R 080555Z MAY 09
FM AMCONSUL YEKATERINBURG
TO SECSTATE WASHDC 1274
INFO AMCONSUL ST PETERSBURG 
AMEMBASSY MOSCOW 
AMCONSUL VLADIVOSTOK 
AMCONSUL YEKATERINBURG

UNCLAS YEKATERINBURG 000027 
 
 
DEPARTMENT FOR EUR/RUS 
 
E.O. 12958: N/A 
TAGS: ECON PGOV SCUL RS
SUBJECT: BILATERAL COOPERATION A BRIGHT SPOT IN AN ECONOMIC 
BACKWATER 
 
Sensitive but unclassified.  Not for internet distribution. 
 
¶1.      (SBU) Summary:  On a visit to Kurgan Oblast April 27-29, 
the Consul General (CG) found a striking mix of highly visible 
areas of U.S. -- Russian bilateral cooperation and durable 
personal relationships forged by exchange programs.  Everyone 
from the Governor on down praised the long-term sister city 
relationship between Kurgan and Appleton, WI.  CG and Embassy 
Moscow Law Enforcement Section (LES) chief handed over 4 million 
rubles worth of equipment to the local Federal Narcotics Control 
Service (FSKN).  Green Cross activists in the village of 
Shchuchye expressed disappointment in the Russian government's 
failure to realize promises of social infrastructure development 
upon completion of the nearby chemical weapons destruction 
facility (CWDF), to which the U.S. made a major contribution. 
End Summary. 
 
 
        Official Meetings Cordial 
        ------------------------------ 
¶2.       (SBU) Official meetings with Kurgan Oblast Governor Oleg 
Alekseyevich Bogomolov and Kurgan Mayor Anatoliy Fedorovich 
Yelchaninov were cordial.  The Governor characterized the 
economic situation in Kurgan as "difficult but not disastrous," 
though the region remains dependent on Moscow for budget 
subsidies.  Kurgan is the leading agricultural region in the 
Urals, and according to media reports, agricultural production 
remains at 99 percent of last year's level.  These same sources, 
however, report that industrial production is down 16.7 percent 
in the region and freight carried by rail down 41.6 percent. 
The automotive industry is struggling and state orders for 
military armored personnel carriers produced by the 
Kurganmashzavod enterprise are down.  Public and private 
indebtedness stands as a major obstacle to overcoming economic 
difficulties.  According to media reports, the regional 
government will be required to seek credit from the center to 
pay off 300 million rubles of debt.  Unemployment, which 
exceeded 9 percent at the end of 2008, continued to grow through 
the first quarter of 2009, according to media reports. 
Meanwhile, the Governor stated publicly that he will not accept 
the economic crisis as an excuse for poor performance from 
officials and enterprise directors. 
 
¶3.       (SBU) Mayor Yelchaninov, a United Russia party member, 
expressed confidence that he would be re-elected for a sixth 
term in October.  There are indications, however, of increasing 
opposition to his continuation in office.  His relationship with 
the governor has been contentious in the past.  In early April 
the governor took part in a conference staged by a movement 
called "This is Our City" that strongly criticized the mayor's 
performance.  According to media reports, the mayor's critics, 
including some from within United Russia, found fault with the 
city's small business development program and decried the 
mayor's failure to attract investment.  Others speakers took on 
the city's land use policies, especially in the "historic" city 
center, where numerous striking examples of 19th century 
provincial Russian architecture are deteriorating and in need of 
restoration or neighborhood development.  "This is Our City" 
describes itself as a civic action movement, but looks more like 
a political campaign:  several full-size billboards featuring 
the organization's co-chairman Ivan Belykh were prominently 
displayed in the downtown area. 
 
