Vesti Special Report on Altai! Far-Flung Siberian Region Opens Doors to Huge Boom in Tourism!

“Economic prospects? Not likely. There are only a couple of passengers here. There's no way it'll develop.” That's what the local authorities thought in 1991 and closed the airport. Imagine, it's been closed for 20 years. We're in the Altai Republic, the capital city of Gorno-Altaisk. Years later, there are still enough problems. Nevertheless, there's also confidence. We decided to check and show you what it's based upon. For that purpose, we'll breed a red deer, climb a new height, go on a voyage, pour some concrete, catch some sunlight, and brew a healing balm.

This is the Gorno-Altaisk Airport, as you might've already guessed. It's fully operational again, even when it's raining in torrents. The airport was reopened in 2011. After the large-scale overhaul, it acquired a longer runway. It became more comfortable for the passengers, only 500 of them at first. Now, there are about 60,000 of them, a good contribution to the local business, primarily tourist.

Let's talk numbers. When the airport just opened, the tourist traffic was 1.3 million people. Now, it's already more than 2. It's no surprise, the region's beautiful. Nature's the greatest advantage of the region. Tourism and agriculture are the main sources of budget money. But in order to prevent the sources from depleting and develop them instead, pressing issues must be resolved. It's a challenge for the republic authorities.

- Last I checked, the unemployment level was pretty high. What are your main methods? What can be done to resolve this issue, to create enough jobs?

Oleg Khorokhordin, Acting Governor: "You're right. Unemployment is the main issue of the republic. 12.5% is twice as high as Russia's average. And the second issue is the low level of incomes. We have the lowest incomes in the Siberian Federal Okrug. How do we tackle the issues? We've already determined the points of growth for our republic. In addition, we've made a decision to write a short-term development plan for the Altai Republic until 2024. It'll be based on the requests of the population. There's another growth mechanism. We definitely need a short-term development plan for tourism. We need to clearly understand when to invite large and small businesses, and what we can do in cooperation with Rosturizm and the Economic Development Ministry."

There's a republic development plan until 2034. Now, they'll have a short-term objective-based plan. This one's urgent. It'll be implemented in cooperation with business, experts, and citizens. For example, agriculture, where 70% of the population works, needs to process more, instead of selling raw materials cheap. Tourism needs more services and comfort to satisfy the most fussy guests. Next, we're going to tell you who's in charge of these objectives and what other problems exist in the region.

Let's climb up higher. The peak opens a great view of one of the projects that are supposed to create new jobs and attract investors. Mangerok is the name of the ski resort that has now become a year-round one. Clearly, in the winter it's a place of snowy fun. But in the summer, it's great for hiking, fishing, and biking spot.

Irma Dvali, CCO of Mangerok:

- The Mangerok resort is the biggest year-round resort in the Altai Republic. Up to 170,000 people visit the resort annually.

- When did it open? How long has it been operating?

- The resort itself functions since 2011. However, it became a major attraction about 1.5 years ago.

A top-tier resort like that is an expensive thing. There's information that the project costs 2.6 billion rubles. The money's not from here: Mangerok is owned by Sberbank. Seeing its potential, a new investor is building a new lift in cooperation with the Doppelmayr company. There's not a single similar lift in Siberia, only in Sochi.

- Those are the supports of the new lift, right?

Irma Dvali, CCO of Mangerok: “That's right. We're currently building a new gondola ropeway on our territory. That means we'll have gondolas, it'll be an eight-seat gondola lift that'll be raising the guests of our resort to the top in 6-8 minutes.”

For a 20% increase in tourist traffic, it's currently higher than two million, the resort needs to create health programs, build new tracks, and get snow cannons. It's possible thanks to the domestic tourism development program. This is just one of the increasing number of similar projects in Altai like the Karakol Lakes tourist cluster or another ski resort on the Telets Lake.

We'll visit the latter soon, but first, the mountains. Mountains aren't just about sports, hiking, and beautiful panoramas. Mountains are also about the contents of this bottle. Everybody knows the herbs of Altai, which are the main component of this healing potion. Sedative and invigorating, curing colds, abdominal pains, headaches, and all other diseases in the world. Ortilia, pyrola, and carthamoid rhapontic sound odd only for commoners. Anatoly knows where to gather them in the Altai mountains, when to gather them, what's the right way to do that, and the main thing, how to turn the brew into a balm or syrup with the required effect.

Anatoly Pankov, CEO of Fito-PaM:

- We've got herbs like sweetvetch, it's our endemic.

- Does it only grow here?

