THE FAR EAST: RUSSIA’S UNFOLDING ECONOMIC DISASTER?

If the Southern district is a poor macro-region experiencing something of a rebound, the Far East could be a relatively wealthy district that is headed for serious difficulties. The Goskomstat data indicate that the Far East is Russia’s second wealthiest district. The US$121 monthly wage reported for this district in November was some 36 percent above the national average, and only 29 percent of this sum was required to purchase Goskomstat’s minimum consumption basket. But these data also indicate that the economic situation in the Far East deteriorated sharply in 2000. The average monthly dollar wage in the Far East dropped 10 percent last year, compared to 14 percent growth for the rest of the country. While 5 percent growth in real incomes was reported in 2000, this was well below the 13 percent increase reported for Russia as a whole.

The Far East also reported the largest (-0.8 percent) population decline in 2000, with particularly large losses noted in Chukotka (-3.8 percent), the Korean Autonomous Okrug (-2.3 percent) and Magadan (-2.1 percent). Virtually no industrial growth was reported in Magadan and Primorsky Krai last year, while declines in retail sales were registered in Sakha, Kamchatka and Magadan.

The collapse of the energy infrastructure in Primorsky Krai late last year suggests that these problems may get worst before they get better. Most of the Far East’s electrical generating plants burn coal, but coal production in the district fell 3 percent last year, compared to 4 percent output growth for the sector nation-wide. Although the Far East is the center of Russia’s fishing industry, the district’s fish catch in 2000 was reported down 11 percent while production of canned fish dropped 10 percent. Many of the district’s problems seemed to be concentrated in Primorsky Krai: whereas electricity production in the Far East was reported up 4 percent last year, it fell 6 percent in Primorye. And while industrial output in Primorsky Krai was reported up 2 percent in 2000, by December of last year it was already declining.

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