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22 May, 2009 05:52

Entire town trapped in crisis

Jobless residents of a city in Russia's northwest, all three plants of which were shut down due to the crisis crunch, have been protesting, demanding an immediate solution to the situation.

On Wednesday, about 300 Pikalevo citizens, in despair over having no money even to buy food, stormed the local administration building during an emergency meeting to make sure the officials finally hear them.

Pikalevo – 300 kilometers from St. Petersburg – is just one of Russia’s many cities and towns that rely totally on industry. The local economy, the council budget, and thousands of jobs are all dependent on it. This kind of centralization created by the Soviet system doesn’t work these days.

Now the city’s three factories – alumina, cement, and potash – are idle, hit by the global financial crisis. The result – jobless people, energy and hot water cuts, crime on the rise, and growing anger among the population.

MK daily writes that many people – trying to make ends meet – are experimenting with vegan diets, and cook nettle soup and dandelion salad. And according to Komsomolskaya Pravda, it’s now impossible to buy water boilers in the town, because they’ve all been sold to locals who are suffering without hot water.

The Pikalevo Alumina Refinery, which used to be one of Russia's industry leaders, is just another dead enterprise now. It was purchased by Baselcement – a company affiliated with Basic Element, the holding company belonging to Russia‘s former richest man Oleg Deripaska, who now is heavily in debt.

While numerous businesses stop production in these tough times, they don't normally paralyze a whole city, as in this case.

The lack of alternative work in the region is affecting many. And the Golubev family is no exception. Lyudmila has given 21 years of her life to the plant, her husband – another 20.

”The situation is critical in the city. We have nothing. No one can say for sure how long it will last. We have no moral or physical strength left anymore,” Lyudmila says.

She says they’ve been offered an alternative job – but far away from their family.

“They say you can place your children in foster care. But it’s nonsense! Let's also place our parents in an old peoples' home, while we’ll be traveling all across the country trying to earn money.”

There have already been several protests, with people calling for work and money. But this could be just the beginning.

According to Svetlana Antropova, the head of the Joint Trade Union, the situation in the city is close to a disaster.

“And it could even worsen over the next two or three months. It could become dangerous because we don't know how far angry and hungry people will go,” she says.

The general director of the plant says he understands people’s frustrations, but he can’t say when they will be able to return to their jobs.

”The crisis brought down prices on our production. We lose too much. We could restart working if the market price rises. But it’s highly unlikely in these tough days,” said Dmitry Maslikov, Director General of Baselcement-Pikalevo.

On Thursday, the governor of the Leningrad region, Velry Serduykov signed a decree allocating 20 million roubles (about $US 625,000) aid to the Pikalevo budget. Meanwhile, the debt of the city’s power plant, which is ruled by Baselcement, equals 150 million roubles.

People in Pikalevo have an omen: if there's smoke coming from the city’s chimneys – everything’s going to be fine. But there is no smoke today; and there has not been any since the beginning of the year. And until the fires of industry start burning again, life here remains far from certain.