- Yes, it's the most famous root of Altai.

- What do you use it for?

- It gives you male strength.

- Where did you learn all that? How do you know so much?

- I've had many years of experience. We had some ancient recipes. We also conducted research in cooperation with many Russian institutes, from the Novosibirsk Science Campus to the Institute of Tashkent and the Moscow VILAR. We've mastered it through practice.

We won't comment on the curative effect, everyone can decide for themselves. However, the alcohol-free balms made in Gorno-Altaisk win awards at international exhibitions.

- Where do you sell all this?

Anatoly Pankov:

- We sell it in the drug stores of Gorno-Altaisk, as well as across the country.

Production volumes depend on orders but are still pretty low. The demand is hampered by the price.

Anatoly Pankov:

- The self-cost is too high. We make boxes in Altai Krai, get bottles from Novosibirsk, they're made there. That's why it's all pretty expensive.

Naturally, they're considering making their own bottles. Some local entrepreneurs may help. They also want to improve the business climate to promote their goods.

People are ready to pay a lot of money for herbal infusions. But some creatures eat those herbs for free. Perhaps that's the reason these red deer have such magical antlers. The red deer is a noble deer species of Altai. It's extremely timid. We had a pretty rough drive along the slopes before we could catch one on camera.

Anastasia Yegarmina, red deer farmer: "The red deer farm is about 30,000 hectares. The animals basically graze freely during the summer. In order to make them grow large antlers, they are heavily fed. The feeding season begins in October."

This one also wants some food, even though it's not a red deer. The story of this farm, red deer farm to be more specific, is the story of resurrection. There was a sovkhoz that went bankrupt. From 2000 red deer, only 300 could be saved. Now, there are more than 1000 of them. The red deer are bred primarily for their velvet antlers, young antlers with curative biological properties. The antlers are being harvested without harming the animals.

They say good velvet antlers are better than gold. The republic is the top producer of the antler-based hematogen. Have you heard about it? Now, you have. It's a substance made of blood in the antlers. It greatly improves immune resistance, the Russian ginseng. In general, antlers are used to make creams, vitamins, infusions, and balms. Those are expensive products, which the republic's just beginning to profit from, establishing its own velvet antler industry, instead of exporting "raw" antlers.

Antlers have so many applications. One can even take an antler bath. Scientists claim it has a renewing effect. It's not some local entertainment but a serious business plan of this five-star hotel.

Nikolai Fursov, General Manager of Altai Resort: "Our complex is basically located at the very heart of Altai. That allowed us to develop tourist routes that begin in our hotel. We offer routes of various lengths. We have motorcycles and quad bikes, we even have buggies. In the winter, we offer snowmobiles and horseback riding expeditions."

This is also a story of resurrection. There were plenty of things in Altai in the Soviet times. Thousands of tourists were hiking in the mountains, sailing the rivers, and getting healthier here. After the 90s, there's been a lack of medical services. Another major investor, AFK Sistema, decided to fix the situation.

Natalia Rau, medical director: "Here's our speleochamber; it creates an environment of natural salt mines. It helps when one has a bronchopulmonary condition. It also decreases blood pressure and promotes immune resistance."

A ton of various procedures, including salt chambers, cold chambers, regular massage, water massage, and a shower.

- These procedures are the reason people come here from all over Russia, right?

Natalia Rau:

- Yes, you're right. Antler products and baths are especially in demand.

Naturally, this place is not about medicine alone. It's also a hotel and a conference space.

- Do you get foreigners here?

Nikolai Fursov:

- Yes, foreigners come here, not as many as we'd like though, the flights are too inconvenient. I believe that's what prevents foreigners from traveling here. We've adopted a program and made arrangements. We want to focus on our neighbors, China. By the end of this year, or rather, by this fall, we expect the first Chinese groups.

Certifying all hotels according to international standards, and opening foreign flight routes is supposed to attract more tourists, including foreigners. Both things are currently being considered. Getting healthier surrounded by beautiful nature is great but one has to travel a long way to get here. The operating airport is a good thing. But the issues of transport accessibility still remain. It's not like anybody's going to ride red deer here.

Iron horses require proper roads. It's definitely one of the ten most beautiful roads in the world, writes National Geographic Russia about the Chuya Highway. It goes from Novosibirsk through the Altai Republic to the Mongolian border. Those who take the new road will see the views no less marvelous. It goes from the Altai Resort to the Karakol Lakes. AFK Sistema plans to build another tourist complex here.

