New Russia, old Russia

Zygmunt Dzieciolowski
4 April 2007

The temperature was -35 degrees centigrade when our decrepit TU-154 airliner landed in the middle of the night in western Siberia after a three-hour flight from Moscow. Khanty-Mansiysk airport is small, but very different from most post-Soviet terminals. It is modern, with signs in English, imported escalators, and brand new luggage conveyor-belts that deliver our bags promptly.

When we drove to the hotel on a brightly lit highway that was neatly cleared of snow, I felt slightly confused. Was this still Russia?

I remembered the homework that I did before arriving. Khanty-Mansiysk is not an average, run-down, post-Soviet Russian provincial city. Its name relates to two different indigenous tribes that once controlled the whole region. Now it is the administrative centre for the country's largest oil production area.

I was in town for the international film festival entitled "Spirit of Fire", featuring the debut work of several young directors. Few provincial cities as remote as Khanty-Mansiysk would be able to afford an international film event on such a scale. Yet it has everything you might expect: handsome cash prizes for the winners; a jury boasting a number of international film celebrities; a supplementary cultural programme of concerts and art exhibitions; receptions, opening and closing ceremonies with Russian stars treading the red carpet clad in expensive fur coats and hats. All of it could have been organised with the help of sponsors, Russia's richest oil companies.

It even has a number of good films, both foreign and Russian, selected by a panel chaired by Russia's brightest film critic, Andrei Plakhov.

The film festival was not Khanty-Mansiysk's only headline-grabbing event. Russia's best symphony orchestra was visiting, conducted by the maestro Valeri Gergiev. The city was also staging the world Biathlon championships.

All this was taking place in a Siberian city where the roads had no pot holes and fast internet connections were freely available.

When I talked to local-government officials I began to understand how this small city could afford such lavish events and facilities. 57% of Russia's crude oil is produced here, accounting for around 7% of global production. Those figures say it all.

A city of pioneers

The distant past in Khanty-Mansiysk was very different. It gained notoriety as a place of internal exile for prisoners of the state as far back as the 18th century. The long-time favourite of Peter the Great, Prince Menshikov, was exiled here along with his daughter Mariya. Both were buried in the city when they died. The Decembrists were also sent here after their 1825 uprising in St Petersburg's Senate Square.

Things began to change when oil was discovered in the 1960s. At that time the Soviet Union had no shortage of oil for domestic consumption. The oilfields of the Caspian and elsewhere easily met demand.

The decision to develop the Siberian fields was taken by the Soviet politburo following the 1973 energy crisis, when it realised that oil was a valuable source of hard currency and a powerful tool in international politics. Railroads were constructed through the region's forests and swamps, and new cities such as Nizhnevartovsk, Surgut, Nadym and Kogalym appeared on the map. But the slump in oil prices and the crises in the post-Soviet Russian economy led to difficult times for the region.

Yegor Gaidar, responsible for the economic direction of the reformist liberal government in 1991-92, gave a lecture in November 2006 where he recalled discussing the privatisation of the Russian oil companies in the immediate post-Soviet period. He was interested to find out how much top executives from international energy corporations were willing to pay for one Russian company. It had serious reserves, although its production was falling by a couple of million tonnes a year. It also owed one year's worth of unpaid taxes and nine months' worth of unpaid salaries, and on top of that a number of its executives had been shot by the mafia. Since no western company was willing to get involved, such oil companies invariably fell into the hands of Russia's most energetic young businessmen, privatised for a song. These men were the future "oligarchs".

In Gaidar's view these privatisations were needed urgently, not to earn money for the state, but rather to find somebody able and willing to manage the most important sector of the Russian economy efficiently.

In present-day Khanty-Mansiysk the stories of how people became fabulously wealthy overnight are still told. SurgutNyeftyeGaz is the largest oil producer in the region, with its headquarters in the biggest city, Surgut. Its CEO is Vladimir Bogdanov, Russia's most secretive oligarch. His hatred for the media and his Soviet approach towards managing his company are legendary.

Bogdanov is said to have arranged an air-traffic blockade of his city during the privatisation auction, preventing anybody who could outbid him from arriving. A producer from the local television station told me that Bogdanov proposed paying them money in exchange for not covering him, rather than granting interviews.

Zygmunt Dzieciolowski is a Polish journalist and writer who has reported on Russia for leading German, Swiss and Polish newspapers since 1989. He is the author of Planet Russia, published in Poland in 2005.

Also by Zygmunt Dzieciolowski on openDemocracy:

"Mikhail Khodorkovsky's shadow"
(3 April 2006)

"Russia: racism on the rise"
(26 April 2006)

"Russia's corruption dance"
(15 June 2006)

"Kinoeye: Russia's reviving film industry"
(11 July 2006)

"Russia and the middle east: post-Soviet flux"
(14 August 2006)

"Roman Abramovich's Chukotka project"
(14 September 2006)

"In Russia, death solves all problems"
(3 November 2006)

"Alexander Litvinenko: the poison of power"
(20 November 2006)

"The Russian politics of vodka"
(7 December 2006)

"How Russia is ruled"
(14 March 2007)

The shock of the old

In another part of the Khanty-Mansiysk region, Nyeftyeyugansk was the production centre for Yukos, the company run by Mikhail Khodorkovsky. Before he bought it, it was controlled by the Chechen mafia. Marina Khodorkovskaya, the mother of the imprisoned oligarch, once told me of her concerns about her son's plans to sort things out with the mafia after acquiring the controlling stake in Yukos.

