Russia: Minatom Closed Cities and Weapons Complex Developments Archive

For more recent developments, see the General Nuclear Weapons Developments file.

This file contains developments relating to the closed cities and nuclear weapons facilities under Minatom's jurisdiction. (Other nuclear weapons facilities are discussed in the Nuclear Weapons, Delivery Vehicle Facilities, and Naval Reactors sections.) For more information on the Nuclear Cities Initiative, please see the Russia: Foreign Assistance: DOE Programs section of the NIS Nuclear and Missile Database, especially the Nuclear Cities Overview.

3/17/2003:  ACTIVISTS RAISE ISSUE OF SUBSTANCE ABUSE AT NUCLEAR FACILITIES
On 17 March 2003 activists from Greenpeace and other groups such as Ozersk's Planet of Hopes, as well as sociologists from the Institute of Sociology at the Russian Academy of Sciences, called on the government to pay attention to drug and alcohol abuse among employees at nuclear facilities, as well as the lack of action taken by industry leadership to address the problem. The groups expressed concern for the increased risk of nuclear accidents and theft as a result of the abuse.  Nadezhda Kutepova, director of Planet of Hopes, contends that the incidents of drug and alcohol abuse at nuclear facilities are underreported because managers tend to cover up for employees under the influence. Minatom refuted many of these claims, maintaining that substance abuse does not exist among employees in responsible positions.
[Steve Gutterman, "Drinking Problem Seen at Nuke Sites," Associated Press; in The Moscow Times, 18 March 2003.] {Entered 5/28/2003 CB}

2/21/2003: MOSCOW PLANS TO AUDIT CLOSED CITIES
On 21 February 2003, Rossiyskaya gazeta reported that the Administration of the President of Russia and the Accounts Chamber of the Russian Federation plan to audit Minatom closed cities. A preferential tax regime attracted many companies to register their businesses in ZATOs (closed administrative territorial formations). As a result, "hundreds of millions of dollars in taxes" were undercollected. The Ministry of Taxation stated that "ZATOs turned into offshore zones, through which the country is losing its financial resources." Oil companies benefited the most from tax breaks in closed cities. However, according to Sergey Stepashin, head of the Accounts Chamber, the audits will not focus on oil companies, but rather on the tax collection and spending patterns of ZATO administrations. The newspaper names Snezhinsk in Chelyabinsk Oblast as the first candidate for the audit.
[Ivan Gromov, "ZATO, oni idut k vam!" Rossiyskaya gazeta, No. 34, 21 February 2003; in Integrum Techno, http://www.integrum.com/.] {Entered 3/11/2003 DA}

1/17/2003: FUTURE MINATOM EMPLOYEES TO BE SCREENED FOR DRUG ADDICTION
On 17 January 2003, Kommersant reported that in accordance with a Russian government anti-narcotics commission recommendation, individuals applying for a job at Minatom enterprises will be required to undergo a medical examination to identify any drug dependency. This measure was initiated by Mikhail Grishankov, a State Duma deputy from Chelyabinsk oblast.
["Narkomanov ne pustyat rabotat v atomnoy promyshlennosti," Kommersant, 17 January 2003; in Integrum Techno, http://www.integrum.com/.] {Entered 2/21/2003 DA}

10/2/2002: STATE DUMA CONSIDERS LAW CHANGING STATE UNITARY ENTERPRISE OVERSIGHT
On 2 October 2002, Dumskaya panorama reported that the State Duma had passed the second reading of the law On state and municipal unitary enterprises. These enterprises are mostly involved in strategic production, including military and nuclear production. The property of such enterprises belongs to the state. According to the new law, the Ministry of Property Relations would gain control over these enterprises: Alexander Belousov, a member of the Budget and Tax Committee, claims that this would contradict existing managerial practices in the defense and transportation industries that have proven quite effective. He states that as a result of the implementation of this law, the task of the control over unitary enterprises would be separated from the task of fulfilling the state armament program, state defense orders, etc, and slow enterprise reform.[1] On the other hand, First Deputy Minister of Property Relations Aleksandr Braverman, argued that it would speed reforms.[2]  Ministers opposed to the law include Minister of Atomic Energy Aleksandr Rumyantsev, General Director of the Aerospace Agency Yuriy Koptev, General Director of the Conventional Weapons Agency Aleksandr Nozdrachev, and General Director of the Shipbuilding Agency Vladimir Pospelov.[1]
Sources:
[1] Dumskaya panorama, 2 October 2002; in Integrum Techno, http://afnet.integrum.ru.
[2] Aleksandr Braverman: Prinyatiye zakona ob unitarnykh predpriyatiyakh sdelayet etot sektor ekonomiki bolee upravlyayemym," Regions.ru Web Site, 10 August 2002; in Integrum Techno, http://www.integrum.ru. {Entered on 10/17/2002 MP}

10/23-26/2002: MINATOM STRENGTHENS SECURITY REGIME DURING HOSTAGE CRISIS IN MOSCOW
On 23 October 2002, a group of armed Chechens took more than 700 people hostage in Dubrovka Theater in Moscow. In response to this crisis, Minatom ordered a security upgrade at its civilian and military nuclear facilities against possible terrorist attacks and established a security task force under Deputy Minister Anatoliy Kotelnikov to supervise its implementation. Minatom security forces and Interior Ministry troops guarding nuclear facilities were put on a state of high alert. Access to closed cities was further restricted.[1] In addition, the Minatom Situation and Crisis Center screened information from all nuclear facilities 24 hours a day for subsequent analysis and reporting.[2] The hostage crisis was resolved in the early morning of 26 October 2002, when Russian special forces stormed the theater using incapacitating gas.[3]
Sources:
[1] "Minatom usilil okhranu yadernykh obyektov," RIA Novosti, http://www.rian.ru/, 25 October 2002; in Integrum Techno, http://www.integrum.com/.
[2] Andrey Vaganov, "Atomshchiki nacheku," Nezavisimaya gazeta online edition, http://www.ng.ru/, 28 October 2002.
[3] Margot Buff, "Russia: Dozens Dead as Troops Storm Theater and End Crisis," Radio Free Europe/Radio Liberty, http://www.rferl.org/, 26 October 2002. {Entered 10/30/2002 DA}

10/16/2002: RUMYANTSEV: CLOSED CITIES WILL BE "OPENED IN THE NEAR FUTURE"
On 16 October 2002, Russian Minister of Atomic Energy Aleksandr Rumyantsev announced that Minatom closed cities would be "opened in the near future". However, he didn't provide any specific time frame. "This cannot happen instantly, though," according to Rumyantsev, because cities with nuclear facilities such as Novouralsk, Snezhinsk, Angarsk, Arzamas-16, Zelenogorsk and others play an important role in Russia's national defense and thorough prearrangements are required before lifting their "secret" [sic] status. The announcement was made at a conference in Novouralsk devoted to the 50th anniversary of UEKhK.[1,2]
Sources:
[1] "Na zavershivsheysya v Novouralske nauchno-prakticheskoy konferentsii A. Rumyantsev nazval UEKhK 'zhemchuzhinoy v korone atomnoy promyshlennosti'," Nuclear.ru Web Site, http://www.nuclear.ru/, 17 October 2002.
[2] Eduard Puzyrev, "'Zakrytyye' goroda, v kotorykh raspolozheny predpriyatiya Minatoma RF, v nedalekom budushchem mogut byt rassekrecheny," RIA Novosti, http://www.rian.ru/, 17 October 2002. {Entered 10/17/2002 DA}

7/1/2002: VIOLATORS OF ZATO ACCESS REGIME WILL BE FINED
On 1 July 2002, the new Administrative Code of the Russian Federation entered into force. According to Article 20.17 of the Code, violators of the restricted access regime in closed cities could be fined an amount ranging from three to five minimum monthly wages. [The minimum monthly wage is a measure used in Russia to calculate wages, social benefits and fines. As of 1 January 2002, the minimum monthly wage was 450 rubles ($14.28 as of 1 July 2002).]
[Administrative Code of the Russian Federation, Rossiyskaya gazeta, No. 256, 31 December 2001; in Integrum Techno, http://www.integrum.com/.] {Entered 8/14/2002 DA}

5/22-24/2002: CONVERSION ISSUES DISCUSSED IN SNEZHINSK
From 22 May to 24 May 2002, Snezhinsk hosted a three-day workshop on nuclear defense conversion. VNIITF specialists and representatives from Dimitrovgrad, Zheleznogorsk, Lesnoy, Obninsk, Ozersk, Trekhgornyy and other cities with nuclear infrastructure discussed the outcomes of the defense industry conversion program for 1998-2001 and outlined plans for restructuring military nuclear enterprises for 2002-2006. The participants emphasized the importance of developing an investment policy for the nuclear cities and maintaining close cooperation with Minatom.
["24 maya v gorode Snezhinske Chelyabinskoy oblasti zavershilsya seminar rukovoditeley predpriyatiy Ministerstva RF po atomnoy energii i administratsiy ZATO, na kotorom obsuzhdalis problemy konversii yadernoy otrasli," Nuclear.ru website, http://www.nuclear.ru/news/full/960.shtml, 24 May 2002.] {Entered 6/24/02 DA}

5/20/2002: STATE DUMA PLANS TO INTRODUCE AMENDMENTS TO LAW ON ZATOs
On 20 May 2002, the Russian State Duma held parliamentary hearings dedicated to the implementation of the 1992 Law on ZATOs. Ozersk Mayor Vladimir Malkov summarized the results of the hearings at a press conference on 24 May 2002. He told local journalists that the meeting in the Duma, initiated by the Association of Closed Cities and its chairman Nikolay Lubenets, mayor of Trekhgornyy, had been prompted by the need to streamline relations between ZATOs and federal authorities and remove the provisions of the 1992 law that contradicted the Tax and Budget codes. The Association proposed a draft law, amending the existing law on ZATOs and overruling a draft prepared by the Ministry of Finance which, if implemented, could have reduced funding for closed cities. The participants in the hearings also noted that the economic and social situation in ZATOs under the aegis of the Ministry of Defense is significantly worse than in Minatom's closed cities. The Duma's committee on local self-government spoke in favor of transferring some powers and financial resources from Moscow to ZATO administrations, especially in the social arena. According to Malkov, Minatom's ZATOs will remain closed, but their status as "offshore zones" is unlikely to be restored.
[Georgard Tolkachev, "Ozersk ostayetsya zakrytym. Poka," Ozersk.ru Web Site, http://www.ozersk.ru/, 31 May 2002.] {Entered 7/15/02 DA}
 
