Sustainable development of Arctic towns: findings from the Murmansk region Larissa Riabova Head of Department of social policy in the North Luzin Institute for Economic Studies Kola Science Centre, Russian Academy of Sciences The 2015 Thorvald Stoltenberg conference - ARCSUS Kirkenes, September 2015

ARCSUS research in the Murmansk region Team – V. Didyk, L. Riabova, Institute for Economic Studies, Apatity Aim – to explore how Arctic towns in Russia can promote sustainable development, what are practice strategies and major challenges for sust. development Case-study research in mono-industrial towns Kirovsk and Monchegorsk, and military settlement Alakurtti Vladimir Didyk, Research Director of IES until July 10, 2015

Concept of Community Capitals (Flora & Flora, 2004) >> Sustainable communities pay attention to all types of capital and their interaction >> All types of capital need to be cared for and improved over time

Russia’s Arctic mono-towns >> Russia’s Arctic – “the land of mono-towns”: 30% of population in the Russian Arctic live in mono-industrial towns, against 10% in Russia >> Last edition of List of mono-towns of RF of 16 April, 2015 (eligible for federal support): In RF – 319. In the Arctic zone – 14, with 7 in the Murmansk region 1) (“red group”) towns with most difficult socio- economic situation (94, with 3 in the Arctic – Kirovsk, Kovdor and Revda in Murm. reg.); 2) under risk of worsening situation (154, with 9 in the Arctic) 3) (“green group”) with stable situation (71, with 2 in the Arctic – Norilsk, Severodvinsk) >> Trend - number of towns with most difficult situation grows Map of Arctic mono-towns of 2014

Case 1 – Kirovsk JSC “Apatit”, mining and processing company, 85 years, apatite-nepheline ore, 30% of population work at “Apatit” Traditionally high level of social responsibility. Lately - trend to extraterritorial and less responsible behavior of the company. Decisions on the company are taken outside the region by PhosAgro holding group In cuts of working places (-2 000), introduction of fly-in-fly-out model, top-managers moving to headquarter in another region, plans to sell out “Red House” Negative reactions in community. Out-migration increased and led to loss of human capital and risk to town’s sustainability Low municipal financial capital. Due to federal center- oriented tax policies - lack of own financial sources while producing great amount of wealth. Artificial subsidization – typical for Rus. Arctic mono-towns

Strategies for sustainable development in Kirovsk State: Federal financial support to mono- towns established in 2010 Precondition for support – preparation of towns’ Investment Plans for years Support to towns with best Plans October 2014 – Federal “Fund for mono-towns development”, 29 bln rub. until 2017 Tasks - financing of investment projects, education of city and company managers, estabishing cross-sectoral teams for town’s development projects Town: Introduction of municipal strategic planning in 2010 Preparation of Investment Plan in 2010, no federal support Strategic priority – diversification of economy, tourism Attracting investments via public – private partnership and EU programs. Alpine ski resort Big Wood - financed by “Apatit” company and regional government. Tourist information office – EU Kolarctic program, “Salla Gate” project Introduction of partnership agreements on cooperation between company, regional & local governments Currently – preparing application to Federal Fund for mono-towns development Company: Regular strong financial support to town. 30 mln Euros annually = early budget of Kirovsk. Lately reduced Participation in diversification of local economy - financing tourism development Concludes agreements “company – town – regional government”, but procedure is non-transparent, no public hearings to define the content

Findings from Kirovsk case >> The town’s major strategies are long-term strategic planning, diversification and attraction of investments >> Emphasis on natural capital prevails with focus on nature-based tourism (typical ) >> Importance to develop local human and social capital is underestimated : - on local level no clear goal declared to retain and attract population, no chapter on soc. capital in municipal strategic documents ; - current federal policies to concentrate higher education and health care in big urban centers undermine human capital in smaller towns >> Attempts to build open social capital (to create external links and broad societal coalitions): - establishing of public/private partnerships with reg. government and company - building relations with international institutions (EU) But: >> Closed social capital dominates (relations within a group, creation of narrow interest groups) : - “big guys” networks don’t cross “grass roots” networks - weak citizens involvement and low cross-community social capital ( typical in Russia)

Case 2 – Alakurtti 60 km to Finnish border, until 2008 – closed military settlement Since 1998 – demilitarization – largest removal of 6,000 militaries Population – 12,000 in 1990s. In 2015 – 3,500 Since 2008 – municipal attempts for cross-border projects to survive and develop Project “AgroPark Alakurtti: a model of trans-border cooperation” (2012 – 2015), supported by EU Kolarctic Program. 50% of Kolarctic financing comes from Russia Great role of one man. Mayor’s outside networking at the regional level and internationally to attract resources - Leadership capital Investment – 2, 5 mln Euro. Agricultural tourism, cross-border cooperation of municipalities ( Salla and Norbotten), 100 new working places Construction in Alakurtti: - farms for cattle and poultry, campsite and a café - guest house with conference room, waste management site Dec – new United strategic command ‘Sever’ to control Russian Arctic. First Arctic brigade – in Alakurtti. Jan – 600 milit. arrived, 3500 more in future Militaries – a challenge to sustainable development? Mayor Alexei Vladimirov, March 2014

Findings from Alakurtti case >> Cross-border cooperation contributes to local sust. development - typical for many places in the Barents region >> Social capital is more important for local sust. development than physical or financial capital >> Open-minded and effective leadership – extremely important factor for sust. development in the Russia’s Arctic towns, especially in the smaller places >> For Russian cases – worth to single out and study “leadership capital” >> Cross-border relations at the local level built due to the Barents cooperation should be preserved, need to continue building cross- border social capital AgroPark Alakurtti – from March 2014 till September 2014

“We are here on the crossroads of history, peoples and countries – we have to cooperate” Photos: S. Britvina, L. Riabova, A. Vladimirov, yandex.ru, Alakurtti municipality, Murmansk Regional Small & Medium Business Support Agency

Typically in Russia: - bonding social capital (closed) dominates, - bridging social capital (open, with external links) is lacking