Monday, February 2, 2009

Window on Eurasia: Depressed Company Towns in Russia Ready to Explode

Paul Goble

Vienna, February 2 – The 460 single company towns in the Russian Federation have been hit particularly hard by the economic crisis. Many of the 25 million people who live in them are now unemployed and angry. And they are now organizing protests and beginning to link up with others in a similar fix, according to a leading Moscow business weekly.
According to an article in “Smart Money,” the prediction economist Yevgeny Gontmakher made at the end of last year is coming true: Russian cities and towns based on a single industry are being hurt more than almost any other group, and their populations are moving from anger to activism (
When the main employer in one of these locations shuts down because it cannot sell its production, it is not only those who lose their jobs at that employer who are affected, labor union activists say. Schools, restaurants and stores are all hurt , and ultimately the suppliers of electricity and communal services are as well.
As a result, and because many workers have families and nowhere they can easily go, the weekly reports, many workers in these places have taken significant cuts in wages in the hopes of avoiding layoffs only to lose their jobs a few weeks later, a strategy that initially hid some of the suffering in these places but one that is now producing more anger.
In some places, workers and their families in these places are signing petition to the often distant managers of the companies and to local governors, and some of them have told “Smart Money” that they will do what they have to attract the attention of those with the power to do something about the situation they find themselves in.
One organizer in Mundybash in Kemerovo oblast told the weekly’s journalists that “if [managers and officials at the oblast level] don’t listen, we will go to Moscow. The entire settlement. We have nothing to lose.” And people who have a sense that they have nothing to lose are almost invariably a threat to stability.
Hundreds of people have already taken part in meetings and protests in these 460 company towns since November, “Smart Money” says, adding that if things continue to deteriorate, “tens of thousands will take to the streets” not just there but “in oblast capitals” as well.
Russian President Dmitry Medvedev has already told his plenipotentiary representatives and governors to prepare a plan in the event of even more massive layoffs. “But so far,” the business weekly continues, “the powers that be do not yet recognize the real extent of the problem” because it hasn’t hit the major cities.
But the size and number of protests in these company towns is increasing, and officials in some of them are trying to provide alternative public service employment, although they seldom have the money to make this work and when their programs end, those involved feel doubly betrayed – first by corporate managers and then by public officials.
In the last few weeks, some analysts in Moscow have begun to focus on this problem with some of them, like New Eurasia Foundation head Andrey Kortunov suggesting that the government should try to channel the anger of workers into protest parties like Zhirinovsky’s LDPR that are loyal to the regime.
At doing that entails great risks: “Why prompt people to go into the streets?” one of them asks. “They will go out under one set of slogans but [there is no guarantee that they] won’t change these for others” or that the parties which gain their support won’t turn on the government that has organized and supported them in the past.
Such discussions, even though they have not yet had a major impact on the way in which senior government officials are acting, are an indication of just how serious the problems of the company towns are becoming and the way in which their economic problems could quickly become a political problem for the regime.

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