RUSSIAN FAR EAST: CHUKOTKANS WORRY AS THEIR "HERO,"

UNCLAS VLADIVOSTOK 000068


E.O. 12958: N/A
TAGS: PGOV PINR RS
SUBJECT: RUSSIAN FAR EAST: CHUKOTKANS WORRY AS THEIR "HERO,"
BILLIONAIRE ROMAN ABRAMOVICH, STEPS DOWN AS GOVERNOR

REF: 2007 VLADIVOSTOK 095



1. Summary. On July 3, President Dmitriy Medvedev agreed to
accept the voluntary resignation of longtime Chukotka Governor
Roman Abramovich and appointed Vice Governor Roman Kopin as
acting Governor until a permanent replacement is named. Under
billionaire Abramovich, Chukotka has gone from being one of
Russia's most impoverished regions to one of its most
successful. This has been due in no small part to the
Governor's investment of some of his personal fortune in the
region. Abramovich had long sought to step down from the
governorship, but former President Putin consistently denied his
requests. With his resignation, Chukotkans worry whether their
run of good luck will continue. End Summary.

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A Hero Leaves Office
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2. Roman Abramovich, 41, has been Governor of Chukotka since
December 2000, when 91 percent of the population of this remote
region bordering Alaska voted for him. Following Russia's
abolishment of direct gubernatorial elections, President
Vladimir Putin reappointed Abramovich to a second term in 2005.
For the past several years, however, it has been widely known
that Abramovich has been seeking to step down as Governor of
Russia's northeasternmost territory, describing the job as "too
expensive." In 2005 then again in 2007, his formal resignation
requests were denied by former President Putin. Rumor has it
that after the most recent rejection Abramovich made a deal with
the Kremlin to stay on just one more year -- according to one
version, in order to complete important social and economic
projects, but according to another, to help deliver the region
to the Kremlin's favored presidential candidate in 2008.


3. Abramovich, one of Russian's wealthiest businessmen (worth
23.5 billion USD, according to Forbes magazine),has served not
merely as Governor but as benefactor to impoverished Chukotka,
turning it into the RFE's most prosperous territory. In 2008,
Chukotka's gross regional product (GRP) is predicted to be 23.3
billion rubles (just over 1 billon USD),3.4 times higher that
in 2001. Budget revenues increased 7.3 times over the past
eight years, from 1.65 billion rubles (72 million USD) in 2000
to 12.02 billion rubles (525 million USD) in 2008. Per capita
monthly income increased over the same period from 8,216 rubles
(360 USD) to an expected 36,000 rubles (1,600 USD) this year.
Federal subsidies also dropped from 75 to 47 percent under his
leadership, and unemployment decreased twofold.


4. Almost all of this revenue is due, in one way or another, to
Abramovich's direct intervention. Simply by registering his
business in Chukotka, Abramovich delivered 30 million USD a year
to the region in income tax payments. He has also personally
underwritten a broad array of social, cultural, medical, and
educational programs. Abramovich first became active in charity
work in Chukotka in the late 1990s. Since then he has re-built
utilities; improved infrastructure; built new stores, hospitals,
and hotels; renovated the regional museum, and sent thousands of
schoolchildren to the Black Sea for summer vacations; among
countless other projects (reftel). As a result, regional living
standards improved, and new investors were drawn to the region.


5. Due to these successes and his personal largesse, Abramovich
has been among Russia's most popular governors, and the
reverence accorded him in Chukotka has bordered on hero worship.
With his resignation, Chukotkans are petitioning to rename one
of the region's three cities -- Anadyr, Bilibino, or Pevek --
after him. Well aware of the personal role played by the
resigning billionaire in their region's fortunes, they are also
expressing concern over their future. A spokesman for
Abramovich, however, said the former governor would continue to
put money into development in the Russian Far East and would not
sever ties with Chukotka. Indeed, one of Abramovich's
intentions in the past several years has been to ensure that the
region's development would become self-sustaining once he left
office. According to government estimates, due in large part to
mining developments, Chukotka should become a self-sustaining
prosperous region by 2015, with 57 billion rubles (2.5 billion
USD) in budget revenues.

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This Time's New Roman
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6. Deputy Governor Roman Kopin, 34, who since April has been in
charge of industrial and agricultural development of the region,
has been named acting governor in the wake of Abramovich's
resignation. Earlier, he was the elected head of the
Bilibinskiy municipal district. He first arrived in Chukotka in
1999, when he was appointed as an advisor to Governor Aleksandr
Nazarov, Abramovich's predecessor.


ARMBRUSTER