Russian millionaire heads a republic of greenbacks


April 29, 1993|By Kathy Lally | Kathy Lally,Moscow Bureau

MOSCOW -- Kirsan Ilyumzhinov, 31-year-old millionaire president of tiny Kalmykia, has fully embraced capitalism.

"Kalmykia," he says of the autonomous Russian republic, "will not be a republic but a corporation."

Two years ago, Mr. Ilyumzhinov was just another young, up-and-coming Communist with an elite education. Then he started working for a Japanese company and began earning dollars.

His conversion was swift and complete. "Let's do business," he remembers resolving, "and talk about ideology later."

Do business he did. Two years later, after setting up gas and oil firms in his republic, running a newspaper and movie theaters, he found himself a millionaire. Not a ruble millionaire, either, but dollars, or greenbacks, as he likes to call them.

"I told my people what to do with all those privatization vouchers," he tells reporters at a lavish news conference here. "I told them to bring them to the Finance Ministry here in Moscow and demand greenbacks for them -- something they can use to set up a business."

Mr. Ilyumzhinov's people are the 350,000 residents of Kalmykia, who live south of Volgograd on land that borders the Caspian Sea. They are descendants of Mongols, and, like Mr. Ilyumzhinov, many are Buddhists.

The president, by the way, has offered Kalmykian sanctuary to the exiled leader of Tibetan Buddhism -- the Dalai Lama. He has offered him land, a house and a temple. "The Dalai Lama is still mulling it over," Mr. Ilyumzhinov says.

His little republic has caviar, wool, oil and gas, but 80 percent of the economy depends on agriculture. Like elsewhere in Russia, it is woefully inefficient. Mr. Ilyumzhinov, of course, plans to change that.

This week, he signed a pile of decrees. He streamlined government, reducing at the stroke of a pen the republic's 40 government ministries to five, eliminating the KGB.

He says tomorrow's session of the 130-member Parliament will be the last, and a 25-member professional legislature will be elected.

He ran against two opponents for the presidency, but won handily after promising every family in Kalmykia $100 -- a fortune in a land where the average monthly income is no higher than 15,000 rubles, about $18 at today's exchange rates.

His critics accuse him of already breaking that promise. He denies it. "The first 50 million rubles have already been transferred into government accounts," he says. "But just to distribute the money -- that would mean supporting the old mentality. That would be wrong. But those young people interested in business -- they are receiving their initial capital from me."

nTC He plans to instill the proper attitudes by refusing to accept further subsidies from the Russian government. "It is humiliating to be subsidized," he says. "I want my people to know they have to earn their own money the old-fashioned way."

In return for refusing the subsidy -- which came to over 20 billion rubles last year -- he has the authority to set his tax rate lower than Russia's so he can attract investment.

Mr. Ilyumzhinov, who at home sometimes gives interviews from the depths of his Lincoln, has been accused of earning his millions through shady means.

Some critics say he illegally sold 40,000 tons of diesel oil abroad to make his money and that he ran for president to protect himself from prosecution. "That's slander," he says.

He likes to show off his wealth. Yesterday, he laid out a lavish buffet for reporters. Each of about 25 tables was lined with red and white champagne, vodka, Stalin's favorite Georgian wine and orange soda, along with caviar, shashlik and salmon.

At one large table lay two suckling pigs -- heads smiling sweetly, bodies sliced and ready to be served. Giant whole sturgeons were piped with decorative pate.

He reportedly helped out chess champion Garry Kasparov by buying his jewel-encrusted chess crown for $1 million, then stashing it in a Swiss bank. "Why not?" he told one interviewer. "It asks for no food."

He refuses to say how rich he is. "Money no longer interests me," he said.

Russian President Boris N. Yeltsin, he says, is behind him -- way behind him. Kalmykia, Mr. Ilyumzhinov says, will show Russia the way to reform.

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