Oleg Khorokhordin: “Under the 2024 tourism development program of Rosturizm, we won the construction of a federal highway. It's 29 km from Altai Resort to the Karakol Lakes and another 20 km to the large tourist area Chemal. We've been given three billion rubles to build this road. We have our own Golden Ring in the Altai Republic.”

In general, 11.5 billion rubles ($182 million), an enormous sum for the republic, has been allocated from the federal budget for the road construction in the region within the next five years. There's another large-scale project, a railway. In order to connect Biysk to Gorno-Altaisk with a 100-km railway, more billions are required. There have been no promises, but negotiations with RZhD are in progress.

Oleg Khorokhordin: “It's a good thing for the republic. I'm talking about the economy because we get the money from the investment fund of RZhD anyway. I've met with their chief executive Oleg Belozerov, and the head of West Siberian Railways Alexander Gritsay. According to our estimates, it'll be an expensive project. The republic needs it but it'll be expensive. But the project is economically feasible.”

This factory is looking forward to getting a new railroad. This way, it'll have an opportunity to produce a lot of useful car road equipment but not limited to that. We're going to show you how that's possible. This reinforced concrete factory is one of the few facilities of the primarily non-industrial region. The range of products is very broad: concrete walls, bridge sections, and paving tiles.

After the molding machine finishes its work, we get a 110-meter long concrete slab. It'll get cut and sent to a construction site. This is someone's future floor or ceiling. The facility also produces special products, for example, extremely sturdy concrete for road construction. Its durability is confirmed by multiple lab tests.

- So your clients come to you and tell you they want some really durable concrete?

- Only we produce concrete like that.

- Only you?

- That's right. Could you explain how durable it is it in terms our viewers can understand?

- It can survive a nuclear war.

- It can?

- Sure.

- Where do you sell all your various products? Where do you supply it?

Levon Gasparyan, CCO of Maima ZhBI Plant: “The geography of our sales is pretty broad. The Altai Republic is our biggest market. Altai Krai buys about 20-25% of our products. Last year, our total production volume was about 45-46 thousand cubic meters.”

It's clear that if your products weigh multiple tons, you can't take it far without a road, be it a railroad or a car road. That's why businesses are looking forward to the development of infrastructure, but not only for tourists and concrete.

Alexander Shulga, CEO of Maima ZhBI Plant: “We'll be able to upgrade some of our products. and possibly expand production. We'll also introduce new products associated with road construction.”

See the connection here? Railroads are required to build car roads. Car roads are required to deliver cheese.

The Republic doesn't produce cheese alone. Look how much cream is in this tub. It also produces yogurt, milk, and many other things. How can one deliver all this if there's no road? There is a road, even though the farm is located in a land no one roams but cows. It's a remote mountain region with 40-degree frosts in the winter.

- I wonder why you built it like this.

Ivan Tsyrulik, CEO of Druzhba: "There are no walls, just a roof. That's much more energy-efficient."

Ivan came from Ukraine to breed cows and produce milk and dairy products. He says that it's the only place where Eco-food can be produced. But just like balm-producers, he requires retail outlets, big stores. If there's demand, he'll also require equipment and preferential loans for it.

Ivan Tsyrulik, CEO of Druzhba: "Last I checked, it was 8.5%. We need money to develop, we can't do it without money. We've got to increase the population and prepare the feed. But you can't make a square meter of land yield more than it can.”

There's another issue that hampers the development. Power. The tariffs are high and accessibility is low. The locals are trying to solve the issue using various methods.

Before telling you about solar stations, here's the reason the tariffs are high. The network is worn out, the power goes nowhere. It's being supplied from another region, the republic itself produces little power. There's a plan to add Altai to the list of preferential regions for at least a couple of years. In addition, there are five solar stations. For example, this one can power the entire capital. In order to provide energy for the entire region and have a surplus, the Russian company Hevel is investing twenty billion rubles in the new stations.

Andrey Yalbakov, CEO of Solar Energy: "The republic consumes 100 MW of power. Our stations will have the capacity of 145-150 MW to have enough for the future. Over the last four years, we've built 55 MW. This year, we're planning to launch 65 MW on the wholesale market."

Speaking of customers, there's a plan to build and agri-industrial park a few meters away from the solar panels.

Andrey Yalbakov: “Everything our agricultural producers harvest, unfortunately, leaves the region in the form of raw materials. We don't do any kind of processing, not even primary processing. We need to harvest it, marinade it, and only then, sell it. We need to produce all our products under a single brand name. Regarding the construction of the agri-industrial park, we've started the project, and are planning to launch the production next October.”

