REGIONAL APPOINTMENTS BALANCE BUSINESS INTERESTS

UNCLAS YEKATERINBURG 000085

SENSITIVE
SIPDIS

DEPARTMENT FOR EUR/RUS

E.O. 12958: N/A
TAGS: ECON PGOV RS
SUBJECT: REGIONAL APPOINTMENTS BALANCE BUSINESS INTERESTS

REF: YEKATERINBURG 0075

Sensitive but Unclassified. Not for Internet distribution.


1. (SBU) Summary: Newly-appointed Sverdlovsk oblast governor
Aleksandr Misharin outlined his priorities for journalists in a
two-hour press conference on December 25. His initial
appointments to the regional government reflect his emphasis on
improving Sverdlovsk oblast's infrastructure and a balancing of
interests between the region's most powerful industrial groups.
Consul General discussed the new governor's initial actions over
lunch with local political analysts on December 25. End Summary.


2. (SBU) At his inaugural press conference, Misharin
enumerated the following priorities for the region: improve
overall energy efficiency; create a transportation and logistics
hub; introduce "innovation" into the economy; develop an
employment program; implement the federal "monocities" program.
To manage these tasks, he has elevated Minister of Economics
Mikhail Maksimov to first deputy chairman of the regional
government. The 35-year old Maksimov, who has a reputation as
an innovative manager, is one of a handful of holdovers to
retain his ministerial portfolio from the outgoing
administration of former Governor Eduard Rossel. In 2007,
Maksimov was tabbed by Rossel as economics minister after his
successful management of Yekaterinburg's Koltsovo Airport
construction project. The principal investor in the airport
construction project was the Renova Group owned by oligarch
Viktor Vekselberg, who wields significant economic power in the
region.


3. (SBU) Misharin's emphasis on transportation, especially
railroads, was clear in his appointment of 28-year old
Konstantin Koltonyuk as Minister of Finance, which most local
analysts considered a surprise, given his age and background in
engineering. Koltonyuk worked in the Russian Ministry of
Transportation and later the Department of Industry and
Infrastructure in the Presidential Administration, both of which
were in Misharin's purview during his years in Moscow (Ref A).
Family and industry connections most certainly played a role in
this appointment: Koltonyuk's father is highly placed in a
company that builds and maintains railroad infrastructure
facilities and equipment.


4. (SBU) The interests of industrialist Dmitriy Pumpyanskiy,
owner of the Sinara group, a major regional conglomerate, were
also taken into consideration. One of his former associates was
named to a post in the new administration. Misharin's emphasis
on infrastructure also caters to a part of Pumpyanskiy's
business: he owns a factory that produces modern locomotives
just outside of Yekaterinburg. Prime Minister Putin visited the
factory earlier this month. In addition, the new Minister of
Industry and Science, Aleksandr Petrov, who heads a company that
produces industrial ovens, is said to satisfy the expectations
of the metallurgy and machine-building sectors.


5. (SBU) Two other appointments deserve mention: Misharin
established a new Ministry of Information technology to be
headed by Irina Bogdanovich, the first woman appointed to his
cabinet. The new ministry is to promote computer and Internet
technologies, develop distant learning and virtual communication
projects in remote areas. Our contacts characterized IT
infrastructure in Sverdlovsk oblast as relatively
underdeveloped, despite the region's wealth and economic
strength. As a final note, the new Minister of Agriculture is
Ilya Bondarev, the former deputy minister of natural resources
who is a 2009 USG program alumnus.


6. (SBU) Our interlocutors unanimously agreed that Misharin is
Putin's man. After all, Misharin was Putin's regional
presidential campaign manager in 2004. They believed that the
delay and procedural confusion that preceded the Misharin's
appointment were due to bureaucratic infighting between the
Presidential Administration and the Prime Minister's office
rather than a conflict between President Medvedev and Putin over
the nominees. Further, none of our contacts felt that the
region's relatively "liberal" atmosphere cultivated by Rossel
over the years would change. They saw no prospect for the
imposition of constraints on civil society under the new
governor. Misharin's early appointments, which draw heavily
from the transport sector, especially the railroads, demonstrate
a strong preference for the familiar and show deference to the
interests of the region's key economic players and industries.

SANDUSKY