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Russia: As EU Prepares For Expansion, Kaliningrad Worries It Could Find Itself Orphaned

The prime ministers of Russia, Poland, and Lithuania have announced they will hold a trilateral summit in March to discuss common concerns tied to the Russian territory of Kaliningrad. At issue is the future accession of Poland and Lithuania into the European Union, which will require changes in both countries' relations with the territory -- changes whose impact could isolate Kaliningrad even further unless corrective measures are taken.

Prague, 31 January 2002 (RFE/RL) -- The district of Kaliningrad occupies a unique position in the geography of the Russian Federation. Soon, it is likely to occupy an equally anomalous spot in the geography of the European Union.

Formerly known as East Prussia, the territory was split in two after World War II, with the northern half -- including the main city of Koenigsberg, renamed Kaliningrad -- annexed to the then Soviet Union. The southern half went to Poland.

Kaliningrad remained as a contiguous part of the USSR for the next four decades, but when the Baltic states regained their independence amid the collapse of the Soviet Union a decade ago, Kaliningrad was set adrift -- an unattached appendage of the Russian Federation sandwiched between the Baltic Sea, Poland, and Lithuania.

Hoping to turn the territory into a Russian Hong Kong, Moscow made Kaliningrad -- roughly half the size of Belgium -- into a free-trade zone. A relatively porous border between Kaliningrad and its two neighbors was also maintained, to encourage trade.

But with Lithuania and Poland now preparing for imminent entry into the European Union, times are about to change. As a first step, both countries will have to demand visas from Russian citizens, including Kaliningrad residents. At present, Poland has no visa requirement for Russians. Lithuania, which does, makes an exception for Kaliningrad.

Gunnar Wiegand, a spokesman for EU External Affairs Commissioner Chris Patten, explains: "I would like to emphasize that Poland and Lithuania, as future members of the European Union, will have to apply our common visa regime -- the so-called Schengen Agreement. Therefore, there is one and only one visa policy. This visa policy will have to be applied to Russia, but we will use every possible flexibility which does exist, in particular for border regions, so that this will not be in any way a burden on the possibilities of Kaliningrad citizens."

Wiegand says there are several ways of softening the transition: "We would foresee multiple-entry visas, visas lasting for a long period and having an easy way to get them through consulates set up by our member states in Kaliningrad and also at a reasonable cost. There is readiness to negotiate this, and our member states will agree on a common position on these matters before meeting the Russian interior minister in April."

The visa issue -- although it is one of the more visible problems to be resolved -- is not the only difficulty. Wiegand added: "The question is the linkages of infrastructure. Kaliningrad is linked to the Russian network of energy and transport, and Poland and Lithuania will in future direct themselves much more to having linkages with the Western European networks. And the question is: What's going to happen with Kaliningrad? The other issue is how to deal with a region where in the past the military was the main employer -- the huge Baltic Sea fleet of the former Soviet Union -- and where nowadays unemployment is very high and people are looking for alternate job opportunities."

Almost totally reliant on the military during the Soviet era, Kaliningrad now depends on cross-border smuggling and the so-called gray economy to stay afloat. A recent EU report estimated that illegal activities such as trafficking in drugs, cars, amber, and human beings provides up to half of the enclave's wealth.

Wiegand acknowledges Brussels worries about the negative consequences closer integration of the territory with Europe could bring: "Yes, it does worry the EU, and it is a matter of concern to us. We certainly do not wish to have a situation where, because of enlargement, we would get additional challenges and perhaps even create a more difficult situation in this context. And that is why it is very important that we do address, already ahead of enlargement, issues linked to creating better economic opportunities and also that we do greatly improve cooperation between our interior and justice administrations."

Aleksei Ignatiev, a Russian, is deputy director of the East-West Institute's Cross-Border Cooperation Program. The aim of the nongovernmental organization is to see Kaliningrad better integrate with its European neighbors.

Ignatiev says illegal border traffic does take place, but he tells RFE/RL that the vast majority of goods are smuggled out of Kaliningrad into Poland and Lithuania, with the help of less-than-honest Lithuanian and Polish customs officials.

"It's essential for Lithuanian and Polish customs officers to work more efficiently, let's say. There are many reasons why this is not happening today. I understand the concerns of the Polish authorities, but the fact is the northern districts of Poland are some of the most backward in the country, and the level of unemployment in these regions is significant. And many of the social problems there are alleviated by the fact that people have the possibility of making money through smuggling goods."

Alvydas Medalinskas, deputy chairman of the Lithuanian parliament's European Affairs Committee, says that if it had a choice, Vilnius would opt for the status quo rather than impose visas on Kaliningrad residents. But, given the EU requirements, he believes the best long-term solution will be for Russia to draw closer to European legal and financial norms to ensure the territory continues to integrate with its neighbors.

"Quite many issues, when you talk about economic relations and the economic situation in the Kaliningrad district, would be solved by one decision which would probably have to be made in Moscow, not in Kaliningrad -- or really two decisions. One of them is to look at how much Russia could adapt to the EU legal system, not even being an EU candidate, but just because of the benefits to its own economy. And secondly is how ready Russia is to become a member of the WTO. Those two issues, probably, would be even more important than to look for some kind of special status in economic terms. But, of course, I would say the Kaliningrad district could become a very good pilot region for creating a common economic space between the EU and Russia."

Moscow has declared WTO membership to be one of its priorities, but the irony is that Russia's rapid accession to the group could actually prove disastrous for Kaliningrad.

Aleksei Ignatiev added: "In this case, it's obvious that tariffs on many types of products will be eliminated and this will mean that the attractiveness of the special economic zone will become minimal. Before then, the Kaliningrad district will have to find new markets and new ways of working."

In fairness, Ignatiev points out that Kaliningrad has made some strides forward in recent years, attracting foreign investment, such as South Korea's KIA auto manufacturers, which has opened a car assembly plant in the district. But the disparity in living standards in the region compared to Poland and Lithuania continues to grow. The main reason, Ignatiev says, is that Kaliningrad, unlike its two neighbors, has not benefited from EU structural funds.

"The level of investment from the European Union has, of course, been nil up to now. Russia is barred from receiving most funds from development programs targeted at non-EU members, unlike our neighbors Poland and Lithuania. For example, the European Commission is investing a lot of money in infrastructure projects in Poland and Lithuania, and it's a big plus for the economic development of these countries. But Kaliningrad is not receiving anything."

The EU and Russia are due to hold another summit meeting this May in Moscow, during which the issue of Kaliningrad is certain to figure prominently. Russian President Vladimir Putin recently complained that European leaders are aware of the territory's problems but continue to do little to help resolve them.

All sides agree, however, that creative solutions will have to be found soon because time is not on Kaliningrad's side.