Of course, personal meetings with entrepreneurs help tackle complicated issues. There are many volunteers. What to do? To hold a Business Week, for example! There, businesses ask the authorities hot-button questions about tariffs, housing, roads, etc. Perhaps, the discussion isn't much fun, but the dialogue itself is valuable.

Oleg Khorokhordin: “Businesses are hiding. Our goal is to negotiate with them. We provide them with some preferences as far as the Republic can, so that they come out of the shadow. Together, we share the value added. They pay taxes, we solve social issues. It's impossible to address problems without staffing.”

The Altai Republic Development Team project has been launched to find, train and hire professionals. It's carried out by the Russian Academy of National Economy and Public Administration.

Oleg Khorokhordin: “The Academy says their project in our region is record-breaking. Never before have there been 400 applications on the first day! It shows that people want to explore the new field. Not only do they want to explore the new field, but also to contribute to the development of the Republic.”

What are the consequences of the staff shortage? Imagine that qualified employees are like water drops. If you know how to accumulate and retain them, you'll get a beautiful lake. Otherwise, you'll get a muddy puddle.

And it leads us to another problem of the Republic. The Altai valley wasn't turned into a special economic zone. There were supposed to be new hotels, ski slopes, a football field, and, most importantly, a beautiful lake. But water disappeared three times due to an error in the project. And so did 2.5 billion rubles ($40 million) of investment and the status of a special zone. But the Republic doesn't refuse the project.

German Chepkin, Altai Pearl CEO:

- As concerns the lake itself, I mean, bringing it to the proper condition, it costs up to... Well, all the project is 10 billion worth ($158.5 million).

- And what about the remaining investment? How much more do you need?

- The overall cost is at least 20 billion ($317 million). Maybe more.

Oleg Khorokhordin: “To date, we're looking for a solution. Naturally, it's about extra-budgetary resources. We talked to VneshEconomBank. We're considering reshaping the project. Maybe, we don't need such a big lake. Well, anyway, we must choose a different technology. Maybe, it will be two smaller lakes. Hotels for tourists... As soon as we get through with the infrastructure, I assure you, investors will come on their own.”

And here's another story. It's about overcoming obstacles rather than solving problems. Though, there were plenty of them. And Agda is, by the way, about a lake too. We're back to Lake Teletskoye. It's the largest and most famous lake in the Altai Mountains. Multiple waterfalls run into it, and it's here that the Biya River starts. The lake is surrounded by the Nature Reserve where you can come across lynxes, deer, and, of course, bears. The best views are from the water.

And here's our main feature, the Altai Pioneer steamboat. It's here, in the lake, far from shipbuilding plants and full-flowing rivers. It's long been a legend. The ship was built back in Moscow in 1964. It was a whole special operation to transport it and its twin Yakov Balyaev steamboat here. They were dragged with ropes through rapids, upstream the Biya River. A lot of tourists, kids, went on these ships. And Ivan, who grew up on the shores of the lake, was no exception.

- It's Altai Pioneer before its rebirth.

- Yes, before its reconstruction. It’s 1979!

Ivan even saw the darkest chapters in the history of the ships. Yakov Balyaev didn't survive the 1990s, it was scrapped. Altai Pioneer was supposed to be scrapped too, but the entrepreneur and his friends bought the steamboat and, to everyone's amusement, reconstructed it. And now Altai Pioneer gives free rides to kids, just like in Ivan's childhood.

- There's even a cinema!

- Yes. It's indispensable, of course. For kids, the cinema is the most important part of the trip. Even more important than waterfalls and nature.

Obviously, when one problem is solved, more aren't late in coming. To make new Eco-paths on the shores of the lake, to organize an exhibition to find Arsa, the capital city of the Altyn Kingdom (Atlantis); and to build a castle on the hill to everyone's amusement.

- I plan to start construction next year.

- And finish it?.. If everything goes right, of course.

- If things go right, in three years.

- Three years.

- Yes.

Finally, let's speak about those who do care. It's for them that the Altai Republic Development Center has been created.

Oleg Khorokhordin: “This entity will embrace all the caring people. We encourage everybody to contribute to the development of the strategy. We elaborate the strategy, work it out, elicit landmarks, pick actors, and start implementing it; control the results. Together elaborate it, together implement it, and share responsibility.”

The life of a steamboat is reminiscent of the life of the Altai Republic. Yes, there were hard times with no hope for future sailing, or economic development. Did they need help? Definitely. But it only works when people themselves are eager to act.

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