Event Summary
For the first time, the U.S.-Russian Investment Symposium held a special
session on economic development and investment opportunities in Russia''s
formerly secret nuclear cities. The session was organized in conjunction with the Department of Energy''s Nuclear Cities Initiative (NCI).
Rose Gottemoeller, Assistant Secretary for Nonproliferation and National
Security at the Department of Energy (DOE), described the ways in which the
Nuclear Cities Initiative, which began in September 1998, is beginning to
assist in creating jobs in the ten nuclear cities spread across Russia.
According to Gottemoeller, in the last year, the Russian Government has
publicly announced that it is actively pursuing transformation and
conversion of these cities. Gottemoeller described NCI''s two-tiered
approach. In the short term, they will develop project work that includes
software development and engineering consulting, to build evidence for
potential funders (like the U.S. Government) and potential investors (like Intel) that the capacity for growth is there. NCI''s longer term plan is to focus on
developing the infrastructure in the cities so that the technically-trained residents can learn skills that will help them function in a more modern business environment. She also emphasized that Russia would be a full participant in the process by creating tax incentives and the legal basis to ensure that the programs can move forward.
Deputy Minister of Atomic Energy Lev Ryabev, leader of the Russian nuclear
cities delegation, described the dramatic cuts in Defense spending in
Russia (from 50% of the USSR''s total output to 6-7% of Russia''s output). He
noted that many Minatom enterprises have continued production in past four
years despite these cuts, and emphasized that Minatom "is connected
to reliable financial structures and banks which remained solvent despite
the crisis." Ryabev affirmed that Minatom is committed to the NCI, and has
created a special fund to support the programs. As they attempt to
diversify industries under their control, they are pursuing microelectronics, medical and laser technology, computer hardware, and semiconductor production. However, in the question and answer period Ryabev also acknowledged that the continuation of tax incentives in the nuclear cities is in question because of some opposition in the Duma.
Other panelists described project-specific proposals for new enterprises in
the nuclear cities. One Western participant in the session said she was
"amazed by the quality of the work that Russian mathematicians and software
specialists are doing for Intel and others - at prices at which one would
hire an undergraduate here in Cambridge." She noted that "they are working
not on the grunt work, but on the most difficult frontier issues."
On April 13th, Secretary of Energy Bill Richardson gave an update on DOE
efforts to improve nuclear security in the former Soviet Union. The
transcript of his speech in the ARCO Forum can be found at
http://www.ksg.harvard.edu/ksgpress/ksg_news/transcripts.