DEVELOPMENT-RUSSIA: Russian And Chinese Traders’ Border Struggle

By IPS Correspondents Reprint | | Print |

Judith Perera and Andrei Ivanov

MOSCOW, Nov 26 1998 (IPS) - Many of Russia’s far eastern territories are now facing a disastrous situation with shortages of fuel, heating, electric power and food. Yet the region is rich in energy and natural resources.

As a reuslt there is a steadily growing resentment at Moscow’s neglect of this vast area, says lawyer Alexander Samoiloff, from Khabarovsk, close to the Chines border and only a few hundred kilometres from the Sea of Japan.

“The Russian government takes from the territories the bulk of regional revenue in the form of high federal taxes and gives them nothing back,” he told IPS.

Loans from the Japanese government for development of the far east economy never reached the territories, he alleges. “At the same time we see rapid economic development in neighbouring China. We see an increase in the Chinese ethnic population in the Russian far east and the penetration of Chinese capital. Never in Russian history has any government treated its territories in this way.”

Historically the far east was considered by Russian Czars and the Soviets as an important military frontier post region. Its development was dictated by political rather than economic considerations.

The far east population enjoyed many special privileges and the government never asked them to pay any taxes until 1910. The Trans- Siberian Railway was built and the world biggest bridge was constructed across the Amur River.

“The Soviets created a huge military industrial complex here and over 70 per cent of the economy in 1990 worked for the military ,” says Samoiloff. Most food products and consumer goods were delivered from central Russia. Local residents enjoyed many social benefits and higher salaries.

“But after 1992 the government left the region to its own devices and never really supported any domestic initiatives to enter Pacific markets by restructuring and developing local industries and infrastructure, or by creating free economic zones and providing tax benefits.” And the result, he says, has been disastrous.

“The fishing and merchant marine fleets and industries are in confusion, and the timber industries are in crisis after a disastrous summer of forest fires, which were ignored by the federal government.”

The far east gold and mineral mining industries are barely surviving for lack of investment and the huge oil and gas projects Sakhalin 1 and Sakhalin 2 may soon be closed because of the Russina parliament and government’s reluctance to adopt a production sharing law. As for the military-industrial complex, still a big employer, it is almost destroyed and receives only 10 percent of its pre-crisis orders from the government.

The Border Guards, Far Eastern National Guards and Pacific Navy have received no salaries since June and are on the verge of starvation. They must depend on the local governments and charity organisations for food and heating.

The Trans Siberian Railway is losing out to the new Trans-China- Kazakhstan Railway, because of high taxes and fuel costs and the major seaports of Vostochny and Vanino are working at less than a third of their capacity.

As a result many people are surviving through border trade with China. The chelnok (Russian small traders) regularly cross into China to bring back goods for sale. An individual is allowed to bring into Russia 50 kilos of duty free goods each trip.

There are three categories of trader: the chelnok, the kyrpich (the ‘bricks’), and the fonarik (the ‘flashlights’). Kyrpich are responsible only for bringing the goods across the border.

They take commodities from suppliers in China and deliver them to Chinese retailers in major centres such as Khabarovsk.

Fonarik are just merchant’s helpers. They sell their duty free allocation to the kyrpich. Because Russians have fewer problems with travel visas to China than Chinese have with visas to Russia, the Chinese hire Russians as their transportation agents.

Most chelnoks are Russian women. “It’s really a hard job, especially for women, to carry a 50 kilo trunk,” says local Khabarovsk reporter Sergei Mikhailov of the daily Tykhookeanskaya Zvezda. In China the kyrpich get help from Chinese luggage boys, ‘pomogaika’ (helper) who are usually Chinese men of about 40.

They carry the trunk, guards it and help to negotiate with suppliers. A pomogaika’s services fee is 10-15 yuans a day (1.50 to two dollars). But there are no pomogaika services in Russia and the kyrpich has to carry the cargo through customs and to taxi.

“You can understood why this job is called kyrpich (brick),” says Mikhailov. The official earnings per trip are around 17 dollars, but most earn much more by smuggling goods, in particular Chinese vodka and frozen raw meat.

“Men and women attach plastic packs with vodka by tape to their bodies. One person can carry up to 25 litres of vodka,” he claims. Frozen meat is smuggled the same way. “They can usually tolerate this for the two to three hours it takes to get through customs,” he explains.

The Chinese traders in Khabarovsk have their own problems to face, not least harassment from the police. Last week China’s consul general Van Go Shi sent a diplomatic note of protest to the Chief of Khabarovsk Krai Police Anatoly Zolotukhin, about the actions of police officers towards Chinese salesmen at Khabarovsk city markets.

“On Oct. 9 three policemen stopped me at the Central City Market. I showed them a requested passport and hotel check-in card,” Chinese trader Tsui Yun Pin told the Khabarovsk daily Pryamurskye Vedmosty. “They said that I was a hooligan and detained me in their car for several hours. They checked my pockets and confiscated, without any receipt, 1,000 roubles”.

Fellow trader Shan Go Tun told the same daily that on Oct. 23, two policemen in the city market beat him stubbed out a lit cigarette on his neck before ‘confiscating’ 250 roubles.

The tensiuons are building as the economic crisis deepens. “The Far East is thirsting for creation of a better industrial investment environment and a fair distribution of revenues,” says Samiloff. “Today Russia has only two ways: to take am emergency measures for saving Far Eastern economy or to develop and implement a plan for evacuation of Russians from the region.”