Vladivostok Pays a High Price for a Free Market

VLADIVOSTOK, Russia — At 6 p.m., the lights go out. Refrigerators clank to a stop and residents of this port city begin to grumble about yet another evening of cooking dinner on portable camp stoves.

Periodic power outages, mounds of garbage on the streets and salaries that are months overdue are just a few signs of the decay and poverty that have gripped Vladivostok, the largest city in Russia’s Far East.

When Russia began free-market reforms after the Soviet collapse in 1991, Vladivostok, a previously closed military port, had every reason to believe it would be one of the leading beneficiaries.

A richly endowed thumb of land on the southernmost reaches of Russia’s Pacific Coast, the Vladivostok region is nestled among some of the world’s most dynamic economies--Japan to the east, China to the west and South Korea to the south.

Foreign investors wasted no time setting down roots as Vladivostok opened to the world, seeking to take advantage of the region’s ports, coal mines and forests.

But five years later, there are only hints of economic revival in Vladivostok, a hilly city of 800,000 people. A few new shops offer imported goods. Cranes swing used Japanese cars off ships. Churches are being built for the first time in 70 years.

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More glaring are the problems. Streets are scarred by impassable potholes. Rusting ships list in the bay. A recent strike by unpaid garbage collectors left diapers, newspapers and plastic bags swirling around suburban streets.

Some 10,000 protesters marched on the city’s main square in late March to vent their frustration with both regional officials and the central government in Moscow, thousands of miles and seven time zones to the west.

But when city council elections were held three days later, only 10% of the electorate bothered to vote, not enough to make the poll valid. A previous attempt in December also failed to produce a result because of voter apathy.

Pavel Kovalyov, a 30-year-old specialist in the acupuncture center at the Primorye Regional Hospital, hasn’t been paid in months.

“Everyone has their own way of surviving,” Kovalyov said. “My mother lives in the country and she has a large stock of food. I’ve been living off that, but I have been very near giving it all up and doing something where I can get paid.”

The average monthly wage in the region is about 1.1 million rubles, which is equal to only $200. And many items, including food, cost roughly the same as in the United States.

Outlying towns look as if time has passed them by. In the village of Primorsky, a four-hour drive from Vladivostok, most people live off the land in tiny, leaning “dachas” constructed of odds and ends of plywood. Plumbing is usually outdoors. At one school, children were eating their lunch standing because the school couldn’t afford enough chairs.

Nadezhda Akhonina, a seventh-grade geography teacher, now earns much of her income selling vegetables on the roadside in Siny Gai, 100 miles northeast of Vladivostok.

She estimates she earned the equivalent of $1,250 during the two months she worked as a roadside vendor last summer. She makes only $125 a month as a teacher--when she gets paid: She finally got her October pay in March.

“It’s the highway that feeds us in the times we don’t get paid,” said Akhonina, 53.

While the markets now offer consumer goods that weren’t available in Soviet times, there are few signs a sustainable economy is developing.

“Nobody is investing in industry now. Everybody wants to buy something abroad and sell it here--Korean paints and Choco-Pies,” said Yury Boyko, a local executive and member of Vladivostok’s Economic Planning Council. “Everybody is learning how to buy, but not how to build.”

Ambitious plans for an American-style supermarket in Vladivostok fizzled last year when the project went broke. Foreign investment has been limited to a few big-league companies like Coca-Cola, Pepsi and South Korea’s Hyundai, and even they have faced countless problems. All face a formidable web of obstacles--crime, bureaucracy and chronic energy shortages.

The latest energy crunch hit in mid-March, when the regional power company, Dalenergo, announced it couldn’t afford to heat apartments in some cities.

The temperatures inside apartments in the town of Nakhodka dropped as low as 41 degrees, and lights went off for several hours at a time in many Vladivostok apartments.

For a solution, regional Gov. Yevgeny Nazdratenko looks to the past and calls for federal subsidies.

“We should go back to our cursed old practices, no matter how we might criticize them,” he said.