Vesti Special Report! The White Road of Kalmykia and the Caspian Sea Region of Russia!

The White Road of Kalmykia. Special Report by Anton Borisov

It’s been two hours by plane from Moscow and we are in the republic for which this flight is very important. It’s not because we are so important. It’s because until recently there were very few of them. The situation is improving now; there’s no other way to develop the economy.


That’s what are we going to do to show you: how it can be developed. We’re going to show you where resources from the Caspian Sea go to. We’re going to make an important part. We will see how they build, that is, breed and then milk ships of the desert. We’ll tell you a delicious story.

You've probably guessed it. We're in the Republic of Kalmykia. This is Elista Airport, which had very few flights until recently. But they’ve decided to improve the situation. Elista Airport's old-timers miss the good ol' days. Before the 90s, there were 22 flights each day. Until recently, only one remained. But the Azimut Company from Rostov-on-Don decided to re-establish a regional air service, which is a critical issue for Russia in general.

- How many flights are there now, and are there going to be more of them soon?

Olga Otkhanova, Elista International Airport representative: "Today, Elista Airport has daily flights to Moscow. There can be two or three flights to Moscow every day. Also, there are two flights per week to Sochi and, starting this June, there are two flights per week to Simferopol. These are new directions".

The airport handles about 11,000 passengers annually. But the number is believed to be growing. This is not only due to the fact there will be more flights.

What else is going to grow? The republic where the unemployment rate is about 10% needs more points of attraction for businessmen, for tourists, and for the residents as well. What are the points? And why can’t they appear without solving problems? We talked about this with Batu Khasikov.

Batu Khasikov, Acting Head of Kalmykia: Kalmykia is certainly lagging behind today in many respects. To make a qualitative leap so that we'll have a solid and powerful growth point, we need to create a special economic climate here. In order to do so, we need to create conditions. Today, we have very expensive electricity. The price is over 0.14$ per kWh. It’s too much for any potential investor. We don't generate electricity, we buy it from neighboring regions.

- What about wind power?

- That’s the point. There was an attempt to implement a wind power project but it remained unfinished.

The wind power project isn’t the only project in the republic that remains unfinished. We’re going to tell you about some more, but the main point is solving problems.

Batu Khasikov: “Getting back to the point of wind energy. We have windmills. Now, there are investors who are ready to invest in the project. They're from South Korea. In general, such countries as China, India, and Iran are interested in Kalmykia now.”

Speaking about energy, there are Russian investors as well. Hevel LLC is going to invest about $217 million into a solar power station. It's expected to bring $62 million of taxes to the regional budget.

But not only the sun brings tax revenue to the republic. The economy of Kalmykia is largely located here, at the bottom of the northern Caspian. There are rich reserves of oil and gas. Everything extracted from here goes through the 120-mile long pipeline to the republic. Lukoil discovered six deposits in the Caspian. Two of them are being exploited. We’ve visited the platform that drills the oil field named after oilman Vladimir Filanovsky. It’s the largest one discovered in the past 25 years — 1,413 billion cubic feet of natural gas and 1.6 billion barrels of oil.

- What are the volumes of extraction?

Alexey Shevchenko, Deposit Deputy Head:

- Currently, we extract about 132,000 barrels daily.

- 132,000 barrels daily?

- Yes. How much is it per year?

- It’s about 44 million barrels per year.

- 44 million?

The oil, extracted from a depth of almost a mile deep, is of good quality. The marine mini-plant pumps it to the coast of Kalmykia. The facilities are necessary to handle, store, and keep records of oil. Its design capacity is up to 59 million barrels per year. For now, the statistics look like that — all of this was built in 2016. Since then, more than 73 million barrels of oil have been pumped through this shiny pipeline.

- This is the famous Caspian oil, right?

Murad Ushanov, Lukoil Nizhnevolzhskneft: "Yes, this is the oil extracted from the northern deposits of the Caspian. It comes here already processed and then we pump it through the pipeline system to the Caspian Pipeline Consortium."

The Consortium is the pipe that transports oil from the deposits, starting with Kazakhstan. It goes right to the port of Novorossiysk, from where oil is transported via tankers to all over the world. Crude oil of poor quality is clearly forbidden to be transported.

