Analysts believed some time ago that Governor of Krasnoyarsk Territory Alexander Khloponin would succeed President Vladimir Putin. It may now seem ironic, but the proponents of this theory were almost right. On January 19, Khloponin was appointed Deputy Prime Minister for North Caucasian Affairs and Presidential Plenipotentiary Envoy to the new North Caucasus Federal District.
In September 2002, the UFG Asset Management investment company published a report praising the new governor and predicted that he could one day become President of Russia. “I suppose that he will be able to take up any government position after serving one term as governor,” Deputy State Duma Speaker Vladimir Pekhtin told the paper in 2002. Subsequent developments showed this forecast to be somewhat premature; Khloponin was asked to work in the Government after two terms in office. Until January 19, his name was not even listed in the presidential personnel reserve. However, many political analysts had included Khloponin among Putin’s successors in the run-up to Dmitry Medvedev’s inauguration, probably in reaction to the above-mentioned sensational report.
Siberian order
Frankly speaking, analysts made some rather hasty assessments. Khloponin was able to become Governor of Krasnoyarsk Territory only after the President’s personal intervention. Khloponin, the former CEO of Norilsk Nickel and Interros Group top manager, won the second round of gubernatorial elections with 48.07% of the vote. His rival, Territorial Legislative Assembly Speaker Alexander Uss, who was supported by RusAl, YUKOS, and Krasnoyarsk businessmen, received 41.81%. In late September, Khloponin openly criticised companies using tolling schemes to the detriment of the territorial budget. This is what RusAl did. The Krasnoyarsk territorial election commission promptly annulled the results of the second election round due to numerous violations, but cancelled its claims several days later. Putin met with Khlopinin and Uss in the Kremlin and signed a decree appointing Khloponin acting governor in their presence. Khloponin was sworn in as Governor a week later. Uss bears no grudge against his old political rival. “I remember he called on me the very next day after elections and proposed working together as colleagues and friends, rather than former opponents. He lacked any post-election syndrome and wanted to see only the best traits in people,” Uss told the paper.
All political analysts polled by the paper note that the Krasnoyarsk Territory, a region previously ridden with political conflicts, has turned into one of the most stable constituent entities after 2002. “When he arrived here, the territory was torn apart by conflicts, lacked a real leader, and faced chaos. Now, it is a prosperous and advanced region, devoid of any scandals,” said Khloponin’s friend and ONEXIM Group co-owner Mikhail Prokhorov. “Khloponin deserves credit for re-establishing order. None of his predecessors had managed to accomplish this,” said Vitaly Ivanov, Vice-President of the Centre for Current Politics. In 1991-2002, the territory was led by Arkady Veprev, Valery Zubov, and Alexander Lebed, respectively. Moreover, it was Khloponin who merged the Krasnoyarsk Territory with the Evenki and Taimyr autonomous areas in 2007. Khloponin headed the Taimyr Autonomous Area for a year before winning territorial elections. Consequently, the territorial budget received proceeds from Evenki oil and gas sales, as well as proceeds from the exportation of Norilsk nickel and platinum on the Taimyr Peninsula. This project is the main success of Khloponin’s political biography, Ivanov said.
