FEATURE

In a Siberian Wasteland, Russian Oligarch Roman Abramovich Recreates a City of Flying Dogs

By Valeria Korchagina

Staff Writer

ANADYR, Chukotka Region — If any place qualifies as being at the end of the world, it is certainly Chukotka.

Almost everything is extreme in Russia’s northeasternmost region, including its location, harsh weather and even the unusually large and aggressive mosquitoes that make a shockingly loud crunching sound when squashed.

The 730,000-square-kilometer region — twice the size of Germany — has no trees except in a small area in the south. The population is so sparse that its land-to-people ratio is comparable to 68 people living within the Moscow city limits.

Locals call the capital, Anadyr, the City of Flying Dogs, because in winter the wind is so strong that it is often impossible to walk a step. In such weather, dogs tend simply to take off.

Yet Anadyr is the showcase of billionaire Governor Roman Abramovich’s efforts to raise living standards in the region. Small enough to be seen in its entirety in a single glance, the city of 10,600 on the estuary of the Anadyr River looks like a Legoland. Nearly all of its buildings — mainly boxy five-story Soviet apartment blocks built on posts above the permafrost — are painted in bright reds, yellows and blues and decorated with patterns and pictures specially ordered from a Moscow company, Yo-Programma.

Just seven years ago, Abramovich was downright shocked when he first visited the region during his run for a State Duma seat, said Mikhail Zelensky, the head of the administration of Chukotka’s Chukotka district. Each village’s only food store was often stocked with little more than salt, vinegar and couple of insecticides, Zelensky said.

“So Abramovich, after visiting a number of places around Chukotka, chartered four ships, loaded them with basic staples and sent them to Chukotka as humanitarian aid,” Zelensky said.

After that, Abramovich paid for a Mi-26 helicopter capable of carrying 20 tons of cargo to fly from village to village, delivering fruit and vegetables.

Although food can only be delivered by ship or plane to Anadyr, it now boasts modern amenities such as a couple new hotels, a few restaurants and the large Novomariinsky supermarket. All of them, needless to say, were built with Abramovich’s money and are owned by businesses connected to the regional administration and various investment vehicles that funnel Abramovich’s cash into Chukotka.

A guided tour of the city quickly revealed that almost everything — from an enormous hospital and clinic to treat sexually transmitted diseases to a food-processing plant and the Holy Trinity Cathedral — had been built after 2001, the year when Abramovich became governor. The latest building going up in the now-continuous construction boom is a pretrial detention center in central Anadyr.

“Abramovich is a real man. He came to the house, and he is fixing it,” said Irina Romanova, deputy director of the local museum, which also was built by Abramovich.

The changes to the city’s appearance are drastic. Locals and those who had visited previously remember unpaved streets and dilapidated buildings.

“Everything changed: There are goods in stores, the place looks so much better,” said Alexander, a 30-year-old driver who took a reporter around the city.

“Returning to Anadyr [after a vacation] was not something I wanted to do before, but now it’s a different story,” he said.

The city’s beautification, however, is one of the few efforts that has stirred up public discontent — a truly rare occurrence in Abramovich’s Chukotka.

“Don’t think all of it was that easy and simple,” said Sergei Segidin, 42, a retired fireman.

As locals tell it, pre-Abramovich Anadyr was not only known for bad roads and shabby houses. Every resident seemed to have a rickety garage, shed or old shipping container outside his or her apartment building to store anything from food to old furniture.

After trying to persuade the people to remove the structures, City Hall one day just sent out a fleet of trucks and evacuated them all to a plot of land outside the city limits.

“When the Anadyr Mayor’s Office decided to remove all the sheds and huts and garages, people were ready to take up arms,” Segidin said.

“And now, you cannot leave anything outside the house. If a shipping container stays out for more than three days, they just come and take it away.”

There is no shortage of guns in the region, where hunting is a way of life or a hobby for just about everyone, but somehow no fighting broke out and the city now looks prettier than ever before.

Abramovich’s Money

Despite the easy-to-spot improvements, Chukotka’s fundamental problem remains: The economy simply cannot function without Abramovich’s money.

“Six years ago, we found people here who were reduced to eating animal food and giving it to their children. There were children here suffering osteoporosis and rickets from malnutrition,” said Irina Ruchina, president of the Chukotka Red Cross and a cousin of Abramovich. People brought in by Abramovich from his companies or other regions fill most top posts in the region.

The Chukotka Red Cross is another Abramovich-funded project, which spends $800,000 to $1 million per year here, funding everything from flowerbeds to helping people combat alcoholism or start up businesses. The average budget of a regional branch of Red Cross in Central Russia is about 100,000 rubles ($3,700).

“It was a ghetto on the territory of Russia. There were times when planes would not come to settlements for three months in a row, and there were villages where, due to lack of supplies, animal fat was burned for heating and actual mica was used for window glazing,” Ruchina said. Mica is a silicate mineral that was used for windows before sheet glass became widely available.

So Abramovich came and started to build.

Apart from paving streets and building hospitals, the region has seen a variety of infrastructural projects implemented in a few short years.

The once press-shy Chukotka administration gladly displays many of them. The administration flew in reporters for a tour apparently aimed at drawing attention to the fact they would not be around forever.