Nikolay Kumenov, shift lead: 'We can see the flow of oil in real time, how much we receive and how much we hand over. Also, we can monitor the quality of oil in real time. They have quality control there, we have redundant quality control here, so we can monitor the quality of oil we receive".

- Are the safety systems installed here modern? Well, I get it, it's all steppe all around. But let’s put it this way — can the gophers feel safe?

Murad Ushanov: "They can feel absolutely safe. We pay great attention to our safety systems".

If someone now has a question, what benefits Kalmykia gets from this pipeline, the answer is simple — it means new jobs, hundreds of thousands of dollars of the land rental.

Nikolay Lyashko, CEO of Lukoil Nizhnevolzhskneft: "In addition, we are major taxpayers in both Astrakhan Oblast and the Republic of Kalmykia. Last year we paid almost $11 million in taxes".

These ovens most likely use the energy of the sea as well: Caspian gas. At a temperature of 470 °F, these puffs have been baked. In general, this company produces very diverse products. It produces 70 types of confectionery. Here, for example, is the sweet incarnation of Kalmyk hospitality. Also, it produces convenience food and bread. This isn’t usual flatbread. It is made from a variety called triticale. It's a hybrid of wheat and rye. There are a lot of vitamins in it and it grows well in arid Kalmykia. 25 years ago, the business here started with bread. Now, when they produce five tons per day, when there are 100 people on the staff, when they have 24 sales outlets, when they sell to other regions, they can afford to produce socially oriented products.

Bembe Maximov, businessman: "We have two types of bread — "Sitnik" and "Urban" the price of which is lower by 12-14 cents than the average price. That is, the company makes no profit on these products. We only cover expenditures or even incur some losses, but this allows low-income citizens to buy bread".

In fact, this enterprise needs subsidies, as well as other small and medium businesses in Kalmykia.

Bembe Maximov, businessman: "Last year we received government support from our region's Ministry of Economy. We received compensation for the electricity consumed for three quarters. I mean, really, only the three first quarters were covered. That’s it".

Of course, businessmen, seeing the experience of other regions, want subsidies, better terms for loans. Batu Khasikov told us there were negotiations. In particular, the Russian Agricultural Bank wanted to increase concessional lending. As for the other assistance to farmers in the sale of products, here is just one more story of an unfinished project, but it is to be continued.

Batu Khasikov: "Some time ago, a meat processing plant was being built in Kalmykia in the Ketchenerovsky District. It wasn’t completed though. It’s still unfinished. Colossal amounts of money was invested but to no effect. In this case, a large investor is ready to invest in this plant, to develop it. Agriko, one of the largest Russian agro-industrial holding companies, is interested in entering our republic's market. In this case, the investments can be about $155-200 million".

Everyone likes to eat, especially the Kalmyks. According to some data, they consume as much as 220 lbs. of meat per capita annually, while other ethnic groups consume half as much. Well, when you see all of this, you can believe this.

Fellows, no hard feelings, but meat consumption is all about you. At this breeding farm, there are over a thousand head of cattle. When you hear about a “breeding factory that is 68 years old, you really imagine a farm. But in Kalmykia, a breeding factory is the steppe, about 270,000 acres of it. Cows, goats, sheep, horses, Kalmyk Bactrian camels, the largest camels in the world, graze on the steppe.

The battle cry "Ura!" is derived from the Kalmyk "Uralan", meaning "forward". Just imagine camel cavalry shouting "Uralan!" and horses and people fleeing from them. That’s what I call the life of nomads.

By the way, the cattle head count is the envy of many ranches.

Erdni Garayev, Deputy Director General, Kirovsky Breeding Factory: "We have 30,000 sheep, about 1,100 cows, 1,000 horses, the 380 camels you just saw, and about 1,500 goats. All of this is for commodity production."

They produce tens of tons of meat, wool, down, milk, horse milk, camel milk, which is said to be very healthy. It’s sold not only in Kalmykia.

Erdni Garayev: "There is demand. People come to us from neighboring regions, from Volgograd, Stavropol, and Astrakhan. Dagestan is constantly buying some. This year we expect Iran to purchase a batch. They’ve already been here, signed a contract. Now they want to buy wool".

Nevertheless, although a quarter of the republic’s population is involved in animal husbandry, exports remain modest.