2/12/2002: DEPUTY PRIME MINISTER DISCUSSES ISSUES OF CLOSED CITIES WITH CHELYABINSK GOVERNMENT
On 12 February 2002, an interagency meeting initiated by the Chelyabinsk Oblast Administration to discuss nuclear industry development and regional radiation safety issues was held in Chelyabinsk. Deputy Prime Minister and Minister of Industry, Science, and Technologies Ilya Klebanov chaired the meeting. Presidential Envoy to the Urals Federal Okrug Petr Latyshev, Minister of Atomic Energy Aleksandr Rumyantsev, Chelyabinsk Oblast Governor Petr Sumin, representatives of the Russian Academy of Sciences, and heads of ZATOs and nuclear facilities took part in the meeting. The participants discussed the economic and social development of ZATOs, radiation protection of the population, and physical protection of nuclear facilities. Klebanov emphasized at the meeting that the government intends to maintain the special regime at Minatom ZATOs and further develop legal regulations defining the status of closed cities.
[Yelena Vyatkina, "Problemy ostryye - ZATO atomnyye," Ozersk.ru Web Site, http://www.ozersk.ru, 20 February 2002.] {Entered 3/12/2002 DA}
 
10/12/2001: RUSSIAN GOVERNMENT APPROVES PROGRAM FOR DEVELOPMENT OF CLOSED CITIES IN 2001-2004
The Russian government approved the "Program for Development of the Closed Cities in 2001-2004," Vek reported on 12 September 2001. The program emphasizes goal-oriented programs for social and economic development in the closed cities, funded by annual federal budget allocations. Administrations of the closed cities and Minatom believe that this approach is most effective and gives federal agencies the most control over development programs. However, current budget allocations for development programs in the closed cities are insufficient, according to Vek. The 2001 budget allocated 613 million rubles ($20.8 million as of 12 October 2001) to these programs, and the 2002 budget only allocates 313.3 million rubles ($10.6 million). According to experts, the closed cities require 3-7 billion rubles ($101.8-$237.5 million) annually in order to implement these programs. According to Vek, Minatom could promote development of the closed cities by funding development of new technologies, continuing funding of the city infrastructure that supports the operation of the nuclear facilities, and creation of new employment opportunities in the closed cities.
[Vladimir Dernovoy, "Demarsh 'sekretnykh' gorodov ZATO proryvayutsya v rynok," Vek, 12 September 2001; in Minatom News Digest, http://www.minatom.ru/presscenter, 12 September 2001.] {Entered 2/21/02 EC}
 
10/4/2001 LUXOFT AGREES TO RETRAIN RUSSIAN NUCLEAR WEAPONS SCIENTISTS AND ENGINEERS FOR WORK IN THE PRIVATE SECTOR
LUXOFT became the first major Russian information technology company to join the US DOE Initiatives for Proliferation Program (IPP).  LUXOFT and its US partner, CTG Inc., of Wayne, Pennsylvania, plan to train 500 nuclear professionals at the Kurchatov Institute in Moscow in a number of computer technology applications.  The project consists of four stages: trainee selection, external basic training, targeted training at LUXOFT, and provision of employment.  LUXOFT plans to expand training at Kurchatov before moving on to Russian nuclear weapons facilities.
["Software Firm Enlists In Effort To Retrain Russian Weapons Scientists", DW, Vol. 22, No. 41, 15 October 2001, pp.1-2] {Entered 2/18/02 TH}
 
9/26-28/2001: MINISTER OF ATOMIC ENERGY VISITS CLOSED CITIES
From 26 to 28 September 2001, Russian Minister of Atomic Energy Aleksandr Rumyantsev visited Trekhgornyy and Ozersk in Chelyabinsk Oblast. On 26 and 27 September, Rumyantsev participated in a meeting initiated by the Closed Cities Association in Trekhgornyy. The meeting was attended by heads of ZATO administrations and nuclear facilities, Minatom representatives, Chelyabinsk Oblast Governor Petr Sumin, Presidential Envoy to the Urals Federal Okrug Petr Latyshev, State Duma deputies, and law enforcement officials.[1] Discussion focused on development strategy; cooperation between Minatom, the closed cities' authorities and Minatom's nuclear facilities; coordination of policies regarding employment, funding, and conversion of nuclear facilities.[1,2] According to Mikhail Shubin, head of Minatom's Department on Regional, Personnel and Social Policy, the Russian Ministry of Finance plans to cut subsidies for ZATOs from 613 million rubles ($20.83 million as of 26 September 2001) in 2001 to 300 million rubles ($10.19 million as of 26 September 2001) in 2002. Shubin believes that despite higher budget allocations and better social services than elsewhere in Russia, the closed cities are not yet adjusted to new economic realities. He recommended ZATO administrations shift investment priorities from social programs to business development and improvement of city infrastructure.[2] Mayors of the closed cities submitted their recommendations for a new law on ZATO and a draft agreement between ZATO administrations and Minatom on development programs for closed cities.[1,2]
Sources:
[1] Aleksandr Abrosimov, "Perspektiva v obyedinenii i rekonstruktsii," Ozersk.ru Web Site, http://www.ozersk.ru/cgi-bin/article.cgi?news/46.
[2] "Obshchiye tseli, obshchiye zadachi," Atompressa, No. 39, October 1999, pp. 1-2. {Entered 2/26/2002 DA} {Updated 7/31/2002 DA}
 
8/9/2001: MINATOM SUMMARIZES ACTIVITIES IN 2000
On 9 August 2001 Minatom published an Internet report on nuclear activities in Russia in 2000. The report provides sector-wide statistics for the year, as well as major achievements in nuclear energy, nuclear fuel production, nuclear research, exports, and international activities. According to the report, the financial situation at nuclear-related scientific institutions stabilized in 2000. Wages for workers in scientific institutions increased, reaching 3549 rubles per month ($121 as of 9 August 2001) by the end of 2000. The report also described progress on conversion of facilities from military to civilian production. Minatom spent 811,748,000 rubles ($27.7 million) on the Conversion of the Nuclear Industry in 1998-2001 Program in 2000. Civilian products worth 1.08 billion rubles ($36.8 million) were produced at Minatom facilities in 2000, and 2,150 jobs were created in the civilian production sector. The report described developments in international cooperation programs in 2000. The United States, Germany, and France continued to be Russia's main partners in MPC&A in 2000.  The US Congress allocated $236.5 million in 2000 to fund these programs. Collaboration between the United States and Minatom in MPC&A involved about 20 Russian enterprises. All scheduled deliveries of downblended LEU under the HEU-LEU agreement were completed in 2000, and all shipments of natural uranium feed were received. According to Minatom's report, nuclear fuel deliveries by Minatom in 2000 increased by 40% in monetary terms over 1999 levels, while all exports increased by 20%. Accelerator hardware was exported to China and South Korea, and an agreement was signed to supply hardware to the United States over the next four years. A major contribution to the increase in exports was collaboration with Asian states on nuclear power plant construction, particularly at Tianwan in China, Bushehr in Iran, and Koodankulam in India. Addressing reprocessing of spent nuclear fuel, Minatom reports that in 2000, 11 trainloads of spent fuel were transferred to PO Mayak for reprocessing. The report also outlined a plan to reorganize Minatom's commercial structures. The plan would combine uranium extraction, enrichment, and fuel-producing enterprises into a new joint stock company, Rosatomprom, unifying fuel cycle activities. Rosenergoatom would manage generation of nuclear power. OAO Rosatomstroy would be formed to make construction in the nuclear industry more efficient.
["Itogi deyatelnosti atomnoy otrasli v 2000 godu," Minatom Press-Center http://www.minatom.ru/presscenter, 9 August 2001.] {Entered 11/20/01 EC}

4/24/2001: CARNEGIE PUBLISHES REPORT ON NUCLEAR AND MISSILE SCIENTISTS IN RUSSIA 
In May 2001, the Carnegie Endowment for International Peace published a report by Valentin Tikhonov entitled Russia's Nuclear and Missile Complex: The Human Factor in Proliferation. The report is based on a 1999 sociological field study of specialists currently working in Russia's nuclear and missile centers and focused on migration to and from nuclear cities, potential and actual emigration of weapons specialists out of Russia, private sector absorption of nuclear and missile experts, and training of new specialists for nuclear and missile industries. The study draws on the results of a survey of 500 nuclear scientists in five closed cities: Sarov, Snezhinsk, Seversk, Zarechnyy, and Trekhgornyy. The report emphasized that conditions in nuclear cities are rapidly deteriorating. The qualifications of nuclear specialists have declined and their salary levels have remained static while the cost of living has sharply risen. According to the study, more than 62% of these scientists earn less than $50 a month, 58% work other jobs to make ends meet, 89% say that their living conditions have declined since 1992, 14% would like to work outside of Russia and 6% would move to any place where they could find gainful employment. However, the number of workers willing to emigrate to other countries is shrinking. In the past decade, most of the emigrants moved to Israel, Germany, and the United States. Furthermore, the number of nuclear employees willing to work abroad is only one-fifth to one-sixth the level it was in 1992 and these are most opposed to working in Iraq, Pakistan, Libya, Iran, and North Korea, in that order. Although "the emigration potential in the nuclear-missile complex remains dangerously high," the study noted that in addition to the changed attitude toward emigration, two other factors help avert scientists from emigration--their low income and administrative restrictions that prevent residents of the closed cities from leaving the country on their own. The study argues that the most serious damage to the nuclear enterprises is posed not by emigration but by specialists taking jobs with private companies or starting their own businesses. "In the 1990s, the intensity of the outflow from enterprises to private business was five to six times greater than emigration." According to the report, the aging of the work force and the absence of an inflow of young people to the nuclear industries also pose serious threat to personnel situation in nuclear complex. Tikhonov warns that without adequate funding, education, and improved living standards, Russia's problems with the safety and reliability of the nuclear sector might worsen in the years ahead.
[Valentin Tikhonov, Russia's Nuclear and Missile Complex: The Human Factor in Proliferation (Washington, DC: Carnegie Endowment for International Peace, 2001).]  {Entered 8/03/01 ES} 
   
