St. Petersburg, 14 November 1997 (RFE/RL) -- For a long time Russia's vast forests have provided a valuable source of hard currency. But since the fall of the Soviet Union many Russian timber companies have gone out of business, unable to be run profitably.
The World Bank plans a pilot project to help Russia's forests, which account for 25 percent of the world's total and play an important role in the global environment.
The project envisages pumping a total of $60 million, in the form of loans, into the forestry sectors of the Leningrad region, Khabarovsky territory and Krasnoyarsky territory. The last two are in Siberia, where the most destructive logging is now happening.
Andrei Kushlin, an official at the World Bank responsible for the project says that the goal is to help the Russian federal government and the regions to transform the timber and forestry industry, which is now in decline, into a net contributor to the treasury.
While an official agreement on the project has yet to be signed, the World Bank suggestions have been critically assessed in the Leningrad region.
Sergei Koltsov, an official from the Leningrad region's Committee for the Forestry Industry Complex, says that the project will be of little benefit to his region. In his own words, "It would just straddle us with a loan that will become a burden for the budget. What we need is technical help to develop the timber and wood industry so that it can be profitable. But it is not in the interest of the West to develop our industry. It is advantageous for them just to buy our raw timber."
Kushlin add, however, that "the project could help viable forest enterprises in the pilot regions attract capital from other sources which are currently reluctant to invest into the sector because of its operational instability and lack of transparency and accountability."
World Bank officials counter that any meaningful investment in the timber and wood industry itself are beyond the scope of the World Bank's project.
Local environmentalists also doubt that the project will succeed in Russia, but not because it is poorly thought out. Indeed, Svetlana Nikitina, a veteran St. Petersburg environmentalist thinks that the World Bank's project is basically a good idea. She says that the project calls for the regions to establish tighter control over their forests and create a system of monitoring as to how much is being cut.
But, she adds that Russian reality will hinder the project's successful implementation. "The current legal system in Russia cannot fulfill the strict requirements laid down by the World Bank. There is no independent mechanism of control in the Russian forestry industry."