SMOLENSK: CONTESTED MAYOR ELECTION, LIMITED

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 000766

SIPDIS

E.O. 12958: DECL: 03/19/2019
TAGS: PGOV ECON RS
SUBJECT: SMOLENSK: CONTESTED MAYOR ELECTION, LIMITED
ECONOMIC DEVELOPMENT

REF: A. 08 MOSCOW 3575

B. 08 MOSCOW 436

C. 08 MOSCOW 411

Classified By: Political MC Alice G. Wells for reasons 1.4 (b) and (d).

Summary
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1. (C) In a March 18-19 visit to the city of Smolensk,
journalists, political parties, business people, and local
officials told us the economic crisis has had limited effect
on the region, but it had hindered future growth and hurt
small businesses. Few companies have declared bankruptcy,
but some have cut back hours and staff. Opposition parties
hailed the March 1 election of an independent United Russia
member in lieu of the party's designated candidate, calling
it a "vote of protest" against the policies and alleged
corruption of United Russia. However, they also complained
of poor access to the media and United Russia's use of
"administrative resources" to secure the election victory.
The new mayor is expected to rein in corruption and better
deliver services despite declining tax revenues. The
recently appointed Human Rights Ombudsman told us that
corruption will not end until the executive branch is checked
by an independent legislature and judiciary. The mayoral
election results may match a growing trend of electoral
competition within United Russia, and of dissatisfaction with
the local apparatchiks. End Summary.

Economic Crisis: Not here
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2. (SBU) During a March 18-19 visit, political party
leaders, business people, and journalists in Smolensk
lamented the lost opportunity to attract investment to the
region during the oil-fueled boom times of the last few
years. Due to the lack of investment, Smolensk's economy has
only contracted slightly, with the crisis accelerating a
decline in tax revenues and squeezing small business
operations, with entrepreneurs ruling out expansion in the
near term. President of the Smolensk Chamber of Commerce and
Industry Vladimir Arkhipenkov told us that with banks
charging small businesses in excess of twenty percent for
loans, business owners have resorted to cutting staff,
cutting back on salaries, and putting expansion plans on
hold. However, Arkhipenkov was quick to note that, as yet,
few companies had declared bankruptcy.


3. (SBU) The regional administration took exception to any
description of an economic crisis in the region, calling the
programs of the Prime Minister and President sufficient to
address the crisis. While Smolensk's Deputy Chief of the
International Relations and Cooperation Department Oleg
Ivanov conceded that large-scale investment in the next
couple of years was unlikely, he stated that the
administration was hoping to develop plans that can be used
when capital frees up, including the development of a tourism
industry that would attract Poles, Belarusians, and Western
Europeans to Smolensk for fishing, hunting, culture, and
history. However, this approach appears to ignore the lack
of existing tourist infrastructure and a poor track record of
attracting visitors to the region. The local newspaper,
Worker's Way, in an article April 19 put the number of
"foreign" tourists at just over one thousand for 2008 (the
number of Belarusian visitors was not calculated as they were
not considered foreign),a number that is unlikely to attract
large investment.

Democracy within United Russia
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4. (SBU) Smolensk came to national attention for the conduct
and results of its March 1 elections. Of the twelve
candidates vying for the position of mayor, five were from
the United Russia party. The winner, Eduard Kachanovskiy,
was a member of United Russia, but he was not the party's
preferred candidate on the ballot. His principal opponents
in the race were former mayor Vladislav Khaletskiy and
Valeriy Razulaev, also United Russia members. Viktor
Pupchenkov head of the party's regional executive committee,
said that the party had put forward Razulaev in place of the
former mayor because it wanted a new face that would draw
more young people into the party. That said, Pupchenkov was
quick to point out that while the local party was not happy
with the results, which in his view resulted in the election
of a less qualified candidate, the party would work with the
new mayor. "He may not be our choice, but he is a member of
our broader party," Pupchenkov said. However, the opposition
and journalists assessed that the lack of a deputy mayor or
any appointments to the mayor's staff was symbolic of

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infighting within United Russia; a fight that Pupchenkov
dismissed as normal after a transition. He also argued that
the mayor should seriously consider retaining some of the
prior mayor's staff due to their experience.


5. (SBU) Opposition parties, including the Communist Party,
Just Russia, and Right Cause argued to us that their
candidates had little chance of winning at the polls, due to
United Russia candidates' access to "administrative
resources." But despite their complaints on the fairness of
the campaigning process, the opposition parties were
optimistic on the outcome and future election prospects.
Communist Party First Secretary Valeriy Kuznetsov told us
that the election of Kachanovskiy was "a vote of protest" by
those tired of corruption and the lack of services. Just
Russia's Viktor Yesin echoed this comment, adding that the
new mayor was widely respected for being intelligent and able
to get things done. Yesin was optimistic that for Smolensk,
at least, the arena for true political competition had
opened. He expressed hope that future regional and local
Duma elections would see a willingness by the electorate to
ignore the dictates of Moscow and United Russia, and instead
pick the best candidate.


6. (SBU) Mikhail Khvostantsev of Right Cause assessed that
on election day, voters made a choice between the far left,
far right, or the United Russia-dominated center. If United
Russia can no longer expect automatic support for its
preferred candidates, democracy could improve, including the
situation for Right Cause. That said, all of the opposition
parties bemoaned United Russia's ability to dominate the
media, with the Communists appealing for the results to be
annulled -- while passionate on this point, Kuznetsov said
the party would not take the issue to the courts. The
opposition pointed to the popularity of PM Putin and the
association of United Russia with his name as part of the
reason United Russia associated candidates dominated in the
elections. While visiting the two United Russia offices in
Smolensk, one could not escape noticing that the offices'
signs had two lines of text with the largest type reserved
for "The Party of Putin."

Corruption and Frustration
--------------


7. (SBU) The new mayor faces a series of problems in
providing services, and he will be constrained by falling tax
revenues and a corruption-laden privatization program, a
legacy of the former mayor. Journalist Sergei Kovalev
alleged that corruption now touched garbage collection
services, repair and revitalization of communal housing
units, road repair, and other public works projects.
Opposition party leaders and journalists hope the mayor can
find a way to work through the corruption and get things
done. However, Yesin surmised that with the fall in local
tax revenues and the slow deterioration of local industry,
due to lack of investment in former state-run enterprises,
the only solution was the appointment of an "Abramovich or
Bill Gates" as governor -- someone with personal resources
who could buy the region out if its decline. Shy of that, he
and other prominent citizens believed that Smolensk will
continue to be rooted in its past with architecture and
infrastructure to match.


8. (SBU) Newly appointed Ombudsman for Human Rights
Aleksandr Kapustin shared with us that the lack of services
was hurting pensioners and the poor the most. The majority
of the complaints he addressed were the lack of services to
communal housing units and the poor communication between the
people and the authorities. He also expressed frustration
with the overall direction of Russia. As long as the concept
of three separate but equal branches of government did not
work in Russia, "there will be no true democracy in the
country," and "it is not possible to successfully fight
corruption."

Comment
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9. (C) Smolensk remains a rather conservative region within
the Russian Federation and unlikely to lead the way in social
and political change. However, the results of the mayoral
election and the outspoken complaints on corruption may match
a broader trend, as evidenced by recent elections in Tver and
Murmansk. It remains to be seen if United Russia and the
Russian leadership will continue to allow competition within
the party at the local level. If the party squelches this
rather limited outlet for dissent and political competition,
some ambitious local politicians may seek alternative paths
to political posts and would be welcomed by opposition
political parties, which are also vying for the center of the

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Russian electorate.
BEYRLE