Features KALININGRAD exclave in the borderland
In 1996, a Special Economic Zone was created that made it favorable for both Russian and foreign companies to relocate production to Kaliningrad. Once the intentions were to make Kaliningrad known for more than just its military bases. But this is no longer the case. Kaliningrad, once again, is gliding away from being an economic zone to becoming a military zone.
Published in the printed edition of Baltic Worlds Baltic Worlds 4 2014, pp 51-55
Published on balticworlds.com on januari 21, 2015
In late September I jumped on the Moscow-Kaliningrad train in Vilnius. It felt a bit odd to catch a train in an EU capital, go westwards, and end up in Russia. Not to mention the oddness of getting off at the beautiful German-built southern train station, constructed in the 1920s when the city still had the name Königsberg and belonged to Germany. Since the clock on the platform showed the time as one hour ahead of Lithuanian time, I changed my watch — only to realize out on the street that I shouldn’t have done so. Only the clock on the platform showed Moscow time; the Kaliningrad exclave has the same time zone as the Baltic countries.
This peculiar detail of time says something about the Kremlin’s relation to its exclave in the west. The capital of the Kaliningrad region is seen as a part of Russia, as if the train had rolled into St. Petersburg or Novgorod. That it runs through a different time zone and 600 kilometers of foreign territory is of minor importance.
Before the breakdown of the Soviet Union, Kaliningrad was one of the most closed regions in Europe. No foreigners were allowed to visit because of the naval base and two air bases. And like other citizens of the Soviet Union, the inhabitants of Kaliningrad had onerous travel restrictions.
This changed after 1991, when Kaliningrad became part of the Russian Federation and one of the most open regions in the country. Extensive cooperation with neighboring regions around the Baltic has led to a large number of people-to-people contacts in areas such as environmental protection, cultural exchange, and business cooperation. Thanks to looser visa restrictions, many citizens of Kaliningrad visit Poland on a regular basis. Eighty percent of its inhabitants have foreign passports, compared to only 20 percent in the whole country.
In the 1990s many ideas for the future of the Kaliningrad exclave were raised. Some talked about a new Hong Kong on the shore of the Baltic Sea. In 1996, a Special Economic Zone was created in line with such thoughts. The zone made it favorable for both Russian and foreign companies to relocate production to Kaliningrad because their products could be exported to the Russian mainland without import duties and fees. The stage was set to give the Kaliningrad region a new role.
Back then, in the early 90s, the newly elected president Vladimir Putin also talked about Kaliningrad as a bridge to the West, as a place where closer contacts with EU countries could develop. The intentions were to make Kaliningrad known for more than just its military bases. But this is no longer the case. Kaliningrad, once again, is gliding away from being an economic zone to becoming a military zone.
Protests are suppressed
Many Russians in Kaliningrad oppose this development, but they have a difficult time getting their message through. Very few descriptions of what is happening in Kaliningrad or other parts of Russia are provided to the public. The veteran opposition politician Salomon Ginzberg is frustrated over the state of Russian media: “We in the opposition have other ideas on how Russian foreign policy should be carried out. But we have no means to get our message out; all TV channels are closed for us.”
But there are other means and channels: “Of course we use the Internet; I am writing a blog which has 10,000 visitors. But compared to the impact of television, it is nothing.”
In Kaliningrad, thousands of people took to the streets in 2010 criticizing both Putin’s handpicked governor and the leaders in the Kremlin. Today the situation is very different from 2010.Two days before I arrived in Kaliningrad in the fall 2014, a few dozen people had held a peaceful protest against the war in Ukraine. The protest was stopped by hooligans who most likely were paid by the government. A demonstration of such insignificance would probably not have been stopped in such a brutal way in Moscow.
Protests in Kaliningrad have always been a sensitive matter for the leaders in the Kremlin, since they can be interpreted as signs of the exclave wanting to drift away from mother Russia.
An illustration of this occurred last March, just after the annexation of Crimea. A couple of young Russian activists raised a German flag outside the regional headquarters of the KGB’s main successor, the Federal Security Service (FSB), alluding to the city’s German history. The historical twist of this protest was underlined by the fact that the FSB is located in a building from the Königsberg era. The flag was taken down immediately and the two young men can be given a seven-years prison sentence.
When it comes to opposition media, newspapers like Novaya Gazeta in Moscow can publish critical stories on the attack on Ukraine without being stopped. In Kaliningrad, such opposition newspapers must be very careful. Alexei Shabunin, the editor of the weekly Dvornik, knows more or less where the line is drawn: “I cannot publish a critical article on Ukraine; they would close down my paper if I did.”
The day I meet Shabunin, he had just interviewed one of the men beaten badly by the mob that interfered in the demonstration against the war in Ukraine. Shabunin concluded that the police did very little to stop the beating. “In my piece I will probably have to focus on the inactivity of the police. I can mention the message of the demonstrators, but not develop the criticism.”
