Enterprise Restructuring in the Context of Urban Transition

This paper examines Russian enterprise reforms in the context of urban transition.The first part gives an overview of the industrial location structure unique to Russia in comparatively isolated regions, traditionally called “mono-profiling towns” (monoprofil'nye goroda) or “town-building enterprises” (gradoobrazuiushchie predpriiatiia), and depicts the case of Baikal'sk Cellulose and Paper Plant (BCPP) as a typical town-building enterprise. The author documents how the uniqueness of this type of enterprise causes the delay of the restructuring process for both private enterprises and public institutions. Nevertheless, It concludes by suggesting that the relation-ship between enterprise and its community, which were constructed in a symbiotic way, has changed. This is also the case for the “elite cites”, often called closed cities, including academic towns, and secret cities in Russian history. In the last decade, they had lost their stature and many privileges due to financial pressure resulting from changes in economic and social circumstances. It was inevitable for the state in the post-So-viet era to reduce and/or eliminate guaranteed social services.The second part focuses on the impact of urban infrastructure on enterprise reforms. Due to a lack of investments in Russia, existing fixed capital faces obsoles-cence. Municipalization of enterprise-owned urban infrastructure poses further threat to the situation. Therefore, many Russian enterprises keep some social assets (catering services, housing, medical services, sports and recreational facilities, kindergarten etc.) at hand. Although this may serve to mitigate impacts of economic reforms in some respects, “urban infrastructure hoarding”, the other side of“labor hoarding” characteristic of Russian enterprises, may lead to more serious social problems such as dilapidated housing (which had existed since the mid 90s in Russia and ruined blocks in the U.S. metropolis after the oil-shock) . No investment in urban infrastructure, its “mercy killing”, can be realized as part of enterprise restructuring. In light of all these, it is no doubt enterprises need to do the final decision-making.