Friday, July 23, 2010

Window on Eurasia: Moscow Ignoring All but a Handful of Russia’s Nearly 1,000 Company Towns, Activists Say

Paul Goble

Staunton, July 22 – Moscow continues to ignore the serious problems of Russia’s nearly 1,000 company towns, with officials acknowledging only 335 of them and providing only 27 of them --including most prominently Pikalevo -- priority attention and investment, according to participants at a Social Chamber roundtable this week.
This approach, which many governors also have adopted, Yevgeny Markov, the head of Russia’s Union of Small Cities, said, reflects “a head in the sands” attitude on the part of officials that somehow, without anyone doing anything, “everything will right itself on its own” (
The company town problem, which attracted so much attention a year ago but which is now seldom discussed, arose in the early 1990s when entrepreneurs swept in, bought up city-forming industries in these places, and manifested “only one desire – to get the maximum profit and then move it offshore,” Markov said.
Local officials seldom have the clout or even the legal basis for obtaining information from businessmen let alone doing anything about it, the Union official continued, and consequently, workers have seen their wages go unpaid and their jobs disappear without much hope that things will change, barring a Pikalevo-like intervention from on high.
Pikalevo, where a demonstration by local workers brought forth a much-publicized visit by Vladimir Putin, is indeed doing since that time. The head of its administration, Sergey Veber, told the roundtable that things had gotten better and that Moscow officials were always prepared to listen to his requests for assistance.
But there are more than 900 other company towns, and Moscow simply has not developed a program for them, other speakers at the session said. Indeed, the only thing approximating a state policy for this category of places, they said, was the continuing and still unresolved discussion about the possibility of simply moving workers there to other locations.
And such an approach, many fear, could be counterproductive and make the situation worse. Economist Nikita Krichevsky said that moving people from one place to another was “asocial.” “It would destroy the customary way of life of tens and hundreds of thousands of people and recall the methods of collectivization and industrialization of the 1920s and 1930s.”
But barring massive outside investment, something that does not appear to be on offer either from the federal bureaucracy or private businesses, the company towns are increasingly being thrown back on their own dwindling resources, a situation that could lead to social explosions if a way out is not found.
One possible exit from the current problems, Markov said, would be for Russian company towns to copy the American experience in which “several thousand enterprises have become the property of the workers” “Of course,” he conceded, “our workers are still not ready and have not matured to the point that they could become real masters.”
But economists like Nikita Krichevsky are skeptical that could work. How could impoverished workers pay for the shares and if they received them for free, what would prevent them from recapitulating the failed experiment of voucher capitalism of the 1990s in which workers sold off their shares in order to get some income?
That is because, the economist said, “workers are not interested in property they are interested in pay.” There are ways to restrict such a rapid sale, but they would not always work either, he insisted. And consequently, such an arrangement under current Russian conditions almost certainly would fail.
Markov ended the session with a call for the government to finally face up to a problem that because of its size no one has wanted to deal with. Moscow must focus its attention on “the entire specter of the problem-filled small cities and development a policy toward company towns,” but the Union of Small Cities head said this without much apparent confidence.

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