He concludes, with great sadness, that many people who were criticizing the national government as late as February this year are now supporters of the government. The propaganda has been so successful that friends and families who used to be united in their criticism of Putin are split and have stopped talking to one another. Many simply avoid talking about Ukraine altogether.
Yet the surge in President Putin’s popularity after the annexation of Crimea is slightly lower in Kaliningrad than in the country as a whole: in September, Putin had a 79 percent approval rating in the exclave, compared to 84 percent in the whole country. It’s a small difference, but nevertheless supports the trend of the last 15 years, which shows that Putin’s United Russia party is somewhat less popular in the exclave than in Russia as a whole. Furthermore, in the city of Kaliningrad, support for the government has been somewhat lower than in the surrounding towns and villages. But even in the city Putin supporters constitute the majority even taking into account the high level of uncertainty that all polls in Russia contain these days.
Given that their region is more negatively affected by the recent sanctions than most Russian regions, it seems a bit strange that most Kaliningraders joined the wave of support for the government’s Ukraine policy. The Kaliningrad region imports more products from the EU than any other region in Russia. When these imports stopped, the prices of domestic food products rose. In September meat prices jumped 50 percent, more than anywhere else in the country. The same thing happened with several locally grown fruits and vegetables. At the same time, Belarusian exporters increased their prices. For the poorest, the price increases creates serious problems, but for those who can go to Poland to buy their groceries the situation is not acute, because the terms of the sanctions permit them to import food for personal use.
Another reason for the Kaliningraders to remain somewhat critical of the national government is the lack of vision for the future of the exclave, says the editor Alexei Shabunin. “Moscow has had 22 years to figure out what to do with this detached region, but no sustainable ideas or solutions have come up. The only thing they know is that we should remain a part of Russia. People feel forgotten here, they don’t feel that the federal government cares about them. The current nationalistic frenzy might temporarily distract people, but the problems remain.”
He doesn’t dream of huge projects like a new Hong Kong or casinos along the Kaliningrad shores. “Why” he asked, “are we Russians such megalomaniacs? Why these huge absurd projects such as the construction of the arenas for the Sochi Olympics? The Ukraine policy falls into this pattern: why suddenly grab a big chunk of another country?”
Shabunin would like to see more funds to build basic infrastructure such as roads, railway tracks, and bridges. He also fears that Kaliningrad will have even less money in the years to come, since Crimea will be a very expensive project. And EU sanctions are already hurting the state economy.
The Special Economic Zone
Moscow has had problems figuring out how best to develop the exclave. According to George Dykhanov, an ombudsman who helps Russian and foreign companies that want to invest in the Kaliningrad region, one hindrance is the lack of a direct connection with the rest of the country. “You must remember that Russia had no experience of having territories detached from the rest of the country. We never had any colonies like the British or the French; it was a totally new situation for us back in 1991.”
He explained how, in the 1990s, the industry of the region was closely connected to production facilities in former Soviet republics. Kaliningrad had, for example, several subcontractors for a big radio factory in Riga, which was shut down soon after Latvia gained its independence. In addition, Kaliningrad’s factories depended in turn on subcontractors from all around the defunct Soviet state, such as Belarusian suppliers for the pulp and paper industries and Ukrainian suppliers for railway car production.
The Special Economic Zone was developed but never really took off, partly because of the deep Russian economic crisis in 1998. Up until the world financial crisis of 2009, there were signs of success and the Kaliningrad economy grew quickly.
But the economic zone never really lived up to the expectations. Dykhanov said, “Mistakes were made, for sure. Moscow has changed the regulations for the zone several times, with the motive that the rules should be the same for all types of economic zones in the country. The problem is that the situation is unique in Kaliningrad; no other part of the country is an exclave.”
The result has been that companies which started to invest in Kaliningrad soon lost their interest when it turned out to be impossible to make long-term plans. For example, the authorities have changed the requirements to make products duty-free in the rest of Russia several times.
“On top of that”, Dykhanov added, “our customs bureaucracy is terrible, I must admit. They still follow laws which haven’t been changed since Soviet times. If they discover that one single box in a truck weighs more than declared, they can stop the whole cargo and weigh every single box of equipment— even if the total is correct!”
The Croatian-American entrepreneur Stefano Vlahovic says it has been more difficult than anticipated to conduct business in Kaliningrad. Vlahovic, who runs the poultry breeding company Produkty Pitania, said: “We have run into many logistical problems, but we have also been affected by false allegations. The authorities accused us of polluting a river even before we had our factory up and running! On the other hand, there is an advantage in investing here compared to investing in the Moscow or St. Petersburg regions: here you have much better access to the local government.”