4/18/2001: RYABEV REPORTS TO DUMA ON RUSSIAN NUCLEAR WEAPONS PRODUCTION COMPLEX
On 18 April 2001, First Deputy Minister of Atomic Energy Lev Ryabev delivered a report to the Russian State Duma entitled The Prospects for Maintaining the Russian Nuclear Weapons Complex and Supporting Fundamental Nuclear Science During the Reorganization of the Ministry of Atomic Energy. According to Ryabev, the government program for arms purchases and the presidential program for developing the nuclear weapons complex contain clear guidelines for the Russian nuclear complex with respect to nuclear munitions production until 2010. Ryabev also noted that the service life of the current nuclear arsenal would expire in a few years and enjoined the nuclear weapons complex to develop new scientific and technological means to compensate for the absence of actual nuclear testing. To this end, three supercomputers in Russia have already begun analytical operations to test the reliability and safety of nuclear arsenal.  Speaking of the reorganization of the Ministry of Atomic Energy, Ryabev stated that by 2003, two of the four plants that assemble and dismantle nuclear munitions, and one of the two uranium and plutonium warhead component manufacturing plants, would be closed.[1] Nezavisimoye voennoye obozreniye names "Elektrokhimpribor (Sverdlovsk-45), PO Start (Zlatoust-36) [sic: the name of the facility in Zlatoust-36 is Instrument-Making Plant, not PO Start], and PO Mayak (Chelyabinsk-40)" as the only facilities to be involved in the manufacturing of nuclear warheads by 2004.[2]  Furthermore, the present number of specialists in the nuclear weapons complex (75,000) would be reduced by 35,000-40,000. Ryabev called for federal measures focused on creating new jobs for excess nuclear workers and developing closed cities' infrastructure to compensate for the restrictions placed on investment zones in closed nuclear cities.[1] 
Sources:
[1] "The Prospects for Maintaining Russian Nuclear Weapons Complex and Supporting Fundamental Nuclear Science in the Conditions of the Minatom's Reorganization," The Duma and Arms Control Newsletter, April-May, 2001. {Entered 6/15/01 GG} 
[2] "Novosti OPK i VTS," Nezavisimoye voennoye obozreniye on-line edition, 11 May 2001, http://nvo.ng.ru. {Revised 8/17/01 ES}

3/2001: GLENN SCHWEITZER REPORTS ON NUCLEAR CITIES
Glenn Schweitzer from the US National Research Council presented a report entitled Nuclear Perestroika - TechnoBusiness in Russia's Atomic Cities to representatives of major US companies.[1] This report resulted from a two-year pilot study conducted in Obninsk, Snezhinsk and Zarechnyy in partnership with Lev Tochenyy from the International Science and Technology Center. Schweitzer believes that promising research projects in non-military areas, such as molecular disintegration (Snezhinsk), nuclear waste disposal (Obninsk), and laser and optical diagnostics (Zarechnyy), could be of interest to international investors. In Schweitzer's view, the Russian government could facilitate technological development in Minatom closed cities by establishing stable tax regime, introducing tax incentives, enforcing protection of intellectual property, giving preference to Russian suppliers of high-tech goods and services, assisting development of innovative products and supporting scientific research. The government should also separate defense and civilian activities in the cities and ease access for potential investors and customers.[1,2]
Sources:
[1] Washington Online, http://www.washonline.org/ICArchives/march2001.htm, 3 March 2001; in "Razvitiye mirnykh tekhnologiy - nadezhda 'atomnykh gorodov'," Yadernaya bezopasnost, No. 46-47, April 2001, p. 13.
[2] Glenn Schweitzer, Lev Tocheny, Nuclear Perestroika - TechnoBusiness in Russia's Atomic Cities (Arlington, VA: Cameron Publications Services, December 2000). {Entered 9/16/02 DA}

12/8/2000: US-RUSSIA HEU DEAL FACILITATES CONVERSION
Russian Minister of Atomic Energy Yevgeniy Adamov announced that the Ministry spent 1.5 billion rubles on conversion programs in 2000. The funds were available as a result of the implementation of the 1993 US-Russian HEU Agreement.
["Deal with USA help Russian conversion programmes," ITAR-TASS, 8 December 2000; in FBIS Document CEP20001208000457.] {Entered 6/1/01 GG} 
 
11/2000: ADAMOV: RUSSIAN NUCLEAR INDUSTRY SHOWS 12% INCREASE IN OUTPUT
Russian Atomic Energy Minister Yevgeniy Adamov told reporters that the Russian nuclear industry's output has grown by 12% since the beginning of 2000. The output of the nuclear defense industry has grown by 8%.
["Russian nuclear industry shows 12% increase in output," RIA, 11 October  2000;  FBIS Document CEP20001011000099.] {Entered 11/6/00 OC}
 
8/25/2000: MIKHAIL KASYANOV VISITS SAROV, VNIIEF
On 25 August 2000, Prime Minister Kasyanov visited VNIIEF in Sarov to acquaint himself with the Minatom nuclear weapons complex. He was accompanied by Minister of Atomic Energy Adamov, other top Minatom officials, representatives of the regional administration, and directors of the federal nuclear centers.[1] Kasyanov emphasized the importance of maintaining the minimum required level of nuclear weapons, regardless of financial difficulties. He said it is necessary to reduce Russia's nuclear arsenal to the lowest acceptable level, while ensuring that existing weapons are secure and well-maintained.[2] Kasyanov spoke against tax privileges for closed cities and said these cities and nuclear complex facilities should be financed solely from the federal budget. He said the government intends to implement measures to improve the standard of living for employees of the Russian nuclear complex and referred to the decree increasing benefits for nuclear complex employees signed on 23 August 2000 by President Putin.[1]
Sources:
[1] Nataliya Kocheshkova "Mikhail Kasyanov: "K nalogovym lgotam otnoshus otritsatelno," Gorodskoy kurer online edition, http://infra.sr.nnov.ru, No. 35, 31 August 2000. 
[2]  Petr Netreba, "Kasyanov podvergsya yadernoy opasnosti," Kommersant-Daily online edition, www.online.ru/rproducts/commersant-daily
-month026-Aug-2000/17445764.DOC/rhtml, 26 August 2000. {Entered 9/18/00 OC}
 
 8/23/2000: PRESIDENT PUTIN SIGNS DECREE ON SOCIAL BENEFITS TO EMPLOYEES OF RUSSIAN NUCLEAR COMPLEX
On 23 August 2000 President of the Russian Federation Putin signed edict No. 1563, On Urgent Measures to Provide Social Support to Specialists of the Russian Federation Nuclear Weapons Complex. The decree is targeted at increasing pensions and salaries of employees directly involved in the development, production, maintenance, monitoring, and dismantlement of nuclear weapons, and reprocessing of nuclear materials. Support will be provided by supplemental monthly life-long payments to retired employees of the nuclear complex if they were involved in the aforementioned activities or worked for federal agencies in charge of these activities. The monthly payments to retired nuclear complex employees will range from 55 to 75 percent of the average salary before retirement. Salaries of civilian employees and servicemen of the Russian Armed Forces who are directly involved in the nuclear weapons complex will be increased to 1.5 times the average salary for similar work outside the nuclear weapons complex.
[Presidential edict No. 1563, O neotlozhnykh merakh sotsialnoy podderzhki spetsialistov yadernogo oruzheynogo kompleksa Rossiyskoy Federatsii, 26 August 2000; in "Ofitsialno," Rossiyskaya gazeta Web Site, www.rg.ru/official/doc/ukazi/1563.shtml.] {Entered  9/19/00 OC}
 
6/23/2000: MINATOM OFFICIAL DISCUSSES STATE ORDERS AND FINANCING OF NUCLEAR WEAPONS PROGRAMS
On 23 June 2000, Vek published an interview with the head of Minatom's Nuclear Munitions Development and Testing Department, Nikolay Voloshin, who reported that the value of the FY 2000 state defense order had increased by a factor of 1.5 in comparison with the state defense order for FY 1999, but he noted that the actual increase is lower because of inflation. Voloshin added that the defense order has also been increased by approximately the same factor for his department. The Nuclear Munitions Development and Testing Department manages the presidential program "Development of the nuclear weapons complex," which constitutes 40 percent of the department's work and consists of five smaller programs: replacing aging nuclear weapons; creating production facilities to replace former Soviet facilities located outside of Russia; constructing new equipment to conduct physics experiments; developing supercomputer complexes, and supporting internal test sites.  Approximately half of the work under the program is related to maintaining the existing arsenal. Voloshin added that the five subprograms comply with the Comprehensive Test Ban Treaty. Financing for each of the subprograms will be appropriated annually. Other federal programs focus on safety and security, prevention of unauthorized use of nuclear weapons, as well as weapons design and modernization, including warheads for the Topol-M complex. He estimated that 45 to 85 percent of the state defense order focuses on new projects, R&D, and nuclear weapons stewardship. Although a small portion of the state defense orders from FY 1997 and FY 1998 remained unpaid, the state was able to pay in full and on time for the FY 1999 defense order. According to Voloshin, the budget for Minatom's Nuclear Munitions Development and Testing Department was 30 times less than the budget allocated to the US national laboratories.
[Vladimir Dernovoy, "Nash shchit ne figovyy listok, ubezhden rukovoditel Departamenta proyektirovaniya i ispytaniya yadernykh boyepripasov Minatoma Nikolay Voloshin," Vek, No. 25, 23-30 June 2000.] {Entered 8/3/00 SS}
 
6/20/2000: CLOSED CITIES TRANSFER BUDGETARY AUTHORITY TO RUSSIAN FEDERAL TREASURY
On 20 June, Head of the Federal Treasury's Main Directorate Tatyana Nesterenko reported that 30 of Russia's 40 closed cities (ZATOs) had complied with federal legislation requiring the closed cities to transfer control over ZATO budgets to the Federal Treasury.[1] She noted that eight more closed cities had transferred either tax collection or their budget expenditures to the Federal Treasury as required by a Russian government resolution.[1,2] According to Nesterenko, only Sarov (Arzamas-16) and Trekhgornyy (Zlatoust-36) had failed to conclude an agreement with the Federal Treasury on the transfer of their financial resources.  Nesterenko warned that the Federal Treasury could suspend payments to those closed cities that failed to comply with the legislation approved by the Russian State Duma in December 1999 as part of the FY 2000 budget.[1] (See development from 3 December 1999 below).  The legislation rescinded the closed cities' authority to grant tax concessions to enterprises located on their territories as part of the ZATO investment zones. The Duma voted to keep investment zones at Sarov (Arzamas-16) and Snezhinsk (Chelyabinsk-70) and stipulated that tax exemptions cannot exceed two billion rubles ($73 million as of 31 December 1999).[2] Regional leaders and officials from the Ministry of Finance had argued that the ZATO investment zones had become little more than offshore investment zones.  According to Chelyabinsk Oblast Deputy Governor Vladimir Utkin, the four ZATO investment zones operating in this oblast caused the federal and oblast budgets to lose 32 billion rubles in FY 1999 ($1.16 billion as of 31 December 1999). The new federal legislation does not regulate regional or local tax benefits. The Ministry of the Economy was put in charge of coordinating the transfer of cities' budgets and financial resources to the Federal Treasury.
Sources:
[1] "Byudzhety rossiyskikh zakrytykh administrativno-territorialnykh obrazovaniy perevedeny na kaznacheyskoye obsluzhivaniye," Interfax, 20 June 2000.
[2] Anatoliy Khodorovskiy, "ZATO sdali v kaznacheystvo, " Vedomosti, 22 March 2000,  p. 3. {Entered 7/6/00 SS}
 
