No Time Like the Present to Invest In Eastern Siberia's Sakha Republic
Officials tour US to promote ventures in chilly, resource-rich nation
SINCE the collapse of the Soviet Union, American companies have grown accustomed to visits by officials from fledgling republics. In the last three weeks, delegations from Kazakhstan, Georgia, and Ukraine have come to Washington to court investors.Skip to next paragraph
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Next up: Siberia.
Anatoly Chomchoyev, a deputy of the Legislative Assembly of the Republic of Sakha, a newly independent state in northeastern Siberia, arrived in Boston late last month to visit factories and pursue joint ventures.
His trip precedes a more official state visit to Washington slated for April.
In an interview, Mr. Chomchoyev made an effort to dispel some of the common stereotypes about his Siberian homeland, also known as Yakutia.
Brandishing a picture book, Chomchoyev pointed to photographs of mining operations, reindeer farms, prefabricated buildings, and Yakutians in colorful ethnic dress.
One series of photos showed people on the banks of the Lena River in bathing suits: an infrequent sight in a republic whose capital, Yakutsk (pop. 250,000), is the largest city in the world built entirely on permafrost.
Speaking through an interpreter, Chomchoyev explained that Yakutia, roughly five times the size of Texas, boasts large reserves of diamonds, gold, timber, and coal, but lacks the infrastructure and industrial capacity to convert them to saleable products. ``In Yakutia, there are many gold deposits. But because of high production costs, it doesn't make any sense to produce gold. It would be cheaper to buy,'' he says.
``The Sakha Republic has so many rich resources as yet untapped,'' says Marjorie Mandelstam Balzer, a cultural anthropologist at Georgetown Univer- sity in Washington who studies the region. ``There's no question it's one of the richest republics in the Russian Federation.''
CCORDING to Professor Balzer, Sakha President Mikhail Nikolaev worked out a unique arrangement with the Russians in which Moscow only retains partial policy control over Yakutia's resources.
While most republics pay taxes to the central government in return for credit vouchers, Yakutia has its own hard currency that it uses to buy goods directly from Russia.
With no need for Russian credits, Yakutia pays no taxes. ``We are more or less self-determinant to settle our financial problems,'' Chomchoyev says. ``That is why we are maintaining a rather stable situation with Russia. We settle all our problems with Russia on the basis of law. Some republics are envious of this relationship.''
These arrangements provide the republic with a modicum of independence that will continue to attract foreign money, Balzer adds.
``I expect an influx of investment from a number of places around the world,'' she says. Nevertheless, Yakutia faces some chilly obstacles. Because the republic's meat and dairy plants are unable to satisfy local demand, 10 million tons of supplies must be trucked in annually, most of it over the frozen Lena River; there are no railroads.
Chomchoyev adds that the biggest impediment to economic development is the now-defunct Communist system of guaranteed wages. ``It's very hard to change the mentality of the people,'' he says. ``Everybody likes to be paid for doing nothing.''
Another difficulty, he says, is uniting Yakutians, who derive from several ethnic backgrounds and speak two languages, Russian and Sakha.
Chomchoyev says that the republic has already worked out joint ventures with other Western countries, but not the United States, a country whose experience he says Yakutia might emulate.
``I believe America is composed of many different nations,'' he says. ``All those people live together and find a common language and are developing very well. So Yakutia is facing the same problem now; we're also a multinational state.''