Remote Russian region builds on legacy of billionaire ex-governor
Chukotka is an icy oasis of economic and population growth
August 16, 2009
By Robin Paxton
"We have belief in tomorrow," the 28-year-old mother says.
Chukotka, nearer Alaska than Moscow, is a region that has been revived by the billions of ex-governor Roman Abramovich.
Salaries rose fivefold in his term, easing the shock to reindeer herders starved of subsidies after the collapse of the Soviet Union.
"I was elected during a period of crisis for Chukotka," said Abramovich, who governed the region twice the size of Germany from late 2000 until July last year. "I believe we were able to resolve many of the most important issues in my tenure."
Now, the challenge for Chukotka is sustaining this growth by exploiting abundant reserves of fish, coal and precious metals.
Chukotka has become Russia's top gold-producing region, supplying a fifth of national output, since Canada's Kinross Gold launched its huge Kupol mine in mid-2008. In the capital, Anadyr, vivid colours lift apartments out of the winter gloom. New roads have been laid and the hospital has been refurbished.
Looking forward
Marina Ostras, its deputy chief doctor, inspects ultrasound equipment made by US firm General Electric as she makes her rounds. About 800 babies are born in Chukotka every year, she says, while deaths number only about 500.
A UN report this year said that Russia's population could drop to 131 million by 2025 from 142 million today, ravaged by alcohol, smoking and poor diet. "If it's a problem in Russia, it's opposite here," says Ostras.
The trend towards having more than one child is growing. "I have confidence I can provide for my children. Ten years ago, I wouldn't have been so sure," accountant Anastasia Khvoroschanskaya says while rocking her second baby, Alexander.
Day dawns on Anadyr nine hours before Moscow, the same time as in Tonga. The town's population fell by 30 percent in the 15 years after the break-up of the Soviet Union but now people no longer want to leave.
"Abramovich allowed us to stand on our own feet again," says Nail Gaifullin of the fish processing plant in Anadyr.
This season's catch was the best in years.
Chukotka's isolation, so often a curse, has been its saviour during the economic downturn. The crisis, an everyday word throughout Russia, is rarely heard here, where the monthly wage of 40 000 roubles (R10 040) is more than twice the national average.
"People are still spending. Our purchasing power hasn't dropped," says Ivan Biryukov, a director at the Field of Wonders shopping centre.
Dmitry Sorokin, a ventilation technician who spends his evenings skateboarding near the docks, said: "Before, the goods were in the shops, but nobody had cash to buy them."
Fuel prices are settled annually to coincide with the summer navigation period, the only time warm enough to deliver supplies by sea. For the rest of the year, the 200 dock workers at Anadyr Sea Port spend their time repairing weather-beaten ships.
"We bring in coal, construction materials, food, everything needed for life in Chukotka," says Viktor Tyukhty, the port's director. He has worked in the port for three decades. The only tangible effect of the crisis, he says, is a slowdown in deliveries of materials this year.
Help at hand
The construction industry's share of the regional economy is forecast to drop below 2 percent this year from 10 percent last year, bad news for the Turkish builders who live in an area of Anadyr called "Little Istanbul" by the locals.
For the 50 000 people who live in Chukotka, half of them ethnic Russians, it may not always be easy to maintain this confidence. Abramovich, who spent $2.5 billion (R20bn) as governor, admits this.
"There is still work to do," he said, "but the region is in a substantially better position from which to address its ongoing challenges."
Roman Kopin, Abramovich's deputy before becoming governor a year ago, says mining will add 37 percent to the regional economy this year, up from 22 percent last year.
The indigenous people, who comprise nearly 30 percent of the population, are also benefiting from new investment in fish farms and the commercial production of reindeer meat from their herds.
A Moscow-based design company has revamped the local museum installing interactive games.
A fledgling travel industry aims to attract more visitors. Less than a thousand tourists arrived last year, says Aivana Enmynkao, the manager at Northern Travel Company.
"We're trying to build an image of Chukotka as a land of authentic people," says Enmynkao who is half-Eskimo, half-Chukcha.
"Some people come here as they don't believe the media and want to see for themselves if what has been published about Chukotka is true."
Abramovich chooses not to publicly reveal his motivation for serving as governor. Some say it was a pact with then-president Vladimir Putin to return some of the riches he made from oil and aluminium; others say that he was testing the water in politics.
His firm controls a small gold mine in Chukotka and Sibneft. The oil firm he sold to state firm Gazprom in 2005 was active in the region.
But much of Abramovich's investment in Chukotka was through charities, infrastructure, housing, education and health care.
"I will continue to invest in Chukotka, in commercial projects that create jobs and grow the tax base, and through my charities," said Abramovich, the chairman of the regional legislature in Chukotka.
For some, Chukotka's revival may be too late. His clothes ripped, Grigory Nikitievich falls repeatedly to the ground after leaving his last empty beer bottle at a bus stop.
"Why work? Let the young people work!" says Grigory, the old man who gives only his name and patronymic.
But here, help is at hand. A teenage passer-by drags him to his feet and they walk, hand-in-hand, up the street home. - Reuters
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