Socio-economic restructuring of a peripheral mining community in the Russian North

Abstract

In the changed socio-economic environment after the collapse of the Soviet Union, resource peripheries and single-industry communities of the Russian North faced significant socio-economic problems that required them to engage in restructuring and economic diversification. This research presents a case study that examines development priorities and options for socio-economic restructuring in the peripheral Russian single-industry mining community of Kovdor located in the Murmansk region. Empirically, the research is based on a survey that has been complemented with interviews. The resultant data is analyzed with quantitative methods. The study develops and tests a new theoretical framework, which examines local development in Russian peripheral resource communities. This theoretical approach emphasizes the role of localized development as a result of complex interaction between different actors. The results of the study show that, despite the aspirations for diversification, foreseeable economic development in the community is dependent on the mining industry. The results and theoretical approach of the study provides the ground for further research and theoretical discussions on the development of resource communities in the Russian North.

Acknowledgments

The author is grateful for the Academy of Finland for financial support of the study. Moreover, the author specially wish to thank Dr. Vesa Rautio for commenting the early drafts of this manuscript and all the other scholars and informants whose contribution has helped to improve this paper.

Notes

1. The Russian North consists of 27 subjects of the Russian Federation. Sixteen subjects are classified as the Far North (Krayniy Sever). The remaining 11 subjects are classified as regions equivalent to the Far North (mestnosti priravnennyye k rayonam Kraynego Severa) (Heleniak 2008, p. 26; Synberg 2010, p. 137).

2. In addition to closure and restricted mobility due to border zone issues, there are also several closed towns owing to the specific military character of the Murmansk region (see more Hønneland and Jørgensen 1998).

3. During the Soviet era Kovdor was located in the border zone. The strictly controlled border zone (pogranichnaya zona) along the Western border was approximately as wide as the current buffer of the border zone (prigranichnaya territoriya).

4. I use the name EuroChem, since the company uses it itself on its official website <http://www.eurochem.ru/>. Occasionally, the name EvroKhim has been used in English texts related to the firm.

5. Economically active people includes only those who were active in the employment market of Kovdor. The figure is not comparable to the percentages related to the total work force, which is discussed later in text related to Figure 4.

6. In this paper, I have used the average rounded rate of 40 to convert rubles to euros (The average rate between 1 January 2011 and 30 June 2011 was 40.13). In 2012 (1 January 2012 – 7 December 2012), the corresponding rate has been 39.90 (Bank of Finland 2013).