Russia Needs One More Capital – in Siberia

21 june 2012

Sergei Karaganov, Doctor of History, is Dean of the School of World Economics and International Relations at the National Research University–Higher School of Economics. He is also Honorary Chairman of the Presidium of the Council on Foreign and Defense Policy.

Resume: If Peter the Great lived now, he would surely build the capital not in the Baltic region, but at the Pacific Ocean.

For over a year, a serious discussion about Russia’s future was drowned in the election debates. Now that the election season, unusually long and intensive, is over, it would be appropriate to address strategic issues again. In one of them I have been keenly interested for 15 years and I have closely studied it for four. The issue surfaced rather unexpectedly during the election, but I’m afraid it can be stonewalled again by an unreasonable policy or prejudices inherited from the past, by Russian slovenliness or thievery.

Joining the accelerating Asian locomotive of economic growth and launching new development of Siberia are long overdue. The United States and most developed countries of Europe have successfully hitched to Asia, finding new sources of growth there. Only Russia, which borders on the region, has been marking time. It has been wringing its hands in the masochistic ecstasy over the depopulation of Siberia and showing how scared it was of the non-existent expansion of Chinese nationals and the upcoming domination of China.

There are many reasons behind this behavior. The main one is objective: in the 20th century, Siberia, including the Russian Far East, was developed by Socialist-style coercive Gulag methods. The collapse of Communism could not but cause a particularly painful restructuring in the region. But subsequent reasons are hardly excusable. The principal one is the long-standing inability of the Russian elite to discard Eurocentrism which is aging rapidly in the new world, and the underestimation of the speed and intensity of Asia’s economic and civilizational upturn. Also, the Russian elite has been unable to give up the stereotype of Asia as a non-Communist alternative to the European way of development (I would note that there is no such alternative for Russia; the Asian development model is basically alien to us in the cultural and human terms).

In the past two to three years, Vladimir Putin and Dmitry Medvedev began to talk about the necessity to turn to a new Asia. Trade cooperation has livened up, but as before, there have been few, if any, improvements in investment cooperation.

In the past six months, an idea was voiced to set up a state corporation for the development of Siberia and the Russian Far East, with fantastic opportunities and privileges. Newspapers began to name potential chief executives of the future corporation one after another.

Some high level economists cautioned against the establishment of such a corporation. Their no less high level counterparts hinted that Russia probably did not need a new corporation after all. The subsequent options suggesting a special ministry or the post of deputy prime minister only exacerbated the feeling that the idea was ill-conceived or simply not serious.

I will stay away from the dispute over the tools to handle the policy of new development of Siberia, and I will confine myself to outlining the principles this policy should lean on.

– It should reject the cherished idea to restore the old setup, no matter how nice it might seem, but proceed instead from the real opportunities presented by the present and the future.

– It should stop weeping over the worsening quality of trade balance with Asia, or harp on the same tune of a new industrialization. Russia should realize that it borders on the region which offers hundreds of millions of far cheaper hands to any industry and which draws in whole industries from countries that are much more developed and efficient than Russia. We should see that the actual new industrialization of Asia, along with its worsening water and food shortages, provides unprecedented competitive advantages to Russia and opportunities to launch the production and exports of highly processed products, foodstuffs, woodworking products, and electricity.

– Russia should create conditions for maximum possible economic opening of Trans-Urals to the outside world. It should give up the fictitious attitude to Siberia as “the strategic rear” in a standoff with the West or “the frontline” in a confrontation with China, and the still worse phantom fear of  the “Asian hordes.”

– This implies maximum possible involvement of investments to develop the region, not only from China, but also from the United States, Japan, South Korea, ASEAN countries, and Europe. Russia should create the best favorable conditions for such investments. The size of attracted investments should become the main criteria of local executives’ performance.

– Other guidelines include creating preferential terms for life and work of local talented people – and especially young people – in their home region, to prevent their outflow to the East or Moscow, and the outflow of young people from central Russia to the West. After gaining experience and capital, these young people might work their way to senior executive posts in the country, as Alexander Khloponin or Mikhail Prokhorov did.

To make Russia part of the rising Asia and develop Siberia, the people living there should be freer and wealthier than in central Russia.

The state must create conditions for such life, draw indicative plans, and invest in the infrastructure: roads, ports, and oil and gas pipelines. But the officials’ involvement in economic management must be reduced to the minimum. We know well how “effective” this management is.

I could suggest dozens of concrete measures to achieve these objectives, but I will name just one here.

To make a real turn to Asia through new development of Siberia, it is necessary to announce – after discussions and calculations – the handover of a sizable portion of Moscow’s functions to a Far Eastern city. This idea is in the air. This is instead of unreasonably overbuilding Moscow which sucks the lifeblood out of the whole country as it is.  

Moving the capital from Rio-de-Janeiro to a city specially built deeper in the country gave a powerful impulse to Brazil’s development. In Germany, moving the capital from Bonn to Berlin sharply accelerated the real unification of the country and the upturn of its eastern lands. If Kazakh leader Nursultan Nazarbayev had not built a new capital in Tselinograd/Astana, Kazakhstan would have broken up or had defective development.

Creating a city in the Far East with the functions of the Russian capital would attract talented and ambitious young people and businesspeople, and make Russia part of the rising world.

If Peter the Great lived now, he would undoubtedly build the capital not in the Baltic region, but at the Pacific Ocean. In modern Russian history Peter’s place is vacant so far.

Russia needs three capitals to be globally modern to develop, culturally and socially the European way, and be successful the Asian way. Moscow should remain as the political and military-diplomatic capital. St. Petersburg should accommodate the cultural and legal capital, while the economic one should be in a New Vladivostok.

Russia needs a project that would be heftier than that of the winter Olympic Games in Sochi or even a manned mission to Mars – it needs a major project of new modern development of the Asian part of the country and creation of a third capital there.

| Rossiyskaya Gazeta

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