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By Trey Whittenton




The disbanding of the Soviet Union in 1991 required transitions in three key areas: the economy, political institutions, and center-periphery relations. The changes in those areas would affect countless other aspects of life for the citizens of Russia and the Newly Independent States (NIS).

The economic transition was from a centrally planned to a market economy, a transformation that started under Mikhail Gorbachev. After the Soviet collapse, the economic reform resulted in privatization and openness to international markets. Of particular importance was the privatization of housing, which allowed citizens to buy, sell, and inherit houses.

The political transition was from a one-party state to a democracy. Changes in this area also began under Gorbachev. In the Soviet Union, the Communist Party was unopposed, and, as such, was the Soviet government itself. In elections, citizens were given a ballot with one name on it, their only choice whether to approve the candidate. Gorbachev brought about the first multi-candidate elections, a system that remained after the breakup.

Russia also is in the process of changing from a unitary state to a federalist system. After the USSR’s collapse, the 89 units, or "subjects of the federation," that make up Russia demanded more autonomy and more power for local and regional governments.

The widespread changes resulted in a lot of uncertainty, as the new government’s actions are often unpredictable and inconsistent. Institutions and rules are weak, and many laws are either too vague or too poorly enforced to have any effect. Policy often shifts wildly, even on situations that appear comparable. The government at times has displayed "asymmetric federalism," handling relations with the governments of autonomous republics in dramatically different ways.1 Moscow went to the negotiating table when Tartarstan sought more autonomy; in a similar situation with Chechnya, military force was used to maintain control. In this paper I assess the impact of Russia’s three post-Soviet transitions on one of the quintessential Soviet institutions, zakrytye administrativno-territorial’nye obrazovaniia (ZATO), popularly known as "secret cities."

ZATO – The closed cities

Spread around Russia are cities which stand as reminders of the old regime, remnants of the Soviet Union. They are ZATO, or closed cities. These cities are usually surrounded by a concrete wall and require a special permit for entrance. In addition to being physically closed, the cities are kept largely secret by the government. In the past, ZATO had been omitted from maps. Although this practice has begun to change in recent years, information about the closed cities is still hard to come by, and the total number in existence is unknown.

ZATO are also financially closed, budgetarily independent of their surrounding regions. Regional finance officials often know little about public financing of nearby closed cities and sometimes even deny their existence.2

The reason for the secrecy surrounding these cities is the work that is done inside. ZATO are tied to the military industrial complex, usually either producing and/or testing nuclear weapons and materials or serving as military or missile-testing bases. There are at least 40 known ZATO, ten of which have nuclear-based economies. In addition, there are thought to be at least 15 ZATO in existence that cannot be accounted for.3

The closed cities have been affected in several areas by the three aforementioned transitions that have taken place in the wake of the USSR’s collapse. They have seen changes in their economies, the level of security surrounding the cities and their industries, and in their effects on the environment.

All public financing received by ZATO comes from the federal budget. In the Soviet era, data on federal funding for ZATO were not available to the public. The fact that this information can be found is an example of the changes in government openness. In the regions listed in the 1994 summary table below, ZATO received nearly $762 million. However, this information is incomplete, as closed cities are known to exist in regions not listed on this chart.4

Known ZATO Subsidies in 1994 U.S. Dollars
RegionU.S. Dollars

North Economic Region


North-West Economic Region


Central Economic Region


Volga-Vyntsk Economic Region


Central Black Earth Economic Region


Povolzhsky Economic Region


N. Caucasus Economic Region


Ural Economic Region


Western Siberia Economic Region


Eastern Siberia Economic Region $175,432,291.67
Far East Economic Region $150,859,375
Total $761,835,937.51

With the transition to a market economy, some closed cities wanted to "open up." This meant that, while they would ideally keep their ZATO status (and accompanying federal funding), they would be able to engage in private trade, as well as conduct international business. Mayors of closed cities and governors of the surrounding states have designed programs to expand the business of the ZATO. Some ZATO have begun producing a wide range of consumer goods, as well as industrial equipment.

