ULAN UDE, WHERE BEING ASIAN WORKS

C O N F I D E N T I A L SECTION 01 OF 04 MOSCOW 005101

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/21/2017
TAGS: PREL PGOV PREF ECON ETRD PINR MG RS
SUBJECT: ULAN UDE, WHERE BEING ASIAN WORKS

Classified By: Political M/C Alice G. Wells. Reasons 1,4 (B/D).


1. (C) Summary. During an October 15-19 trip to the
Republic of Buryatia, squeezed between Lake Baikal and
Mongolia, local government officials, political party
representatives, and civil society leaders shared with us
their views on the political, economic, and social
development of the region. Buryatia is about the size of
Germany, but has a population of fewer than one million,
almost forty percent of whom live in its capital, Ulan Ude.
On December 2, three major elections -- for the State Duma,
the Republic legislature or Khural, and for mayor of Ulan Ude
-- will take place. The recently-appointed President, the
incumbent mayor (who is seeking the third term),and 34 of 66
Khural deputies are United Russia members, and the upcoming
elections will most likely further strengthen the ruling
party's hand. The Ministry of Economics May 2006 decision to
designate Buryatia one of seven special tourist zones has
raised hopes of economic progress in the republic. Buryatia
is home to more than 100 ethnic groups and a variety of
religious sects, and considers itself a model of interethnic
and interconfessional harmony. Cultural similarities and a
shared heritage have created bonds between Buryatia and many
of its Asian neighbors. Chinese and Mongolian traders, South
Korean businessmen, and North Korean laborers (legal and
illegal) are seeking their fortunes in the republic. End
summary.

From "Red" Republic to United Russia
--------------


2. (C) Although the Soviet Union disappeared 16 years ago,
interlocutors with whom we met during an October 15 - 19
visit to Ulan Ude agreed that the residents of Buryatia
continued to nurture a pronounced nostalgia for the Communist
regime. Even now, the world's largest head of Lenin -- seven
meters high -- keeps watch over the city's main square, while
many residents to this day reportedly long for the days when
education, living space, and annual visits to the sanitarium
were cost-free. Ivan Kalashnikov, a former Communist party
leader and now head of the United Russia party spoke
feelingly of that nostalgia before turning to a discussion of
the political campaigns. Kalashnikov denied the connection
between Putin's decision to lead the United Russia party list
and the stampede to his party in Buryatia, claiming that the
UR had begun to attract defectors months before Putin's
announcement and that the process is continuing. He noted
that five Agrarian party members in the Khural had been
absorbed by United Russia at their request two months before
Putin's decision. United Russia's current membership, which
Kalashnikov estimated at 13,000, is increasing at a rate of
100 - 600 per day.


3. (C) Kalashnikov told us that United Russia hoped to add
one Duma seat to the one it won in the last election. He
also predicted that United Russia would win two-thirds of the
local Khural and that the party's candidate for mayor,
Gennadiy Aidayev, would win as well. United Russia Buryatia
was following the party's national policy in running twenty
percent women and twenty percent youth (under 27 years of
age) on its party list. The chief plank of the party's
platform was to increase the volume of subsidies flowing from
Moscow.

Winner Takes All?
--------------


4. (C) Not so fast, said Just Russia's Irinchey Matkhanov in
a subsequent conversation. Matkhanov is a popular
businessman who has reportedly done much for the republic,
and he exemplifies the personality-driven politics that seems
to prevail in the underpopulated and poor Republic.
Anzhelika Meshkova, a journalist told us that Just Russia's
high standing in the republic -- it is the second-strongest
regional party organization after St. Petersburg -- is
attributable to Matkhanov's prominence. Just Russia's
success meant that its chairman, Sergey Mironov, visited the
republic frequently and that, according to Matkhanov, Just
Russia hopes to harvest at least one Duma seat and win 20 -
25 percent of the Khural, which could increase the number of
seats (13) that it currently holds.


5. (C) The remaining opposition parties seemed to be much
weaker than United Russia and Just Russia. Local Communist
party chairman Naydan Chimbeyev complained bitterly about the
numerous small, "ineffective" opposition parties that
allegedly subtracted votes from his party. As a result, he
said, the Communist party is not represented in the Khural.
Despite Just Russia's professed socialist orientation,
Chimbeyev believed that the Communist party was the only real
"left" party, with a republic-wide platform that called for
the re-nationalization of the energy sector and other

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industries. In his small, unheated office, adorned with red
flags and a bust of Lenin, Chimbeyev argued good naturedly
that the U.S. and Yeltsin had destroyed the Soviet Union. He
hoped that his party would win one Duma seat and 5 - 6 seats
in the Khural. Chimbeyev complained that United Russia's
lavish promises had seduced the youth, leaving his party only
the region's pensioners.


