Russia, March 8, 1998
New & Shiny: Nizhny Novgorod
The 'Lower' Novgorod working it like Moscow!
March 8 AFP via Johnson's Russia ListRussian 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, however.
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."