The shift to federalism has caused confusion about who is in control of the closed cities. Russia is currently in the midst of a nonpayment crisis. Some workers have not received their wages for months, due to corruption and/or confusion. This crisis has affected workers all over Russia, and has caused unrest among workers at nuclear facilities, who claim that funding problems may compromise nuclear safety. About 300 workers from one nuclear submarine factory blocked the Trans-Siberian railroad, demanding wages that were nearly ten months overdue.5

The transitions also affected nuclear-related ZATO on matters of security, making it harder to maintain. The market economy in particular has contributed to the security problems, through the nonpayment problem. Workers who have not received wages represent a serious risk, because of the possibility of them causing a nuclear accident in protest. One striking plant mechanic said he could see "only one way out – to go to a nuclear submarine and do something," adding that it would not be hard to cause a "tragedy worse than Chernobyl."6

In addition to serving as a means of protest, the nuclear materials can provide an alternate source of income. There have been documented cases in which factory workers have attempted to sell materials taken from the factory. With so many unpaid workers needing to find money somehow, this black market will continue to be a problem. There have been hundreds of known cases of nuclear smuggling in the 1990s.7

The shift to federalism has contributed to the nonpayment crisis. The federal government sometimes sends the workers their wages, only to have them intercepted by someone in the provincial government. The regional official then deposits the money in his bank account to earn interest, and the workers aren’t paid on time, if at all, that month.

The conflict over government openness has affected security, as ZATO must try to find a balance between transparency to citizens and national security. Because of the nature of the industries in ZATO, officials cannot be completely open with people. At the same time, the people of Russia now have a legal right to know what their government is doing.

The demise of the Communist Party, caused by the new democratic system, has left a void in the ZATO. The Party provided motivation for workers to do their jobs well, with incentives for good performance and punishment for mistakes. Employers might have been publicly honored for good work, or privately reprimanded for mistakes. In addition, workers usually received an annual bonus of an extra month’s pay. The laws and institutions that have taken the place of the Party are not yet well established, and therefore are not as powerful. The Party-based security forces, including the KGB, military, and police, declined with the Party, making it harder for businesses to control corruption.

The security questions tie in with another potential problem the ZATO could cause: risk to the environment. Obviously, the effects of a nuclear sabotage such as the one suggested by the striking worker would be devastating to the environment. Even when functioning as intended, though, the nuclear-based ZATO can take a harsh toll on surrounding air and water.

Democracy and the market economy have changed the goals of Russia’s government. The end of the Cold War resulted in cutbacks in spending on the military, which previously had been, arguably, the foremost institution within the Party. Now, nuclear submarines sit unused and unattended while workers look to the private sector for opportunity. The decaying conditions of these subs raise the risk of an accident, as fuel or other nuclear waste could leak. Bolshoy Kamen, a ZATO in Primorskii Krai, could help in this matter, because it specializes in repairing nuclear submarines. However, for now the submarines remain an environmental hazard.

As mentioned, the move to federalism has led to disputes over who should control the ZATO. Regional economies may not be able to maintain the cities if the federal government reduces funding. The Primorskii Krai government has used the threat of dumping waste in international waters as leverage for more funding in Moscow.


The ZATO are cities in flux. They served their purposes well for the USSR, sustaining the Soviet military superpower in secrecy. In this new era, though, it is hard to tell what will become of the closed cities. Will they open up their borders and economies and become normal cities? Might some abandon their old industries altogether? Or, is it possible that the ZATO will maintain their clandestine ways, and remain a mystery to the outside world? Whatever the result, it is likely that the direction taken by the ZATO will mirror that taken by the rest of Russia.

1 Sakwa, Richard, "Russian Politics and Society," New York, Routledge, 1996.

2 Brock, Gregory, "Public Finance in the ZATO Archipelago," Europe-Asia Studies, 50, 6, 1998, p. 1065.

3 Rowland, Richard H., "Russia's Secret Cities," Post-Soviet Geography and Economics, 37, 7, 1996, pp. 426-462.

4 Brock p. 1066.

5 Alexseev, Mikhail, "Russian Far East: From Nuclear Threat to Sustainable Nuclear Safety and Security," policy paper, Pacific Rim Enterprise Center, Seattle, WA, 1997.

6 Moltz, James C., "Economic and Political Factors in the Security of Russian Far Eastern Nuclear Facilities," National Bureau of Asian Research, Program on Security Implications of Political and economic Developments in the Russian Far East, Khabarovsk, 10-21-99, p. 4.

7 Deutch, John, testimony before the Senate Permanent Investigations Subcommittee March 20, 1996.

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