Meanwhile in Siberia: A Case for More Autonomy in Russia's Far East

By Vladislav Inozemtsev

Originally published in Kommersant

MOSCOW - The mayoral election is approaching in Novosibirsk, the largest municipality in Russia, as both candidates and observers there are fond of observing. But there's more at stake than just local leadership. Experts say the April election could be an important indicator of the Russian electorate's overall political mood.

Novosibirsk is a city that already has a "unified opposition," where representatives of different political parties are ready to cooperate to stand up against the government in power. It is also the capital of Siberia - a territory that plays an enormous role in the country's economy.

In the past few years, Siberian elections have been dull, and only the ruling center-right United Russia party has taken them seriously. But times are changing: There are several important political contests throughout Siberia in the next year and a half. What's surprising is that the issues candidates are talking about don't seem particularly Siberian. It's especially surprising that no opposition candidate has presented a platform tailored to the needs and challenges of the people living to the east of the Ural Mountains.

If you include parts of the country east of the Urals, Siberia is where most of the raw materials that make up the majority of Russia's export income are mined. Siberia provided about 76% of the country's exports in 2013. Taxes on minerals mined in Siberia, together with gas exports, make up 52% of the federal budget.

Even as the showdown continues with the West over Ukraine, Moscow has never depended on the country's East as much as it does now. And its relationship with Siberia is decidedly colonial.

In truth, a change in Siberia's status to more accurately reflect its contributions could become an effective opposition slogan. I see several reasons for that. First of all, a call for more regional autonomy could not be misconstrued as separatism. It is a part of the country that is inhabited primarily by the majority ethnic group, with a long history in common with the country's core, and it has never tried to secede.

In addition, most Russians understand both that life is hard in Siberia and that the region contributes more than its share to the country's economy, so it's unlikely they would take offense at Siberian efforts to change the way the region's riches are distributed. Lastly, we could reduce both the amount of money that is collected from Siberia and the money sent back there through government investment programs, which would have a major impact on reducing corruption.

The theory that only a serious reduction in gas prices will force the Russian government to modernize becomes much less threatening when considering that allowing Siberia to keep more of its own income would have the same effect. More autonomy for Siberia is in fact one of the key steps toward modernizing the whole country.

A platform in need of a candidate

At the moment, Moscow is the center of conservatism. All of the government structures are concentrated there. Moscow's accounts for around 13% of the entire federal budget, and most of its municipal income comes from large, vertically integrated companies, which in turn earn money from exploiting Siberian resources. That's why it seems unlikely to me that the opposition would win in Moscow elections. Siberia, on the other hand, is ripe for an opposition candidate campaigning on a platform of increased autonomy for the area of the country east of the Urals.

It's obvious to people living in Siberia that a measure of independence would be good for their home region. They need only look across the Bering Strait for an example. Isn't Alaska so attractive for investors precisely because it has as much autonomy as a federal system allows? Alaska produces almost as much oil as all of Siberia and the Russian Far East, produces 50% more ocean products than all of Russia's Pacific Coast, and its major cities are growing. Major Siberian cities are losing population.

Look at Mongolia. Russia, with its oligarchs, monopolies and state-owned corporations, has seen a 6% decline in coal production since 1991, while Mongolia is open to foreign investors and has more than tripled coal production in the same time period.

Regions like this are always developed as a result of private investment. In the United States, private companies built five railroads to the Pacific Ocean while Russia built one. Moscow was not capable of developing Siberia and the Far East into the Russian equivalent to California - or even Oregon or British Columbia. Now it needs to let go of its top-down management style.

Because Siberia should be the engine pushing the development of a modern Russia. First of all, that is where all the country's natural riches are concentrated, so there should also be an influx of cash that would increase the standard of living for local residents. Secondly, there needs to be development in the sense of moving from a purely extraction economy to industrial production and innovation. Third, once Siberia has achieved some autonomy, it could liberalize its tax laws to attract more outside investment and population, both of which are hard to attract due to Moscow's bureaucratic infrastructure. Once it has done all of those things, it can focus on increasing efficiency, a measure of development often ignored by the central government.

Just as it was 400 years ago, modern Russia is divided in two: On one side is Moscow and its surrounds, home of the globalized elite who feed like parasites on the nation's riches. And on the other side is the rest of the country. It's exactly the kind of situation that should mobilize regional Russian politicians, who understand better than anyone the imbalances in the country's politics and economics.

Vladislav Inozemtsev is a professor of economics at Moscow State University.

Originally published in Worldcrunch. Republished with permission.

 

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