The number of workers in the Russian nuclear weapons complex has beencut in half since 1989, according to Antonov. A significant portion ofthe original 70,000-stong workforce is now employed in research and developmentand "civilian-use-items development." Under MINATOM’s plan, up to 50,000jobs will be eliminated in the weapons complex by the 2005-2007 timeframe,with 40,000 of those jobs located in the closed cities. Therefore 50,000jobs must be created by that deadline. The coefficient of stress in thelabor market equals 6.6 unemployed to each 1 employed, he explained.

Currently MINATOM has the following government-developed programs inplace:

• The Federal Program on Restructuring and Conversion of the Nuclear Enterprises
• The Program to Assist MINATOM Population Employment
• The Program on Development of the Closed Cities.

• Energy park equipment manufacture;
• Advanced materials development;
• Isotope production;
• Medical equipment manufacture;
• Microelectronics;
• Instrumentation;
• Machine building for farm-use;
• Tool fabrication; and
• EleGas equipment production.

At present there is a draft program for restructuring. This plan callsfor creating 30,000 new jobs (costing approximately $900m) in the followingareas:

• Nuclear power safety/facility security;
• High-energy physics research;
• Gas dynamics/explosion physics and conversion into magnetic energy, andthe development of "magnitocumulative generators;"
• Laser physics;
• High-purity isotope production;
• New technology/advanced materials;
• Nuclear materials physical protection/control systems;
• Improve oil/gas production facilities;
• Telemechanical development for increasing pipeline efficiency; and
• Specific development of "ways to lift oil and gas from secondary and tertiarysources."

Bill Desmond
Director, Department of Energy Nuclear Cities Initiative

Desmond began with a history of the NCI program, reminding that NCIhas $12.5 million in appropriated money, and hopes for the program to "expandwith authority from the U.S. Congress and the Russian Federation." Thegoal of the program is successful downsizing of the Russian complex, "inorder to create an atmosphere that will attract outside investors." Ithas taken two years to put a platform together. The program is "lucky tohave attracted outside money and create jobs." Further, "the U.S. is doingNCI because Russia asked them to help in economic diversification, givenDOE’s experience in downsizing the U.S. complex," Desmond summed up.

The International Business Centers will serve as resources for citiesand investors, Desmond added. The Snezinsk OCC is currently housed in atemporary building, but will soon be relocated into a renovated building.The Zheleznogorsk IDC will benefit from "a very proactive city government,"and currently has about 60 customers per month. Basing the success of theprogram on the number of jobs is hard to do, although "it is required byboth MINATOM and the U.S. Congress." Desmond added that environmental managementand energy efficiency are two "areas of potential new work" for the program.

Responding to a question and comment from Frank von Hippel on the High-LevelWaste tank demonstration project---that in order to be successful, theproject has to have interest from DOE’s EM and ER offices---Desmond statedthat "DOE has been watching with great interest since January. We thinkit’ll be a good IPP project with application in both in the U.S. and Russia."

Dr. James Toevs
Los Alamos National Laboratory

The common objective for the U.S. and Russian sides in downsizing theRussian nuclear weapons complex is to keep nuclear weapons and materialssecure, as well as increase irreversible arms controls. In FY2001, theNuclear Cities Initiative must demonstrate significant conversion progressand increase U.S. Congressional advocacy. The U.S. must increase fundinggoing into the cities to complement MINATOM’s on-going efforts. Likewise,the accelerated conversion of Sarov is a must: the OCC "won’t be successfulunless it is self-supporting."

Anatoli Daikov
MIPT; Director, Center for Arms Control, Energy, and Environment

Diakov’s presentation was primarily a discussion of his soon-to-be-establishedCreative Business School at MIPT, and the need to train managers from theregions of Russia, and possibly scientists from the nuclear cities. Thereis a need for "managers in a market system," whoa re versed in principlesof "price effectiveness, product quality, and know how to function in amarket economy." These things are currently not considered. At the recentZheleznogorsk Technopark Workshop, it was revealed that individual "projectsare not the solution to the city’s problems." The proposals of individualprojects were "not well-developed," Diakov stressed.

Frank von Hippel
Professor of Public and International Affairs, Princeton University

The successful downsizing of the Russian weapons complex will require$200m per year, roughly twice the amount that is currently available orprovided by MIANTOM. Von Hippel echoed the statements of MINATOM’s Antonov(see above) that 35,000 MINATOM employees will be laid off by 2005. TheHEU Purchase Agreement "is the crux of the downsizing effort," von Hippeladded, as it is the only source of income for MINATOM to finance any downsizingwork. Commercial ventures are only part of the solution to successful downsizing,he stressed.

Following von Hippel’s presentation, Igor Kripunov from the Universityof Georgia’s Center for International Trade and Security commented thatRussian President Putin in March stated he would like to lift closed-statusof the nuclear cities, but with enhanced modern technology to increasesecurity. Kripunov stated that the advantages of a pilot open city wouldinclude: increased marketability; would be consistent with government policyto strip privileges; and serve as a case study for opening other cities.It would also "accelerate the process of reviving civilian life" in thecities.