FEATURE - Bureaucrats are a big force in Russia reform war
10:08 p.m. Aug 02, 1998 Eastern
By Philippa Fletcher
KOSTROMA, Russia, Aug 3 (Reuters) - Yuri Tsikunov, one of Russia's vast
army of bureaucrats, is anxious that people recognise his importance.
''Before you, you should know, sits the head of the emergencies
committee with colossal powers, so whatever I order, it will be carried
out,'' he says in his imposing wood-panelled office in the historic town
of Kostroma.
The reach of those powers is miniscule in Russian terms -- Tsikunov is
first deputy governor of just one of 89 regions.
Combine the Kostroma region -- itself the size of Belgium -- with the
others, however, and Tsikunov and his like make for a formidable force,
whose views and actions shape what happens in Russia every bit as much
as the central government.
That government, trying to show the International Monetary Fund it can
plug its leaking budget, should be encouraged therefore, by Tsikunov's
frankness about where the holes are in Kostroma, 340 km (200 miles)
northeast of the capital.
MIDDLEMEN SYPHON OFF RUSSIA'S WEALTH
''Local factory directors think to themselves 'why should we spend all
our time trying to pay wages on time?' So they create some little
companies. The factory's production is sold through these companies and
they get gigantic sums of money,'' he said.
''In some places the cynicism of those directors is so great that
they've lost their humanity. They end up thinking 'I've come out on top
and you are my slave'.''
The result is plain to see, not only among Kostroma's 800,000 population
but across Russia, where countless workers and pensioners go unpaid for
months on end while their bosses and their friends acquire luxury cars
and foreign bank accounts.
Corruption does not account for all the wage delays -- reluctance to
close moribund, communist-era industries for social reasons has allowed
a web of debts to strangle even well-run firms -- but it does tell a big
part of the story.
Which makes it all the more surprising that neither the government, nor
Tsikunov, for all his avowed powers, appears to have done much about the
graft, which has helped create conditions reminiscent of Russia's
pre-revolutionary serfdom.
Until now that is, when financial instability and popular exasperation
are beginning to force Moscow's hand.
Ministers have been sent on rare forays to the provinces to stop
blockades of key railway lines by miners fed up with not being paid.
They have promised to crack down on the middlemen who spirit the coal
away without the miners seeing any money.
PROTESTING WORKERS RISK PUBLIC IRE
In Kostroma doctors and teachers are also angry, but have not resorted
to such desperate measures, confining their protests to banging pots and
pans outside Tsikunov's office in a pre-revolutionary church school for
girls by the river Volga.
He said the protest was unlikely to develop since workers risked the
wrath of friends and neighbours by going on strike.
In June, President Boris Yeltsin chose Kostroma to try to show workers
that the government was on their side. Departing from the traditional
script, he lashed out at officials who had papered over the cracks for
his visit in time-honoured fashion.
The director of Kostroma's biggest plant, a linen factory, may have made
Yeltsin smile by getting attractive young models to show off his cloth,
but he did not escape the presidential wrath when he said he was seeking
big new investments.
''Perhaps the money will go to finance your easy life,'' Yeltsin stormed
in front of a crowd of workers nervous of discussing delays in their pay
under the eye of their boss.
The manager of a cattle-breeding farm fared little better.
''I always hear such phrases,'' Yeltsin snapped when the man said output
was up. ''The Bolsheviks have already said this,'' he said. ''Do you
think I don't understand anything?''
Yeltsin also accused Kostroma's governor of trying to blame Moscow for
all the region's wage and pension delays even though he was responsible
for half. But though he may claim to understand the problems, he did not
set much of an example.
He brought with him 46 million roubles ($7 million) owed to pensioners,
teachers and doctors and other state workers. His spokesman said it was
an unfortunate tradition that money tended to be released in time with
official visits.
IMF DEMANDS PUT LOCAL LEADERS IN HOT WATER
The IMF is not happy with such loose financial planning.
The Fund's first deputy managing director Stanley Fischer said on his
latest visit to Russia it was time companies, especially big monopoly
energy companies, began paying taxes.
''It's a very unusual belief that you don't have to pay taxes, that
they're a subject of negotiation,'' he said. ''That should not be the
case.''
Driven by fears that without IMF cash the rouble could slide, sparking
inflation and wiping out the gains of seven years of painful reform, the
government has taken Fischer's message to heart, declaring an end to the
practice of writing off mutual debts and insisting taxes are paid in
cash.
In Kostroma, the effect of the measures has been dramatic. The town has
been one of several to have lost its hot water when the local gas
company, under pressure to pay taxes to Moscow, responded to local
non-payments by simply turning off the taps.
Tsikunov admitted to playing a role in the tax problem, saying he lets
some local firms off their taxes because they would otherwise go under.
Arguing ''it is harmful to give up smoking all at once,'' he predicted
the government's crackdown would not last the summer.
''All talk about getting all taxes in real money today is groundless. It
won't happen,'' he said, adding that he had to think about the
well-being of the local population.
For all the government's good intentions about imposing financial
discipline, local leaders in a country where the temperature drops to
minus 40 degrees Celsius (minus 40 degrees Fahrenheit) have other
priorities.
Come the winter, Tsikunov said he would use his emergency powers to keep
the hot water running, though he did not make clear whether he would
target tax dodgers or the energy firms.
''In the winter we will behave differently. If necessary we will take
them all and put them in prison. We will not allow the pipelines to be
shut off,'' he said.
Copyright 1998 Reuters Limited |
