World financial turmoil hits Russia’s oldest cities

The Vladimir region, home to the Golden Ring cities of Suzdal and Vladimir has not been left untouched by the crippling economic crisis. The ancient cities are also facing tough challenges amid the financial turmoil.

The Vladimir draft horse is a breed which traditionally gives sleigh rides during the Russian Christmas holiday. For generations, its wide, sturdy body and strong legs helped villagers survive by providing transportation, pulling heavy loads and plowing rocky soil.

With time and technological advances, the role of draft horses has diminished and so has their population. Now fewer than 300 of them remain.

”Vladimir breed of draft horses is like a trademark of Yuriev Polsky district and a reason for pride for the Vladimir region,” said horse breeder Olga Evseeva.

”The breed was selected in 1946. The city of Vladimir is the birthplace for this breed of draft horses,” she added.

Olga is the managing director of the Monastyrkoye Podvorye horse farm in the Vladimir region. It is one of three farms in all of Russia working to preserve this local and Scottish mix.

In addition to increasing numbers, the company also markets the horses for other uses, including milk production. However, so far even with government support profits and sales are on the decline.

The crippling global economic crisis has threatened another regional traditional industry.

The Gus Khrustalny factory is one of the prides of the region. Since the mid-18th Century craftsmen and women have made artistic and intricate glassware here. Tourists from Russia and abroad come to what is called the “Crystal City” for the hand-made home wares and trinkets.

The business has been operating since 1756, and essentially using the same technique all these years – rolling crystal concoctions on metal rods and putting products, whether they are bowls or vases, into hot ovens. However, what has cooled is the demand for these products. As demand dipped, the company’s owners considered closing down the plant.

“It was a very difficult period and we did have to downsize staff. The first ones were those who had already reached retirement age. We reduced the number of employees from 500 down to 320, but in most cases these were people who agreed it was time to leave,” said the Gus Khrustalny factory CEO Svetlana Parshina.

To tackle job losses in the region, the government introduced programs to attract the attention of foreign companies. It has also instituted programs to retrain the unemployed.

Vera Shamota is the head of the External Economic Relations Department for the Vladimir region. It is her job to lure and to retain foreign companies and investors.

“Some companies who negotiated with us before the crisis stopped the negotiations, but it is not that they did not like the Vladimir region or the situation in our region. The main reason was the position of the company on the world market,” she told RT.

Shamota added, however, that eight foreign companies decided to go ahead with plans to relocate to the region in the last year.

They say that is more profitable to build during a financial crisis because the cost of the labor and the cost of materials are lower.

Vera Shamota hopes this positive approach to business, along with the region’s courting of foreign companies, will provide greater stability for the area.

The head of the international company Energy Automotive Systems, Igor Matrosov, says that the Vladimir region is attractive for foreign investors.

“Vladimir region is very attractive for our company because of a very good location from the point of view of potential customers first of all. Also they have a good labor cost here and regional government supported us,” he said.

Head of the international “Greiner” company Valery Snegirev has also pointed out some benefits of running business in the region as compared to other Russian territories.

”Production price – the land, the salary for the workers and so on in Moscow – are higher than in our area and from here we can work to the West and to the East,” he said.