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INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
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RHEHNSC/NSC WASHDC

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 000365 
 
SIPDIS 
 
E.O. 12958: DECL: 02/19/2020 
TAGS: PREL PGOV PINR KDEM
SUBJECT: ULYANOVSK: RUSSIA'S AVIATION CAPITAL SEEKING NEW 
INVESTMENT 
 
REF: 09 MOSCOW 946 
 
Classified By: Acting Political Minister Counselor David Kostelancik fo 
r reasons 1.4 (b) and (d). 
 
 ¶1. (C)  Summary:  Russia's Ulyanovsk region Governor Sergey 
Morozov is focusing on the need to attract investment, 
foreign or domestic, into his central Russian region.  During 
Emboff's two-day visit February 11-12, local officials 
promoted their receptivity, and Ulyanovsk's infrastructure, 
industry, and history as major selling points for investors. 
While facing economic challenges, authorities refuse to open 
the political sphere to greater competition, with upcoming 
local elections slated to preserve United Russia's dominance. 
 End Summary. 
 
--------------------------------------------- ---- 
Selling the Region's Foreign Investment Potential 
--------------------------------------------- ---- 
 
¶2. (C)  As they did in early 2009 (reftel), regional 
officials went to great lengths to promote Ulyanovsk's 
natural advantages for investors.  Head of the regional 
International Relations Department (and U.S. educated) Igor 
Lukin told us that Ulyanovsk, which sits along Russia's Volga 
river, is the self-proclaimed "Aviation Capital of Russia." 
Ulyanovsk is home to three airports, and has one of Russia's 
largest pilot training programs.  During our visit, Governor 
Morozov was in London at the Oxford Aviation Academy to 
discuss educational and training exchanges.  Russian 
President Dmitriy Medvedev opened a new bridge, over six 
miles long, over the Volga on November 24, 2009 to improve 
national and regional transportation links and ease 
congestion over the city's old two-lane bridge.  Lukin also 
noted that being straddled by "two crazy, larger neighbors" 
(Kazan and Samara), meant that Ulyanovsk was prime for 
investors, since Kazan and Samara were already saturated and 
"over developed." 
 
¶3. (C)  Officials emphasized their receptivity to investment 
ideas and, building on Medvedev's mantra, innovation and 
modernization.  Lukin said that local officials were prepared 
to immediately meet with potential investors and would review 
projects faster than larger cities because of the city's 
"minimal bureaucracy."  As the birthplace of Vladimir Ilyich 
Ulyanov (Lenin), Ulyanovsk, (called Simbirsk prior to 1924) 
boasted numerous museums that Lukin diplomatically said, "pay 
tribute to Lenin's importance as a historical figure," rather 
than to his status as founder of the Soviet Union.  As 
evidence of the region's use of history to promote 
innovation, officials showed us the city's unique, year-old, 
downhill ski slopes, dubbed Lenin Hills, that make use of the 
Volga's steep banks along the city's Western edge. 
 
¶4. (C)  Despite officials' attempts to portray the region in 
the best light, a sample of taxi drivers and discussions with 
journalists and opposition party members revealed a city 
struggling to revamp its outdated industry.  The region is 
home to the Ulyanovsk Automobile Factory (UAZ) and Aviastar 
aviation plant, which we were told were struggling to stay 
profitable.  Compared with Western work practices, relatively 
few people in Ulyanovsk had been fired, but many factory 
workers had had their salaries reduced, were working 
draQically reduced hours, or were on unpaid leave.  Our 
interlocutors blamed the worldwide economic downturn for the 
falling demand of the region's industrial goods, but remained 
optimistic that Morozov could improve prospects. 
 
¶5. (C)  As Ulyanovsk's historical reliance on Soviet-era 
military-industrial products has weakened, and well-paying 
jobs difficult to find, locals are migrating to find adequate 
employment.  Local Right Cause member Irina Palshintseva 
explained that Ulyanovsk was a major military-industrial 
complex during World War II as factories were transferred 
East during the War.  The city grew from about 40,000 in the 
early 1940s, according to Palshintseva, to nearly half a 
million by the late 1940s.  Demographic settling continued in 
the late 2000s as Russia's economic reliance on Ulyanovsk's 
heavy industry and the military-industrial complex, mainly 
UAZ and Aviastar, diminished.  Locals, she said, were moving 
to larger urban areas such as Moscow in order to support 
themselves financially. 
 
