Identifier
Created
Classification
Origin
09VLADIVOSTOK64
2009-05-28 06:52:00
UNCLASSIFIED
Consulate Vladivostok
Cable title:  

THE MYTH-BUSTING TOWN ON THE PRIMORYE COAST

Tags:  EAGR PGOV ECON RS 
pdf how-to read a cable
VZCZCXRO4499
RR RUEHCHI RUEHDBU RUEHFK RUEHHM RUEHKSO RUEHLN RUEHNAG RUEHPB RUEHPOD
RUEHYG
DE RUEHVK #0064 1480652
ZNR UUUUU ZZH
R 280652Z MAY 09
FM AMCONSUL VLADIVOSTOK
TO RUEHC/SECSTATE WASHDC 1155
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION COLLECTIVE
RUEHVK/AMCONSUL VLADIVOSTOK 1258
UNCLAS VLADIVOSTOK 000064 

SIPDIS

E.O. 12958: N/A
TAGS: EAGR PGOV ECON RS
SUBJECT: THE MYTH-BUSTING TOWN ON THE PRIMORYE COAST

UNCLAS VLADIVOSTOK 000064

SIPDIS

E.O. 12958: N/A
TAGS: EAGR PGOV ECON RS
SUBJECT: THE MYTH-BUSTING TOWN ON THE PRIMORYE COAST


1. Vladivostok Consul General and PolOff joined a USAID
delegation on a visit to the small timber-producing town of
Plastun on Primorye's Pacific coast and discovered an
economically thriving town with foreign investment, a stable
population, and the only known golf course in the Russian Far
East. The town illustrates how stereotypes of the Russian Far
East are often incorrect.

Myth: Populations Are Declining Everywhere
--------------


2. Though the populations of many rural Far East towns have
decreased from their peaks, some towns have actually grown,
while other one-company towns are disappearing. The town of
Plastun currently has a full-time population of about 7,000,
which is an increase of about one thousand compared to the year

2001. Plastun is also very much a company town, and according
to Sergey Kurchinskiy, the head of the municipal region, about
35 percent of the population of the area works at the Terneyles
timber plant in town and at wood harvesting sites and ports
nearby. The company even attracts outsiders to the town -- most
of the inhabitants the Consulate delegation talked to left major
regional centers such as Vladivostok, Khabarovsk, and Nakhodka
to join the company and live in Plastun. The town's fate very
strongly depends on the fate of Terneyles, a company that the
Japanese firm Sumimoto has a 44 percent stake in, but for the
time being the company is strong and largely unaffected by the
financial crisis.

Myth: There's No Processing Industry in the Far East
-------------- --------------


3. Authorities in Moscow have been trying with various degrees
of success to encourage natural resource processing industries
in the East to add value to the abundant raw resources harvested
there. While it is true that much of the raw material extracted
and produced in the RFE is exported to China for processing, the
situation in Plastun is different. Terneyles initially dealt
only with raw timber which it exported mostly to Asia and
Western Russia. But after successfully attracting significant
investment from the Japanese company, the company has branched
out into plywood production for domestic consumption and export
to Japan and Korea. The company remains profitable and has also
recently purchased some heavy equipment, including an American
dry kiln and Caterpillar earthmovers, from the U.S.

Myth: There's No Infrastructure in Rural Areas
-------------- -


4. Though infrastructure development in the rural East has
lagged behind that of some of the major population centers,
Plastun has an impressive infrastructure for such a small town.
Its roads are paved, and it has a port which supports the timber
company as well as brings consumer products to the town. A
small airstrip outside of town handles weekly flights to
Vladivostok and another regional town. The flights are
subsidized by the federal government, and cost only about USD 35
for a distance that takes nine hours to travel by car.

Myth: The Far East Has No Golf Courses
--------------


5. Municipal leaders were eager to show off their town's golf
course. Eduard Mashkov, Deputy General Director of Terneyles is
the town's most experienced player, and serves as instructor and
unofficial ambassador to those new to the game, encouraging
interest in the sport throughout the region. The nine-hole
facility, set in a picturesque wooded valley, is open to anyone
interested in the sport, and has been used by visiting investors
and diplomats as well as a significant number of locals. The
town even holds annual golf tournaments at the course to support
various charities.


6. Comment. The rural areas of the Russian Far East are
certainly not without problems, but it is important to note that
there are bright spots as well. The town of Plastun shows that
given a steady economic base and sufficient foreign investment,
the rural areas of the Far East are capable of flourishing and
being profitable for local inhabitants and investors alike.
Getting to this point was not easy. One official we spoke with,
who is a United Russia party member, has effectively boycotted
trips to Moscow for 20 years, insisting that locals are better
equipped to handle local issues. However, his assistant
informed us that wresting control from Moscow was not easy, and
our official, like many others, had to pay heavy bribes 20 years
ago to gain control of the port and timber factory and allow for
local and foreign investment chosen by Plastun residents, and
not Moscow powerbrokers.

ARMBRUSTER