Ridder is a one-company town with a population of 56 thousand people, which is located in Eastern Kazakhstan. The main source of money for the municipal budget as well as for locals is Kazzink and its subsidiaries, which provide jobs for more than 11,000 residents. The joint project of the Kursiv edition and Chevron Corporation The Real Kazakhstan reveals how the town’s life looks.
Editor’s Note: The author expresses her personal opinion that might be different from what the Kursiv edition or Chevron believe or think.
As of early 2021, the town’s budget was estimated at nine billion tenge ($21.6 million). According to the local administration’s data, the expenditures of the town have gone up to $550,293 or 9.3% ($46,639) compared to last year. The non-tax revenues have also exceeded expectations.
One of the local firms Etalon is used to repair and clean public roads and haul away garbage. Last year the company added to the list of its businesses one more activity: waste sorting. The company had spent about $601,020 of its funds over two years before the waste sorting plant was built. It was put into operation in April 2020 and can now process more than 70 tons of waste per day.
“The amount of waste declined during the quarantine and we just put it into a warehouse. We couldn’t sell it, because everything was closed due to lockdown. However, we have a pretty big warehouse where the bales of waste had been stored. There were no other options but to lose money for a while because we had to pay people. Workers are used to receiving from $216 to $288 a month. Currently, we provide jobs for 21 men, some of whom were unemployed before we hired them. Now we need to rebound and cover all that losses,” said Maksim Schelkunov, head of the workshop.
Since April last year, the company sold about 40 tons of used boxes, 15 tons of cardboard and plastic bags, 8 tons of plastic bottles and 10 tons of briquette coal.
“We collect waste through the entire town, and then sort it on the conveyor. We separate plastic bags, plastic bottles, cardboard, and aluminum cans from each other. After that, we press all that stuff and sell it to processing companies from Semey and Usk-Kamenogorsk. All leftovers of the trash as well as colored plastic, leather, textile, etc. we burn and then make briquette coal from the ashes we get. As a fuel it works better than the real coal because it burns much longer,” he said.
LEGO-Style Building Bricks
Taymur company produces gas-concrete blocks, LEGO style bricks, sand and slag-concrete blocks for the needs of ordinary people.
“I make gas-concrete blocks out of ash from the local heating and power plant. I always make sure that the ash poses no risk for people’s health or the environment. We have also produced LEGO-style bricks and other building materials. Since the products we’ve made are important for the town, we managed to obtain three million tenge as a grant ($7,200). Concerning gas-concrete blocks – we produce about three cubical meters of them during one shift. Our prices are the same as in Ust-Kamenogorsk but our costs are lower because there is no need to pay for logistics. The business goes well, but we want to scale it,” Murat Ordakanov, head of the company, said.
Meantime, local authorities try to prepare themselves for the building boom. The town plans to rebuild about 70 old houses, which were built in 1947 by German and Japanese war prisoners. Moreover, Ridder authorities want to build two apartment houses and provide people with land parcels to build houses on their own.
“More than 1500 residents wait for new housing, so we are planning to restore some old houses and build two new houses for 62 and 90 apartments. If the central authorities will support us, we are ready to expand these plans in the following years. Also, we want to let people build houses on their own in a new micro-district; our task is to provide this area with water and energy supplies. We hope to reduce the line I mentioned significantly by 2023,” said Dmitry Gorkovoy, the new head of the town of Ridder.
To raise Ridder’s budget, entrepreneur Oleg Belyaev has suggested authorities support local small and medium-sized businesses.
“Production volumes have declined everywhere, I mean this trend affects either big and small businesses. However, the government has always supported foreign big companies and invites them to bring money into the regional economy to create new jobs. They are right of course, but we have to consider small and medium-sized companies as investors as well. My suggestion is to use such a new definition as ‘Kazakhstani investor from the sector of small businesses.’ To get this status you have to prove you pay taxes, that’s it,” Oleg Belyaev, director of Avto-Fort company, said.
The idea is to make a connotation between the taxes that companies pay and the volume of tax preferences.
