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February 2004 • Vol 4, No. 2 •

In Post-U.S.S.R. Russia, Any Job Is A Good Job

By Timothy L. O’Brien

Despite needle-prick winds, numbing cold and winter days that crawl into constant darkness, miners seldom stop hollowing out the hills surrounding this Arctic town.

Few of the workers, it seems, want to stay. But even fewer have better options. In a country where a quarter of the population lives in poverty and the average wage is $190 a month, a steady job is a good job.

The lodestar in town is Apatit, a fertilizer factory that used prison labor and reindeer to haul minerals when the Soviets opened its doors more than 70 years ago, and that went into private hands in questionable circumstances in 1994.

Apatit is now Exhibit A in the state’s criminal fraud case against the tycoon Mikhail B. Khodorkovsky; more broadly it is a test of the post-Soviet society’s tumultuous encounter with capitalism.

Apatit’s managers note that the company employees 14,000 people, but as three Apatit machinists tipped back vodkas at a grocery store one recent evening, they complained that their circumstances had diminished under capitalism.

“Life was better under the Communists,” said Aleksandr, 49, who said he has worked here since he was 19; like the others, he asked that his last name not be used for fear of reprisal from the company. “The stores are full of things,” he recalled, “but they’re very expensive, and labor isn’t worth a thing.”

Victor, on the other hand, said the main problem was the long-gone stability of an earlier era of affordable health care, free higher education and housing, and the promise of a comfortable retirement—things now beyond his reach.

Most of all, he wants his children to live elsewhere but even that dream is faint. “I don’t really believe that’s possible.” Victor said.

“You want them to leave?” asked Aleksandr.

“Yes, to leave here is freedom.”

Managers in their modest executive offices enthusiastically defend Mr. Khodorkovsky’s stewardship, arguing that the operation was on the brink of collapse when he took over. “Privatization was new to all of us,” said Vadim Svinin, Apatit’s technical director. He said the managers had to succeed “because if we don’t the towns that depend on us will die.”

Yet prosecutors accuse the jailed tycoon of rigging an auction to gain control of Apatit a decade ago, then failing to pay the bid of $283 million.

Mr. Svinin, a former miner who has an easygoing mastery of Apatit’s business and a devotion to his work, contends that Mr. Khodorkovsky has invested more money in Apatit than the $283 million originally required. He said the company spent more than $100 million on new equipment in the last two years, plans to invest $75 million this year and projects capital outlays of more than $1 billion by 2020. If true, Apatit would spend a significant portion of its funds upgrading operations.

In 2002, Apatit had revenue of about $529 million and net profits of about $33 million, according to the company that manages Apatit’s accounts. It paid scant taxes that year: about $4 million.

Mr. Svinin said that this year the company would produce almost 9 million tons of fertilizer concentrate, up from 6 million tons a decade ago, though well below the peak of 20 million tons a year reached in 1989 when the state held control.

Sprawling across 35,000 acres peppered with 120-ton dump trucks, football-field-size factories, and miles of mine shafts, Apatit dates largely from the Soviet period. The company said that most new investment has gone into trucks, mining equipment, and other small-bore improvements.

Critics accuse corporate titans like Mr. Khodorkovsky of amassing fortunes from company coffers while leaving average Russians struggling, but Mr. Svinin said that Apatit’s workers have been treated well. “You don’t think our state is so foolish as to allow people to extract huge profits and leave people without food?” he asks. That darker opinion is held by many in Kirovsk, and across Russia—a view that has fueled broad support for president Vladimir V. Putin’s crackdown on the business elite.

Workers say their wages have not kept pace with increases in the cost of living and that, despite Kirovsk’s Alpine beauty and its friendly residents, young people want to flee.

“It’s like this all over Russia. said Andrei Yamashev, a 31-year-old driver who failed to find work in St. Petersburg before returning to Kirovsk. “I’m really sad about this.”

The New York Times, January 11, 2004





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