Batu Khasikov: "This year we should export in the amount of $300,000 and, by 2024, it’ll be $1 million. But I think you realize the scale of our agriculture and understand it’s not very much for it. My team and I, we understand that Kalmykia's potential in this regard is much greater. The president set a serious task — to increase exports of agricultural products. Accordingly, Kalmykia doesn’t want to sit idle".

This means lending, sales. If the farmers can be helped, the effect will be larger than it seems at first glance. Agriculture is the main driver of Kalmykia's economy.

This is a shyrdyk. On these rugs, people used to be born and die on them. It's made of sheep wool. Sheep feed numerous small businesses of Kalmykia even today.

Ekaterina Adyaeva, master of folk arts and crafts: I make Kalmykia's national headwear. Here's a woman’s hat. It is called Kamchatka. It is decorated with braid and embroidery. Sometimes, such a golden embroidery can be used.

- So Kamchatka isn’t just a peninsula in Russia but also an ushanka?

- Yes.

- In Kalmykia, people know how to make good use of leather.

Anastasia Aranova, leather-dresser:

- I wanted to make a more traditional modern ethno-accessory.

- Do the locals buy them? Well, I think tourists are interested in them but what about the locals?

- They buy them too.

- So, the museum has become a workshop. This seems to take a lot of time. How much time did it take you to make this chess set?

Viktor Dordzhiev, folk craftsman: When they ask me this question, "How much time does it take you?" I answer: "Two months and five years". You know why? Because you really need proper training to make something like this.

We filmed our interviews with Anastasia, Ekaterina, and Viktor in the National Museum of the Republic on purpose. The masters study the exhibits and books and recreate traditional Kalmyk crafts — wool clothes, leather goods, bone carving.

By the way, chess is considered to be quite a Kalmyk souvenir. It has nothing to do with knights and their horses. It’s just because there’s a chess-city in Elista, the only one in the world. In 1998, the Chess Olympiad was held in the capital of Kalmykia. In the chess-city, the grandmasters lived and battled in black and white. That time, the Russian team did the best. Of course, the local museum, in which there are 3,500 exhibits, remembers not only this event. For example, eight years later, there was a world chess tournament.

Erdm Kornushkaev, CEO of Chess City: We also have a famous table at which Kramnik and Topalov played.

- This is the one?

- Yes, the original one. It’s a little bit shabby.

- It’s weather-beaten. Shall we?

Now the chess-city is a hotel with a capacity up to 100 people and a venue for festivals, exhibitions, and conferences. It just so happens that people don’t play chess here. Or, to be more precise, they don’t play chess here for now.

- How come?

Erdm Kornushkaev, CEO of Chess City: "Yes, such a problem exists. Chess City Hall does not meet the requirements of anti-terrorism legislation. At the moment, together with the Ministry of Sports, we are considering possible options for the work of the city chess hall as a sports facility".

Well, the Kalmyks do have a sense of humor. Not because there’s a monument to the great combinator near the chess city, but because it’s on Ostap Bender Avenue. That is, the real street is named after a fictitious character.

But the one who will solve the problem of water in the republic really deserves a monument. People and plants aren’t camels. They can’t live for two weeks without water. Water supply is a critical issue for the republic. For years, the issue has continued to defy solution. For example, there’s the Levokumsky Channel project, which remains unfinished. The water quality is poor, although a lot of money was spent.

Batu Khasikov: “Yes, criminal proceedings were initiated. But it doesn’t make it easier for us. So, our task now is to conduct an examination and see whether we need to implement this particular project. If so, then we need to know what needs to be fixed there because even now there are different approaches. Some say it is necessary to build a centralized water treatment system, others say we should install local treatment systems directly in the settlements. That’s why we're going to carry out a comprehensive analysis, after which we’ll make a decision and devise a road map. I think it’s crucial that by the middle of the summer we’ll understand what should be done.”

Solving water problems will undoubtedly open up new opportunities. Life can appear in places where there’s nothing now. Now it’s really memento mori time. In a month, this place will be just scorched earth. Water will help not just agriculture but also tourism. If you have resources and electricity, you can build hotels and develop new routes that will allow you to show the real Kalmykia.

- All this is done not for tourists, right?

Erdni Garayev: "Of course not. They’ve been living here for seven years already. That’s how they live".