3/31/2000: PUTIN ATTENDS EXPANDED MINATOM COLLEGIUM SESSION IN SNEZHINSK
On 31 March 2000, President-elect Vladimir Putin visited Snezhinsk, which hosted an expanded session of the Minatom Collegium. Deputy Prime Minister Ilya Klebanov, Defense Minister Igor Sergeyev, Minister of Atomic Energy Yevgeniy Adamov, Security Council Secretary Sergey Ivanov, and Unified Energy System of Russia Chairman Anatoliy Chubais also attended the collegium.[1] In his opening remarks, Putin stated that the work conducted at VNIITF "is an absolute priority for the country and beyond any doubt makes it a great power."[2] According to Putin, the importance of the nuclear weapons complex is increasing as Russia seeks to improve the reliability of its nuclear deterrent. He also made clear his interest in the problem of reliability and safety of the nuclear arsenal.[5] Putin stressed the importance of Russia's nuclear power industry and noted that a lack of cash and prevalence of barter had taken its toll on the nuclear power industry. He stated that restructuring and conversion of the nuclear defense complex remains a key problem for Russia. Putin noted that conversion must be pursued "energetically and intentionally," in ways that do not simply protect defense workers in the closed cities, but create alternative jobs.[5] He noted that money from state defense orders is "often distributed irrationally and [does] not allow new breakthrough technologies to develop."[2] Putin stated that the government has appropriated 1.5 billion rubles ($52.4 million as of 31 March 2000).[3] Putin also noted that Minatom should strengthen and increase its role in resolving environmental problems, including radiation safety and the reprocessing of nuclear waste.  In response to a question regarding whether Russia would continue to restrict access to the closed cities (ZATOs), Putin replied that the ZATOs should be opened, but the approach must take into account fundamental security issues. He further noted that the Minatom Collegium had discussed the need to modernize certain elements of the nuclear weapons complex, including the security systems in place at the ZATOs, and he added that a gradual and consistent approach would allow Minatom to resolve issues related to opening the ZATOs.  Chair of the Association of Minatom Closed Cities and Trekhgornyy Mayor Nikolay Lubenets asked Minatom to reinstate the ZATO tax status at all 10 closed cities. Putin spoke against the idea of granting tax privileges to the ZATOs and criticized Lubenets's decision to spend 6 billion rubles (approximately $232 million as of 6 April 1999) on the construction of a ski resort near Trekhgornyy.[5] In 1999, the federal budget funded all state orders in full and Putin stated that the government would continue to meet its budgetary commitments. The government also expects to settle Ministry of Defense FY 1997 debts owed to Minatom by the end of FY 2000.[4]
[1] "The Atom Brooks no Delay," ITAR-TASS, 1 April 2000; in "Putin on Nuclear Arms, Atomic Energy," FBIS Document CEP20000331000186.
[2] "Vystupleniye na zasedanii rasshirennoy Kollegii Ministerstva Rossiyskoy Federatsii po atomnoy energii," 31 March 2000, President of the Russian Federation Web Site, http://president.kremlin.ru/events.
[3] Oleg Osipov, RIA-Novosti, 31 March 2000; in "Putin Recalls Reasons for Snezhinsk Visit," FBIS Document CEP20000331000147.
[4] "Zaklyuchitelnoye slovo na zasedanii rasshirennoy Kollegii Ministerstva Rossiyskoy Federatsii po atomnoy energii," President of the Russian Federation Web Site, http://president.kremlin.ru/events.
[5] Elena Mazanova, "Snezhinskiy forum," Gorodskoy kuryer online edition, http://www.sar.ru/~courier/14/txt/m140402.htm, No. 148 (14), 6 April 2000. {Entered 4/26/00 SS}
 
3/17/2000: LLNL AND VNIITF'S SPEKTR SIGN TWO NCI CONTRACTS
On 17 March 2000, representatives from Lawrence Livermore National Laboratory (LLNL) and Spektr State Unitary Enterprise signed two contracts as part of the strategic planning process for the city of Snezhinsk under the DOE's Nuclear Cities Initiative. According to the first contract, which will last for one year, Spektr will receive $200,000  in US support to develop oil well casing perforators for the Russian civilian market.  The second contract, which will last for two years, focuses on the development of multi-mode optical fiber for use in local area networks. As part of the second contract, Spektr will develop business relationships with cable suppliers to help commercialize the multi-mode fiber.  LLNL and VNIITF also agreed in principle to establish an open computer center at Snezhinsk similar to the open computing center established in Sarov in October 1999.
["U.S. Department of Energy Announces Russian Contracts," US Department of Energy Web Site,  http://www.doe.gov/news, 21 March 2000.] {Entered 4/12/00 SS}
 
3/14-15/2000: CONFERENCE ANALYZES DOWNSIZING OF RUSSIAN NUCLEAR WEAPONS COMPLEX
Beginning on 14 March 2000, Princeton University hosted the two-day conference "Helping Russia Downsize its Nuclear Weapons Complex." Participants included Russian First Deputy Minister of Atomic Energy Lev Ryabev, US Assistant Secretary of Energy for Nonproliferation Rose Gottemoeller, representatives from both governments, research institutes, Russia's closed nuclear cities, and from US national nuclear laboratories. The conference discussed Russian and US approaches to reducing their nuclear weapons complexes, the current situation within Russia's closed nuclear cities, the status and Russia's implementation of existing downsizing programs, US assistance, and prospects for further downsizing and conversion. In his presentation, Ryabev noted that Russia has stopped production of highly-enriched uranium (HEU) and weapons-grade plutonium, and Minatom has planned to close two of its four warhead assembly plants and one of its fissile material production facilities, and to halve its nuclear weapons workforce by 2005. A report based on the conference may be downloaded from Princeton University's Center for Energy and Environmental Studies web site.
[Center for Energy and Environmental Studies, Helping Russia Downsize Its Nuclear Complex: A Focus on the Closed Nuclear Cities, (Princeton, NJ: Princeton University, March 2000),  http://www.princeton.edu/~cees/arms.] {Entered 8/3/00 SS}
 
3/2/2000: MINATOM RELEASES INDUSTRY FIGURES FOR PAST TEN MONTHS
On 2 March 2000, Okno published data released by Minatom concerning economic growth, funding, social policies, personnel, new technology and scientific developments that affected the Russian nuclear industry. In the first half of 1999, capital within Minatom enterprises increased by nearly 12 percent and the year's hard currency profits increased one and a half times. Sales of low enriched uranium contributed to the increase in hard currency earnings and were used to finance state military orders. As of 1 October 1999, companies owed Minatom 42.9 billion rubles ($1.69 billion as of 1 October 1999), and Minatom owed its creditors 41.9 billion rubles ($1.65 billion as of 1 October 1999). During the first half of 1999, Minatom enterprises created 1661 new jobs. Minatom spent 278.9 billion rubles ($10.2 billion as of 31 December 2000) to create new jobs and maintain previously existing jobs. In 1999, Minatom hired 1270 young specialists, including graduates of technical institutes and universities. Also in 1999, Minatom continued research related to the reprocessing, storage, and transport of spent nuclear fuel; nuclear submarines; radioactive waste and the rehabilitation of polluted territories; and safety procedures at nuclear power plants. In July 1999, Minister of Atomic Energy Yevgeniy Adamov issued the decree "On the creation of a system of financial returns of investment projects and scientific design bureaus." Minatom approved a series of implementation measures, which included the formation of the "Fond-M" group of nonprofit organizations.
["Minatom: Oblik otrasli," Okno, No. 3, 2 March 2000.] {Entered 3/27/2000 SS}
 
2/5/2000: FY 2000 BUDGET INTRODUCES UNCERTAINTIES FOR ZATOs
On 5 February 2000, Komsomolskaya pravda assessed the impact on the 40 closed nuclear cities (ZATOs) of the recently approved FY 2000 budget (see 12/3/99 development below). The FY 2000 budget eliminated the tax concessions in all but two ZATOs and allocated 210 million rubles ($7.3 million as of 5 February 2000) to each ZATO. According to Komsomolskaya pravda, an earlier budget proposal had appropriated an average of 150 million rubles ($5.2 million as of 5 February 2000) to each ZATO, which would be allowed to finance their remaining expenses from taxes collected in the ZATOs. Komsomolskaya pravda reported that the average ZATO budget totals 500 million rubles ($17.4 million as of 5 February 2000).
[Yevgeniy Protnikov, "V ZATO my delayem rakety!" Komsomolskaya pravda online edition, http://www.mosinfo.ru/news, No. 22, 5 February 2000.] {Entered 4/28/00 SS}
 
1/25/2000: SNEZHINSK HOSTS SEMINAR FOR MAYORS OF US AND RUSSIAN NUCLEAR CITIES
From 25-28 January 2000, Snezhinsk hosted the second meeting meeting of US and Russian legislators and mayors from the two countries' nuclear cities. Seminar participants discussed a draft memorandum of understanding between representatives from the Association of Minatom Closed Cities, the US Union of Energy Associations, and the International Association for City Administration. On the final day of the meeting, US and Russian participants signed a memorandum for further cooperation. According to VNIITF Deputy Director for International Contacts Boris Vodolaga, VNIITF does not plan to reduce the number of nuclear weapons specialists during the restructuring process. Vodolaga reported that VNIITF has considered new projects and new technologies with the goal of creating new jobs and minimizing its dependence on state financing. In 1998, VNIITF created the separate enterprise Spektr, which now employs approximately 400 specialists. Spektr projects include computer assisted tomography (CAT) equipment, hydroabrasive cutting, fiber optic communications lines, and superplastic forming. Although these products generated widespread interest among Russian enterprises, most of these enterprises are unable to pay for the new technologies.  Vodolaga also reported that VNIITF had created a business plan for the CAT equipment, which it presented to the US investors. During the first phase of the VNIITF restructuring program, Snezhinsk officials must convince the federal government and residents to make the closed cities more accessible to private business. The second phase of the restructuring program will create new jobs. Deputy Director Aleksandr Makarenko from Minatom's Department of Social Policy stated that discussions about opening the closed cities are premature because Minatom's reasons for restricting access still exist. Makarenko added that removing guards from the city's external perimeters means that the city would need to increase its internal security. According to Trekhgornyy Mayor and President of the Association of Minatom Closed Cities Nikolay Lubenets, Trekhgornyy is currently working on 20 different projects and is able to sell its products to 20 constituencies of the Russian Federation. Lubenets noted that the Russian government has rushed the restructuring process, spending a lot of money to retrain nuclear specialists to "sew gloves and crochet vegetable netting." Instead, Lubenets argued, Russia should find work that corresponds to the level of skill of the unemployed nuclear specialists.
[Viktor Riskin, "Tomograf vmesto bomby, " Chelyabinskiy rabochiy online edition, http://www.chelpress.ru, 1 February 2000.] {Entered 3/31/00 SS}
 
