VZCZCXRO4499
RR RUEHCHI RUEHDBU RUEHFK RUEHHM RUEHKSO RUEHLN RUEHNAG RUEHPB RUEHPOD
RUEHYG
DE RUEHVK #0064 1480652
ZNR UUUUU ZZH
R 280652Z MAY 09
FM AMCONSUL VLADIVOSTOK
TO RUEHC/SECSTATE WASHDC 1155
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION COLLECTIVE
RUEHVK/AMCONSUL VLADIVOSTOK 1258

UNCLAS VLADIVOSTOK 000064 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAGR PGOV ECON RS
SUBJECT: THE MYTH-BUSTING TOWN ON THE PRIMORYE COAST 
 
¶1.  Vladivostok Consul General and PolOff joined a USAID 
delegation on a visit to the small timber-producing town of 
Plastun on Primorye's Pacific coast and discovered an 
economically thriving town with foreign investment, a stable 
population, and the only known golf course in the Russian Far 
East.  The town illustrates how stereotypes of the Russian Far 
East are often incorrect. 
 
Myth: Populations Are Declining Everywhere 
------------------------------------------ 
 
¶2.  Though the populations of many rural Far East towns have 
decreased from their peaks, some towns have actually grown, 
while other one-company towns are disappearing.  The town of 
Plastun currently has a full-time population of about 7,000, 
which is an increase of about one thousand compared to the year 
¶2001.  Plastun is also very much a company town, and according 
to Sergey Kurchinskiy, the head of the municipal region, about 
35 percent of the population of the area works at the Terneyles 
timber plant in town and at wood harvesting sites and ports 
nearby.  The company even attracts outsiders to the town -- most 
of the inhabitants the Consulate delegation talked to left major 
regional centers such as Vladivostok, Khabarovsk, and Nakhodka 
to join the company and live in Plastun.  The town's fate very 
strongly depends on the fate of Terneyles, a company that the 
Japanese firm Sumimoto has a 44 percent stake in, but for the 
time being the company is strong and largely unaffected by the 
financial crisis. 
 
Myth:  There's No Processing Industry in the Far East 
--------------------------------------------- -------- 
 
¶3.  Authorities in Moscow have been trying with various degrees 
of success to encourage natural resource processing industries 
in the East to add value to the abundant raw resources harvested 
there.  While it is true that much of the raw material extracted 
and produced in the RFE is exported to China for processing, the 
situation in Plastun is different.  Terneyles initially dealt 
only with raw timber which it exported mostly to Asia and 
Western Russia.  But after successfully attracting significant 
investment from the Japanese company, the company has branched 
out into plywood production for domestic consumption and export 
to Japan and Korea.  The company remains profitable and has also 
recently purchased some heavy equipment, including an American 
dry kiln and Caterpillar earthmovers, from the U.S. 
 
Myth: There's No Infrastructure in Rural Areas 
--------------------------------------------- - 
 
¶4.  Though infrastructure development in the rural East has 
lagged behind that of some of the major population centers, 
Plastun has an impressive infrastructure for such a small town. 
Its roads are paved, and it has a port which supports the timber 
company as well as brings consumer products to the town.  A 
small airstrip outside of town handles weekly flights to 
Vladivostok and another regional town.  The flights are 
subsidized by the federal government, and cost only about USD 35 
for a distance that takes nine hours to travel by car. 
 
Myth:  The Far East Has No Golf Courses 
--------------------------------------- 
 
¶5.  Municipal leaders were eager to show off their town's golf 
course.  Eduard Mashkov, Deputy General Director of Terneyles is 
the town's most experienced player, and serves as instructor and 
unofficial ambassador to those new to the game, encouraging 
interest in the sport throughout the region.  The nine-hole 
facility, set in a picturesque wooded valley, is open to anyone 
interested in the sport, and has been used by visiting investors 
and diplomats as well as a significant number of locals.  The 
town even holds annual golf tournaments at the course to support 
various charities. 
 
¶6.  Comment.  The rural areas of the Russian Far East are 
certainly not without problems, but it is important to note that 
there are bright spots as well.  The town of Plastun shows that 
given a steady economic base and sufficient foreign investment, 
the rural areas of the Far East are capable of flourishing and 
being profitable for local inhabitants and investors alike. 
Getting to this point was not easy.  One official we spoke with, 
who is a United Russia party member, has effectively boycotted 
trips to Moscow for 20 years, insisting that locals are better 
equipped to handle local issues.  However, his assistant 
informed us that wresting control from Moscow was not easy, and 
our official, like many others, had to pay heavy bribes 20 years 
ago to gain control of the port and timber factory and allow for 
local and foreign investment chosen by Plastun residents, and 
not Moscow powerbrokers. 
 
ARMBRUSTER