“Over 2018 the coefficient of the tax burden for construction companies was from 7% to 8.4% on average. However, if the turnover of your company is more than 100 million tenge ($240,000), it makes a difference in how you pay and what coefficient your business has. All this data is available in tax service, so we need to take a look more closely and decide who pays correctly and who pays less than the specific industry as a whole. Those who try to refuse to pay taxes correctly must be excluded from the list of receivers of the state bonuses. On the other hand, those who have a coefficient of 20% should be supported with a wide range of preferences,” he added.
This move may motivate companies to not hide their revenues and avoid wrongdoing with taxes. Once this practice is common, the local economy would get the real boost, Belyaev believes.
“Unfortunately, these days we have to cope with a different approach. Those who refuse to pay taxes and hide their revenues are the winners. Instead, we need to support the real economy, those who despite the crisis with COVID-19 have worked an everyday basis and pay taxes as it should be,” the entrepreneur stated.
Tourism and Bureaucracy
Ridder is well known for its beautiful landscapes, forests and mountain resorts. However, some nuances prevent the region from being a brilliant tourist destination.
According to the local administration’s data, there are 30 tourist objects in the region including 12 recreation facilities, two mountain resorts, 10 hotels and four guest homes.
“Ridder is a part of Altay Ski Resort Area. There are several tourist zones. The first includes Ridder Resort Hotel in Ulba, where people can enjoy skiing or riding a snowmachine; Sinegorye (Blue Mountains) mountain ski resort and Ridderhutte sports base for professional biathlon runners.
The second zone is Poperechnoe village, where four guest homes are located. They work during the summer season and offer tourists to embrace the simple joys of a rural area and homemade food. This spot is particularly popular among foreign tourists. The third zone is Konovalovka village, where the Berezovka recreation facility operates. This resort is focused on traditional crafts,” said Assel Zhumabayeva, head of the Department of Tourism and Entrepreneurship of Ridder’s administration.
Any entrepreneur who wants to make a business with red deer farming or build a camping or recreation facility may apply to the Ridder administration and ask for land.
“In 2020 one entrepreneur Klimov brought here five red deer (marals) to make them get used to the local climate. In another case, we are helping Erda company to obtain 10 hectares of land,” Zhumabayeva said.
However, entrepreneurs say that it’s not so easy to obtain a parcel of land.
“I have 400 marals in Russia. I want to bring them here but I can’t receive a land parcel because of a mess with documents. I already have an agreement with investors from the UAE, I have horses and marals, and all I need now is a maral enclosure. I applied for land nine years ago but there is still no response,” Vladimir Klimov told Kursiv.
Moreover, it’s very hard to develop a business here because of the shortage of electricity. Some recreation facilities have no power lines, according to the entrepreneur.
Business Wants to Work with the Russian Altay
Ten years ago there was a plan to build a road between Ridder and the Republic of Altay in Russia to develop tourism in Eastern Kazakhstan. The project also envisaged the construction of power lines along the road to power West Altay Natural Park. Owners of five tourist bases out there have also waited for power, but the project was temporarily abandoned by the town of Ridder.
“Why did we stop the construction? The answer is simple: there is no road on the Russian side. However, I know that in 2022 or 2023, the Republic of Altay is planning to build all proper infrastructure right close to our border. If they’ll do that, we also will finish our part,” Dmitry Gorkovoy stated.
On the Kazakhstani side, the road is almost done and ready to be covered with asphalt. But there is no reason to complete the project and spend money for its maintenance until Russia builds the road on its side. Moreover, Kazakhstan lost about 400 million tenge ($961,632) it spent for power line construction because of fraud.
“Several criminal cases against local officials have been opened, so let the court determine whether they are guilty or not. This year we’ve allocated 230 million tenge ($552,938) to complete the construction with help of a contractor we’ll choose through the bidding,” the Ridder mayor said.
He also commented on the land issue. “The vast majority of land people want to use for tourism is a forest reserve, so it’s just out of my jurisdiction; we need to negotiate with Kazakhstan’s Forestry and Wildlife Committee. That is the reason for all these problems local businesses are forced to struggle with. However, we know that there is a lot of people who want to invest in Ridder’s tourist industry,” Dmitry Gorkovoy noted.