A number of strange incidents happened afterwards. The mayor of Nyeftyeyugansk who had accused Yukos of not supporting his city sufficiently and gone on hunger-strike to make his point was shot dead by contract killers. Some people say that nobody else but Yukos could have been interested in the mayor's death. Khodorkovsky and his attorneys deny any involvement.

Now those pioneering days are gone, and few Russian regions can boast a standard of living as high as in Khanty-Mansiysk. In the last few years the city has been able to build a new university complex, police and army buildings, a rather impressive Orthodox cathedral, a modern biathlon stadium, a museum and a number of theatres and conference halls. Most of them still smell of fresh paint, and are filled with baroque post-Soviet flourishes such as towers, columns and other ornaments.

The film-festival's main centre has three impressive audience halls, decorated handsomely with marble and chandeliers. Their projectors and sound systems are state-of-the-art, and their bars serve expensive wines and cognac.

A glance at the traffic on the smooth tarmac roads of Khanty-Mansiysk leads me to believe that only Moscow can boast a higher proportion of foreign-made luxury cars. There is no shortage of drivers who can afford BMWs, Mercedes and other assorted SUVs.

The boutiques in the city-centre shopping-mall are full of expensive cosmetics and designer clothes. A very few wooden barracks, originally built to house workers developing oil installations, remain. Those that still stand will soon be demolished and replaced. Fancy ice-sculptures stand in the winter air, decorating city streets and squares.

When I commented to the deputy governor responsible for social issues, Natalia Zapadnova, that Khanty-Mansiysk it looks like a prosperous northern Canadian town she did not agree. "I have been to Canada recently", was her reply. "It is better here."

But the abundant evidence of economic prosperity only allows the social and political patterns regulating life in Putin's Russia to become more visible. This provincial area has returned quietly and firmly to the old routine. In such areas in Russia it has always been like this. The paternalistic nomenklatura still enjoys a monopoly of wisdom. Managers and officials know what is best for themselves and for the people. Important matters are sorted out without ever asking members of the public for their opinions.

The local media, just as in the past, are well aware of the need to avoid offending local authorities. The grey-haired 57-year-old governor of Khanty-Mansiysk, Alexander V Filipenko, does not hide his past. He has never been a pro-democracy dissident, and used to occupy important positions in the Communist Party before the collapse of the USSR. Now, governor Filipenko remains in the power structures of post-Soviet Russia. To some degree this gives him additional credibility in the eyes of the population. In Soviet times party officials balanced privileges with responsibilities for the territories they administered. The Kremlin trusts governor Filipenko too, confirming him in the top job after the abolition of direct elections for regional heads.

At the opening of the film festival, the well known French director, Leos Carax, said he was pleased to come to such a rich region, as film production is an expensive undertaking. Straight away he was rebuffed on stage by governor Filipenko. We don't think we have a lot of money, he argued, and we have problems too. He warned the audience that they could not expect to find cash everywhere. The local television station understood the situation well. The French filmmaker's words were censored while the governor's response was aired in full. Viewers could tell that he was answering somebody, but no clue was given as to who this was or what they had said.

The elite and the motherland

Vladimir Putin's Russia is keen to copy old Soviet models, methods and patterns. Moscow is allowed to be chaotic and vibrant, but out in the provinces people are expected to live by the rules. When I arrived in Khanty-Mansiysk the whole country was celebrating the day of the "defender of the motherland". On my first day here I happened to attend a local ceremony organised to commemorate this occasion.

The audience was packed with students from different city schools. Officers from the local military authorities took to the stage to deliver official slogans about Russia's future and the need to defend the motherland. Their approach and rhetoric have not changed since the days of the USSR. Russia is great, they said, its soldiers are heroic, and hostile nations are trying their hardest to take away her wealth and prosperity. Watching the stage it was difficult to avoid a feeling of déjà vu. It made me feel like I was on a visit to some sort of Soviet Disneyland.

I stayed in a hotel where governor Filipenko has several VIP rooms and apartments at his disposal, strictly off-limits to normal guests. It was in one of these rooms that I met his deputy, Natalia L Zapadnova. Just as in Soviet times the authorities have access to services not available to average people. In the past that meant shops supplying when with what were called "deficit" goods. Now, when the market economy means that exotic fruit and women's underwear are available everywhere, officials can confirm their status by isolating themselves from the rest of the population in luxury VIP rooms in restaurants, hotels and suburban dachas.

At the closing ceremony of the film festival I asked Ms Zapadnova whether she felt that officials from poorer regions were envious of her. She is, of course, an experienced bureaucrat, used to avoiding answering questions that she does not like. Instead of answering my question she says that she does not envy anybody.

I tried my best to get a more relevant answer, but failed. I did not even try to joke with her that the people of Khanty-Mansiysk might prefer to secede from the Russian Federation, and keep all their oil revenue for themselves.

I did, however, agree with deputy-governor Zapadnova that local authorities are right in their cultural initiatives. After all, surely it is better to spend oil money on a film festival or concert by Valeri Gergiev than to send it straight to an offshore bank in some tropical country.

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