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Cablegate: The Eastern Front of Russia's Demographic Crisis

VZCZCXRO4222
RR RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD
DE RUEHMO #5221/01 3041319
ZNR UUUUU ZZH
R 311319Z OCT 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 4956
INFO RUEHSH/AMCONSUL SHENYANG 0041
RUEHYG/AMCONSUL YEKATERINBURG 2812
RUEHVK/AMCONSUL VLADIVOSTOK 2500
RUEHZN/EST COLLECTIVE
RUEAUSA/DEPT OF HHS WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEHPH/CDC ATLANTA GA

UNCLAS SECTION 01 OF 04 MOSCOW 005221

SIPDIS

SENSITIVE
SIPDIS

DEPARTMENT FOR EUR/RUS
USAID FOR GH, E&E
HHS FOR OGHA

E.O. 12958: N/A
TAGS: TBIO SCUL PREL SOCI CH RS
SUBJECT: THE EASTERN FRONT OF RUSSIA'S DEMOGRAPHIC CRISIS

REFS: A. Vladivostok 114
B. Vladivostok 094
C. Moscow 654
D. Vladivostok 032
E. St. Petersburg 045
F. Moscow 1834

MOSCOW 00005221 001.2 OF 004


THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT
ACCORDINGLY.

1. (U) This is a joint message from Consulate General Vladivostok
and Embassy Moscow.

2. (SBU) SUMMARY: The population in the Russian Far East (RFE) and
Siberia is continuing to decline, due both to a long-term trend of
"Western Drift" (internal migration from east to west within Russia)
and the serious but somewhat less acute fertility and mortality
problems that plague Russia as a whole. GOR efforts to counteract
these trends have failed to reverse population loss east of the
Urals, and strict immigration policies have limited the number of
foreigners who could replace the shrinking Russian population. Many
local officials and demographers recognize the threat of Chinese
immigrants overrunning the RFE and Siberia is greatly exaggerated,
and that a more relaxed immigration policy and gradual economic
integration with China and the rest of the Asia-Pacific region could
lead to economic opportunities and improved social conditions. It
appears, however, that policymakers in Moscow have yet to recognize
that China could be more of an opportunity than a threat on the
eastern front of Russia's demographic crisis. END SUMMARY.

-------------------------------
GIANT SUCKING SOUND IN THE EAST
-------------------------------

3. (U) As of January 1, 2007, the population of the RFE stood at 6.5
million people, 18.8 percent less than in 1990. Siberia lost 7.2
percent of its population over the same period, and now has 19.6
million inhabitants. (Russia's population as a whole declined by
3.7 percent over that period.) The steep decline in the eastern
population can be explained by both natural population loss (more
deaths than births) and "Western Drift."

4. (U) Many younger Far Easterners are moving west for more and
better job opportunities. Russia's Central Region (18 Oblasts
located west of the Urals, including Moscow City and Oblast) suffers
from low fertility and high mortality and has a more elderly
population than the area east of the Urals. As a result, the
Central Region has supported an influx of working-age inhabitants
from across Russia. According to demographers, 43 percent of the
internal migration to the Central Region has come from the RFE and
Siberia, making those regions the principal population "donors" to
the center.

5. (U) At the same time, many in Siberia and the RFE feel that their
social and economic conditions lag those of the rest of the country.
In addition to the difficulties of a harsher climate and, in many
areas, geographical isolation, wages in the RFE and Siberia are
lower than the Russian average, while the cost of living is higher.
While demographic decline has tapered off considerably in recent
years after the big losses of the 1990s, a number of trends lead
demographers, economists, and policymakers to worry anew about
population loss. According to economist and governor of Khabarovsk
Viktor Ishayev, the gross regional product (GRP) per capita -- used
by economists as a proxy for regional well-being -- of the RFE and
the Transbaykal region (Chita Oblast and Buryatiya) stood at 89.5
percent of the national average in 2005, having fallen from 117.5
percent seven years before. Ishayev said that consumer prices in
eastern Russia remain on average one-third higher than they are in
the country as a whole (Ref A).

6. (SBU) The consensus among demographers is that the Central Region
will need at least 6 million migrants through 2026, either from
within Russia or from other countries, to compensate for its labor
resource losses. They predict that Siberia could lose an additional
one million people and the RFE at least another half million people
over the next 20 years to feed this need. Even government
forecasters are projecting that both regions east of the Urals will
each lose 11 percent of their population over that period. The
prospect of replenishing these areas from other Russian regions or
from the CIS countries is unrealistic, according to many experts,
who say that China is the only genuine source of labor for the RFE

MOSCOW 00005221 002.2 OF 004


and Siberia.