Among the new Abramovich-funded enterprises is Agriculture Corporation, an Anadyr-based poultry farm and compact food-processing facility that bakes bread, produces dairy products and processes meat.

The plant is top of the line and packed with Western technology. Rosy-cheeked and plump female bakers mix dough in one big, sparkling white room. In another, broad-shouldered young men carefully chop meat to make sausages and a variety of cold cuts. But behind the cheery scenes is a secret that people do not like to talk about. The plant, which is a joint-stock company 95 percent owned by the Chukotka administration, is losing money.

“A loaf of bread costs us 100 rubles to produce, but in stores it is sold for 20 rubles,” said Irina Norova, the acting director of the plant. “The transportation portion of the cost is very expensive.”

Quizzing her and the management of other businesses yielded the same reply: all are subsidized by nonbudgetary funds — or, simply put, by Abramovich.

The recently built fish-processing plant, Chukotrybpromkhoz, which also boasts brand-new equipment, offers locals, particularly native peoples, seasonal jobs that pay 40,000 rubles to 80,000 rubles for the few short weeks in the summer when salmon swim upstream for breeding.

Here, too, are rosy-cheeked plump women in clean white aprons picking bad eggs from the red caviar, and young and focused men methodically cleaning the fish along a fast-moving conveyor belt ahead of freezing. A lot of the salmon goes to feed schoolchildren, students and hospital patients across Chukotka, but the business is in the red. In the winter months, the plant packages and freezes fish caught in the Bering Sea by local fishing companies.

The Chukotka administration wants to sell the plant to a strategic investor, but with strings attached: The buyer would have to keep the salmon business.

“There are mechanisms, though,” plant director Vladimir Gorbunov said reassuringly. “The administration has a good instrument to influence the business — fishing quotas,” he said.

Even Anadyr’s Novomariinsky supermarket, which looks much like a purely commercial enterprise, is in fact a powerful tool used to control prices in the city.

“The moment the price for any product goes up in shops owned by smaller traders, Novomariinsky just lowers its prices for the same item. It’s here to make sure that things are affordable,” said an official employed by Abramovich who spoke on condition of anonymity.

Building the Economy

The harsh climate, poverty and extreme remoteness of the region all take a toll on business activity, officials conceded. While there is some retail activity, services and other small businesses are so underdeveloped that the regional administration spends some 2 million rubles per year helping establish them in rural communities. The program trains people and then buys them the necessary equipment to open basic services such as instant photo booths or hairdressers. The cost of setting up a hairdresser in a small village is 100,000 rubles.

“So far, we are not getting any tax revenues from this program, but this is not the top priority,” said Yakov Kiselyov, a 34-year-old Muscovite who is in charge of Chukotka’s economy.

Agriculture is another sector that needs constant funding to survive. With a climate as harsh as Chukotka’s, agriculture is largely limited to reindeer herding.

The tough economic conditions of the 1990s meant that the number of reindeer fell from 450,000 in 1989 to less than 100,000 by the end of 1990s, prompting Abramovich to pay reindeer herders 1,040 rubles for each live animal at the end of every year. As a result, there are now more than 150,000 reindeer, and the administration is looking to commercially produce reindeer meat, including for export abroad.

There are about 17,000 native peoples living in Chukotka, mostly Chukchi but also Eskimo, Evenks and others. The native population is split into two groups — reindeer herders who live inland and sea hunters who catch fish, walrus, ringed seals and whales and live on the coast.

While deer herders are getting paid to rebuild the deer population, sea hunters also get money to maintain their lifestyle. Since a solution on how to support tribal traditions has yet to be found, any native who calls himself a sea hunter is paid 5,100 rubles per month.

Chukotka Deputy Governor Mikhail Sobolev said the regional administration was looking for ways to cooperate with Western pharmaceutical companies to make medication with marine mammal products. The region has a commercial quota to hunt 13,000 ringed seals but has yet to come up with a way to use it.

Chukotka’s economy quintupled since 2001, and its average salary also has jumped by five times, to 22,600 rubles last year. The average national salary is 8,550 rubles. Chukotka’s minimal subsistence level is 7,365 rubles per month.

Furs a Grim Reminder

Acute poverty and disrepair are evident in rural communities. In the village of Lorino, 260 kilometers east of Anadyr, the streets are littered with rusty discarded car parts. Many Lorino residents have sled dogs and use canoes made of walrus skins.

The village’s fur farm is a grim reminder of the Soviet economy’s collapse and a striking contrast to the businesses created by Abramovich in Anadyr. Ramshackle cages hold some 1,600 arctic foxes — a fraction of the Soviet-era production scale of 12,000 per six-month season. The farm only survives because it pays each of its dozen employees a meager 4,000 rubles per month — money it gets from the district administration and from Anadyr. It makes no profit, and about 6,000 skins are in storage with little prospect of ever being sold. Some are getting so old that they will be simply thrown away.

“Transporting skins from here is expensive,” said Klara Yermakova, an elderly woman with a hearing aid who works as the farm’s administrator. She acknowledged that the farm did not have anyone in charge of marketing. The future of the farm, and of Chukotka as a whole, largely depends on what will happen to Chukotka after Abramovich leaves for good.

Or take part in the discussion below.