Window on Eurasia: Putin’s Approach in Pikalevo Won’t Save That Company Town or the 458 Others like It in Russia, Experts Say

Paul Goble

Vienna, July 3 – Prime Minister Vladimir Putin’s dressing down of an oligarch in Pikalevo may have made for good television, but experts say it won’t save that company town from a new catastrophe later this year or keep any of the 458 other such places across Russia from suffering a similar fate.
Indeed, these analysts say, according to an article posted on the SVPressa.ru portal this week, Putin’s approach reflects both the set of attitudes that gave rise to these company towns in the first place and the policy approaches that are reducing the chance these places, where a quarter of the Russian population lives, will survive (svpressa.ru/issue/news.php?id=10850).
The issue of company towns has been a focus of discussions since Moscow economist Yevgeny Gontmakher published his article about them, “Novocherkassk-2009” at the end of 2008 (www.vedomosti.ru/newspaper/article.shtml?2008/11/06/167542) and especially since the residents of Pikalevo and several others have taken actions forcing the center to intervene.
But the article this week provides the most succinct summary yet of the nature of these places, their downward trajectory over the last 20 years, and the reasons why Putin’s actions won’t save Pikalevo for more than a few months or provide a useful model for saving any of the others.
A company town – in Russian, “monogorod” – is, the SVPress.ru article says, “a population point, the entire population and all the infrastructure of which are supported by one or several industrial enterprises.” Until the current economic crisis, these settlements inherited from Soviet times “produced 40 percent” of the regional GDP.
There are three kinds: company towns that are the satellites of major cities, company towns with several “city forming enterprises, and company towns with a single “city forming” enterprise. “All of them,” the portal says, “figure on the so-called ‘Kremlin list’ of territories of heightened social risk.”
After the end of the Soviet Union, these company downs began to lose population. “But in the second half of the 1990s and the beginning of the 21st century, these population points got a second wind” when Russian oligarchs bought them. But sadly, the oligarch were seldom interested in developing them but rather in stripping their value or using them as collateral.
Once the current economic crisis began, the portal continues, it “destroyed the last illusions” that these places could revive as the Kremlin and its economic advisors had claimed. And “as a result, the enterprises began to collapse like a house of cards,” something everyone could see in the much covered case of Pikalevo.
There, of course, Putin arrived after the citizens blocked the highway and “personally solved” the problem “in ten minutes,” the Russian media suggested. But after dressing down an oligarch, Putin left, and left the people of that company town to face the prospect that they will suffer a “new catastrophe” by this winter, along with other company towns.
Gontmakher told the portal why: The problems of Pikalevo and of other company towns reflect the fact that Russia’s “entire economy to put it mildly does not correspond to the demands of the times” and that the regime lacks the resources to prop up the company towns in their current state for more than six months longer.
“2009,” he argued, “is the last year when it will be possible to spend so generously. In 2010, such measures will be simply impossible. There are not enough resources financial or political.” And that will put before the country the choice of reforming the economy in radical ways or suffering an explosion.
Meanwhile, in an interview published in the current issue of “Argumenty i fakty vostochnoy Sibiri,” Mikhail Rozhansky, the head of the Irkutsk Center of Independent Social Research and Education who has studied company towns for almost 20 years, put their problems in a broader context (www.aifvs.ru/nomer/632/03-1.shtml).
These places, he says, “are the offspring of an extensive economy; they are a loss in all respect and without any chances for the future. In order to become cities, they must overcome this mono-status, mono-style and corporate nature of life. Such a phenomenon is not specifically Russian. It exists in other countries, but in Siberia, it has reached catastrophic proportions.”
For the still hyper-centralized Russian powers that be, the Irkutsk specialist continues, “the corporation is the ideal for the organization of life.” Consequently, [they] will not resolve the problems of the company towns or more generally the problem of the transition to an intensive economy.”
That will be possible only if the powers that be and business are “part of society” rather than standing above it and “dictate conditions,” as is the case in Russia. But if these company towns are able to develop their educational system, support an active intelligentsia, and diversify, then they and the country have a chance. Otherwise, for both, the future is very bleak indeed.