12/3/99: 2000 FEDERAL BUDGET GUARANTEES FUNDING FOR CLOSED CITIES, LIMITS TAX BREAKS
On 3 December 1999, the Russian State Duma approved the FY 2000 budget that guarantees federal funding for Russia's closed nuclear cities (ZATOs). The new budget curtailed tax breaks previously granted to the ZATOs to facilitate business investment in these cities.  Disagreement over the three previously submitted FY 2000 budget proposals centered on the ZATO investment zones, which First Deputy Prime Minister Viktor Khristenko called a "real threat to the budget and the country's economic security."[3] According to Khristenko, ZATO tax credits could cause the federal budget to lose as much as 100 billion rubles ($3.7 billion as of 12/3/99) and the consolidated budget to lose roughly 200 billion rubles.[3]  After the Duma rejected the third draft of the 2000 budget proposal, a parliamentary Conciliatory Commission was formed to develop recommendations for financing the ZATOs.[1] Speaking before the Duma, Khristenko argued that next year's budget should reduce the amount of tax credits that ZATO officials had been allowed to grant under previous legislation.[1] According to Khristenko, the Duma Conciliatory Commission developed three budgetary mechanisms to finance the closed cities in the next fiscal year.[1,2] The new FY 2000 budget limits the volume of ZATO tax credits to no more than 50 percent or two billion rubles ($2.8 billion as of 12/3/99) and tax credits will not be extended to goods subject to excise tax.[1,2]  Sarov (Arzamas-16) and Snezhinsk (Chelyabinsk-70) will be excluded from the new investment zone regulations.[1,2]  The 2000 federal budget will allocate a total of 2.6 billion rubles ($98 million as of 12/3/99) to ZATO development programs, with two billion rubles coming from Minatom and 600 million rubles coming from the Ministry of Defense.[1] Khristenko added that financing for ZATO military enterprises would come from Minatom and the Ministry of Defense and it would not be reduced in any circumstances.[1,2] The Duma passed the budget in its fourth reading, with 308 deputies voting for the budget and 52 voting against it.[1,2]
[1] "Gosduma RF prinyala byudzhet-2000 v chetvertom chtenii," Interfax, No. 2, 3 December 1999.
[2] "Gosduma RF podderzhala resheniye soglasitelnoy komissii po ZATO," Interfax, No. 2, 3 December 1999.
[3] Irina Granik, "ZATO," Kommersant Daily online edition, http://www.online.ru/rproducts/commersant, 30 November 1999. {Entered 1/26/2000 SS}
 
11/12/99: CHRONIC UNEMPLOYMENT CALLED BIGGEST PROBLEM FOR CLOSED CITIES
On 12 November 1999, Vek reported that restructuring and conversion programs currently planned for the principal enterprises located within Russia's closed cities (ZATOs) are threatening the ZATO economies with mass unemployment. Vek cited the example of  Novouralsk's Urals Electrochemical Combine, which has been able to sell products on the world market and reinvest its proceeds in the combine and in the city at large.  In spite of these sales, however, Novouralsk Mayor Valentin Feldman called the situation in the city's labor market critical. Sarov (Arzamas-16) and Snezhinsk (Chelyabinsk-70) have received funding for 224 joint research projects totaling $31.3 million through international research programs, including the International Science and Technology Center (ISTC). Sarov and Snezhinsk also concluded contracts with General Atomics and Mobil Technology as part of the Initiatives for Proliferation Prevention (IPP), and in December 1998 Sarov, Snezhinsk and Zheleznogorsk (Krasnoyarsk-26) became the pilot cities for the US Department of Energy's Nuclear Cities Initiative (NCI), which has appropriated $20 million to help finance conversion and investment programs in these ZATOs. According to Vek, ZATO mayors have likened foreign assistance to "therapy for chronic unemployment," recognizing that the ZATOs and the principal enterprises located within them must resolve the unemployment problems themselves. In 1994, when ZATO officials expected unemployment to increase from four percent to 14 percent, city officials granted financial assistance and loans to the principal enterprises to develop more efficient production technologies and save jobs. After 1995, the Siberian Chemical Combine in Seversk (Tomsk-7) began working on three major projects as part of the Siberian Uranium for Power Engineering program, which will enlarge existing production facilities and increase production at the Combine.  Mayor Nikolay Kuzmenko expressed hope that other nuclear power engineering projects will create thousands of new jobs in Seversk. Officials from the cities of Zheleznogorsk (Krasnoyarsk-26) and Zelenogorsk (Krasnoyarsk-45) want their ZATOs to be designated as scientific cities. The designation would make Zheleznogorsk and Zelenogorsk eligible to participate in the New Technology for Regional Administration and Development program, which the Russian government approved in September 1999 as part of the decree On the Approval of the Criteria for the Conferment of Scientific-City Status on Municipalities. The Russian government also adopted the Special Program of Employment Assistance for the Population of ZATOs in 1998-2000, which will use federal and municipal budget resources and contributions from employers to save jobs and create new jobs in the closed cities. In spite of these measures, the average unemployment rate within the ZATOs was five percent, and it is higher in Zarechnyy and Novouralsk.
[Gennadiy Aleksandrovich, "From the Couch to the Lathe," Vek, 12 November 1999, p. 7; in "Programs Improve Workers' Prospects in Closed Cities," FBIS Document CEP1999112300016.] {Entered 2/16/2000 SS}
 
10/26/99: RYABEV: MINATOM MIGHT CUT WORKFORCE BY 40,000
On 26 October 1999, Minatom First Deputy Minister Lev Ryabev confirmed that Minatom plans to stop assembly of nuclear munitions at two of the Ministry's four assembly plants.  (Please see the 3/25/99 item in this file for more information.) Ryabev added that the nuclear weapons complex must be efficient and he estimated that  40,000 workers would be discharged as a result of conversion and restructuring efforts.
[Oleg Lebedev, RIA Novosti, 26 October 1999; in "2 Russians Plants to Stop Assembling Nuclear Ammunition," FBIS Document FTS19991026001218.] {Entered 1/13/2000 SS}
 
10/1/99: MINATOM SURVEYS HOUSING AND WAGES OF YOUNG SPECIALISTS
On 1 October 1999, Atompressa published two articles detailing the findings from a study of working conditions, housing, and wages of specialists within the nuclear weapons complex.  Minatom's Social Policy, Industrial Relations, and Cadres Department, together with the Nuclear Fuel Cycle Department,  the Nuclear Munitions Development and Testing Department, the Nuclear Munitions Production Department, the Nuclear Power Engineering Department, and the Nuclear Science and Engineering Department carried out the survey, which examined the working conditions within various enterprises subordinate to the individual departments. Forty-five enterprises submitted lists of specialists considered to have critical knowledge, along with their ages, spheres of activity, and salary levels. The survey estimated that the nuclear enterprises employ 3,000 specialists who have knowledge essential to the production of nuclear munitions, but this estimate does not include specialists working at the Federal Nuclear Centers at VNIIEF and VNIITF. The study also focused on the social support given to the specialists, including access to housing, medical, and child care services, and what enterprises can do to prevent specialists from seeking employment elsewhere. The loss of older specialists combined with the difficult task of recruiting new specialists could contribute to the decline of both individual enterprises and the entire nuclear weapons complex. The study concluded that nuclear weapons specialists are paid one-and-a-half to three times more than other industrial personnel and that medical and childcare services were generally at an acceptable level. According to Atompressa, most enterprises are having difficulty recruiting young specialists and retaining older specialists because of low wages, lack of housing, and insufficient demand for the technologies and services produced at the enterprises. The study recommended that Minatom allocate funds to construct housing for young specialists and that employees working in the nuclear weapons enterprises should be allowed to defer their compulsory military service. The study also called for broader involvement of nuclear weapons specialists in international joint research projects, such as those financed through the International Science and Technology Center.  According to the survey's conclusions, enterprises should use nonstate pension funds to help retired weapons specialists, with such social support provisions being included in the enterprises' collective contracts.[1] A second article published in  Atompressa summarized findings from a study of the hiring practices at 36 Minatom enterprises and the ability of these enterprises to provide housing to young specialists recruited from other cities. The enterprises submitted lists of young specialists hired from 1995-1999, forecasts for hiring new specialists from 2000-2004, the number of young specialists in need of housing as of 1 October 1999, planned housing construction from 2000-2004, and the need for federal funding to finance additional housing. Beginning in 2000, the Nuclear Munitions Development and Testing Department, Nuclear Power Engineering Department, and the Nuclear Science and Engineering Department plan "an appreciable increase" in the number of young specialists hired. Enterprises have established practical training programs at seven universities that have departments staffed by specialists from the Federal Nuclear Centers.  After graduation, these students are offered employment. Each year, these seven universities graduate approximately 750-800 specialists; 65-70 percent of these young specialists find employment in nuclear sector enterprises and 30 percent of the graduates find employment in the closed city nuclear enterprises. According to the article, it is somewhat easier for enterprises to hire those university graduates who grew up within the closed cities because these young specialists can live with their parents whereas specialists new to the closed cities must stay in workers' dormitories and wait for an apartment. To attract and keep young specialists in the nuclear sector, the housing survey recommended establishing a housing construction program for university graduates and compiling a list of young specialists in line for housing. According to the survey, Minatom enterprises employ 5,000 young specialists and these enterprises reported that 2,400 young specialists have registered for improved housing conditions.[2]
Sources:
[1] A. Munistov, "A Critical Profession," Atompressa, No. 38, 1 October 1999, p. 1; in "Status, Problems of Atomic Sector Workers,"  FBIS Document CEP19991116000004.
[2] A. Voronkov, "Housing for the Young Specialist," Atompressa, No. 38, 1 October 1999, p. 1; in "Status, Problems of Atomic Sector Workers,"  FBIS Document CEP19991116000004. {Entered 1/18/2000 SS}
   