Friends in Moscow
Alexander Khloponin was born on March 6, 1965 in Colombo, the capital of Sri Lanka, into the family of a Soviet Foreign Ministry interpreter. In 1989, Khloponin graduated from the international faculty of the Moscow Financial Institute, where he became acquainted with his best friend, Mikhail Prokhorov. In 1983-1985, Khloponin and Prokhorov were conscripted into the Armed Forces together with many other students from Moscow. After being discharged from the army, both men made and sold the famous and highly popular stonewashed jeans. After becoming governor, Khloponin recalled in an online interview with Krasnoyarsk residents how he had courted and won over Prokhorov’s girlfriend. He also made ironic remarks about their height: “If anyone wanted to find me in the Institute’s corridors, he or she first had to come across a tall guy named Prokhorov and then look down,” Khloponin quipped. Prokhorov likes to recount how he helped Khloponin climb into the windows of a girls’ dormitory. “When we were taking a geography exam, Mr. Khloponin forgot the date of the establishment of the Council for Mutual Economic Assistance, and I whispered ‘1949’ to him,” Prohorov said in a Komsomolskaya Pravda interview. “When the professor overheard, Khloponin rose from his seat and said ‘Please let him stay because it was I who asked him.’ Such honesty impressed the examiner, and we were both allowed to stay.” “There were some other incidents that I would like to discuss. But I can’t do it, because although I have nothing to lose, I’m in no position to tarnish Mr. Khloponin’s political reputation,” Prokhorov added merrily.
After receiving his degree, Khloponin worked for three years at the USSR Bank for Foreign Trade. In 1992, Khloponin moved into the private business together with Prokhorov and became deputy chairman of the International Financial Corporation Bank, part of Interros Group, which was co-owned by Prokhorov and Vladimir Potanin. In 1994, Khloponin was appointed the bank’s board chairman. In June 1996, Khloponin was appointed CEO of Norilsk Nickel, the largest platinum producer in the world and a leading nickel manufacturer. Interros received control of the company after a loans-for-shares auction in the autumn of 1995. At 31, the newly-appointed CEO became the youngest top manager in the global non-ferrous metals sector. According to Prokhorov, Khloponin volunteered to head Norilsk Nickel, which was in a disastrous state. “At that time, nickel prices had hit an all-time low and were ten times lower than they are today,” said Dmitry Zelenin, Khloponin’s co-worker at Interros and Norilsk Nickel and current governor of the Tver Region. After being appointed to Norilsk, Khloponin praised the experience and talents of his subordinates in a Kommersant interview, but later complained that these people had worked within a planned-economy system all their lives and had never operated on the free market and that consequently, they knew nothing about finance and asset management. “They don’t understand that loans must be paid and returnable, that this is not the same as borrowing money that will later be repaid by the state … For them, tax minimisation is like jumping a gunman, a nightmarish option of stealing from the state. Nor do they realize that it is unwise to stipulate global prices during raw-materials deliveries between corporate enterprises and to pay exorbitant VAT on them,” Khloponin said.
In 2001, Khloponin decided to quit production and financial matters and to become a politician. First, he won the gubernatorial elections in the Taimyr Autonomous Area. Khloponin, who was already wealthy by that time, expanded his fortune by selling his Nornickel stake, several percentage points of the company’s statutory capital. “After the tragic death of Alexander Lebed, he said he wanted to be the governor of the Krasnoyarsk Territory and to move into politics, and he won the elections,” Prokhorov said, noting that Khloponin was supported by just 4% of Krasnoyarsk Territory voters pending the elections.
“I used to deal with him as governor. Although he is quite young, he has tremendous political experience and can work with people. He is a solid person, not some shallow man,” said North Ossetian President Teimuraz Mamsurov. Khloponin’s other co-workers have a similar opinion of him. But even such an impressive background sometimes does not prevent him from making ill-conceived statements, including critical remarks of tolling practices after his victory at the gubernatorial elections. In January 2006, Khloponin caused quite a stir on financial and commodity markets by telling the Avtoradio Krasnoyarsk radio station that Norilsk Nickel shareholders and those of diamond giant Alrosa were negotiating a possible merger. After all the global wire services had reported the news, Khloponin said that the press had misinterpreted his statement.
Plans for the Caucasus
“Since the times of the great Minister of Medium Machine Building Yefim Slavsky, our North Caucasian Institute of Mining and Metallurgy (State Technological University) in Vladikavkaz has worked to establish the Norilsk ore-processing plant,” Mamsurov said.
