Page last updated at 00:48 GMT, Tuesday, 31 March 2009 01:48 UK

Unrest threat as crisis hits Russia

Millions of Russian workers have been laid off or sacked recently amid the global economic downturn, and the government in Moscow is already facing angry protests by ordinary people.

The BBC's Richard Galpin has been to a northern Russian industrial town to investigate the political threat of mass protests.

Aluminium factory in Pikalevo
All three factories in Pikalevo now stand idle

Once visited, the grim town of Pikalevo is best forgotten.

Built 50 years ago in the remote, forested plains east of Russia's second largest city, St Petersburg, it stands as a monument to the fundamental flaws of the Soviet Union's command economy.

Its population of 21,000 people lives or dies by the complex of aluminium, cement and potash factories which are the town's only raison d'etre.

But now all three factories stand idle, forced by the economic crisis to close their gates.

Their workers either sit at home or throng the small unemployment office tucked behind the main street.

The rattle and hum of machinery in Pikalevo has been replaced by the cold silence of austerity and hardship.

'Impotent' government

While most Russians would rather forget Pikalevo's existence, it won't be so easy for President Dmitry Medvedev to banish it from his thoughts as he travels to London to attend a G20 summit on the world economic crisis.


That's because he knows there are hundreds of other so-called "mono-towns" in Russia which, just like Pikalevo, depend on a single industry.

And in Pikalevo, something unusual for modern Russia is happening: the people are taking a stand against the government and its economic policies, blaming them as much as the factory-owners for their plight.

The opening salvo was fired in mid-February, when thousands took to the streets holding black balloons as a sign of mourning for the jobs they have lost.

Some carried placards accusing the government of being "impotent".

The people of this bleak town have reason to be fearful.

Already almost half the workforce has either been sacked or laid off and another round of redundancies is expected in May.


And if the aluminium factory closes for good, then most of the town's heating and electricity supplies will also be lost because everything here is inter-connected, Soviet style.

Nikolai Tsigankov and his wife
Nikolai says he will join expected protests next month

The waste product of the aluminium plant provides the raw material for the other two factories, while the power plant for the industrial complex also keeps people's homes warm and bright.

"The destruction of this plant is criminal," says Kostia, who was laid off three weeks ago.

"The town only exists because of this plant. So if it goes under, then the town will be lost and there will be looting and fighting in the streets."

The local trade union, under the dynamic leadership of Svetlana Antropova, has been effective in channelling this public anger.

In a particularly troubling sign for the government, she is also a member of the ruling United Russia party, led by Prime Minister Vladimir Putin.

"Most people don't have enough to eat. Some are starving," she said.

"People here don't understand why the government is supporting the oligarchs and banks instead of supporting individual workers directly."

A short drive from Svetlana's office is a particularly drab apartment block, where Nikolai Tsigankov and his family live.

He has seven children, a disabled wife and now no job.

He was sacked after more than 30 years' service at the cement factory, where he said he had never missed a day's work. His pay cheques stopped in February.

"Now I don't know how my family will survive or whether I will survive. It might lead you to poison or hang yourself," he said.

"I won't, but I can't live like this. How can I, if the government spits on me?"

He went on to tell me he would be among the first on the streets if the trade union organises more demonstrations next month as expected.


It is hard to see how there can be any good outcome to the crisis in Pikalevo.

The company which owns the aluminium factory insists it is an inefficient relic of the Soviet Union and cannot be saved in the current economic climate.

Women selling food and drinks in Pikalevo
Some Pikalevo residents say they are in a desperate situation

"It's losing money all the time," said senior company manager Yevgeny Ivanov.

"It must be converted into a cement factory by May.

"If not, the business will run out of money, there will be no money for wages or heating and the factory will close down for good."

But both the trade union and the regional governor insist this is nonsense and that the aluminium plant can be saved, if necessary by a change of ownership (assuming anyone can be persuaded to buy it).

The authorities also say they have offered millions of dollars in loans to the factory, as well as free re-training and education programmes for those who have already lost their jobs.

But so far, all to no avail.

The fear of serious unrest is growing as the May deadline imposed by the company approaches.

And the big fear for the government is that the example set by Pikalevo could be copied by the hundreds of other "mono-towns" across the country, which are also fighting for their survival.

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