Is Chukotka gone bankrupt?

Chukotka's government does not think that the district has gone bankrupt.

"The government of the Chukotka autonomous area (Russia's northeast) believes that the Russian Audit Chamber's statements about the district's bankruptcy do not reflect the real financial position of Chukotka and discredit the authorities' efforts to fulfil the district's debt obligations and improve the socio-economic situation in the area," runs the government's official statement.

The Russian Audit Chamber has checked the use of budget means in the Chukotka autonomous district and come to the conclusion that the region is actually bankrupt.

An official of the Russian Audit Chamber Sergei Ryabukhin said at a press conference on Friday that the district's state debt totalled 9.3 billion roubles ($1 equals 29 roubles) as of January 1, 2004, having exceeded Chukotka's revenues of 3.9 billion roubles over 2.5-fold.

According to the district's official statement, under the current Russian law, the term "bankrupt region" is inappropriate for Chukotka.

"Such a definition is suitable for a federation member who cannot afford servicing and settling its debts. Chukotka has all the opportunities to settle its state debt inherited from the previous leaders of the district," says the statement.

At present, the return of "gold loans" that the district received in 1992-1998 is being addressed, the document states. Only this year Article 88 included in the law On the 2004 Federal Budget gave the opportunity to remedy this situation. The article provides for restructuring payments on "gold loans" till 2015.

Chukotka Governor and Sibneft CEO Roman Abramovich, a financial bigwig of the Yeltsin era and an acknowledged member of Yeltsin's "family" (entourage), spends most of the time in London, and is the one who purchased the London Chelsea Club for $100 million much to the disapproval of Russian political circles.