 
        CG, LES Chief hand over equipment to FSKN 
        --------------------------------------------- -------- 
¶4.       (U) Our visit coincided with the visit of Embassy Moscow 
LES chief and enabled us to participate in the handover of over 
4 million rubles worth of equipment to the Kurgan FSKN.  A press 
conference provided the CG with an opportunity to highlight the 
connections between Kurgan and the U.S. and enabled the LES 
chief to explain how the contribution of equipment to FSKN units 
along the border with Kazakhstan strengthens the ongoing 
partnership between the U.S. and Russia in combating narcotics 
trade in the region.  Two all-terrain vehicles, computer 
equipment and surveillance equipment formed an excellent 
background for media photos of the handover ceremony that 
appeared in the local internet media. 
 
 
        Exchange program alumni active 
        --------------------------------------- 
¶5.       (U) Alumni of Sister Cities and Open World and other U.S. 
Government exchange programs were eager to tell of their 
experiences and expressed hope for continuation of these 
relationships.  Governor Bogomolov said that his daughter had 
spent a year in Appleton and that he had personally hosted the 
family with whom she stayed.  Mayor Yelichanov spoke of his two 
visits to Appleton in the 90's, though he suggested that 
interest in the relationship had recently waned somewhat. 
Alumni members of the city's active Rotary Club, however, were 
anxious for more contact, and the vice rector of the 
agricultural academy told of plans to visit the U.S. in June on 
a Fulbright grant. 
 
 
        Shchuchye's fate 
        --------------------- 
¶6.      (SBU) Returning to Yekaterinburg we took a side trip to 
the village of Shchuchye to visit Galina Vepreva, head of the 
local branch of the Green Cross organization, the contractor 
that monitors the welfare and rights of citizens residing near 
the CWDF.  The Russian government is obligated to contribute 10% 
of the total cost of the facility - to which the U.S. 
contributed USD 1.39 billion through the Cooperative Threat 
Reduction program - for the development of the region's social 
infrastructure.  Though Governor Bogomolov spoke of the benefits 
this project brings to the region and praised the U.S. for its 
cooperation, the deteriorating village of Shchuchye itself 
reflected very little of this promise. 
 
¶7.      (SBU) Vepreva complained that only 70% of the funds 
designated for social infrastructure development had been spent 
and that control over some of the benefits, such as a mobile 
environmental testing unit that was ceded to the military, had 
been diverted.  Though the village received a new school and a 
new clinic, it remains poor even by Russian rural standards. 
According to Vepreva, there is no hot water in homes, no sewage 
treatment facility, and gas is available only to those who can 
afford to be connected. 
 
¶8.      (SBU) We had to take a detour into town because flooding 
had rendered the main road impassable.  The dirt road into the 
center was in such poor condition that vehicles were forced to 
run a slalom course to negotiate the crater-like potholes.  The 
administrative buildings in the center of town were in an 
advanced state of neglect and the main features of the central 
park were litter and rusted playground equipment.  Elderly 
people sold clothing and household goods at a small flea-market 
in the central square.  Even the modern residential complex that 
rises above the ramshackle wooden houses of Shchuchye is 
something of an illusion:   According to Vepreva, workers at the 
CWDF will be housed in this complex for the life of the 
facility, but apartments will revert to state ownership when the 
facility is closed, with no clear provision for the occupants. 
She commented that she fears mismanagement of the social 
infrastructure program more than she fears the proximity of the 
CWDF. 
 
¶9.      (SBU) Comment:  We found the predominantly agricultural 
region lacking economic dynamism.   Though a beautiful theater 
had recently been built, there was little new construction in 
the city.  In contrast to other regional capitals in our 
consular district, Kurgan was dusty, run down and provincial, a 
city where two popular American Wild West-themed restaurants did 
not seem particularly out of place.  Notable aspects of the 
region's landscape included broad marshlands remarkable for a 
lack of bird life and birch and pine forests that had been 
extensively burned by a wildfire that claimed numerous lives 
earlier this decade.  Along with these features, expanses of 
fields being readied for cultivation emphasized the influence 
that climate and topography have on Kurgan's economy and its 
people. 
 
 
SANDUSKY