Pacific Russia - rich, rugged and risky

By Carroll du Chateau

The part of Russia that borders the Pacific Rim - and which qualifies it for Apec membership - is both the richest and most inhospitable area of the entire Russian Federation.

The Russian Far East, which encompasses Eastern Siberia and the Russian Pacific, covers one third of the country's total territory. The region is rich in raw materials - containing perhaps half of the world's gas and coal reserves, a quarter of its oil, plus boron, fluorite and tungsten concentrates, gold, diamonds, fish and forests.

It is also the coldest, harshest piece of all Russia, and severely underpopulated. Pacific Russia, for example, has just 8 million people compared with almost 150 million in all Russia.

Perhaps more important, largely because of skirmishes with China and Japan, the region is firmly focussed on military manufacturing. Want a rocket, a tank or a nuclear warhead? Try the Russian Far East.

Right now the region is hurting. Because of the strategic importance of its port of Vladivostok - home of the Pacific fleet - the Russian Far East trailed the economic reforms of the rest of Russia.

It was seven years after Gorbachev's era began, and the rest of Russia embraced the wider world, that Vladivostok was finally opened.

By then many military contracts had folded. Result: the highest unemployment and crime rate coupled with the highest prices in all of Russia. Many Far Eastern Russians left for European Russia, while a deluge of Chinese flowed in across the border.

According to some unconfirmed sources there are now between 1 and 2 million Chinese living in the Russian Far East. Although such wholesale immigration - legal and illegal - has bred distrust, the Chinese are now the number one investor in the region.