9/27/99: US AND RUSSIAN OFFICIALS WORK TO MAKE CLOSED CITIES MORE ACCESSIBLE
On 27 September 1999, US and Russian officials signed a memorandum of understanding under the auspices of the DOE's Nuclear Cities Initiative to work to improve US access to Russia's closed nuclear cities. According to press reports, officials from the city of Snezhinsk agreed to work with the Russian Federal Security Service (FSB) to reduce the current 45-day advance notice required for access to the closed city. The United States and Russia also agreed to develop multi-year visas for lab-to-lab exchanges.
["U.S., Russia Working to Improve Access to Closed Nuclear Cities," Nuclear Weapons & Materials Monitor, 27 September 1999, p. 9] {Entered 4/7/00 SS}
 
9/21/99: NUCLEAR ENTERPRISES UNVEIL CONVERSION PRODUCTS AT NIZHNIY NOVGOROD CONFERENCE
From 21-24 September 1999, Nizhniy Novgorod hosted the conference "Nuclear Technologies for the Non-Nuclear Market," which displayed civilian and commercial projects developed at nuclear enterprises. Minatom, the Nizhniy Novgorod Division of Russia's Nuclear Society, the oblast administration, and enterprises from Nizhniy Novgorod Oblast and the city proper organized the conference. In all, 14 enterprises displayed and demonstrated their conversion projects, including VNIIEF, Avangard, NIIS, the Experimental Machine-Building Design Bureau (OKBM), NPO Luch, VNIITF Spektr State Unitary Enterprise, the All-Russian Science and Research Institute of Atomic Reactors (SRIAR), Omsk Etalon Experimental Plant, the Bochvar Institute (VNIINM), Dzerzhinsk KhimMash, Nizhniy Novgorod State Technical University, Ulba Metallurigcal Plant, Lazurit Central Design Bureau, and the Start Production Association. Seventeen nuclear enterprises attended the conference. During the technical sessions of the conference, nuclear enterprise specialists presented 70 reports on activities and issues related to conversion. According to the final document adopted at the conclusion of the conference, many of the conversion projects had already developed production plans, prepared investment proposals, and established product manufacturing and supply lines. Participants said the conference demonstrated how nuclear enterprises are independently seeking financial opportunities, researching new products, and supporting advanced developments in spite of chronic underfunding. Participants acknowledged that they must seek customers abroad because most Russian businesses lack the resources to invest in their projects.  They further expressed concern that selling this advanced technology keeps Russia from using its scientific and technical potential to develop its domestic industries.  Participants voted to continue the Nuclear Society's conversion conferences, to create a database of conversion projects, and to provide mutual assistance in marketing and promoting new products.
[M. Gorbacheva, "The Week of the Peaceful Atom in Nizhniy Novgorod," Atompressa, No. 35, 1 October 1999,  pp. 4-5; in "Conference on Nuclear Technology Held," FBIS Document CEP19991108000007.] {Entered 3/3/2000 SS}
 
8/30/99:  RUSSIAN NUCLEAR WEAPONS COMPLEX VITAL TO NATIONAL SECURITY
On 30 August 1999 at the 50th anniversary celebration of the first Soviet nuclear test, Russian Prime Minister Vladimir Putin told journalists that the existence of Russia's nuclear weapons complex "remains the guarantor of national security and global peace in the current geopolitical setting."  Putin believes that developing and upgrading the nuclear weapons complex is one of the main tasks facing Russia.  "If we do not preserve our nuclear weapons capability in the next five to seven years, the situation will cardinally change in our country," according to Putin.[1]  At the same ceremony, Defense Minister Marshal Igor Sergeyev said that Russia's nuclear weapons are the most modern and "the best in the world."  While acknowledging that Russia is reducing its nuclear arsenal, Sergeyev noted that it would be a long process, due to "US double standards" in the nonproliferation of nuclear technologies.[2]
Sources:
[1]  "V sovremennykh geopoliticheskikh usloviyakh yadernoye oruzhiye Rossii garantiruyet sokhraneniye mira - Putin," Interfax, No. 4, 30 August 1999.
[2]  "Marshal Sergeyev schitayet rossiyskoye yadernoye oruzhiye luchshim v mire," Interfax, No. 4, 30 August 1999. {Entered 9/9/99 CEM}
 
8/26/99:  MODERNIZATION OF RUSSIAN NUCLEAR WEAPONS CONTINUES
On 26 August 1999 at a meeting with journalists at VNIIEFin connection with the 50th anniversary of the first Soviet nuclear test, Deputy Minister for Atomic Energy Lev Ryabev said that Russia's weapons are currently undergoing modernization in four different areas.  The first area is safety, specifically the prevention of accidental detonations or launches.  He noted that nuclear weapons have safety features that prevent their use if stolen by terrorists.  The second area is extending the service life of Russia's current nuclear arsenal.  The third is continuing research and development to maintain the nuclear arsenal in the event of a test ban (through laboratory modeling.)  The fourth is improvement of nuclear weapons in view of the development of anti-missile defense systems.  Ryabev also called for the formation of a smaller nuclear weapons complex, noting that Russia has already reduced its production of nuclear weapons more than ten-fold.  Weapons assembly facilities will be cut from four to two, and industry staff from 75,000 to 35,000 by the year 2005.  Ryabev commented that Russia has received $215 million from the United States, Japan, and the European Union to assist in conversion efforts.  The cities of Sarov, Snezhinsk, and Zheleznogorsk are scheduled to receive an additional $20 million in 2000 from the United States for defense conversion.  With regard to nuclear waste, Ryabev said "no nuclear wastes will be brought to Russia from abroad--only spent fuel from nuclear power stations, specifically uranium 235 and plutonium.  Plutonium will be extracted from the spent nuclear fuel for energy purposes.  The wastes will then be vitrified and returned to the sender country."
["Rossiya prodolzhayet sovershenstvovat yadernoye oruzhiye," Interfax, No. 2, 26 August 1999.]  {Entered 9/10/99 CEM}
 
7/5/99: INVESTMENT ZONES IN CLOSED CITIES CRITICIZED
On 5 July 1999, Ekspert reported that the Russian Ministry of Finance audited the investment zones of 16 closed nuclear cities (ZATOs) and concluded that the federal budget lost more than 15 billion rubles ($614 million as of 5 July 1999)  in tax revenues from these cities. Ekspert included a rebuttal written by Chairman of the Duma Subcommittee on Small Enterprises Ivan Grachev, who dismissed the figures cited by the Ministry of Finance as incorrect. The law On Closed Administrative-Territorial Formations, which the Duma approved in 1992, granted special investment zone status to 43 closed cities and permitted these cities to keep all taxes and revenues collected within their territory. The ZATO law further permitted the closed cities to grant tax breaks to enterprises in an effort to stimulate private investment in the closed cities.  Grachev argued that the ZATO law is necessary until such time when the Russian federal budget can guarantee funds for the closed nuclear cities.  However, critics asserted that the ZATOs have become a tax haven, where enterprises would register without actually establishing new firms that would in turn create new jobs.  Ekspertreported that 390 enterprises from other regions had registered in Snezhinsk (Chelyabinsk-70).   According to one official at the Ministry of Finance, the amount of tax benefits granted to some ZATO investment zones in the first quarter of 1999 was 20 to 30 percent higher than for all of 1998. The Ministry of Finance warned that if benefits to the ZATOs continued to increase, the federal budget would suffer enormous losses. In response, the Duma included a law in the federal budget for 1998, giving authority to the Ministry of Finance to determine privileges granted to enterprises registered in the ZATO investment zones. The Duma also amended the original ZATO law and specified the criteria for a business to register in a ZATO.  According to the amendment, an enterprise must have 90 percent of its fixed assets located within the ZATO, 70 percent of the enterprise's business activities must be conducted in the investment zone, and 70 percent of the workforce must live within the ZATO. In response to the new requirements, enterprises with production facilities in other regions moved their marketing operations to the investment zones.
[Galina Kostina, "ZATO Heaven.  Secret Installations of the Atomic Energy Ministry Have Become Popular Refugees for Tax Evaders," Ekspert, 5 July 1999,  pp. 10-11; in "Closed Cities Seen as Boon for Tax Evaders," FBIS Document FTS19990719001335.] {Entered 11/30/99 SS}
 
6/16/99: NUCLEAR ASSOCIATION MEETING DISCUSSES FUTURE OF NUCLEAR WEAPONS COMPLEX
On 16 June 1999, Atompressa reported that the Council of the Association of Professional Organizations of the Nuclear Weapons Complex met in Trekhgornyy to discuss problems of "strategic character." According to Atompressa, Minatom had recently paid most of the wage arrears owed to specialists working in the nuclear weapons complex.  During the meeting, council members discussed the lack of funding to implement conversion projects and the problem of finding employment for those specialists who lose their jobs to downsizing the complex. There was a general consensus that considerable financial investments would be necessary to efficiently produce competitive goods. The council recognized that the high level of security associated with the closed cities introduces additional obstacles to conversion projects in these cities. Those in attendance further agreed that attracting young specialists to work in the nuclear weapons complex had become more difficult in these circumstances.  Representatives from Lesnoy (Sverdlovsk-45) and Trekhgornyy (Zlatoust-36) criticized the government's decision to place defense orders with enterprises outside of the nuclear weapons complex. According to them, if these orders were transferred to Lesnoy's Elektrokhimpribor or Trekhgornyy's Instrument-Making Plant, more jobs would be preserved and in turn, this would lead to greater cooperation within the nuclear weapons complex. The Council plans to develop a similar proposal for discussion with the appropriate departments within Minatom.
["Problemy kompleksa obsuzhdalis v Trekhgornom,"  Atompressa, No. 21,  16 June 1999, p. 3.] {Entered 11/9/99 SS}
 
5/8/99: ADAMOV: NUCLEAR CENTERS PRACTICALLY WITHOUT FUNDING
On 8 May 1999, Parlamentskaya gazeta reported that Minster of Atomic Energy Yevgeniy Adamov appeared before the State Duma to discuss federal funding for the Federal Nuclear Centers (VNIIEF and VNIITF).  According to Adamov, as of 1 January 1998, VNIIEF and VNIITF  received 80 percent of the financing they needed. Adamov stated that through sales of "nuclear components," the federal debt to VNIIEF and VNIITF, which totals 196 million rubles ($8.2 million as of 8 May 1999), will drop to 86 million rubles ($3.6 million as of 8 May 1999). Adamov also reported that the Ministry of Finance was able to meet all of its financial obligations in the first quarter of 1999; however, funding was sufficient only to pay seven weeks of wages to VNIIEF and VNIITF employees. Adamov stated that the budget is formulated in such a way that the nuclear centers are essentially without funding, and he proposed that the Federal Nuclear Centers should be exempted from paying value-added taxes. According to Adamov, Russia's conversion programs have not been financed for "several years." Adamov further remarked that Russia has not developed computing technology that would permit reliable maintenance of its nuclear arsenal.
["Yadernyye tsentry opyat bez deneg," Parlamentskaya gazeta, 8 May 1999, p. 4; in WPS Oborona i Bezopasnost, No. 54, 12 May 1999.] {Entered 10/21/99 SS}
 
