New & Shiny: Nizhny Novgorod

The ‘Lower’ Novgorod working it like Moscow!

March 8 AFP via Johnson’s Russia List

Russian city is bright spot amid the gloom

NIZHNY-NOVGOROD, Russia, – The Russian region of Nizhny- Novgorod, 450 kilometres
(275 miles) southeast of Moscow, is one of the few bright spots in the country’s
economy, continuing to attract investors. “Industrial output was about the
same in 1998 as in 1997, despite the financial crisis, and growth will resume
this year,” Mikhail Tedorovich, regional vice-governor with responsibility
for the economy, said confidently.

He predicted investment totalling more than 500 million dollars in 1999,
compared with 150 million last year, referring to interest from German, Italian,
Japanese and Swedish firms in the pharmaceutical, automobile, household goods
and food industries.

Last month saw the European Bank for Reconstruction and Development put 10
million dollars into the Nizhfarm pharmaceutical factory, in the largest
foreign investment in Russia since the financial crisis broke in August last
year. Teodorovich admitted that Nizhny-Novgorod, viewed as the third economic
centre of the country after Moscow and Saint Petersburg, had not escaped
the crisis unscathed. “The region has lost between 600 million and 1.3 billion
dollars in all”, he said.

But the area of 3.7 million people has major assets, such as automobile builder
GAZ, which unlike many Russian firms pays its taxes regularly, accounting
for a third of the regional budget on its own. The region is one of only
nine in the whole country out of 89 which give to Moscow more than they receive.
But Nizhny-Novgorod is facing a major problem, that of reconverting to civilian
use military plants which during the Soviet era accounted for 30 percent
of the local economy.

“The problem is less acute than a year or two ago. It’s no longer a question
of survival, but of development and mergers,” Teodorovich said. “Many factories
have succeeded in diversifying their output.” This has not happened painlessly,

The Sokol plant, which builds the MiG-31, considered one of the best fighters
in the world, also repairs trolley-buses for the municipality to earn some
cash and keep its workers busy. Average wages are 580 rubles, or 26 dollars
a month, and last year they were paid some four months late, factory chief
Vassily Pankov acknowledged.

But the situation is worse in other military plants: workers at the Pravdinskovo
transmission equipment makers have not been paid for 18 months. After introducing
measures to control the prices of basic necessities, the authorities last
month began producing cheap bread aimed at the most deprived, notably those
in rural areas where half the population lives.

At Nizhny-Novgorod’s central market dozens of women from outlying villages
stand all day in temperatures well below freezing, trying to sell hand-knitted
shawls, for which they ask 300 rubles a piece. “My pension amounts to 270
rubles, and here I am reduced to freezing for hours in the market,” said
Tamara Ivanovna, an elderly woman missing most of her teeth.

As they wait for the better days promised by local officials, many local
inhabitants survive by cultivating small plots of land. “I don’t know how
I would be if I hadn’t my garden, my onions, cucumbers, strawberries and
tomatoes,” said Volodia Romanov, a driver who also juggles two jobs at once
to feed his wife and two children.”