6. (C) There was little evidence of the presence of other
parties in Ulan Ude, except a few posters for LDPR's Vladimir
Zhirinovskiy. Yabloko has 477 members and with its focus on
small-scale social projects, seems to function more like an
NGO than a political party. Its leader, Lazar Bartunayev,
offered us his list of administrative resources at United
Russia's disposal: abundant "dead souls" on the voter lists,
control of the media, and the use of the extremism law to
prohibit criticism of political leaders during the election
campaign. All interlocutors agreed that none of the small
opposition parties had a chance for a seat in the Khural. A
meeting with a group of students suggested that lack of
information and limited choices were the biggest problems
that local voters face. When Radio Siberia, the only voice
opposing the merger of the Aginsk Buryat Autonomous Area into
the Chita region, was closed by local authorities, the Buryat
republic got the message, said one of the students. Graduate
student Maksim Sharipov, in referring to the current campaign
said, "They ask us whether we want dark or light beer when we
don't want beer at all."

Baikal -- Buryatia's Hope
--------------


7. (C) According to two South Korean investors who have been
working in Ulan Ude for 14 years, change was coming slowly to
the republic. In the last three years it had experienced a
construction boom, and there had been a noticeable increase
in used Korean and Japanese cars and new shopping centers.
Mrs. Kim (64),owner of a restaurant complex, and Mr. Huang
(65),a timber exporter to Japan and Korea, attributed the
change to increased border trade with Mongolia, China, and
Korea. Buryatia's two major resources-- Lake Baikal and
precious stone deposits -- were firmly controlled by Moscow,
he thought, and could not reach their economic potential.
Locals attach much hope to the GOR's May 2006 designation of
Buryatia as one of the country's seven tourist zones. An
Austrian group has won a GOR contract to construct a new Ulan
Ude airport; and the first Austrian construction team visited
the airport on October 16.


8. (U) Lake Baikal, the reservoir for more than one-quarter
of the world's fresh water, draws attention from all major
environmental organizations, but suffers from administrative
neglect by all three Baikal regions--Irkutsk, Buryatia and
Chita-- as well as by China and Mongolia whose rivers feed
Baikal. The accumulation of garbage and chemical/waste
dumping into the lake by Irkutsk region's factories was an
urgent issue for the environmentalists but only a necessary
evil for the region's authorities.

Turn to the East
--------------


9. (C) The usual Asian ethnic composition one sees in
Primorskiy, Khabarovsk, and Chita regions repeats itself in
Buryatia. Twenty-four percent of the local population are
Buryats, and their ethnic similarity to Mongolians, and the
geographical proximity of Mongolia itself, have fostered
close ties between the two. The Moscow-controlled quota
system limits the amount of labor that can be imported from
Asian countries to 2,700 per year for Buryatia. About 1,500
work visas are awarded to Chinese each year. They can stay
for one year and may return for a longer period after they
have returned once to China. Cabbages covering fields just
outside Ulan Ude as far as the eye can see attest to Chinese
industrious; something that the Republic's residents both
admire and fear. Every shopping center in Ulan Ude is
flooded with Chinese goods, mostly clothing and shoes, and
Korean electronic goods. A quick survey of the Chinese
markets showed Chinese traders mainly from the Northeastern
provinces of China, such as Heilungjiang and Yanji. Unlike
the Primorskiy region, no Vietnamese or Russian Koreans were
visible in the markets.


10. (C) Many Chinese and Mongolians travel between Ulan Ude
and Manzhouli, on the Chinese border in neighboring Chita
region, as shuttle traders. They often wait as much as ten
hours at the border following their long journey from Ulan
Ude. Buryatia's own border towns of Naushkiy (train crossing
only) and Kyakhta are gateways to Mongolia through which many
Russian and foreign businessmen travel. According to
Mongolian Consul General Chimidorzh Agvandamdin, most Mongol
traders prefer to engage in the more lucrative re-sale of

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Chinese goods than to engage in direct trade. (Russia -
Mongolia relations to be reported septel.)

Chinese -- Odd Man Out?
--------------


11. (C) Buryats believe they share an ethnic kinship with
Mongolians and Koreans. Ethnic similarity contributes to a
warm feeling among the three groups. Despite years of
atheism practiced both in Buryatia and Mongolia, the two
groups believe they are bound by the shared practice of
Lamaism, while many Koreans remain devout Buddhists.
Buryatia is the seat of Russia's highest Lama --the Khombo
Lama-- and boasts the largest lamasery in Russia. The
lamasery, with its colorful thankas, worn-out prayer wheels,
and prayer cloths tied to every possible tree branch reminds
the visitor of the small lamaseries of Llasa in Tibet and
Xining in China. The only noticeable difference is the
absence of the smell of yak butter. Many interlocutors spoke
with reverence of the Dalai Lama's 1993 visit to Buryatia.


