Russia's westernmost territory, the enclave of Kaliningrad, poses a strategic challenge for both the European Union and Russia. Bordering EU aspirants Lithuania and Poland, and separated from the rest of Russia, Kaliningrad could be a bridge between Russia and the EU. But a new British academic study says the enclave is sinking under its economic problems and its reputation as a hotbed of organized crime.
London, 18 January 2000 (RFE/RL) -- A heavily armed naval base, Kaliningrad has long been strategically important as Russia's only ice-free port. Formerly the German city of Koenigsberg, it was ceded to the Soviet Union in 1946 under the Potsdam Agreement.
A new study ("Competing for Kaliningrad") by Graeme Herd of the Scottish Center for International Security says Kaliningrad today is growing even more strategically important. The small enclave of 400,000 people is on the front line between an EU keen to enlarge itself, and a Russia struggling to manage its transition process.
The study predicts: "As with Kosovo in the Balkans, Kaliningrad will be the touchstone for the new European security order in the region. Its fate is inexplicably linked to regional stability."
After the 1991 collapse of the Soviet Union, some optimists said Kaliningrad had the potential to serve as a "Baltic Hong Kong" or a trading conduit to the huge Russian market. But it signally failed to become a thriving Euro-zone when its economy collapsed and it was hit by organized crime. For years, it remained a forgotten backwater.
A decade later, a new debate is emerging about where Kaliningrad will stand in relationship to Moscow and the EU. Lying as it does next to NATO-member Poland and potential EU members Poland and Lithuania, Kaliningrad faces three critical challenges.
The first is whether Moscow and the EU can conclude successful negotiations about the future of the territory. The second is whether Kaliningrad can be integrated into future pan-Baltic energy and transport projects, essential if the province is to sustain itself. But the most crucial question is the third: Will Moscow be prepared to accept the potential integration of Kaliningrad into the new Euro-regions that are expected to emerge as the EU enlarges itself?
There are a number of uncertainties. Will greater integration into the EU help to stabilize Kaliningrad and northwest Russia? Will Moscow accept a process of decentralization for its westernmost province? Or will Russia see this as a dangerous process which represents a threat to its territorial integrity?
According to the study, these problems are compounded by Kaliningrad's economic woes. Farming has collapsed; traditional industries such as fishing, paper and pulp are largely obsolete; while other raw materials, such as the region's famous amber, are traded on the black or gray markets.
Yet economic recovery is particularly difficult for the enclave because of its reputation as a center for organized crime. Prostitution, drug trafficking, small arms smuggling and illegal migrant networks thrive in Kaliningrad, and the authorities themselves have been accused of corruption in shipyard privatization.
The image of Kaliningrad as a crime center has deterred investors, both domestic and foreign. And it has discouraged companies keen to capitalize on Kaliningrad's geo-strategic location as a gateway to the vast potential market in the rest of the Russian Federation.
The study says the status of Special Economic Zone granted to Kaliningrad reflects Moscow's "uncoordinated and constantly fluctuating policy" towards the region. Last July, the cash-strapped federal Ministry of Finance ruled that SEZ-status was contributing both to the high crime rate and direct losses to the federal budget.
Local politicians have warned of the further economic isolation of the territory from European-Baltic energy and transport projects, both of which are vital to its internal sustainability.
The study concludes with these words: "The process of integrating Russia into a new European security order -- a project for the 21st century -- will largely stand or fall on how Brussels and Moscow manage the competition for Kaliningrad."
(The study was published in the December edition of "The World Today," the monthly journal of the Royal Institute of International Affairs in London.)