7. (U) With a current population of 13.9 million, the prospects in
Southern Siberia (Krasnoyarsk, Irkutsk, Kemerovo, Novosibirsk, Omsk
and Tomsk oblasts) seem relatively brighter than those of the rest
of Siberia and the RFE, with large urban centers and established
industrial, academic and scientific bases stretching from Omsk and
Novosibirsk to Tomsk and Irkutsk. Southern Siberia is also itself a
recipient of internal migration from northern Siberia and the RFE.

-----------------------------
CHINA: OPPORTUNITY OR THREAT?
-----------------------------

8. (U) Sensationalist Russian press accounts in the early 1990s
warned that millions of Chinese would overrun eastern Russia in a
matter of decades. Based solely on comparative population, the
fears have some merit. Experts call the RFE and Siberia a
"demographic desert." Only 5.5 million people live in the five
Russian regions bordering Northeast China (not including Altay,
which shares a small border with Northwest China), while over 90
million people live in the three Chinese provinces bordering the
RFE. The population density in the RFE as a whole is 1.4 people per
square kilometer, and is 2 to 3 people per square kilometer in the
four RFE regions along the Chinese border, but the population
density is 20 times greater on the Chinese side.

9. (SBU) Despite the stark comparison, demographic experts say there
are far fewer Chinese in Russia than the press would leave many to
believe. According to Zhanna Zayonchkovskaya of the Institute of
Economic Forecasting, Russia's leading expert on the issue of
migration, the Chinese population in Russia is concentrated mainly
in the RFE and Moscow, and accounts for less than one million total,
up from 200,000 to 300,000 ten years ago. According to Yuriy
Avdeyev, Director of the Institute of Regional Projects at the
Pacific Center for Strategic Development, the vast majority of the
Chinese in the RFE come for relatively short visits and are not
interested in staying longer. To some extent this is a function of
the current visa regime: obtaining a one-month tourist visa to
Russia is not that difficult, and may be all the time a laborer
needs to work one planting or harvest season. A researcher who
spent a year interviewing Chinese laborers on both sides of the
Russia-China border said that most Chinese workers are not
interested in working more than a few years in Russia, even if they
could get longer visas.

10. (U) Rather than fearing a population invasion from China, many
experts and Russians living in the RFE and Siberia believe that
Chinese labor is absolutely crucial for the region. A report
developed by the Russian Academy of Sciences' Institute of Far East
Economic Research characterizes Chinese immigration as an important
factor in the region's development and calls for easing customs and
border controls along the border and removing administrative
barriers for immigration. Similarly, recent surveys indicate that
50 percent of respondents in the RFE have a neutral or positive
attitude towards the presence of Chinese, compared to 25 percent a
decade ago.

11. (SBU) Despite the need for foreign labor, the Russian government
continues to maintain low quotas for guestworkers. The nationwide
quota for non-CIS guestworker visas was 308,842 for 2007 -- down 6
percent from the previous year. The share of the quota for the nine
regions of the RFE was 56,501 workers, nearly 4 percent lower than
2006. In Primorye, last year's quota was 16,500 laborers, while
this year it is only 6,701. According to regional labor experts,
Primorye needs 200,000 guestworkers (Ref B). Indeed, a number of
employers from restaurants, construction companies, and farms have
told USCG Vladivostok that there is not enough labor to meet their
needs. (Note: Separate and much higher quotas are in place for
workers from the CIS, but demographers and labor experts say that
CIS countries do not have enough skilled workers to send to Russia.
Thus, much of the RFE remains reliant upon Chinese and other
workers. End note.)

12. (SBU) Anatoliy Vishnevskiy, Russia's leading demographer and
head of the School of Demographics at the Higher School of Economics
in Moscow, believes the GOR is wary of loosening immigration
policies because it could lead to instability and exacerbate
existing social problems, such as xenophobia and ethnic conflict.
In his view, the Russian popular psyche is simply not ready to
accept immigrants, and they would "never" be considered Russian --

MOSCOW 00005221 003.2 OF 004


nor would their children or grandchildren. (Note: This could be the
case both de facto and de jure, since citizenship is not acquired
automatically by being born in Russia, and the naturalization
process is difficult. End note.)