12. (C) Economic necessity makes the hatred of the Han
Chinese, so palpable in Tibet, more muted in Buryatia.
Meshkova summed up the locals' attitude toward the Chinese as
"we hate them, but we need them." In a comment that was
typical of many heard during the visit, one student described
the Chinese as "ants, who do not need to think and do not
think, but only work."

Korean Tragedy
--------------


13. (C) Three types of Koreans -- Russian Koreans, South
Koreans and North Koreans -- collide and experience
"cultural" differences, which are often hurtful and
insurmountable.

--Russian Koreans: Most of their parents were forcefully
relocated to Central Asia from Sakhalin during the Stalin era
and for many different reasons they ended up in Buryatia.
Their grandparents were sent to Sakhalin by the Japanese
while Korea was under Japanese rule (1910-1936). Most of
them do not speak Korean but culturally consider themselves
Korean. They took the arrival of South Koreans as their
chance to move up the societal ladder, only to be
disappointed. Many blame the GOR for not letting them leave
Russia to relocate to South Korea, while others complained
that South Korea treated them as "poor" relatives whose only
goal was to move to Korea, and applied a strict visa regime
to them.

-- South Koreans: With the IMF crisis in full swing in South
Korea in 1994, several came to Buryatia, where "similar"
people lived, to seek economic success. Many turned to local
Koreans for language and administrative help. One after
another, they were "cheated" by the local Koreans who were
"Russians" and not "Koreans" culturally. Those that
succeeded won the attention of local politicians, which was
more of a curse than a blessing. Mrs. Kim, who won a legal
battle against the mayor's office over the possible
expropriation of her commercial property, has since been
saddled with an exorbitant tax bill of 5 million rubles, an
unheard of sum in Buryatia.

--North Koreans: According to Mr. Huang, a South Korean
businessman who serves as a one-man oasis for North Koreans,
there are 200 "legally" working North Koreans and about 20
"illegals" in hiding in Ulan Ude. Those on legal contract
were sent by the North Korean government as guest workers,
most of whom are engaged in construction work. Although they
are hard working, they are unskilled, as they were chosen
because of their political loyalty to the regime rather than
their agility in heavy labor. North Korean workers face
fierce competition from the Chinese who arrive equipped with
skills and good tools. The going rate for North Korean
workers is 1000 rubles a day, from which their leader
collects 450 rubles. With work not in steady supply, most
North Koreans earn USD 1,500-2,000 a year. Once sent out,
North Koreans stay for 3 years. After they return home, they
are not allowed to leave again for five years -- the period
deemed necessary for re-education.

--North Koreans in hiding: About 500 North Korean lumberjacks
work in the nearby Siberian city Tinta, according to the
South Koreans, and many have attempted to escape the
execrable conditions there. The twenty in Ulan Ude are a
combination of escapees from Tinta and other illegal border
crossers. Buryatia and Irkutsk are known to be good hiding
places because North Koreans can more easily blend into the
local Asian population. Their dream is to relocate to South
Korea; their fear is of the "legal" North Koreans who could
inform on them and the Russian authorities who could capture

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and send them back. South Koreans can easily detect new
arrivals. The new ones run away as soon as they discern
South-Korean accented Korean, while the "veterans" approach
with requests for additional work.

Hope Floats
--------------


14. (C) The new President of Buryatia, Vladimir Nagovitsyin,
has brought much hope to the republic. On Nagovintsyn's one
hundred-day watch, much of the city's long-overdue roadwork
is already under way and a first-ever escalator-equipped
shopping mall has been completed. According to Deputy Mayor
Viktor Gavrilov, the average monthly salary for Ulan Ude
residents is around 11,000 rubles while that of the whole
republic is 8,000 rubles. The two most important industries
at this point -- helicopter production (with exports to ten
countries, including India, Pakistan, Spain and Iran) and
meat processing -- are insufficient to turn Buryatia into a
regional trade and tourism center. As an important junction
for the Moscow - Beijing, Moscow - Ulanbaatar railroads, Ulan
Ude could play a more important commercial role. The local
tolerance of difference has brought many ethnic groups and
religious sects to the republic. Besides Buddhism and the
Russian Orthodox, Catholics, Protestants and Muslims are
represented. The old believers, exiled under Catherine the
Great, have left their mark and a group of Semeyists (so
called because they were sent in families, semyami in
Russian) still live in the republic.


15. (C) Many problems remain. Among them is the migration of
the educated population to the big cities of Russia,
including Moscow, St. Petersburg, Novosibirsk and Irkutsk.
Economic growth in the neighboring Irkutsk region has
outstripped that of Buryatia, which is a source of
frustration. While Irkutsk is producing hydroelectric energy
from Baikal, Buryatia has benefited little from the natural
resources it has. Aleksandr Yelayev of the Republic's
Presidential Administration, however, hoped that an
increasing birth rate, and signs that outmigration had
lessened, meant a more prosperous future for the region.
Burns