The Old Vlad Now A City Of Villains
ERIC ELLIS, Vladivostok
05/29/1995
A MORNING jog in Vladivostok, Russia's schizophrenic, rusting port closer to Beijing, Tokyo, Seoul and Hong Kong than to Moscow, means taking your life in your hands.
Those hardy, or foolhardy, enough to brave its hilly streets must first run the gauntlet of traffic police in bullet-proof vests, the occasional Mafia hit and Chevrolet police cars upholstered with bullet holes.
If that's not enough, runners must also dodge the hundreds of empty shipping containers that line its smartest boulevards, their contents disgorged into Boris Yeltsin's free market, the importers forgetting to take away the receptacle. The once-closed Vladivostok has been released to do what geography willed it, employ its magnificent port to the ignoble art of commerce.
In the old Russia, it was prestigious to be an engineer. In today's Vladivostok, import-export is the hot new game to be in, enriching oneself instead of the state.
This is frontier capitalism at its finest. Such is the flood of US dollars swishing through the town, Vladivostok has suddenly become one of the most expensive cities in the world.
The rush of funds has led to a wave of Mafia-led crime and values that do not auger well for the future of Vladivostok's 1 million people.
The distance from Moscow's control has made Vladivostok a mobster's town, the Wild East as Moscow knows it, and Vladivostok celebrates it.
According to resident foreigners, the real authority in this city falls around a company known as PAKT, the Russian acronym for the Primorsk Producers Shareholders Corporation.
A post-Gorbachev alliance of bureaucrats, old party hacks and navy officials, PAKT is a BHP, Elders, Pioneer and Howard Smith all rolled into one, manoeuvring itself in to grip Vladivostok's newly-privatised industrial complex.
It is not unusual for PAKT-related listings on the nascent stock exchange to zoom 2,000 per cent in a month.
PAKT men effectively run the city and regional government, with Mr Yeltsin's blessing, having ousted a democratically elected populist mayor.
What PAKT does not touch or want, the Mafia does, in what is occasionally a violent battle between warring gangs, identified by their fondness for stretch limousines, Ray-ban sunglasses and black skivvies.
The division of the spoils seems to be working because locals say crime is down since PAKT and the gangs reached their "understanding". Foreigners, too, are arriving in numbers, making their mark all over town.
One morning jog this week took this correspondent past a sports stadium by the Vladivostok seafront, where not long ago Russia's finest were exhorted to athletic greatness by the communist propaganda emblazoned around the stands.
The propaganda is now fading but not the advertisements for Castlemaine XXXX beer that frame the seating.
The stadium makes an unusual setting for the energetic office of the Pacific Gemini group, run by Anglo-Australian Andrew Fox (his company also goes by the name of Russia Fox). The sport authority ran out of funds, so it was encouraged to convert part of its changeroom facilities to offices.
Pacific Gemini is one of the hottest foreign companies operating in Vlladivostok.
With a seat on the stock exchange, it recently launched the first investment fund for the Russian Far East, known as the First Vladivostok Fund.
With $A12 million of start-up capital behind it from a number of international banks, including Australian, the fund is a pure venture capitalist of the most adventurous kind.