13. (SBU) Nevertheless, Vishnevskiy acknowledged that the Kremlin
would not be able to completely stem migration from China, even if
it wanted to. Illegal migration will continue due to economic
opportunities and the huge population density disparity between the
RFE and Northeastern China. Overall, however, both legal and
illegal Chinese migration will remain at a relatively low level, he
said, and there is no danger that Chinese will overrun the RFE.

--------------------------------
IF YOU BUILD IT, WILL THEY COME?
--------------------------------

14. (U) President Putin stated on October 18, in his annual on-line
question-and-answer session with the Russian people, that stopping
the sharp population decline in the RFE is one of the government's
top priorities. One of the major goals behind the federal
government's recently-announced 566 billion ruble (22.6 billion USD)
development plan for the RFE and Trans-Baykal region is to stem
out-migration and make settlement in the area more attractive.
Potential projects include the construction of new oil refineries,
ports, train lines, shipbuilding centers, hospitals, schools, and
industrial plants. The Kremlin has also drawn up a plan to help
ethnic Russians living outside of Russia settle in targeted areas of
the country. Some regional politicians harbor their own grand
schemes, such as Primorye Governor Sergey Darkin, who has revived
Soviet-era plans to turn Vladivostok into a "megalopolis" of 2 to 3
million people, despite the fact that the city and its surrounding
suburbs currently have fewer than 750,000 inhabitants (Ref B).

15. (SBU) Little headway has so far been made. At their most
optimistic, regional officials in Primorye and Amur Oblast are
anticipating just a few thousand new settlers in the next five years
-- not nearly enough to turn the demographic tide. But even these
expectations are not being met, because of a lack of adequate
housing, schooling, and jobs. It was recently reported that
although Primorye planned to welcome 1,000 new Russian migrants in
2007, only sixty people have so far applied to settle in the region,
due to inadequate housing and low pay. For example, while
Krasnoarmeyskiy Rayon in northern Primorye has 255 employment
vacancies, they can only provide newcomers and their families with
rooms in hostels. And a mining company in Dalnegorsk (northeast
Primorye) is failing to entice migrants with monthly salaries of
3,000 rubles (120 USD).

16. (SBU) Most demographers doubt that current government programs
can counteract the prevailing population trends. Vishnevskiy told
us that although depopulation east of the Urals is one of the most
serious aspects of Russia's demographics crisis, "no one knows what
to do about it." He is skeptical that heavy industrial and
infrastructure megaprojects would have any impact on improving the
situation. Because of technological advances, fewer people are
needed for oil and gas extraction, which remains the region's most
auspicious economic activity, and there has been little attempt to
develop processing and refining capacity east of the Urals (though
this is part of future development plans).

17. (SBU) Vladimir Shkolnikov, a leading Russian demographer at the
Max Planck Institute for Demographic Research in Rostock, Germany,
agreed that the GOR has no coherent strategy for dealing with the
depopulation of the RFE and Siberia. He expects the huge
out-migration from the RFE and Siberia to continue indefinitely,
except in a few pockets where core populations will remain to work
in oil and gas extraction. "Demographic osmosis" will continue --
as great disparities in population density exist between the RFE and
northeastern China, people will move from more densely populated
China to the more sparsely populated RFE. Russian populations that
are on the map for primarily political or military reasons will not
survive under "market conditions" and will have to be artificially
supported for years to come. Still, Shkolnikov believes that the
RFE could be economically developed by simply accepting the
inevitable and fostering greater economic ties with Northern China,
though he doubts that the GOR would ever seriously embrace such a
plan.

-------
COMMENT

MOSCOW 00005221 004.2 OF 004


-------

18. (SBU) While demographers and many Russians living in the RFE and
Siberia realize that Chinese migration and greater economic
integration with the Asia-Pacific region is both inevitable and
beneficial, it is clear that policymakers in Moscow have not yet
accepted this view. Quotas on guestworkers continue to decline, and
new federal laws have emerged limiting employment opportunities for
foreigners (Refs D, E, F). The Kremlin is faced with a fundamental
contradiction between its political goals and economic reality: it
wants to maintain its population east of the Urals as a bulwark
against China and an outlet to the Pacific, but despite grand
development plans, the economic incentives for living in the region
remain lacking. Reconciling this contradiction may require some
counter-intuitive thinking. Maintaining the RFE as a vital and
vibrant part of Russia may actually depend upon inviting foreign
workers to help develop the economy.

BURNS

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