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17 Sep, 2009 05:14

Roads in golden city paved with… nothing

Krasnoye-on-Volga, with its eight thousand inhabitants, should fit into the stereotype of rural Russia: simple and traditional. Only this town is the country's goldsmith capital, and the one of a multi-million industry.

The small town of Krasnoye lies on the banks of the Volga River. Any driver can certainly tell when they have reached the town: one goes off-road, literally.

Ironically, though, Krasnoye happens to be very rich. It is widely known as Russia’s jewelry capital.

“The first silversmith tools found here are more than 1,000 years old. In Soviet times, this became a real industry, which now feeds the whole region,” tells Anna Utkina of the Museum of Applied Arts.

Regardless of the wealth, the roads in Krasnoye have not been repaired in many years, and it seems nobody wants to invest in them – and there is a good explanation why this is not happening.

Repairing one square meter of road here, officials say, costs $32, whereas processing one gram of gold here costs $25, which can then be sold at a profit.

Around 80% of the locals are goldsmiths or silversmiths, or traders. One of many small local companies, for instance, employs 30 people from Krasnoye and nearby villages working in shifts. The pay there is the best you can get – a goldsmith makes up to $4,000 a month. So, the wages here are many times higher than the Russian average.

Locals say the problem is that Moscow entrepreneurs own most of the businesses.

“Jewelers from Krasnoye repair their roads. Muscovites ignore that the road here is destroyed. They should stop squeezing money out of this town and start caring,” a local driver complains.

The town administration says it is not their responsibility alone to repair the road.

“We have a surplus budget, but it cannot cover our needs. We cannot collect taxes in full, as most of the businesses here are discreet and sometimes gray. People should be responsible and invest in their land, in their future,” Viktor Murnaev, the head of the local administration, explains.

One example of this is the local church: it was completely restored by private capital as the local jewelry giants pooled in to repair it. But, when it comes to their roads, that is a bottomless pit, they say.

Krasnoselsky Yuvelirprom is the biggest jewelers in Krasnoye, and it is owned by a company in Moscow.

“Our jewelers’ guild tried pooling in to repair the road, but it didn’t last long. We were frustrated – covering the road in the piles of money we invested would have been more effective,” the head of production, Nina Kuznetsova, complained.

The officials say there is not enough tax money, while businesses say they are not charities. In the end, no one takes responsibility.

Meanwhile, bargain-hunters continue to come to Krasnoye for the precious metal – as it costs twice as much in the capital – only to find the roads are not paved with gold, they are not even paved at all.