The Governor of the Khabarovsk Territory, Sergei Furgal, was detained on 10 July on suspicion of involvement in organising the contract killings of Khabarovsk entrepreneurs in the 2000s. The detention of the governor has since then been accompanied by tens of thousands coming out at rallies, day after day, in Khabarovsk, and with more protests throughout the country, which is unprecedented. The appointment of a new, Moscow-based, governor has done nothing to calm the situation.
Up to this point, the police harshly suppressed any mass protests in Russia. Many people are detained at rallies in Moscow or St. Petersburg. Last year, through mercenaries and the police, the authorities tried to disperse people in Ekaterinburg who were protesting against the construction of an Orthodox church on the site of a public park.
However, during the protests in Khabarovsk, so many people came out that the small Khabarovsk police force were openly afraid to go against the opinions of citizens and of provoking them. In addition, the protesters mostly confine themselves to demanding the return of Furgal, but they do not often speak out against the Kremlin oligarchy.
Khabarovsk is the largest city in the Russian Far East in terms of population. The Russian Far East is not as rich in oil and gas as Siberia but it is rich in other minerals. However, it is difficult and expensive to export the minerals to the centre of Russia (Khabarovsk is almost 2.4 times farther from Moscow than London is); it is much easier to export them to China or Japan.
The Russian Far East began to be actively populated only in the 18th century by Ukrainians and remained the poorest part of Russia. Before the 1917 October Revolution, this area served mainly as a place for political exiles. It was only during Soviet industrialisation that the first powerful industrial base appeared and the pace of development began to outstrip not only the rest of Russia but also the United States.
During the Cold War, the Soviet Far East was strategically important, primarily militarily, as the border of Russia with Mongolia, China, North Korea, Japan, and the United States passes here. At the same time, after the collapse of the USSR, the living standards of the inhabitants of the Far East fell sharply, and migration to the centre of Russia increased many times over.
Since then, the Russian Far East has had the worst economic and social situation in the country. The collapse of the industrial base forced the Far East to into a commodity dependence on China and subsequently into an economic one. In the 1990s, cheap goods from China began to be supplied to the region, which actually saved people from starvation and poverty.
Such a phenomenon as “Shattle traders” still persists, when small and often illegal traders buy goods in China and then sell them in Russia. This was typical for the existence of the former USSR and post-Soviet countries in the 1990s. A huge amount of timber is exported from the Far East to China. Since the beginning of 2020, illegal tree felling, worth 1 billion rubles, has been estimated, although the alarm about mass tree felling was being raised back in 2018. Differences between the centre of Russia and the Far East arise not only in historical terms but primarily in economic terms.
Politics and crimes
Sergei Furgal is probably involved in crimes, like many modern Russian business people. But there are many questions and inconsistencies in the arrest of Sergei Furgal, the most significant of them is: Why now?. The governor’s case is not connected with “good performance”, as many oppositionists write, but with the redistribution of the property of the “Amurstal” metallurgy plant between Furgal and the oligarchs of Russia.
The reasons for the interest in the plant are quite simple and understandable. In the coming years, the implementation of megaprojects in the Far East will begin – the Bridge over the Lena River in Yakutia and the bridge from Sakhalin Island to the mainland. For such large facilities, building materials will be needed, including reinforcement bars. “Amurstal” is one of the most obvious suppliers for these construction sites.
Sergei Furgal is a member of the Liberal Democratic Party of Russia (LDPR). Despite its name, the Liberal Democratic Party is essentially a reactionary right-wing party. Its slogans often contain populist, nationalist and monarchist statements. It is trying to appear oppositional, but the party is loyal to the Kremlin. They have proved their loyalty by the fact that they generally do not participate in the protests and, in every possible way, try to dismiss the Kremlin’s accusations that the LDPR organizes the protests. Nevertheless, the party expressed its support for the arrested governor,
Before becoming governor of Khabarovsk, Furgal was for a long time among the LDPR deputies in the country’s parliament. In 2018, he decided to run for governor of the Khabarovsk Territory. Having won in the first round of voting, Furgal still had to go through the second round. The incumbent governor – Shport from United Russia party – realising his precarious situation, offered to appoint Furgal as his assistant, to which Furgal readily agreed. The public’s confidence in Furgal immediately fell. The LDPR leader, Vladimir Zhirinovsky, publicly declared that the candidate from his party would not become governor. However, by the time of the second round, Furgal changed his mind and defeated United Russia by a huge margin.
