Innovating for Profit in Russia: Summary of a Workshop (2006)

The Nuclear Cities Initiative (NCI) is part of the Global Initiatives for Proliferation Prevention program of the U.S. Department of Energy’s National Nuclear Security Administration. NCI advances U.S. nonproliferation objectives by assisting Russia in downsizing its Weapons of Mass Destruction (WMD) complexes through infrastructure and worker transition activities that create civilian opportunities for the displaced workforce. The United States has a strong nonproliferation interest in assisting Russia with its WMD complex downsizing plans. NCI has developed and implemented strategies that lead to economic diversification of the nuclear cities and alternative employment opportunities for displaced weapons scientists, engineers and other workers. In addition, NCI is applying the lessons learned in Russia to redirect WMD experts in Libya and Iraq, and possibly elsewhere in the future.

NCI has operated under a five-year Government-to-Government Agreement (GTGA) between the U.S. Government (USG) and the Government of Russia, which expired in September 2003. The agreement is currently being renegotiated; arrangements have been made with Russian agencies for NCI to complete approved projects during the interim. NCI is currently working in Sarov, Snezhinsk, and Zheleznogorsk, three of the ten Russian nuclear cities. Expansion to Seversk,

to assist in worker transition as the plutonium production reactors are shut down, will begin after a new agreement is in place.

NCI leverages its funds with resources from various partners, including other USG programs, non-governmental entities and foreign governments, to create employment opportunities for displaced WMD experts. Through local partnerships with Russian institutes, city municipal administrations and regional businesses, NCI assists in developing commercial infrastructure in the closed cities, along with business creation and expansion, thereby laying the groundwork for additional private sector investments.

NCI has accomplished its economic diversification objectives in the nuclear cities by building physical and business infrastructure, and by creating new businesses. This has included

• Physical Improvements: moving fences, renovating buildings, upgrading telecommunications, installing utilities

• Business Development: establishing International Development Centers, business training, providing marketing support, and supporting business plan development

• Commercial Development: creating and expanding self-sustaining businesses, focusing on core competencies and business partnerships; NCI facilitates the transition from weapons-related production to non-military business

NCI will remain focused on Russia, but the tools developed for commercial infrastructure building and displaced worker transition to sustainable employment are being applied to other regions of proliferation concern. NCI is completing work in Snezhinsk and Sarov, will continue efforts in Zheleznogorsk, and will expand to additional cities, including Seversk and Zarechny, when a new GTGA is established. NCI is coordinating with the Department of Energy’s Elimination of Weapons Grade Plutonium Production program to support reactor shut down in Zheleznogorsk and Seversk. NCI is also forging a relationship with the International Science and Technology Center to develop a new multilateral, strategic program for economic diversification and worker transition in the closed cities.