF ALTERNATIVES HOLDS MONEY-LOSING COOPERATIVE TOGETHER

The Novaya zhizn cooperative of the Tim Raion specializes in growing wheat, barley, oats, and some livestock. In 1999, as in the last seven years, the cooperative lost money. According to Chairman Valentina Pozhidaevaya, of the 3,200 hectares available, only 200 were planted. The harvest was transferred to the oblast produce fund, but by the end of November the farmers had not been paid. For 2000, the cooperative only has enough seed to plant 200 hectares again.
Of the 400 cattle and 1200 calves the cooperative owned in 1992, only 98 cattle remained in 1999. The 14,000 pigs have completely disappeared during the last decade. Only the frame of the former pig sty remains.
The members of the cooperative have not been paid in seven years. The workers survive on the products they sell from the garden plots (milk, meat, potatoes). Why do they remain in the cooperative? Mostly from habit. Also the cooperative can still supply some equipment and fuel. Outside the cooperative it is difficult to obtain credits to work independently.

LATVIAN BANK WINS COURT CASE AGAINST KURSK OBLAST

Kursk Oblast's borrowing activities in 1996-7 are causing major problems now. Then newly elected Governor Aleksandr Rutskoi wanted to establish personal control over as much of the oblast's financial flows as possible. He therefore established the Kursk Guberniya Bank, backing it with a guarantee based on funds in the oblast budget.
Rutskoi then ordered all Kursk enterprises to open an account in the bank and the oblast planned to make all its payments through the bank. However the bank collapsed in 1998 and it then came out that the Latvian Pareks-Bank owned a large share of the Kursk bank's stock. The Latvians secured a large stake because the oblast had to borrow the necessary capital to
establish the bank.
During the first part of January 2000 a team of lawyers from Moscow is working in the oblast to implement a court ruling which states that the oblast budget must pay back the Latvian bank for the money borrowed to establish the governor's bank. Since the Latvians' initial loan to the bank was guaranteed by the oblast budget, regional officials are responsible for paying it off. Several other credits were arranged in a similar way.
Now money coming into the oblast budget is going to pay off the debts rather than other expenses such as the salaries of state employees. Chief Inspector for the Kursk Oblast branch of the Ministry for Taxes and Collections Nikolai Dolgikh is also taking any credits that come into the oblast to pay the debt (Drug dlya druga, 5 January).
Despite these moves, not all of the administration's accounts are frozen. The local authorities have avoided paying the debts by opening accounts in Moscow commercial banks. As a result, the oblast is working like a heavily indebted enterprise. It is easy to send it money, but much more difficult to receive any back.

KURSK: EGG PRODUCER STANDS OUT

The Rus egg-producing agricultural cooperative was the only enterprise in Oboyanskii Raion that made a profit in 1998 and 1999. And its profits are quite large. This enterprise has thrived because it has learned to live on the basis of its own resources. It has also benefited from the leadership of Aleksandr Loktionov, who joined the enterprise after serving as a raion-level bureaucrat. Loktionov combines a subtle analysis of economic trends with a professional knowledge of his field. He is a good organizer and has a powerful understanding of human psychology.
Loktionov's decision to work in Rus demonstrates his leadership skills. He moved to the village of Rudavskii, Rus's home, from Oboyani, the raion center where he was born and grew up. This move strongly raised his standing in the eyes of his subordinates. Almost every other former and current collective farm chairman or state farm director has set up or is currently preparing "an escape route," either building a home in the raion center or Kursk itself, so that they can avoid a life in the countryside. The sly Loktionov probably took this into account when he decided to live in a village. Today Rus is known across Russia.
The most important aspect of the egg business is the quality of the feed given to the chickens. In Kursk Oblast, the feed producers are monopolists, such as the Kurbakinskii Feed Factory in Zheleznogordkii Raion. The feed producers traditionally did not pay much attention to the quality of their product because the poultry farm consumers had no other suppliers. The farms were losing money because of the deceitful activities of the factory. However, Loktionov took action to solve this problem. First, Rus itself added the necessary supplements to the feed it bought locally to improve its quality. Then it began to buy feed
in another oblast, from where it now gets 80 percent of its supplies. The Kursk monopolist is now trying to win Rus back as a customer, promising to improve the quality of its feed.
In 1996, Rus's chickens were each producing 160 eggs a year, in 1998, the figure rose to 264. The plant hopes to ultimately achieve a rate of 300. (The chickens in the Irkutsk plant described below produce at the rate of 330 per chicken a year.)

12 January 2000

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