Indifference kills Russia's eastern dream

Taxes and mafia stifle Vladivostok's hopes of a boom, writes Phil Reeves

The threatened Siberian tiger, symbol of Vladivostok, may be hard to find anywhere near the far eastern Russian city these days, but white elephants are not. Passengers disembarking from the Trans-Siberian railway meet one face-to-face as they step out of their carriages.

With its ornate turrets and high-pitched roof, the city's station looks startlingly out of place as you step into the sunlight, joints creaking after days of lurching over a monotonous landscape in a fourth-berth cabin. Across the bay, Russia's Pacific fleet rusts at its moorings. Soviet-era apartment blocks rise along the crooked skyline around the sea's edge, pillars of squalor and utilitarian tedium.

Elderly Russian peasant women form a line along the pavement, selling spring onions, potatoes, cabbages, anything that can raise a rouble or two. A couple of drunks are slumped against one another on a bench, cradling a bottle of cheap imported vodka. And yet there, in the midst of this clutter, stands what looks like a French mansion, topped by a large red sign bearing the city's name.

The intention is clear enough: it belongs to a vision in which passengers travel by rail across Russia's mighty girth - a seven-day journey of 5,600 miles, if you start in Moscow - to arrive in a graceful, modern metropolis which stands at the doorway to the Far East. Japan is an hour's flight away; China is (to the alarm of many Russians here) only three hours by road to the south. But that dream has yet to happen. The railway has not yet brought the crowds of elegant travellers that were envisaged when it was inaugurated under the Tsars more than 100 years ago. Exotic this city may be; a glamorous international destination, it is not.

When I arrived, the power was off in much of Vladivostok, just as it had been for the previous two days. Delays in payments from clients, caused partly by Moscow's refusal to release subsidies, had prompted the state- run power company to turn out the lights for 24 hours at a stretch. The crisis has blighted the area for months but it eased before June's presidential elections, as the authorities mounted a successful drive to secure support for Boris Yeltsin. Almost the day after polling, the problems began anew; now the city's 700,000 citizens feel betrayed.

Not far away from the station, up the hill, stands what looks like another white elephant, at least for the time being. The US Consulate is a tall, new red-brick building. It opened four years ago with a thriving commercial relationship in mind, a Pacific Rim partnership uniting the huge business machinery of California and the West Coast with the equally large unharnessed opportunities in Russia's far east - from gold and diamonds to timber and fish.

That was at time of extravagant predictions of a boom in Vladivostok, which was closed to foreigners for 32 years because of its role as a Soviet naval base, but was thought to have great prospects as a shipment point between the markets of Europe and the workshops of Asia. But so far these expectations have fallen flat, spoiled by the bewildering array of taxes (there are at least 18 different levies), official indifference, unpredictable politics, tough working conditions, and - inevitably - the long shadow of the mafia.

Exactly who the mafia are is a matter of debate in this unruly port city. I found a plentiful supply of muscle-bound thugs in a harbourside bar (one of whom stole my wallet and air ticket), but these are almost certainly the small fry, the brawn rather than the brains. The term embraces a loosely- defined multitude of sinners, from a coalition of old Soviet managers who have pooled together to buy a stake in newly privatised industries to small, turf-conscious gangs controlling the docks, smuggling weapons and drugs, and doing a roaring illegal trade in the cheap second-hand Japanese cars which fill the streets. There are several murders a day, and the occasional bombing. "There is a gang war out there," one local told me, "The police can do absolutely nothing about it."

Despite this, there have been some efforts to drag the place into the modern age. The Korean company, Hyundai, is building a $52m (pounds 34m) business centre, using Chinese and Korean labourers because, according to the management, Russians will not work long shifts and seven-day weeks. Several international- class hotels have opened, including a Canadian establishment which was imported piece by piece from Canada.

But perhaps the city's most enthusiastic advocate is not a Russian, but a 25-year-old New Yorker, David Poritzy. "Just look at that," he said proudly, as he unfurled a large coloured banner inside his basement office. "VladiROCKstok '96!" Mr Poritzy and another young American are staging an international music festival in the city in September, bringing together groups from the US Pacific north-west - particularly Seattle - and Russia.

He came to the city to work for an American food company that was trying to open a supermarket. The project foundered, yet he stayed - sufficiently undeterred by the problems to invite American performers to a 20,000- capacity stadium. "The mafia tends to dominate the headlines, but the real problem here is the tax inspector and official indifference," he said, "A lot of people look at the situation and say, shit, I'll move on to China or Korea." And yet he adds, gazing lovingly at his banner, "It can be done here. The place can work." And that, for the new arrival, seems to be the definition of optimism.