4/23/99: RYABEV ASSESSES NUCLEAR INDUSTRIES' CONVERSION EFFORTS
In an interview published by Vek on 23 April 1999,  First Deputy Minister for Atomic Energy Lev Ryabev stated that military production, which once totaled more than half of Minatom's production, now makes up roughly three percent of Minatom's activities.  Over the past decade, Ryabev noted, nuclear munitions production fell ten-fold, prompting Minatom to develop a restructuring and conversion program, which the Russian government approved in 1998. The Minatom program, which calls for defense production to be scaled back and for enterprises to be "reprofiled," will phase out 75,000 positions in nuclear enterprises over the next five years.  Ryabev cited increasing demand for nuclear energy as proof that the civilian industries will benefit from hiring highly qualified employees who will lose their jobs to restructuring and conversion. In 1998, VNIIEF and VNIITF signed an agreement with Gazprom to develop prospecting and transporting technology for the oil industry. He further emphasized untapped possibilities to manufacture electronics for the automobile industry and microelectronics.  According to Ryabev, conversion efforts are currently supported with money from the US-Russian HEU Deal, taxes collected in the closed cities' investment zones, and financial assistance from the US Nuclear Cities Initiative.  Ryabev noted, however, that many employees are not looking for work outside of the nuclear weapons complex.  Minatom plans to stop producing nuclear munitions at two of its factories by the year 2000 and disassembly of nuclear munitions will cease by 2003.
[Gennadiy Vosskresenskiy, "Iskusstvennaya pochka vmesto atomnoy bomby," Vek  No. 16, 23-28 April 1999, p. 7.] {entered 10/21/99 SS}
 
4/23/99: MIKHAILOV: SUPPORT OF NUCLEAR WEAPONS COMPLEX RUSSIA'S HIGHEST PRIORITY
In an article published 23 April 1999 in Nezavisimoye voyennoye obozreniye, First Deputy Minister of Atomic Energy Viktor Mikhailov wrote that Russia's nuclear weapons status must be "guarded like the apple of our eye" and warned that underfunding is taking its toll on the nuclear weapons complex. According to Mikhailov, if Minatom were allowed to keep hard currency proceeds from exports, it could use them for wages, new equipment and modernization. Mikhailov stressed that Russia must implement stewardship programs similar to those in place in other states, and emphasized three components for Russian nuclear stockpile maintenance: new computer technology, laboratory test simulations, and hydronuclear tests, which release a minimal amount of nuclear energy. (For more information on subcritical and hydronuclear tests please see the Novaya Zemlya Test Site file.) According to Mikhailov, there are two reasons to focus on new technologies for Russia's nuclear weapons complex. First, trends in world politics are leading to the return of "full scale" nuclear testing and underscore the need to introduce test limits and institute laboratory test simulation technologies to head off such developments.  Second, equipment at Russia's nuclear weapons complex is aging and needs to be replaced before underfunding reduces Russia's nuclear deterrent.
[Viktor Mikhailov, "Perspektivy novykh tekhnologiy razrabotki yadernogo oruzhiya," Nezavisimoye voyennoye obozreniye, No. 15, 23-29 April 1999, p. 6.] {Entered 10/15/99 SS}
 
3/25/99:  RYABEV SPEAKS ON CONVERSION AT RUSSIA'S NUCLEAR WEAPON FACILITIES
On 25 March 1999 Russian First Deputy Minister of Atomic Energy Lev Ryabev stated at a press conference that by the year 2000 all production of nuclear munitions will stop at Sarov (Arzamas-16) and Zarechnyy (Penza-19).  Ryabev also stated that numerous conversion initiatives are being carried out.  Sarov is planning to create a public computer center within the framework of the Nuclear Cities Initiative.  In Zheleznogorsk (Krasnoyarsk-26) the conversion initiative envisions the development of silicon production, which is in high demand on the world market. Snezhinsk (Chelyabinsk-70) plans to develop an enterprise for packaging medicine. Ryabev underlined the importance of creating an alternative job base for people formerly and currently employed by the weapon development facilities.
[ Anna Bazhenova, ITAR-TASS, 25 March 1999; in "Russia's Nuclear Arms Facilities Undergoing Conversion," FBIS Document FTS19990325001894.] {Entered 6/8/99 KP}
 
3/13/99: ADAMOV WANTS TO KEEP NUCLEAR CENTERS AT BOTH SAROV AND SNEZHINSK
Russian Minister of Atomic Energy Yevgeniy Adamov stated that he would prefer that Russia keep both federal nuclear centers at Sarov and at Snezhinsk open. In response to criticism that only one center should stay open, Adamov maintains that mutual control and competition between both centers is beneficial to the industry.
[Yevgeny Tkachenko, ITAR-TASS, 13 March 1999; in "Minister Wants Russia To Keep Both Of Nuclear Centres," Lexis-Nexis Academic Universe, http://web.lexis-nexis.com/universe.]{Entered 5/4/99 SK}
 
2/99: PAPER ANALYZES POPULATION AND MIGRATION PROCESSES IN CLOSED CITIES
In February 1999, Valentin Tikhonov from the Russian Academy of Science's Institute for Economic Forecasting published a paper that analyzed internal migration into Russia's ten closed nuclear cities (ZATOs) and argued that if the flow of new personnel into the ZATOs were interrupted, then the "normal functioning of the nuclear complex would be under serious threat." According to Tikhonov, the role of Russia's nuclear enterprises has changed to emphasize the safety of existing nuclear stockpiles and dismantlement of nuclear warheads.  He added that the change does not lessen the importance of highly qualified specialists for the nuclear enterprises and that Russian nuclear weapons complex must ensure a kind of succession from one generation of specialists to the next. From 1989 to 1998, the number of residents living in the ZATOs increased by 57,000 and Tikhonov observed that changes in population depended on the activities conducted at the nuclear enterprise within a particular ZATO. Novouralsk (Sverdlovsk-44) and Zelenogorsk (Krasnoyarsk-45) reported the largest population increase, which Tikhonov argued is linked to the uranium enrichment activities conducted at the cities' nuclear enterprises and the export of enriched uranium. Lesnoy (Sverdlovsk-45) witnessed a net population decrease in the last five years, and Tikhonov argued that the drop in the number of residents is related to the decline of activities at  Elektrokhimpribor Combine, which is responsible for the assembly, disassembly and storage of nuclear warheads. Although data on migration into the ZATOs is not published in open source materials, official yearly statistics dating back to 1989 record population fluctuations within the ten closed cities. Tikhonov observed that migration into the ZATOs was generally higher than migration into other Russian cities, but beginning in 1997, the number of Russians migrating into the ZATOs decreased. Although the greater availability of housing and the relatively low crime rate may prompt Russians to migrate to the ZATOs, Tikhonov argued that the low wages and growing unemployment had reduced the attractiveness of the closed cities. Tikhonov noted that the nuclear weapons enterprises are also losing their ability to attract young specialists. Recent graduates specializing in technical fields take jobs unrelated to their studies and young specialists already working within the nuclear enterprises attempt to leave the state sector for jobs in the commercial sector. Furthermore, the prestige associated with a technical education has dwindled among Russian students. Tikhonov noted that the majority of academic institutions that train nuclear specialists are located far away from most ZATOs, and rising transportation and tuition costs will compel more specialists to stay closer to the ZATOs and to study at provincial institutions, which may offer a lower quality of education. He observed that the general situation in the Russian labor market and the labor market within the ZATOs are very similar.  According to his calculations, every tenth ZATO resident of working age is unemployed. Tikhonov warned that if current migration trends continue, then the population of the closed cities will shrink and the exodus of young specialists will adversely effect the nuclear weapons complex. (See also the development from 24 November 1998 below).
[Valentin Tikhonov, "Atomnyye goroda Rossii: migratsionnyy fenomen," Yadernoye rasprostraneniye, No. 20, February 1999, pp. 17-27.] {Entered 5/31/00 SS}
 
1/12-14/99:  SEVEN MAJOR NUCLEAR INDUSTRY TRADE UNIONS FORM AN ASSOCIATION
On 12-14 January 1999, a meeting of seven nuclear complex trade-union committee chairmen took place at VNIIEF.  The outcome of this meeting was the formation of the Association of Trade Union Organizations of Minatom Nuclear Weapons Complex Enterprises.  Aleksey Nikitin, the Trade-Union Chairman of the Scientific Research Institute of Automation, was appointed the coordinator of the association.  The main goal of the association, as announced by the coordinator, is the defense of the social and labor rights of nuclear weapons industry workers.  By working together, the trade unions hope to deal more effectively with Minatom and government agencies, and will work to promulgate legislation to advance the interests of the nuclear complex workers.  The association intends to influence the review process of federal bills on nuclear weapons and on the social protection of nuclear test participants.  Also, the member unions are concerned with the social impact of conversion and erratic financing of state defense orders.  Among the seven trade unions that joined were PO Start, Urals Electromechanical Plant, VNIIEF, VNIITF, VNIIA, Instrument-Making Plant, and Avangard Electromechanical Plant.
[Weapons Workers Unite, Atompressa, No. 3, January 1999, p.3; in "Nuclear Weapons Workers Merge Unions," FBIS Document FTS19990226001120.] {Entered 6/14/99 KP}
 
