Siberian governor wants to develop region beyond natural resources
27 April 2004
Russia's huge Krasnoyarsk region in Siberia may be sitting on a wealth of metals and other raw materials, but, says Governor Alexander Khloponin, the huge interest these natural resources attract may be more of a curse than a blessing.
The raw materials "are our tragedy and the cause of our poverty," this bright-eyed, diminutive former businessman of 39 told AFP.
Since the 1990s, Krasnoyarsk's raw materials have been at the center of vast conflicts between business interests eager to grab and exploit them, which has hardly benefited the local population.
For all the region's natural wealth, the monthly income of its three million residents last year was 186 dollars (158 euros), only slightly above Russia's 176 dollar-average, and people keep leaving the area for other parts of the country in hope of a better life.
Khloponin, however, wants to depart from the current business model based almost solely on raw materials, and dreams of turning Krasnoyarsk into one of Russia's leading territories in terms of economic development.
He is not one to be deterred by such a difficult task: "What I am interested in is solving problems," he says.
What Krasnoyarsk region needs is not to deliver even more resources to clients outside the region, but to attract investments here, he says.
"We have many offers, particularly from Chinese companies, who tell us: 'Sell us electricity, build us an oil pipeline to China.' I am against this," Khloponin says.
"But if you want wood, gasoline, manufactured goods, come amd invest in Krasnoyarsk region factories!" he says.
A former CEO of metals giant Norilsk Nickel, Khloponin was elected governor two years ago, following the death in a helicopter crash of his predecessor General Alexander Lebed, once a presidential hopeful.
The track record of this graduate of the Moscow Finance Institute includes turning around the economic fortunes of once embattled Norilsk Nickel, and being a governor of Taymyr autonomous region, at the northernmost tip of the wider Krasnoyarsk region.
Two years into his term, "Alexander Khloponin has successfully stabilized the (Krasnoyarsk) region, both politically and economically," says his first deputy, Vasily Kuzubov.
His administration has paid local civil servants over one billion rubles (34 million dollars, 29 million euros) in back wages and the region's debt to the federal government has decreased by 15 percent.
Tax revenues, 70 percent of which come from the metals industry, have gone up. "We have struck deals with most large corporations so that they actually pay their taxes in the region," Kuzubov says.
And Khloponin has numerous projects to attract investors and diversify the region's economy, including setting up a hub at Krasnoyarsk airport, finishing a hydro-electric dam on the Angara river, and creating a vertically integrated wood processing company.
But in spite of all this, a regional investors' forum organized earlier this month in the region's capital, Krasnoyarsk, drew only a handful of foreign businessmen.
For, Khloponin admits, the region has one problem, its location. "We are 4,000 kilometers (2,500 miles) away from the European markets, and another 4,000 from the Asian markets," the governor says.
Another difficulty is the fact that the federal government heavily taxes Krasnoyarsk to redistribute the funds to areas less well-off. To counter this, Khloponin has submitted a project to the government according to which all local tax incomes would be reinvested into the region's economy.
Whatever the success of this particular initiative, Khloponin clearly intends to be around for some time to come. He says that he needs at least six years to see all his projects through, before returning to the business world.
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