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. Last Updated: 07/27/2016

Cherkesov Asserts State Interests in Northwest

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The presidential envoy for the Northwestern Federal District, Viktor Cherkesov, began his duties by making changes to regional legislation that strengthen his offices' role in local politics.
In addition, Cherkesov's involvement in the extensive preparations for St. Petersburg's tricentennial in 2003 may further establish his new authority.


Q:
You said St. Petersburg could receive 30 billion to 40 billion rubles [$1 billion to $1.4 billion] to prepare for the 300th anniversary celebrations. For some reason, Governor [Vladimir] Yakovlev has given a lower estimate. How do you explain the contradiction? I remember that after returning from Moscow, [Yakovlev] gave a lower figure, saying 350 million rubles or 1 billion rubles would be given to the city.
A:
Perhaps the city administration had something different in mind. For that reason our estimates do not coincide. I believe the governor gave a different figure because he estimated it on the basis of how much the city receives. He probably only considered the city administration's funds, but the large part of the financing will be transferred through federal channels. And the work will be carried out through a federal order.

Regarding the sum of 40 billion rubles, we have specific federal programs in mind. Several sector programs exist that are financed by various ministries. They will be financed by the federal budget. The federal government made the decisions and decreed the formation of each program. I am referring to the ring road, dikes, the restoration of branches of the metro and restoration of the historical center. Let's not forget that the city's best buildings are nearly all federal property. In order to completely restore them, federal ministries need to earmark money to those managing those properties.

There certainly will be a control mechanism. I am not planning to arouse the suspicions of prosecutors or the tax police. The Audit Chamber will, of course, control the spending of federal funds; it's the chamber's primary responsibility. In particular, I want to mention that we have a district inspectorate in the presidential envoy's staff. And the main monitoring body is responsible for controlling spending.

Q:
So your responsibility is to guarantee the money is received?
A:
I don't want us to play the game of more or less. In essence, the figures I named are the combination of ideas that took shape and were then realized. And the participation of the president in the capacity of chairman of the state commission [for the 2003 jubilee] is a clear sign not just a gesture. Its part, a large part, of the responsibility the Russian president is taking upon himself.

Q:
Do you expect to receive financing from the private sector?
A:
Of course such initiatives already exist. They are very diverse in terms of size and participants.

Q:
Have you noticed a rise in both federal and private investment activity? In your opinion, where does it come from? Could a private investor approach you directly?
A:
There are statistics that demonstrate the investment process has been stimulated. In 1999 the Northwestern district received 16 percent of all of the foreign investment in Russia. In 2000, more than 18 percent.

Representatives of large European and international business are in regular contact with us. Last week, I had a long conversation with the directors of the French company Total. We talked about the participation of Total in the implementation of two large projects, the development of the Timano-Pechora oil fields and the Shtockman gas condensate. I am offering that example so you will understand that potential investors do not come to calculate the length of our pipelines or the number of boats that will transport their oil. Those meetings are, for them, a fundamentally important element that allows them to formulate long-term plans. They decide for themselves which path to take, while keeping in mind the growing strength of the Russian government — its influence on the stability of the region. The number of such meetings is constantly increasing.

Q:
How is the creation of a business consulting board under the presidential representative's office progressing?
A:
The list of participants has already been drawn up. We are in constant contact with them and consultation is underway on a number of economic questions. But we don't want to confirm and announce this list until work is completed on the mechanism governing the board's work. It is vital that we cooperate with businessmen not just on the basis of personal good will or as a result of their interest in being closer to the structures of power. I think that the names of the board members and their aims will be publicized at the beginning of April.

Q:
What levers do you have for managing the situation in the region and how will you use them?
A:
Unfortunately, many of the problems leading to the country's inefficient management are not due to regional conditions nor to the abilities or experience of political leaders, but rather, to the way the Constitution determines jurisdiction on two levels of authority — the federal center and federation subjects — for each state activity.

In recent years the state has lost much of its leverage for regulating economic, legal and social issues and the territories took them on themselves. At times, this happened simply because it was impossible not to deal with these problems.

But the regions also took on uncharacteristic functions. For example, so-called security committees were set up in about half of the regions — they were called by different names depending on the imagination of the regional authorities. The security committees brought together the heads of subdivisions of federal structures — the tax police, the tax inspectorate, the FSB, the prosecutor's offices and the customs committee. In practice, they were managed by the regional leadership, which gave them their orders and occasionally consulted with them. In such situations, it is possible to respond to crises. This is correct. It is also possible to resolve problems at a regional level using these instruments and the regional leaders' entourages. But state interests and functions get left behind. Therefore, the need to reform the system of managing the country arose.

If we talk about the Northwestern district, then there is nothing particularly odious here, nor is there anything of particular merit. There exists, for instance, a state security committee in the republic of Komi. This is essentially an administrative department that must ensure cooperation between the republic's administration and the subdivisions of the federal law enforcement bodies. But the name itself suggests functions that are outside the republic's jurisdiction. This situation naturally raises questions and demands correction.

Q:
This is a question of politics. What economic levers can you apply in your activities?
A:
Among other tasks, the president instructed us to supervise federal budget expenditure, the procedure for implementing federal programs and the use of federal property.

There's an opportunity for everyone to get involved with this. The presidential representatives are authorized to supervise and coordinate the activities of federal ministries' territorial subdivisions. This includes subdivisions of the economic block. Over the nine months that the institution of presidential representatives has existed, a number of ministries and services have established their teams in these districts — the tax police and the Justice Ministry, for example. The district subdivision of the Property Ministry is being created. One of the deputy transportation ministers looks after the work of all the transport structures in the Northwest. Viktor Zubkov, head of the St. Petersburg tax inspectorate and deputy tax minister, was chosen to coordinate this department's work in the Northwest. We resolve economic issues through these structures. In other words, if required we will formulate an approach to this or that problem and determine their priority. This is the simplest instrument.

Other forms depend on the president's direct instructions. We keep control of everything that concerns the dates, scale, and participants in federal programs and we coordinate with the government. If the program is of strategic significance, we report directly to the president.

There are other levers, and I suggest that they are even more important than participation in management. In order to influence the economic processes in the regions, one doesn't have to take responsibility for making long-term forecasts developing branch or inter-regional programs of economic growth. I believe that such large-scale planning is not realistic as it is very hard to determine the procedure for the implementation and responsibility for these projects.

I propose that today and in the near future, our participation in economic procedures will be realized via the activities of anti-crisis managers — in the broad sense of this word. Such measures are pressing when conflicts arise in certain strategic areas for the economy or in city-forming enterprises.