Since 1989, the number of people working in the NWC has been halved.A significant proportion of previous NWC workers, (up to 70,000 people),are now involved in research and development work, and in the manufactureof products for civilian purposes.

Due to the significant decrease, (compared with 1990), in the numberof State orders, the Ministry of Atomic Energy (MinAtom) [slide 1] facesthe immediate task of preserving existing employment places for workerspreviously employed in the nuclear-weapons industry, (approx. 70,000 jobs),and also creating a further approx. 50,000 new jobs in civilian productionby 2005-2007, including in the "Nuclear Cities", where 60,000 existingjobs must be preserved, and 40,000 new jobs created.

The unemployment situation in the nuclear cities is worse than the Russianaverage, at 6.6 unemployed workers for every vacancy. Linked to the decommissioningof industrial reactors, and the proposed closure of active reactors inZheleznogorsk and Seversk, the issue of the provision of alternative energyto serve both industrial production and the needs of the population ofthe nuclear cities has become a question of critical importance.

MinAtom is currently implementing measures to restructure and convertthe NWC, [slides 2 and 3], with the aim of providing work for the populationsof "closed cities" [Literally: "closed administrative-territorial zones],within the framework of the Federal Target Program’s "Restructuring andConversion of the NWC". These target programs will promote employment ofthe populations of the closed cities, within the following sectors: "Medicalequipment", "Instrument-making", "Microelectronics", "Electro-gas equipment","Isotopes", "Tools", "Materials with potential", "Machinery constructionfor the agro-industrial complex", among others.
 
In 1999, the "Department for the Conversion of the Nuclear Industry"was created within MinAtom, to handle the organization, coordination andrealization of these programs (projects).

The total spend on the realization of conversion programs and projects,in the period 1988 – 1998, amounted to $688.2 million, including $287.5million capital investment. Currently a draft program for the reform ofplants within MinAtom Russia’s NWC has been developed, which aims to create30,000 jobs. This will cost $900 million. MinAtom Russia’s basic targetprograms [slide 3] include:

Scientific Conversion [slide 4]

Unique nuclear and precision physics technologies form the basis ofthe plans for conversion of the Research Institutes of the NWC. Work on"Scientific Conversion" includes the following research:

• security in the nuclear industry
• the physics of high-density energy
• gas-dynamics and the physics of explosions, the transformation of explosiveenergy into magnetic energy (magneto-cumulative generators)
• theoretical-computational modelling and information technology
• the technology of powerful lasers and laser physics, inertia (laser) thermo-nuclearsynthesis
• the production of high-quality isotopes
• new technologies and materials with potential
• physical protection systems and control of nuclear materials

Manufacture of equipment for Fuel and Energy Complexes(FECs)

First and foremost, this program envisages the creation, developmentand re-profiling of the production and research subjects of the industrialplants and scientific organisations that are to be converted, leading tothe provision of modern equipment, automation technology, information systems,protection of fuel pipelines and spare-parts manufacturing for the gasand oil mining industries. At the converted plants, the following willbe produced:

• equipment for oil mining (gas-lifting method)
• perforators and perforator charges
• technical programming packages for Automated Management Systems for technologicalprocesses in Thermal Electric Power Stations
• remote control of mains-gas pipelines
• industrial heat-meters
• small-diameter reinforced locking armatures and other types of output forthe FEC

Cooperation within the framework of the Agreement onthe Implementation of the Nuclear Cities Initiative (NCI)

The aim of the Agreement is cooperation in the provision of assistancein the manufacture of products for the civilian sector, which providesnew jobs for workers, freeing plants within the nuclear complexes of thenuclear cities from dependence on the Ministry of Atomic Energy.

Such cooperation is in accordance to mutual efforts directed at nucleardisarmament and non-proliferation of nuclear weapons. The Russian sidegreeted the signing of the above agreement on 22 September1998 with greatenthusiasm, hoping that its implementation would provide significant helpin solving the problems of new job creation for the Ministry’s plants inthe nuclear cities.

Russia’s MinAtom supports the American Energy Ministry’s efforts tofind extra sources for funding of NCI projects, including the enlistingof private American investors such as Intel, Oracle, Motorola, and alsothe expansion of work with state and private funds (The Soros Fund fortelemedicine projects, the Fund for Civilian Research and Development,and others).

The establishment of a working relationship with the international financialorganisations and institutes, such as the European Bank for Reconstructionand Development (EBRD), is an important part of the financing of NCI projects.Russia’s MinAtom plans to conduct talks with the EBRD to determine theconditions for the provision of credit for projects in the closed cities.

The expansion of cooperation between the institutes and plants of theclosed cities, and the (Moscow) [(Moscow) - my addition, assuming Mr. Antonovis referring to the Russian institute] International Science and TechnologicalCenter (ISTC) represents important potential in the preparation of projectsfor the closed cities.

Russia’s MinAtom supports the combined initiative of the Italian ForeignMinistry and the Landau Center, (Volta, Italy), to enlist the help of Europeancountries in the creation of new jobs in the nuclear cities.

We believe that it is important to continue this work, and to look intothe possibility of organising a wider European forum to determine the attitudesof European countries to this issue .

In 1999, the United Coordination Committee (UCC) met twice. At the firstmeeting, in February 1999, the priority areas for cooperation, includingspecific projects and proposals, were determined. The second meeting ofthe UCC, in November 1999, reviewed the work done under the Agreement in1999 and drew up the priorities for the year 2000. The UCC met again inMay 2000, and discussed work on the creation of jobs in the closed cities.

One of the main problems in 1999 was the insufficiency of funding: ofthe $12.5 million earmarked by the U.S. Congress, only around $1 millionhas been received in Russia. Funding tranches were often seriously delayed.At the same time, in 1999 Russia’s MinAtom earmarked $60 million for theimplementation of programs and projects in the nuclear cities. Due to thisproblem with the funding of projects, only 2 of the 12 priority projectsselected at the first meeting of the UCC have been realized: the Open ComputerCenter [The Sarov Technopark?] in Sarov (up to 100 jobs) and the BusinessCenter in Zheleznogorsk (6 jobs).  In 1999, around 200 American specialistsvisited nuclear cities.

It is important to note the advantages of investment in the nuclearcities [slide 5]:

• investment processes in the closed cities are backed by the Russian Government
• highly qualified, well-educated and disciplined personnel
• traditionally high technological and production standards
• the existing security system for the closed cities and their plants doesnot require further protection
• the closed cities have a low crime level, and organised crime and corruptionare insignificant

For Russia:

• acceleration of the conversion of closed cities
• experience of modern market relations in developed countries
• access to new technologies

• stability  of the situation in relation to nuclear disarmament andnon-proliferation of nuclear weapons
• access to highly qualified personnel who have low wages
• access to the Russian market and scientific-technical potential

A.N.Antonov (signed)