RUSSIAN FAR EAST FACING DIFFICULT TRANSITION.

Over one hundred power workers in Primorsky krai in Russia’s Far East called off a 16-day hunger strike last week, after krai governor Yevgeny Nazdratenko promised that they would soon be paid their wage arrears. (Financial Times, September 20) However, a far larger number of striking power workers (about 10,000) are refusing to return to work until they receive their wages. Meanwhile, blackouts continue throughout the territory. The energy crisis in the Russian Far East vividly demonstrates the region’s long-term economic fragility. Like the Far North, Russia’s Far East was developed during the Soviet period on the basis of heavily subsidized transport and energy sectors, and the costs of linking these remote regions to the centers of Russian population and production were not covered in the prices for food and energy delivered to them. With the collapse of central planning and the freeing of prices, the populations of both the Far East and the Far North have had to face the real costs associated with living and working in remote areas.

In the case of the Far East, proximity to Japan and other Pacific-rim countries provided an initial stimulus to the economy. Foreign investment flowed into a number of industries, especially fishing. But most of the Russian profits from Pacific-rim trading activities have gone offshore, and the region’s underlying problems of economic adaptation and transition remain considerably more serious than those of most other Russian regions. These difficulties are reflected in the region’s dependence on the federal budget for subsidies and a net outmigration from the area. Russia’s perennial preoccupation with the possibility of Chinese expansionism is heightened by the awareness that today’s Russian Far East is a large and sparsely populated region. Perched on the border with densely populated China, the region is also — in relative terms — economically deprived, and lacks well developed trade links with the outside world. Primorsky governor Nazdratenko has repeatedly played on Moscow’s fears of a Chinese threat to extract subsidies from the center.

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