Will Unemployed Nuclear Specialists Make It to North Korea?

31.07.2009 — Analysis

The Russian Government is incapable of finding a solution to a systemic issue of employing highly qualified nuclear specialists from restricted access nuclear towns of the Urals. RusBusinessNews observers found out that support programs for former nuclear specialists have proven inefficient so far. Castaway states - such as North Korea or Iran - can take advantage of the situation.

In the recent years, Russia's nuclear sector has been dynamically restructured and reformed. There are plans to cut the production volumes and reorganize specialized enterprises, in particular those within the Rosatom structure.

The country has a total of 10 restricted access territorial administrative formations (RATAFs) where atomic industry facilities serve as local economic mainstays. About 770 thousand people live in RATAFs. 12% of these are defence industry workers. It is expected that 15 thousand workplaces will be made redundant within the next 5 years as a result of "atomic reforms".

The Urals region will suffer the most: there are 5 closed nuclear towns located in the Sverdlovsk (Lesnoy and Novouralsk) and Chelyabinsk (Snezhinsk, Ozersk, and Trekhgorny) oblasts.

Snezhinsk is the host to the Federal State Unitary Enterprise "The Russian Federal Nuclear Centre - The Zababakhin All-Russia Research Institute of Technical Physics" (RFNC-VNIITF). Yury Rumyantsev, deputy head of Snezhinsk administration, told RusBusinessNews that the process of the nuclear facilities restructuring was launched approximately ten year ago.

"As a part of this process, Rosatom, the state corporation of which RFNC-VNIITF is a part, has been performing scheduled work to reduce the number of staff and step up efficiency of the business. However, it is just now that the restructuring has entered its active phase. Snezhinsk being a mono-economy, the redundant engineers, physicists, and mathematicians find it extremely hard to get a job. These days alone, some 200-300 people leave the town each year", says Yury Rumyantsev.

The Urals atomic facilities do not have the official statistical records as to the number of those made redundant and dismissed. RATAF administrations emphasised in a conversation with the RusBusinessNews observers that so far several dozen employees have been made redundant each year. The number is small. But firstly, it will evidently grow in the years to come. Secondly, nuclear physicists are considered "a unique asset" throughout the world, therefore the problem of non-proliferation of nuclear weapons can be aggravated just by several of these bright minds.

According to Yury Rumyantsev, the specialists who were made redundant by atomic enterprises and find no job offers in their towns will leave for Moscow and Saint-Petersburg, as they are highly educated and have unique experience. Their right to travel abroad is restricted for 5 to 10 years. However, upon expiry of this term most of them can emigrate from Russia. It will be extremely difficult to further track the movement of specialists who possess the technology for creating nuclear weapons.

The risk that the information about nuclear weapons will be disseminated stimulates the development of international programs aimed at keeping the nuclear specialists within RATAFs. In the Urals area there is only one intergovernmental project for the support of former nuclear specialists - the Russian-British Closed Nuclear Cities Partnership (CNCP) program.

Not all RATAFs let CNCP representatives in. Thus, the administration of Lesnoy informed RusBusinessNews that "the town is the only RATAF that was prohibited by the FSB to participate in the Russian-British Closed Nuclear Cities Partnership program or in any other programs supported by organizations from abroad. In Trekhgorny, no one has ever heard anything about CNCP at all.

CNCP intends to allocate grants for entrepreneurs in the amount of up to 200 thousand pound sterling on the condition that the recipients will establish a business within RATAF and at least 55% of jobs in the new company will be taken by former workers of the nuclear defence industry sector. Since 2002 CNCP has already allocated 4.5 million pound sterling for the nuclear towns of the Urals, whilst another 8.5 million pound sterling will be contributed by the initiators of business projects (co-financing is a prerequisite for receiving grants under the program).

Most of the companies that were established within CNCP are technical ones, whilst many of them work directly with the issues of efficient energy usage. The first company of this kind - DiagEn LLC ("Diagnostics and Energy Efficiency") - was established in Snezhinks in 2004; it provides energy saving services. After two years of work the business became self-sufficient and started to grow in the Sverdlovsk and Chelyabinsk oblast markets. Later on "DiagEn" has become a subcontractor for the European Bank for Reconstruction and Development to conduct an energy audit at large industrial facilities in Russia. In 2007 the company received a second grant under the CNCP to purchase additional diagnostic equipment, expand its services in energy audit and energy service, and train its personnel.

"Finding a decent job in Snezhinsk for people who were made redundant by economic mainstays is a difficult task", Aleksey Kholodov, director of DiagEn LLC, told RusBusinessNews. - First of all, there are no jobs in town where nuclear physicists could apply their professional skills, and they will hardly agree to do low-skilled work. Secondly, salaries at the economic mainstays are several times higher than the town's average. Taking into consideration all the increments, VNIITF engineers earn 1.5 times more than engineers in our company."

There is no doubt that CNCP provides a serious support to the Urals nuclear towns by diversifying the economy and easing social tensions. However, it does little to achieve the main goal of the program so far, which is inducing nuclear specialists to stay in RATAFs. The grants are mainly allocated to small and medium size businesses which on average create 10-15 work places for highly-qualified staff.

"Making investments into a large enterprise, which promises to use the money to implement high technologies and create 500 work place at once, implies, as a rule, big risks and wasted money", Alexander Tsibulya, deputy head of the Moscow office of the HTSPE Ltd, told RusBusinessNews to explain the position of the Russia-UK partnership.

As a result, having invested 4.5 million pound sterling since the beginning of the program in the Urals, the Russia-UK partnership has only created jobs for 350 former employees of economic mainstays; taking into account other citizens of the towns, the number is 507. Some further 350 work places are planned to be established within the initiated projects. However, according to the information from Yury Rumyantsev, several thousand employees of RFNC-VNIITF will be made redundant by 2015 in Snezhinsk alone; there will be several times more jobs lost than created.

The municipalities are not able to cope with the problem of employment of nuclear physicists by themselves. In Lesnoy, for example, small business is only represented by shops and hairdressing saloons. The local economic mainstay is the Electrokhimpribor Combine which assembles nuclear munitions and produces stable isotopes. Mass redundancies are not expected at the Electrokhimpribor yet; there are no alternative "intellectual" jobs within the RATAF either, though.

Various technoparks and business incubators that are created in the Urals with the funding from regional budgets are not a solution to the issue either. "The essence of business-incubators quite often boils down to the provision of office space. This can hardly be a support for us", Alexey Kholodov, Director of "DiagEn", believes. - There is no problem renting a place, this does not exceed 10% of a company's expenses. Building a production facility and premises with machine tools where specialists could work on new designs would be much more efficient for our business from the development point of view".

The Russian authorities must understand that the atomic brain drain is not an issue of the future - it is the evident reality. The difference is that in the 90s, the nuclear-physicists were leaving the country heading West, whilst today their destination is Asia - China, India, Iran, etc.

"There exist a problem of the employment and, consequently, of the migration of specialists from RATAFs," Alexey Kholodov admits. - Emigrating from the country is not easy, of course. If you are not permitted to leave the country, you will not be able to receive a passport for travelling abroad. But, I guess, there are ways to leave via the CIS countries - Ukraine and Belarus - where Russian citizens can travel using their internal passports."

Evgenia Eremina, Pavel Kober