The current Special Economic Zone will disappear in 2016 because the authorities in Moscow have put their hope in a more export-oriented strategy: the more you invest in Kaliningrad, the lower your taxes will be. Nobody knows whether the new tax rules will lead to more investments in the long run. For the moment, investments are going down, primarily because of the sanctions and the global uncertainties.
Some companies already active in the region face problems when they can’t import crucial components. One Lithuanian company, for example, can’t get the right meat for its sausage production, and a German company can’t import the right vegetables for its baby food production.
But the lack of growth in the Kaliningrad region has also to do with basic structural shortcomings, Dykhanov argues: “We are fairly few living here, less than a million, and we are far away from the majority of Russian customers. This makes it difficult for companies to place big production units here, such as full-cycle car plants. Additionally, in a workforce of less than half a million, car companies and other big firms would have problems finding enough skilled labor in the short run. And on top of that, we have very few raw materials of our own.”
Tourism: hope for the future
An area of grand hopes in the Kaliningrad region has been tourism. Some years ago the regional authorities asked the American global management consulting firm McKinsey about Kaliningrad’s tourist potential. Five million tourists, the firm answered, which kept the dreams alive. Last year half a million came, of which less than 100,000 were foreigners. This year, probably even fewer foreigners will come because of the tensions between Russia and the West.
I asked Alla Ivanova, a minister in the regional government and responsible for international affairs, if it was time to downgrade the expectations. “No, definitely not,” she answered. “Our tourism potential is still great. The main obstacle is the visa regime. If EU citizens want to visit the beautiful seaside and the Curonian Spit, it is, of course, easier for them to go to Palanga in Lithuania than to any of our resorts. But we are working on it. Hopefully, an Italian cruise company will make weekly stops here, and passengers will have the right to make three-day visa-free visits to the country. We also need to develop more tourist attractions in our region.”
I asked if she had anything special in mind.
“Why not build our own Disneyland?”, she said, “I actually think that would be a very good idea. I haven’t been to Disneyland myself.”
Ivanova agrees with other critics that the federal authorities have done too little to help the regional government develop the region. But, she said, over the last couple of years, more funds have been allocated, partly for developing the tourism industry. Svetlogorsk is one of the health resorts along the coast that could be developed further.
For three weeks I tried, even with the support of the Swedish consul in Kaliningrad, to arrange an interview with the mayor or someone else who could describe the strategy to attract more visitors. But they refused to meet me, without giving any reason. I told Ivanova about the city’s attitude. “That was not very smart of them, of course. If they want more foreign tourists, they have to be open to foreign journalists.”
I took the one-hour train to Svetlogorsk, to drink in the atmosphere. It was low season and the beach was empty except for a group of locals collecting amber in the seaweed. The five-star Grand Palace, the only seaside hotel, has high white pillars in the front and golden ornaments in the lobby. An employee told me that they had had fewer tourists from EU countries this past summer. “People seem to dislike us Russians more and more. I don’t understand why,” she said.
The German heritage
My local taxi driver, Eduard Kunigelis, gave me a tour of the town. We communicated in German, which he had learned in the 1990s so that he could give German tourists nostalgic tours in the neighborhoods where they grew up in the ’20s and ’30s.
”Of course, there are very few left,” he said. “But one old lady, who has become my friend, came back again this summer. She is over 90 but she still gets on her bike and pedals the streets of her childhood Rauschen.”
Kunegelis still uses the German name of the town, Rauschen. While driving around on the hills above the seashore, he points out house after house from German times — beautiful and often well-restored wooden structures. In front of the municipal offices, we see a mural with the inscription “Rauschen”. The authorities want to lure tourists with the German history of the town.
“But neither the town nor the regional and federal authorities are doing enough to help us develop tourism here,” says Kunegelis, who nonetheless did show me at least one major investment being made for the moment, the construction of a concert hall for 2,500 spectators.
We drove out of the town, following the coast on roads which here and there needed major maintenance, passing by a military installation and a couple of military vehicles. The naval base in Baltiisk is not far away.
We stop in Yantarni — Eduard, of course, used its German name, Palmnicken — to look at the two-kilometer elevated wood boardwalk. The EU had sponsored it. He said, “I believe it was a German EU parliamentarian who helped us get the money.”
Although fewer German tourists come these days, he feels that the German roots of the city are alive, perhaps even more so than back in the 1990s. “When I ask my 10-year-old granddaughter where she comes from, she answers ‘König’. The history lives on!”
Back in the city I meet a retired art teacher, Viktor Ryabin. He runs a little homemade museum on the history of Königsberg on the top floor of a fairly run-down building, a stone’s throw from the former stock exchange, designed by an architect from Bremen in 1865. For him the city has only one name: “Just as Viktor is my name, Königsberg is the name of my city. It’s as easy as that.”