12/22/98: STATE DUMA AMENDS ZATO TAX LEGISLATION
On 22 December 1998, the Russian State Duma approved the bill On introducing amendments and additions in Russian Federation legislative acts on closed administrative territorial formations [ZATOs], which allows local officials to temporarily grant tax breaks to businesses registered in the ZATOs beginning on 1 January 1999.  The Duma  Committee on the Budget, Taxes, Banks, and Finances recommended passage of the bill, noting that the closed city investment zones would provide economic support to important fundamental scientific research, including the nuclear weapons complex.[1] According to the legislation, closed city officials would no longer be able to grant tax concessions after January 2000.  Duma members argued that the original ZATO tax legislation had a negative impact on tax collection, and the closed cities had in effect become tax-free offshore zones, which allowed businesses located in the closed cities to avoid payment of federal taxes. According to the original ZATO legislation, all federal taxes levied on enterprises within the investment zone remain in the closed cities. Vek reported that ZATO officials used the taxes collected within the investment zones to strengthen the social welfare and support services.[2]  Vek noted that the tax breaks allowed Snezhinsk (Chelyabinsk-70), Ozersk (Chelyabinsk-65), and Trekhgornyy (Zlatoust-36) to reduce their federal subsidies ten-fold. According to First Deputy Minister for Atomic Energy, Lev Ryabev, tax breaks gave the closed cities more than 1.6 billion denominated rubles, and Ryabev estimated that closed city officials spent half of these funds on "innovative projects and investment programs."[2]
Sources:
[1] Duma Committee on the Budget, Taxes, Banks, and Finances, "Zaklyucheniye Komiteta po byudzhetu, nalogam, bankam i finansam Na proyekt federalnogo zakona 'O vnesenii izmeneniya i dopolneniya v zakonodatelnyye akty Rossiyskoy Federatsii o zakrytykh administrativno-territorialnykh obrazovaniyakh,'" 22 December 1998.
[2] Gennadiy Aleksandrovich, "Tuchi nad gorodami. Zakrytymi," Vek, No. 2, 15-21 January 1999, p. 8.  {Entered 5/22/00 SS}
 
12/98:  RUSSIAN PARLIAMENT HOLDS HEARINGS ON THE STATUS OF NUCLEAR WEAPONS
First Deputy Minister of Atomic Energy Lev Ryabev delivered a report to the Duma in which he addressed several fundamental issues concerning Russia's nuclear weapons sector.  First, he stated that the budget allocations for weapons development in 1999 were less than those in 1998.  He then addressed the issue of the investment zones in ZATOs (Closed Administrative-Territorial Units)  and stated that the investment zones should be put under tight control of the ministry.  Many parliamentarians gave speeches in support of the idea of investment zones.  The dispute over the "uranium money" expected from the HEU deal, to which both Minatom and the Ministry of Defense laid claim, was not resolved but reserved for governmental arbitration.  Finally, the parliament heard suggestions about adopting a new federal law that would assure social protection for nuclear weapons industry personnel.
[L. Saratova, "Gosduma pered zavodom v dolgu," Gorodskoy kurer online edition,  http://www.sar.nnov.ru:80/~courier, 24 December 1998.] {Entered 6/9/99 KP}
 
11/24/98: MEETING FOCUSES ON JOB MARKET, TRAINING OF SPECIALISTS IN CLOSED CITIES
On 24 November 1998, Moscow's Carnegie Center hosted a seminar on migration and the job market within Russia's 10 closed nuclear cities (ZATOs) and their effect on the Russian nuclear weapons complex. The seminar was based on the research of Valentin Tikhonov from the Russian Academy of Sciences' Institute of Economic Forecasting, which began studying the 10 ZATOs in 1992 (see 2/99 development above). Tikhonov reported that Russia's financial problems had increased the average age of specialists working within the nuclear weapons complex. According to his data, younger specialists are leaving the state sector to find employment in the commercial sector and older, pensioned specialists remain at the enterprises. He also noted that fewer students are receiving a technical education at universities in Moscow and larger cities and speculated that it is linked to the reluctance of young people to work far away from the country's economic centers. He further noted that low salaries deter recent technical graduates and young specialists from seeking employment at technical and scientific research institutes. Tikhonov reported that in 1992 unemployment was virtually nonexistent within Russia's nuclear weapons complex, but by 1997 official figures recorded 20,000 unemployed persons and unofficial estimates claimed that 60,000 persons lacked jobs in the ZATOs. Tikhonov concluded that the safety of the Russian nuclear weapons complex is presently maintained by older workers, who subsist on low wages, and he warned that if the Russian government does not undertake radical measures to address social problems unfolding in the ZATOs, then in the near future no one will be left to take care of the complex.
["Snizhayetsya uroven podgotovki spetsialistov v ZATO," Yadernyy kontrol, No. 1, January-February 1999, p. 27.] {Entered 6/2/00 SS}
 
11/98:  UNEMPLOYMENT IN NUCLEAR CITIES REPORTED
While the critical level of unemployment is considered to be at 5 percent, the registered unemployment is 7.9 percent in Zarechny, 4.6 percent in Trekhgorny, 4.4 percent in Seversk, 4.1 percent in Lesnoy, 4 percent in Zheleznogorsk, 2.2 percent in Snezhinsk, 1.9 percent in Zelenogorsk, and 1.6 percent in Sarov. (See the corresponding entry in the Sarov file for more information.)
[ I. Muravieva, "Bez raboty syt ne budesh," Gorodskoy Kurer  http://www.sar.nnov.ru:80/~courier/19 November 1998] {Entered 6/8/99 KP}
 
10/7/98: MINATOM NUCLEAR ENTERPRISES STAGE GENERAL STRIKE
On 7 October 1998, employees at nuclear research institutes throughout Russia and the nuclear weapons enterprises in Minatom's closed cities (ZATOs) staged protests in support of demands put forth by the Federation of Independent Trade Unions (FNPR). The trade unions called for Minatom to settle wage arrears and increase salaries. Protesters sought guaranteed employment and also argued that fees for utilities should not be increased without a corresponding pay increase.  In Sarov (Arzamas-16), residents and employees of VNIIEF and Avangard demanded that the Russian government include in its conversion plans employment programs and social support for employees of ZATO enterprises undergoing restructuring. Protesters from PO Start in Zarechnyy (Penza-19) and municipal officials agreed to create a commission composed of representatives from municipal governments, nuclear enterprises, and the trade unions that would reconcile workers' demands. In Ozersk (Chelyabinsk-65) more than 1,000 people from trade unions and social and municipal organizations protested Russia's "inhumane economic policies" on behalf of tens of thousands of workers. Participants approved a resolution warning that low wages and failure to pay employees at PO Mayak and at local schools and hospitals for months at a time had caused "an extremely critical situation" in Ozersk.  In Snezhinsk (Chelyabinsk-70) more than 5,000 VNIITF employees staged a two-hour protest and warned that reforms threatened the economic, defense, scientific, and technical potential of the country and would bring Russia to the brink of losing its nuclear arsenal and its national sovereignty. The protesters also expressed their dissatisfaction with VNIITF Director Yevgeniy Avrorin. In Dimitrovgrad, workers from the All-Russian Scientific Research Institute of Atomic Reactors (SRIAR) objected to funds being transferred from the oblast to the federal budget until the Russian government pays back wages, pensions, and subsidies to workers. During a meeting held on 6 October 1998, Novouralsk's (Sverdlovsk-44) trade union drafted proposals for municipal officials on the work situation within the city, and protesters also decided to appeal to Minister of Atomic Energy Yevgeniy Adamov to preserve the ZATO status of the city. In Lesnoy (Sverdlovsk-45), workers petitioned Minatom to pay debts owed for state defense orders from 1997 and 1998. Residents and employees of Krasnokamensk's Priargunskiy Mining and Chemical Association Joint Stock Company joined the protests, and in Moscow, approximately 1,500 representatives from enterprises and organizations from Moscow and the surrounding areas staged meetings.
["V den protesta rabotniki otrasli potrebovali: zarplati, zanyatnosti, zakonnosti," Atompressa, No. 37, 14 October 1998, p. 3.] {Entered 6/5/00 SS}
 
9/15/98: GOVERNMENT, PROMPTED BY PROTESTS, RELEASES FUNDS TO NUCLEAR WORKERS
On 16 September 1998, Vladimir Kashkin, the deputy chair of the Russian nuclear industry workers' union informed Interfax that the Ministry of Finance had disbursed funds, to be used to repay wage arrears, according to a 9 September plan arranged by Kashkin and Acting Finance Minister Mikhail Zadornov.[1] The payment, totaling 137 million rubles ($9.6 million at the 8-15 September average exchange rate), was scheduled to be remitted by 15 September, and was "fulfilled on the dot."[1,2] Another 180 million rubles ($12.6 million) is scheduled to follow by the end of the month.[1] Nuclear industry workers began staging protests over delayed wages on 7 September. Thousands of VNIIEF and VNIITF employes participated in one-hour strikes at the institutes.[3,4] Workers from research centers participated in protests outside the Ministry of Atomic Energy on 8 September.[3] Nationwide, the number of protesters was estimated at 47,000. The government owes Minatom 3.3 billion rubles ($230 million), 2.8 billion rubles ($196 million) of which is owed for state orders.[2] Wage arrears amount to 800 million rubles ($56 million).[3] Russian Minister of Atomic Energy Yevgeniy Adamov met with trade union representatives on 8 September, stating, "The action is absolutely justified. The Ministry of Finance sabotages all the resolutions."[4]
Sources:
[1] Radio Rossii Network, 16 September 1998; in "Government Meets Wage Repayment Pledge To Nuclear Staff," FBIS Document FTS19980916001102.
[2] Veronika Romanenkova, ITAR-TASS, 11 September 1998; in "Russian Nuclear Industry Staffers To Join 7 Oct Protest," FBIS Document FTS19980911001511.
[3] Interfax, 8 September 1998; in "Russian Nuclear Industry Workers Demand Wages Payment," FBIS Document FTS19980908000321.
[4] Veronika Romanenkova, ITAR-TASS, 8 September 1998; in "Nuclear Scientists Picket Ministry Building Over Wages," FBIS Document FTS19980908001324. {Entered 10/23/98 SK}
 
4/25/98: NO FUNDS FOR RUSSIAN NUCLEAR CENTERS
The government owes Russian nuclear centers 306.1 million rubles for 1997, a third of which should have been used as wages. (N.B.  On 1 January 1998 the Ruble was redenominated, so that 1 million rubles in 1998 is equivalent to 1 billion in 1997 rubles.)  Minatom is allowed to use the money it received from the sale of special raw materials to make up for the lack of funds.  However, according to Minister of Atomic Energy Yevgeniy Adamov, Minatom revenues from such sales in April is unlikely to bring more than 52 thousand rubles, whereas the government received $431 million from the sale of LEU to the US in 1995-1996, and $261 million in 1997.  Adamov hopes that the Program for Development of the Nuclear Military Complex for 1998-2005, will help the situation, which is complicated by mass layoffs due to conversion of military enterprises to civil production.
[Vladimir Koltsov, "Rossiyskiy atom deneg prosit," Russkiy Telegraf online edition, http:// www.mosinfo.ru:8080/news/rtf/index.html, 25 March 1998.] {Entered 6/11/98, AAM}
 
2/18/98: FIVE OF EIGHT NUCLEAR WEAPONS PLANTS TO BE SHUT DOWN
A