Furgal’s solid victory, despite coming as a complete surprise, is still quite understandable. Ruling the Khabarovsk Territory since 2009, Shport brought the region to a worthless state by abolishing all Aeroflot flights and destroying the free medicine system. Another factor is that Furgal was supported by the former regional governor, Viktor Ishaev, who at that time had influence among the workers in large scrap metal processing plants. Ishaev was detained by authorities in March, last year, in connection with the theft of funds from Rosneft.
The Amurstal plant is today the largest metallurgical enterprise in the Far East, but back in 2017 it was on the verge of bankruptcy. Then it was bought by the Torex-Khabarovsk company, among the founders of which were Sergey Furgal’s wife, Larisa Starodubova, and his longtime business partner, Nikolai Mistryukov, each of whom owns 25% of the company. Another 50% of the shares of Amurstal, at that time, belonged to Moscow businessman, Pavel Balsky, who also owned 50% of the shares of Torex-Khabarovsk.
Pavel Balsky, who has already seized control of the plant from Furgal, is known as “the confidant of the oligarch, Arkady Rotenberg, a friend of Vladimir Putin”. Rotenberg is a close friend from Putin’s youth, who was responsible for the construction of the Crimean Bridge, in which huge funds from the country’s budget were invested. Balsky is the president of the National Union of Veterans of Judo – the “presidential” sport. The younger Rotenberg is a member of the Supreme Council of this organization, and the older one heads it.
At first glance, the judo veterans do not attract attention. But if we look closely at the top team, we will see Arkady Pinchevsky. This oligarch recently seized the crab market from the “Crab King” Oleg Kan. Pinchevsky has emphasised his close links with the Rothenbergs. According to him, they became friends while working in the National Union of Judo Veterans.
The purchased plant was quickly revived and began to break production records. However, this did not last long. In 2019, Nikolai Mistryukov, who was in charge of financial activities, was arrested. The plant’s profits fell sharply, which was the reason for accusing Furgal in relation to the launching of the plant. After Mistryukov’s arrest, Grigory Freidin became the general director of the Avoda, appointed by Balsky. This February, Furgal’s wife tried to appeal against Freidin’s appointment as general director of the plant, but the court did not take her side.
So, the war between Balsky and Furgal ended in favor of the former. Naturally, such an outcome was not unexpected for Furgal. According to his friends, the Security Services (FSB) threatened to bring forward the “file with the criminal case” two years ago. Immediately after the arrest of Furgal, the management of the steel works was changed and a criminal case was also opened against four managers of the plant close to Furgal over the embezzlement of funds.
In place of the regional governor, another member of the Liberal Democratic Party, Degtyarev, was put in. The authorities are trying in every possible way to show their protégé as a skillful leader, but Degtyarev does not shine with intelligence. For example, in an interview, Degtyarev said that a fridge magnet with 500 ruble notes on it depicted with Orthodox crosses instead of Western $5 signs, “improved the quality of his food”. The video of this interview has become a local internet-meme.
The general economic and political crisis that has begun is forcing people to fight for their rights, but the ruling elites are trying to use the anger of workers in their own interests. The protests in Khabarovsk are part of the showdown between business elites. To fight for Furgal or against him, would apparently mean taking one of these sides.
However, the protesters in Khabarovsk are gradually changing the agenda from a struggle in defence of the former governor into demanding the resignation of the country’s president, Vladimir Putin. The authoritarian regime, the crisis situation and the ongoing coronavirus epidemic in the country are forcing people to go against the entire oligarchic thieves’ system.
But speaking out for the removal of the criminal oligarchic clique at the top, including Vladimir Putin, is not enough; it is necessary to fight to dismantle the system that generates corruption and banditry among oligarchs and officials.
The large and long-suffering working class across Russia needs to organise resistance at work and in society against the capitalists and their system. Mass and independent trade unions and a workers’ socialist party urgently need to be built. It is vital to fight for a system where power is exercised not by business people, but by representatives of workers and people, old and young. It’s time to start fighting for socialism!