He underlines that even Russians in mainland Russia often refer to his city as Königsberg. “They don’t even know where Kaliningrad is. They think it is somewhere close to Moscow. But Königsberg, they can find on a map.”
He is also negative about the name that the Soviet leaders gave his city. Mikhail Kalinin was a long-time Boleshevik and a close associate of Stalin’s, with no historical connection to the city. “After 1991 the Russian leaders chose to restore the names of several other cities. Leningrad became St. Petersburg again, Stalingrad became Volgograd. Why not go back to Königsberg?”
This will not be, for one simple reason: the former name of the city was the name under other rulers, which is not the case with the cities which have regained their former names. And the fact that the country of which Königsberg was an integral part killed several million Russians doesn’t make it easier for the Russian leaders of today to rename it Königsberg. The name change issue has been raised among officials in Kaliningrad, but never seriously considered. And in today’s political climate, it is a nonstarter.
The sociologist Mikhail Berendeyev, who has just published a book on the identity of Kaliningrad, sees no great support for a name change, even though the German history is of importance for many people. He is at Immanuel Kant University — the only university in the country named after a foreigner — and has not sensed any strong Königsberg identity in the population: “What I found was a strong search for a regional identity. Of course, all regions of Russia have their own specific identities, but I have found that the Kaliningraders contemplate who they are more than others. It’s more common here that people ask how they are perceived by other Russians and by Europeans.”
“I guess this search for identity has to do with Kaliningrad being so unknown, both in the surrounding EU countries and in the rest of Russia. Kaliningrad has no brand recognition; if anything, it is known for its military base. And for being the birthplace of the philosopher Immanuel Kant.”
Searching for identity
The search for a regional identity has also to do with the large turnover of the population: very few families have lived in Kaliningrad for more than a generation or two. By the end of the 1940s, almost all the Germans were gone, replaced by 400,000 Soviet citizens. And after 1991, many moved there from other parts of the crumbling Soviet empire, especially families of military personnel from the Baltic countries. Almost one third of today’s population in the Kaliningrad region arrived after 1991.
For many Kaliningraders — especially the young — mainland Russia feels far away. As school children, they are sent on sponsored trips to other parts of Russia to learn more about the country. But most of them have made more trips to EU countries —
especially Poland — than to mainland Russia. They actually say that they “travel to Russia”, even though they are already in the country.
The Kaliningrad cultural profile and writer Alexander Popadin has delved for many years into the mysteries of the Kaliningrad identity: “Political scientists come here from other parts of Russia, trying to understand our identity. But they never succeed. And liberal activists have come here to get support for their struggle for a more democratic Russia. But they haven’t found much backing. Yes, we have had protests here and we have forced governors to resign. But we protest to solve our own everyday problems; very few of us are interested in joining the battle to change Russia.”
He points to the current sanctions, which have resulted in higher food prices and the lack of certain foreign products. “Kaliningraders are not happy with this; something has been taken away from us and we want it back. We are pretty clever and can find quick solutions to new problems. That is why you find trucks filled with smuggled Polish fruits and vegetables in the middle of the street. But you don’t find major protests against the Putin regime.”
Popadin senses a certain kind of patriotism in Kaliningrad. “We don’t like when foreigners criticize Russia; then we get defensive. But we love criticizing Russia ourselves! For the moment I am fed up with this military nationalism and the comeback of a rhetoric from Soviet times. Where is the non-military patriotism? The pride of being the country that produced a Tolstoy or a Tchaikovsky?”
Before 1991, when the region was closed to foreigners, very few Kaliningraders traveled to neighboring European countries; since then, a new generation has become used to crossing borders. This may change. No borders are being closed, but there is already a decline in people-to-people contacts. Since the tensions have grown between Russia and the EU, the neighboring countries of Poland, Lithuania, and Sweden have noticed a somewhat lower level of mutual contacts, according to Baltic Worlds’ sources in Kaliningrad. The trend is not dramatic, but it is there.
The writer Alexander Popadin has observed a tendency for partners in neighboring countries to be more cautious than before. “We are not as welcome as we used to be; they have postponed planned projects. Everybody is waiting to see what happens.”
And what about the dream of Kaliningrad as a bridge to the west? “No, we can forget that metaphor,” said Popadin. “Metaphors have life cycles, and that one’s life cycle is over. A new metaphor? Impossible to say; the global context is changing so quickly now.”
A couple of weeks after I left Kaliningrad, the Swedish navy launched an operation in the Stockholm archipelago because they had detected underwater activity. Speculation arose about a Russian submarine in the area — from the naval base in Kaliningrad. It’s yet another indication that the words of the opposition politician Salomon Ginzberg might become reality: “It looked so promising; we were supposed to turn into Russia’s window to Europe. Now we can end up being the gun pointed at Europe, just as it was before.” ≈