#9 - JRL 7219
Moscow Times
June 11, 2003
Half as Many, But Twice As Big
By Natalia Yefimova
Staff Writer

The Perm region's steady progress in merging with a smaller neighbor has fueled long-smoldering rumors that the Kremlin wants to slash the number of Russia's constituent territories from 89 to 40 or so.

But proposals to combine dozens of regions have sparked fierce debate among political and business elites eager to retain or expand their influence. The battle suggests that a merger campaign could be used by Moscow as a bargaining chip in political haggling but would be tough to implement across the board.

Proponents of the plan say fewer regions would be easier to manage and would help cut down on administrative costs, especially if poorer regions are combined with wealthier ones.

"From the state's point of view, it is easier to manage 40 regions than 89," Sergei Mironov, the Kremlin-backed speaker of parliament's upper house, said last week.

The idea of cutting the country into smaller, more manageable administrative units was a key element of President Vladimir Putin's "vertical structure of power," the construction of which began in May 2001 with the creation of the seven federal districts.

Opponents argue that merging regions would be an expensive undertaking that is not sure to bear fruit and could instead paralyze local government activity for months if not years.

"Any such large-scale reorganization is a long and costly process that will meet with internal resistance," Nikolai Petrov, a specialist on regional politics, said in an interview. "And I think in this case the cons outweigh the pros."

Negative responses to the idea have echoed much of the criticism targeted at the Kremlin-drafted bills to overhaul municipal and regional government, which the State Duma is to consider in a crucial second reading Wednesday.

On the ground, the merger plan has had active support from the presidential envoys and powerful regional governors eager to head up the new territories or simply get on a good footing with federal authorities. For some of the governors, the project could open the door for seeking additional terms in office.

One such man is Perm Governor Yury Trutnev, whose region has made the most significant progress on the merger front. Trutnev and Governor Gennady Savelyev, his counterpart from the neighboring Komi-Permyak autonomous district, signed an agreement earlier this year to gradually combine their regions. They have agreed to hold a referendum on the merger, most likely in December together with the nationwide Duma elections.

The effort in Perm has had obvious support from Moscow, but there are differing points of view on how much the Kremlin had to prod the regions to agree. The details of the deal, ambitiously set for completion by 2007, are being ironed out by a presidential working group headed by Kremlin deputy chief of staff Vladislav Surkov.

Like Perm, many of the potential mergers involve vast regions that surround or border smaller, often poorer ethnic enclaves, which were part of the larger region before the breakups of the early 1990s. Many of these areas -- called matryoshka regions in reference to the traditional Russian nesting dolls -- have complicated administrative and financial links.

"The autonomous districts used to be part of the regions and in many ways they have remained a part of them. ... In many ways, the relationship of subordination has stuck," Petrov said.

The merger idea also has been applied to regions that have never been anything but neighbors and to regions that did have links in Soviet times but were not matryoshkas. One of the hottest items of speculation in recent weeks has been the possibility of combining Moscow with the Moscow region and St. Petersburg with the Leningrad region.

A law passed two years ago laid out the legal procedures for creating or getting rid of new regions, and proposals to do so started sprouting up across the country.

In Perm's case, a merger might prove mutually beneficial. The poor but resource-rich Komi-Permyak district would retain its semi-autonomous status while coming under the wing of its more powerful neighbor. Meanwhile, Perm's elite would get greater access to the promising northern territory.

But calls to change regional boundaries elsewhere have stirred up bitter battles among local leaders, especially in oil- and gas-rich areas in Siberia.

According to the Russian Regional Report, a research newsletter published in conjunction with American University, the plan's key detractors are in regions where large financial-industrial groups exert considerable control over local government and lawmakers.

"Currently, corporate representatives control six of the 10 autonomous districts, particularly the ones that have the richest resource bases and are the most developed in economic relations," the newsletter said in April.

"Big business sees its representatives in political office as an additional guarantee of its ability to continue working, and efforts to merge regions could create tensions in business-government relations at both the regional and federal levels."

The highest stakes and greatest resistance seem to be surrounding the Tyumen and Krasnoyarsk regions, where major-league companies like Yukos and Interros play a big role in shaping the political landscape.

Tyumen's two oil- and gas-rich autonomous districts -- Khanty-Mansiisk and Yamal-Nenets -- are much wealthier than the region itself and have loudly protested the idea of further integration, fearing that they would lose control of their hefty revenues.

The situation in Krasnoyarsk is similar in that the giant region earns a fraction of the revenues pulled in by its mineral-rich Taimyr autonomous district. However, the governors of those two territories, both former executives at metals major Norilsk Nickel, have chosen a different strategy than their counterparts in Khanty-Mansiisk and Yamal-Nenets.

Instead of vocally opposing a merger, they have teamed up with the head of the region's second autonomous district, Evenkia, and have supported the idea, but have made it clear that they want to control the process themselves.

Merger proposals have also made little progress in Irkutsk and Altai, both of which were toying with the idea of swallowing up autonomous ethnic districts on or near their territories.

Petrov warned that if the Kremlin and the merger plan's backers did push ahead with the idea, they would be naive to hope for quick returns.

"I hope there are no radical moves to reorganize," Petrov said. "Neither the changes nor the benefits they bring can come too quickly."