SECURITY COUNCIL DISCUSSES KALININGRAD.

The meeting yesterday (July 26) of the Kremlin’s Security Council did not, as some media had rumored, result in Kaliningrad Oblast being designated Russia’s eighth federal district (see the Monitor, July 26). However, Viktor Cherkesov, President Vladimir Putin’s representative to the North-West federal district, announced that he would appoint a deputy for Kaliningrad to coordinate the activities of the region’s ministries and agencies. This means, as one observer noted, that Kaliningrad will now have “a parallel administration not under the control of the local authorities and responsible only to the president” (Gazeta.ru, July 26). The state’s Itar-Tass news agency quoted unnamed sources as saying that plans for turning Kaliningrad into Russia’s eighth federal district had not been scrapped altogether, but were on hold for now (Vedomosti, July 27; NTV.ru, July 26).

While a number of observers have said that the Kremlin is seeking to bring the Kaliningrad enclave, which is surrounded by Lithuania and Poland, under greater central control in response to NATO expansion and the Baltic states’ impending entry into the European Union, Putin yesterday accentuated the positive concerning relations between Kaliningrad and Western Europe. Opening up the Security Council session, the Russian president declared that the Kaliningrad Oblast could provide “a real chance… to work out a model for Russia’s cooperation with Europe” and that it was important to look for ways to turn the inevitable “minuses” of Poland’s and Lithuania’s EU membership into “pluses.” Putin said that such an approach “responds to Russia’s key national interests,” particularly given that the security of Russia in general and its northwestern area in specific depends “in large part on the condition of Kaliningrad Oblast.” The “responsibility for solving the problem of Kaliningrad” would be Russia’s “exclusively,” Putin added (Gazeta.ru, July 26).

Speaking in stark terms about the current condition of Kaliningrad, Putin noted that it has both a standard of living 1.4 times smaller than the national average and a high crime rate. He was critical of the federal authorities’ efforts to address such problems, saying that in relation to Kaliningrad “the gulf between bureaucratic bustle and real returns from that bustle is very large.” Kaliningrad was designated a “special economic zone” in the mid-1990s and a law granted it exemptions from paying value-added tax on exports and imports, excises and customs duties. Putin yesterday raised questions over the effectiveness of the special economic zone, saying it had only a “short-term economic effect” without solving the problem of building “a new economy” for the region. The federal authorities, he said, would soon unveil a new program for Kaliningrad’s development. It remains unclear, however, whether the deputy presidential representative in charge of Kaliningrad will control the financing for this program, or whether a special federal government minister will be named to oversee it, as some have proposed. Given the potential size of such funding, it is likely to spark a serious bureaucratic turf war (Polit.ru, Vremya Novostei, July 27; NTV.ru, July 26; see also the Monitor, July 26).

PUTIN REPORTEDLY DENIES NEGOTIATING WITH CHECHEN REBELS.