MOSCOW/YEKATERINBURG (Reuters) - Steel workers in Russia’s industrial heartland are returning to the land to dig themselves out of an economic crisis that has pushed national unemployment rates to an 8-year high.
Magnitogorsk Iron and Steel Works is offering 1,000 plots of land around Russia’s biggest steel plant on which its employees can grow potatoes free of charge. Transport to the farms and 24-hour security will be included.
“Sowing will begin next week, weather permitting,” Alexander Derunov, chairman of the steel plant’s trade union committee, was quoted as saying in Magnitogorsk’s in-house newspaper.
“The earth there has been fallow for seven years now. The crop should be good.”
Ten percent of the Russian workforce, or 7.5 million people, were unemployed in March as the country headed into its first recession in a decade. Another 1.2 million were on unpaid leave or forced holiday, Economy Ministry data shows.
Steel makers and associated industries, such as the automotive and machine-building sectors, are most at risk from a further round of job cuts that the ministry expects will affect more than a third of all Russian companies.
“In the current situation, protecting the interests of its workers has become a pressing concern for the management,” said Yevgeny Kovtunov, a spokesman for Magnitogorsk, which employs about 25,000 people in the Ural mountains city of the same name.
Steering Russia through the economic crisis and avoiding mass social unrest poses a major challenge for the country’s leaders, who have grown accustomed to nearly a decade of economic boom fuelled by high oil and commodity prices.
“Everyone is saying: ‘Crisis! Crisis!’,” said Eduard Rossel, the long-serving governor of Sverdlovsk region, home to many of Russia’s metallurgical and machine-building enterprises.
“We need to gossip less about the crisis, and work harder,” he told reporters.
“Give me a hammer, a saw, and in a few months I will build a house, a vegetable garden, and do everything to save myself and my family.” Sverdlovsk region has 82,600 registered unemployed, more than triple the number of jobless at the beginning of October. The rate at which unemployment is growing, however, has slowed to 2-3 percent each week from 10 percent in January.
In Chelyabinsk, the neighbouring region that is home to the Magnitogorsk steel plant, 67,318 people are registered unemployed — 3.7 percent of the working population.
Writing by Robin Paxton