---------------------------------------- 
Opposition Struggling Against United Russia Machine 
---------------------------------------- 
 
¶6. (C)  Interlocutors were pessimistic that elections would 
change United Russia's stranglehold on local politics. 
 
MOSCOW 00000365  002 OF 003 
 
 
Regional Communist Party leader Aleksandr Kruglikov, whose 
office was the only opposition party buzzing with activity 
ahead of local elections on March 14, blasted United Russia 
without hesitation.  He said that United Russia was full of 
criminals and future criminals who use administrative 
resources to put pressure on the opposition and local media 
outlets.  He, as well as every other political contact with 
whom we spoke, were convinced that the election results had 
already been determined by local United Russia leaders. 
Argumenti i Fakti journalist Stanislav Ikkonikov bluntly 
stated that elections in Ulyanovsk were divided up ahead of 
time, "just like in every other region of Russia."  Kruglikov 
added that the Communists would, nevertheless, field party 
and independent candidates, ranging from 21-61 years old, in 
each local district. 
 
¶7. (C)  Other opposition leaders complained that the use of 
administrative resources was increasingly used to remove 
candidates for elections.  Mayoral candidate and local 
National Democratic Union and Solidarity member Aleksandr 
Bragin told us of his recent battles with the local 
judiciary.  Having come straight from court to meet us, 
Bragin said that the judge told him that the signatures he 
had collected to run for mayor were invalid because residents 
had included their street address instead of just writing 
their city and region.  The judge described this as 
residents' "address of place of residence," rather than the 
legally required "place of residence."  Bragin said that in 
previous years the City Central Election Committee had 
removed him from election lists because he had used the 
incorrect form to collect signatures.  When Bragin replied 
that he had printed the form off the CEC website, they told 
him that the form on the CEC website was for "informational 
purposes only," and that they could not favor him over other 
candidates by telling him where to find the proper form. 
 
¶8. (C)  Opposition leaders counter United Russia's dominance 
by working together on the local level.  Bragin, Kruglikov, 
and local Patriots of Russia leader Vladimir Aladin told us 
that a wide ideological range of parties, such as Patriots of 
Russia, the Communist Party, Yabloko, Solidarity, Right 
Cause, as well as several NGOs had created a joint Committee 
of Civil Control to exchange information and support each 
others' candidates in select districts.  Opposition parties 
also conducted regular joint pickets in front of the mayor's 
office, which partly explained the large-scale "training 
exercise" we noticed across from our hotel one evening 
complete with shields, shouting, and batons. 
 
--------------------------------- 
Blame United Russia, Not Governor 
--------------------------------- 
 
¶9. (C)  Our interlocutors laid the blame for the use of 
administrative resources at the feet of regional United 
Russia leaders, not Governor Morozov, who is also a United 
Russia member.  Bragin said that Morozov was not happy about 
opposition candidates not being registered, but was having 
problems controlling local United Russia activities.  He 
stated that several local United Russia leaders wanted to 
replace Morozov because he had not done enough to support 
financial groups linked to United Russia leaders.  Aladin 
said that Morozov was a good guy, but one who would follow 
national and local party decisions.  Ikkonikov stated that 
several of Morozov's subordinates were United Russia leaders 
with stronger ties to the party leadership in Moscow.  He 
added that the Governor was viewed by regional elite as a 
member of a financial team tasked with improving Ulyanovsk's 
economy.  Morozov had strong popular support and understood 
the need to create good political and economic conditions for 
investment, but did not have absolute control. 
 
¶10. (C)  Government officials also praised Morozov for his 
work in the social sphere.  Local Human Rights Ombudsman 
Galina Edvars told us that Morozov was instrumental in 
improving the situation for human rights within the region. 
He established the Ombudsman office in January 2009, and over 
1000 people had already appealed for assistance, most of whom 
Edvars explained sought "non-political advice."  Right Cause 
member Palshintseva noted that Morozov met regularly with 
members of all political parties and movements and often 
created policies from ideas gleaned from these meetings. 
 
------- 
Comment 
------- 
 
¶11. (C) Governor Morozov is focused on using the region's 
existing infrastructure and tax benefits to attract 
 
MOSCOW 00000365  003 OF 003 
 
 
investment to the region.  Part of his efforts involves 
working with U.S. firms and investors to draw needed 
investment to the region.  We did not fully buy-in to local 
officials slick attempts to sell the region's "limitless 
economic potential," but their attempts speak volumes about 
Morozov's diligence and priorities.  He faces an uphill 
climb, however, to retool the city's industrial base, while 
fighting for influence with Moscow and United Russia 
leadership. 
Beyrle