Books & artsNov 8th 2003 edition

Destiny at -60°C

RUSSIA is the wrong shape. Too big, far too long, flat for much of the way and accursedly mountainous in between; but above all, as Fiona Hill and Clifford Gaddy show in this fascinating study, the wrong shape economically.

Its problem, in a word, is Siberia. All Russia's rulers have been obsessed with territory, and Siberia, with its vast expanses, unearthly cold and untold reserves of oil, wood, diamonds and metals, is an obsession-forming place. Both the tsars and the Bolsheviks moved people there, both to exploit the wealth and stake Russia's claims to the land—the Bolsheviks most effectively, with planned cities and labour camps in Siberia's remotest reaches.

As a result, millions of people ended up in Siberia who would never have gone there in a market economy. Canadian cities, for instance, cluster near the southern border; people who go north do so only seasonally. Alaska's only biggish city is Anchorage. Russia, though, is dotted with such mining towns as Norilsk (metals, population 235,000) and Mirny (diamonds, population 40,000), where winter lasts 10 or 11 months, temperatures drop to -60°C, and the nearest big cities—themselves none too warm—are hundreds of miles away.

Using a clever indicator, “temperature per capita”, the authors show that while the average Canadian's environment has got warmer over the past century, the average Russian's has grown colder. Cold means cost: in Soviet times, construction and living costs were up to 50% higher in Siberia and the Russian Far East than in European Russia. Distance means cost too: a developed economy depends on internal as well as external trade, and trade over thousands of miles is expensive. Instead of forming an economic network, Russia's cities are islands, with few economic links except back to Moscow. Many, over inflated by Soviet planners, are too big to survive economically. Yet Soviet cities are also the hardest in the world to shrink, because they rely on centralised heating that can be cut off only to entire neighbourhoods one at a time.

What all this adds up to is that turning Russia into a true market economy is tougher than anyone thought. Rampant corruption, crony-capitalism or a weak banking system are minor annoyances compared with the fact that too many Russians are simply living in the wrong places for the economy to work properly. Some are already moving west; nobody builds company towns in the Arctic circle any more. But, say the authors, the government needs to help. “The basic principle is to maximise labour mobility.”

How? Unfortunately, the book contains only a few general suggestions, such as easing restrictions on internal movement and providing financial incentives. But as the authors recognise, the first and biggest problem is psychological: the sense that Russia's wild east, like America's wild west, is part of the country's manifest destiny. The typical Russian leader wants Siberia not emptied out, but repopulated as a buffer against the trickle of Chinese immigration that he fears could become a flood (even though no Chinese wants to live at -60°C any more than a Russian does). If only some of them would read this book, Russia might start shifting towards the right shape.

This article appeared in the Books & arts section of the print edition under the headline "Destiny at -60°C"

Reuse this contentThe Trust Project
The Economist Today

Hand-picked stories, in your inbox

A daily email with the best of our journalism