“I don’t know whether Khloponin has been to the Caucasus or not, but he has talked to our graduates at Norilsk Nickel. As a Presidential Plenipotentiary Envoy to the North Caucasus Federal District and Deputy Prime Minister, he has great powers. Moreover, he will directly cooperate with Vladimir Putin, who has substantial experience regarding the Caucasus,” Mamsurov stressed.
Before meeting with President Dmitry Medvedev yesterday, Khloponin attended a meeting of the Council on High Priority National Projects and the Demographic Policy as Krasnoyarsk Territory Governor. Zelenin, who has seen him there, claims that Khloponin said nothing about his new appointment. His other friends say he kept it a secret and hinted only this weekend that there was some idea regarding the Caucasus. An acquaintance of Khloponin said that he has happy about his new appointment because he had already worked for a long time in Krasnoyarsk. “Khloponin is one of those who need drive, who want to develop and who are eager to work hard to realize one’s potential. And there is a lot to be done in the Caucasus,” the source said.
“Khloponin is among the most promising regional leaders with a federal mentality, and he enjoys federal support. His appointment to such a difficult region as the Caucasus was predictable,” Uss said. He said Khloponin had received an extremely heavy burden in terms of the territory and its organisational-legal situation. For him, this is a chance to display all his best and strongest talents.
“It is good that Khloponin is not just a plenipotentiary envoy but that he also has the status of a deputy prime minister. On the one hand, this means that he will be closer to the president and the prime minister. On the other hand, he will be closer to the people. Pyatigorsk, the future capital of the North Caucasus Federal District, is located closer to the republics that Rostov-on-Don, the current district capital. He will have an opportunity to maintain permanent contacts with local elites,” said Adalbi Shkhagoshev, member of the Federation Council’s Committee on Labour and Social Policy from Kabardino-Balkaria. A Dagestani government official said that Khloponin’s lack of knowledge of the Caucasus was a plus because he lacked any connections or covert commitments to local elites.
“He is able to compromise. This is one of the few cases in which an appointed official combines a number of essential qualities. He is Russian, which is important for such a multi-ethnic territory as the North Caucasus. He has spirit. He can talk to the people. Even when he was governor of Krasnoyarsk Territory, he could talk to local residents bypassing his subordinates, and he was appreciated for this. His proximity to the people will also be appreciated in the Caucasus, and he will sure to succeed,” a senator familiar with Khloponin told the paper. The senator said it would take Khloponin at least five years to establish law and order in the Caucasus.
“After Presidential Envoy Dmitry Kozak, who also headed an ad hoc commission [comprised of ministers, which is why Kozak had deputy prime minister status] on the North Caucasus, ordinary plenipotentiary envoys Grigory Rapota and Vladimir Ustinov were appointed to the district. The North Caucasus faces numerous problems that must be promptly tackled by a deputy prime minister,” said an official at the North Ossetian administration. As far as Ustinov is concerned, he accomplished nothing spectacular. He seldom visited the region, and his deputy, Alexander Zhukov, conducted video link-ups on important socio-economic issues, said a republican government official.
A source in the administration of the Krasnoyarsk Territory said Khloponin’s family lived in Moscow and that Khloponin had frequently travelled to the capital. “He had created a smoothly functioning mechanism, the regional-administration system functioned effectively, and he made strategic decisions on the spot,” the source said.
Khloponin could not be reached yesterday. The secretary at his reception office in the Krasnoyarsk Territory’s Moscow division and a spokesperson said he was unavailable to the press. A spokesperson for Khloponin’s wife, Natalia, declined to comment on the new turn in the career of her husband. Khloponin’s father, Gennady Khloponin, said he had learned about his son’s appointment on a TV news broadcast and did not have the time to talk to him. Prokhorov believes that Khloponin will be able to improve the economic situation in the North Caucasus. “It requires his unique ability to compromise with everyone, to reach agreement, and to attain the required result rather than a tough stance,” Prokhorov said.
Olga Rozhkova