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Analysis & Opinion
29.07.08 A New Novgorod?
By Edward Cowley

VELIKY NOVGOROD/Along the Moscow-St. Petersburg highway, as trucks trundled past throwing up clouds of dust, the local women who have sold homemade pies and pastries to passing drivers for years wondered whether next year they would still be here.

“This is my only income, if they stop me from doing this I’ll have to go out and steal,” said Nina, a stall owner who did not wish to give her last name. These women are the unlikely victims of Novgorod’s new governor, Sergey Mitin, and his war on corruption. Local officials say that these women’s incomes are not taxed and that this business must be regulated, which in practice entails closing the stalls down. The police claim that they are also in danger. This is one of the busiest highways in Russia, and last year four stall owners were killed.

A local journalist who wished to remain anonymous said that Mikhail Prusak, the former governor, didn’t pay any attention to them, and was also skeptical of the risk the stall vendors pose. “Perhaps the new governor is worried that Vladimir Putin might see them on his way to Valdai, where he has a country residence,” he quipped.

In 2004, president Putin introduced a law ending the popular election of regional governors, instead having them directly appointed by the president. Since the governors are now handpicked, they can easily be replaced, regardless of the local residents’ wishes.

Yuri Vasilev, the mayor of Borovichi, the second largest town in the Novgorod region, insisted that Prusak left voluntarily, but this seems unlikely upon closer inspection, as there was much going on in the Novgorod region to displease the president. In the October 2006 local Duma elections, the Communist Party came in first, with the Kremlin’s “United Russia” trailing in second thanks only to votes cast in some of the smaller towns across the region. The Kremlin understood this to mean that Prusak had lost political control of the larger towns.

Prusak was also indirectly linked to a number of corruption scandals. According to federal authorities, 120 anti-corruption cases have been filed in Novgorod this year, three more than during the previous year. Almost all of them take root in Prusak’s time as governor.

As soon as Prusak was replaced, a prominent local businessman, Telman Mxitaryan, disappeared from Novgorod and hasn’t been found. Local observers note that the finance and building company he ran, called Akron, rose to prominence because of its close relationship with the regional government, and that the two men were known to have been friends. In the words of the Russian sociologist Vadim Volkov, “Whether it’s in Chicago or Sicily, the mafia will always attempt to help mobilize the regions’ voters to vote for the same local officials who guarantee their security.”

Another local journalist said that Novgorod was coming to be viewed as a closed territory to Russian investors. According to her sources in the regional administration, the Kremlin believed that Prusak was starting to have a negative influence on regional development. Not only was he considered to have lost control over the region, but also, more importantly, he was now viewed as disloyal.

With support from the president, Mitin can now rely on extensive federal assistance, including extra cash. The local budget has already increased 2.3 times since he took office, but Novgorod residents have mixed views as to whether anything will change under his leadership.

The four national projects--housing, health, agriculture, and education--are developing dynamically across the region. In agriculture, the changes are tangible: banks have lowered interest rates so credit is easier for farmers to obtain, and the much-needed new equipment is finally beginning to arrive.

Reviving agriculture in Russia, however, will not be easy. “You can have as much credit and machinery as you want, but without the people to work the land and tend to the animals, it’s useless. And people is what I don’t have,” said Aleksander Evdokimov, a struggling farmer residing in the east of the Novgorod region. The population in many of Russia’s rural areas has been falling for decades, and many villages across the Novgorod region are either dying out or completely gone.

Housing is another area which has improved since Mitin’s arrival. Interest rates for mortgages have fallen, and young families are now given subsidies by the state of up to 300,000 rubles ($13,000) toward buying a new flat. The local minister in charge of housing says that the waiting list for a new flat is about a year long.

But Arkady Meetetsky, a young businessman and a father, is not convinced. He earns twice the local average of 14,000 rubles per month ($600) selling home security systems, but has still been unable to buy a place of his own. Paying a mortgage would eat up almost 60 percent of his monthly salary for the next ten years. He has even thought about buying land and building a house himself, but says that this also is too expensive. “Some of my friends from school, who became teachers, now work as cinema attendants, because they earn more. How can they ever hope to buy their own flat? It’s a problem of almost every young family in Russia,” he said.

However, Meetetsky remains optimistic. “I believe in our government and in our president, because there are regions in Russia where the problem is getting sorted out,” he said. One of these regions is Krasnodar, where the regional government gives out land for free and once the foundations and walls of a house have been built, also pays for the roof.

Another serious problem yet to be dealt with in this region is the roads. Hope that next year’s 1150 anniversary may act as a stimulus for the much-needed repair work is fading fast, as the end of the summer approaches and little work has so far been done. Meanwhile, out on the Moscow-St. Petersburg highway the ladies selling pies await their fate. Eventually, this stretch of road will also be widened and resurfaced, which may mean unemployment for the stall holders, regardless of what Sergey Mitin and his team officially decide to do with them.
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