There’s a lot to see. The largest number of species of wild tulips grow not in Holland but here. They even hold a festival of this flower. Visitors from all over Russia and even from abroad come here. But its tourist potential has not yet been realized.

Batu Khasikov: In general, Kalmykia needs to be developed in a comprehensive manner. That is, we are not saying that we want to build a hotel or a sports facility or an entertainment center or some kind of a production facility. It seems to me that the investors who will take this approach will succeed. They should create some systems.

- You mean something complete, where people can eat, relax, ride a horse.

Contemplating beauty is surely a plaster on any wound of the soul. By the way, Kalmykia is increasingly developing medical tourism. It’s Eastern medicine. They have everything — needles, rocks, wormwood cigars, cups, scrapers.

Alexandra Utkhunova, reflexologist: It doesn’t feel bad, does it?

- Oh, I feel it.

- See, I barely touched it but there’s flushing already. It improves blood flow, blood goes there. You feel better after it.

- It also removes hair, right?

The center won a government grant. It received $7,000 as a project for the development of tourism. But the employees say that it’s not just another show for tourists.

- I suppose real doctors work here, right? Not just people who like sticking needles into someone.

Alexandra Utkhunova, reflexologist: Of course, they’re doctors. All of our employees who do acupuncture undergo medical training, in Russia or abroad.

This enterprise produces medical electronics. Or, to be more precise, they’ve made a whole lot of things over its 50-year history here. It produces 14 types of products. In addition to medicine, it produces electronics for machine tools and radio equipment, and even for military equipment.

- Where is all this used? Well, you know, I want to point out at something and say that Kalmyk transistors are installed there.

Sarik Abushinov, director of the Zvezda plant: It's used in space equipment. We used to make equipment for the Venera and the Luna vehicles, for aircraft.

- For spacecraft as well?

- Yes. Aircraft. In terms of volumes, we produce about 300,000 pieces annually.

As befits a serious enterprise, a product receives a warranty after testing. It will work for 25 years in the most extreme conditions.

Anatoly Yeiskov, engineer: First, we test them in the heat chamber, and then in the cold chamber, at -76 °F. We leave it there for an hour. Then we repeat the whole process three times. If there are any defects in the products, in terms of production or choice of materials, these defects are sure to be found.

- This is a kind of contrast shower.

- It’s even worse. We call it thermal shocks or thermocycling.

However, the army doesn’t need millions of transistors like they did in the Soviet era. According to the plan, defense enterprises should increase the share of civilian products. By 2030, it should be 50%. It’s not like making furniture, they’re complex devices. The enterprise, which has been on the verge of bankruptcy more than once, needs new equipment.

- That is, you need soft loans, right?

Anatoly Yeiskov, engineer:

- They are vital for us and they would move us forward.

This enterprise shows that people here have a strong desire to preserve and develop what has been created. But they need assistance.

The history can be projected onto Kalmykia in general. Having survived resettlement, repressions, and difficult times for Russia, the republic is still part of a large country, but it has retained its originality.

Kalmykia is the sole European region that practices Buddhism. Inside of the largest temple in the Old World, Yonten told us that Buddha statues were brought here. People preserved them during the most difficult times of prohibitions and deportations to Siberia. In fact, this story is the answer to the question of whether the republic will be able to solve its problems on the path of development.

Yonten Gelyung, administrator of Buddhist temple: If a person understands the Buddhist teachings correctly, then he believes in a good result and he tries to achieve this good result.

- You mean if one doesn’t sit idle, they will get roads, electricity, and everything else, right?

- Exactly.

Batu Khasikov: "My countrymen have never lost the feeling of love for life, optimism, healthy patriotism, the desire to make their lives and the lives of those around them better on this land. Therefore, I once again want to emphasize that we have the potential, that people are ready to work, work for the good of the republic. Let us remember once more our countrymen living in other regions and large cities of Russia and even abroad. They're ready to return here. They're ready to invest everything they have here: their knowledge, competence, and resources. In order to streamline all of this, we want to create a program of personnel reserve of Kalmykia".

Of course, residents of the republic have gotten used to overcoming difficulties. To make this journey easier, it is customary here to wish "a white road”, which means "a happy journey".

Well, a white road to you, Kalmykia, on the way of your development.