Publication: Monitor Volume: 7 Issue: 83

Opposition to Deputy Prime Minister Ilya Klebanov’s military reform plan appears also to be brewing among regional leaders. The Kremlin appeared to try to head off this not-unexpected reaction last month, when it presented the draft restructuring program to the State Council presidium and entrusted one of its members, Yaroslavl Governor Anatoly Lisitsyn, with the task of organizing the government’s initiatives in this area. Regional leaders have apparently resolved since that time to set up their own working group to deal with issues related to Klebanov’s program. The group includes four other regional governors along with Lisitsyn. They are Eduard Rossel from Sverdlovsk, Boris Gromov (the well-known former Russian general) from Moscow, Viktor Ishaev from Khabarovsk, and Yury Yevdokimov from Murmansk. Reports suggest that Ishaev has emerged as the sharpest critic of Klebanov’s plans. His objections center on the fate of the Komsomol’sk-on-Amur Aircraft plant, which is located in his home district. Indeed, the Komsomolsk-on-Amur facility appears to lie at the heart of much of the more general criticism of Klebanov’s plans. In a foreshadowing of the currently planned consolidation effort, the Komsomolsk-on-Amur plant was placed, along with several other aircraft facilities, into a holding under the control of the Sukhoi company in 1996. But the Komsomolsk plant, which has been profitably turning out aircraft for China, has done everything to resist the consolidation attempt, and its leadership is likely to oppose any new effort to deprive it of its independence.

The Komsomolsk-on-Amur plant reflects the dilemma that Klebanov’s defense industrial restructuring program poses for a host of regional governors. The plant provides some 40 percent of Khaborovsk’s budget revenues, and is thus crucial to the regional government’s financial health and, some would say, the region’s economy. Regional leaders fear that the resubordination of individual defense enterprises like the Khabarovsk plant to giant holding companies–many of which will presumably be based in Moscow–will deprive them not only of control over plant assets, but of related access to defense allocations and tax revenues flowing from procurement contracts and arms sales.

Governors in regions with heavy concentrations of defense enterprises are apparently now pushing Klebanov to address their concerns on these and related issues. Whether the Kremlin is really listening, or whether it has been using the State Council Presidium deliberations on defense industrial reform mainly as window dressing to assuage the governors is unclear. One piece of evidence suggesting that the latter may be the case is the fact that the governor’s working group is slated to come up with its proposals sometime this fall. The Kremlin, however, apparently hopes to have the cabinet finalize the defense industrial reform plan next month (Vek, No. 14, April; Trud, Nezavisimaya Gazeta, April 20; Izvestia, April 21; Vedomosti, April 26).