The vast eastern tip of Siberia, known as the Russian Far East, is home to only 8 million people, less than 6 per cent of Russia’s population, despite comprising more than a third of Russia. In 2012, when Putin began his third presidential term, he identified the development of the region as a strategic direction for the country’s development and prepared strategies to mobilise the significant economic potential of Siberia and the Far East. Russia’s Far East region has increased its exports and imports of goods with Asia-Pacific countries, attracting significant investments from these countries and stimulating economic development in the region. The region has expanded exports of oil, gas, seafood, timber and other products to China, Japan, the Republic of Korea and other Asia-Pacific countries.
Although Siberia has always been the subject of development projects for Russia, it has not been a sustainable policy for the Russian state.
Russia’s policies in the region may be based on security concerns, but the new order it is trying to create in Siberia should not be ignored. For hundreds of years, Tsarist rule physically made Russia the largest country in the world, but it was Soviet rule that shaped its economy. Where the tsars built villages and towns in Siberia, Soviet rulers employed millions of labour camp inmates to build giant power stations, factories, mines, railways and cities.
One third of the world’s known diamonds and all of Russia’s diamonds are mined in Siberia. Yet Yakutia, a vast part of northern Siberia that covers an area as large as India, is home to only one million people and is one of the most sparsely populated regions on the planet.
Almost 10 months after Russian Prime Minister Mikhail Mishustin signed a government order approving the implementation plan of the Siberian Federal District’s socio-economic development strategy for the period up to 2035, the functioning of the plan, which includes more than 150 events grouped into various areas, remains controversial.
Siberia from past to present
Especially during the Second World War, Siberia’s economic development gained momentum as important factories moved from the European part of Russia to the eastern Ural Mountains and even further east, out of the reach of the invading German forces. It was also in those years that the foundation was laid for Siberia to become a major development project. In the 1970s and early 1980s, Siberia and the far eastern regions of Russia played an important role in Soviet regional development programmes. Western Siberia, rich not only in oil but also in natural gas, began to become the largest energy-producing region of the Soviet Union, leading to the planning of major long-term industrial projects for the whole of Siberia. However, the stagnation of the Soviet economy and the launch of a major arms race by the United States brought plans and investments in Siberia to a standstill, and almost completely halted with the collapse of the Soviet Union in 1991 and Russia’s introduction of macroeconomic reforms in the 1990s.
Russia’s inability to rationally use Siberia’s space and resources, coupled with the reluctance of the Russian business community to implement projects for the deep processing of raw materials and fuel extracted from Siberian territory, meant that for a long time the region received little attention.
What does the Siberian Vision mean?
Today Siberia is being re-evaluated in the context of a new Arctic policy and elements of a new paradigm for the development of the Arctic region. Attempts are being made to reformulate the socio-economic and regional policies of the Russian Federation, as well as the state policy in the field of subsoil utilisation, which should contribute to solving the main development problems in Siberia. The Russian government offers tax incentives to large energy, mining and infrastructure companies to invest in the region, especially in the eastern/Siberian Arctic regions, which have so far been much less developed than the Arctic regions west of the Urals. In 2020, the government approved a stimulus programme of over $300 billion for infrastructure, industrial, liquefied natural gas (LNG) and oil and gas extraction projects in the Arctic. In addition to oil and gas extraction, the petrochemical, mining and timber industries will also receive incentives to attract domestic and foreign investors. The aim of these incentives is to stimulate economic activity and the construction of towns, power plants, ports and airports, as well as to prevent population migration from the region.
The Urengoy-Pomari-Ujgorod pipeline, also known as Trans-Siberian, was built during the Soviet Union and is still Russia’s main export pipeline. The pipeline runs from the Urengoy gas field in Siberia to the west of Ukraine. From there, gas is exported to Europe. It is currently in the spotlight because Sudzha, just across the border with Ukraine, is the focus of intense fighting between Ukrainian and Russian forces. Gazprom’s gas metering point Sudzha is located a few kilometres outside the city, closer to the Russian-Ukrainian border, and was one of the central locations of the recent Ukrainian-led Kursk offensive.
In December 2019, Moscow and Kiev signed a five-year long-term agreement for the transit of Russian gas through Ukraine. The agreement on the transit of Russian gas through Ukraine to Europe expires in 2024 and Kiev has stated that it does not intend to extend the agreement or conclude a new one. Once this expires, the only operational pipeline route to Europe will be TurkStream under the Black Sea.
In addition, Russia and China are expected to sign the Power of Siberia-2 gas pipeline contract in the near future. Russia has been negotiating for years for the construction of the Power of Siberia-2 pipeline, which would transport 50 billion cubic metres of natural gas per year from the Yamal region in northern Russia to China via Mongolia. Russia came up with the idea for the pipeline years ago, but the issue has become even more urgent now that Moscow has replaced Europe with China as its largest gas customer. The 2,600 km pipeline is planned to transport 50 billion cubic metres of natural gas per year. The first Siberian Power pipeline is 3,000 km (1,865 miles) long and runs through Siberia to Heilongjiang province in northeast China.
Geographically, Siberia has many advantages. The port of Vladivostok, the largest city on Russia’s Pacific coast, is located across the Sea of Japan from Japan and South Korea, two of the world’s most productive, high-tech countries. Vladivostok is also within a few hours’ flight from Tokyo and Seoul. It has the potential to become an international business centre on the Pacific Rim. In 2016, Putin launched the Far East Hectare programme and announced that any citizen willing to live in the Russian Far East for five years would be given one hectare (2.5 acres) of free land. However, according to estimates, more than 300,000 Chinese have migrated to the region to work in agriculture and industry and now live in Siberia.
Europe and Russia are on an unspecified course of mutual economic disengagement. This is because supporting the Russian economy within the European Union means supporting not only a country that is a threat to its neighbours, but also a regime that sees the EU, and Germany in particular, as an enemy and has been trying for years to undermine the foundations of their peaceful, democratic and rules-based order. In Germany in particular, there is an intense debate about cutting economic ties with Russia. Therefore, policies such as incentives for the withdrawal of German companies from Russia, gradual reduction of ongoing exports and imports, and cutting ties with Russian banks are being pursued as appropriate steps. With Russia’s New Siberian Vision, the process of economic independence from the European Union is expected to strengthen.
In particular, Prime Minister Mishustin’s plans include projects aimed at Russian youth, such as the opening of university campuses in Tomsk and Novosibirsk to develop science and education and the design of campus projects in Irkutsk, Gorno-Altaysk and Kemerovo. It is also planned to launch the mega-science project of the Siberian Circular Photon Source synchrotron in the town of Koltsovo in the Novosibirsk region. The strategy also includes the modernisation of airports in Bratsk, Gorno-Altaysk, Kemerovo, Krasnoyarsk, Novokuznetsk and Novosibirsk.
The plans for the implementation of the socio-economic development strategy of the Siberian Federal District also envisage the creation of a new railway corridor with China. The first corridor involves the creation of Sevsib, which, according to the document, should run from Nizhnevartovsk (Khanty-Mansi Autonomous District) to Bely Yar (Tomsk Region) and from Tashtagol (Kemerovo Region) to Urumqi (China).
Investments in regions such as Siberia, where Russia has long suffered from population and youth problems, are at least as important as the economy. The fact that the problems between Russia and the West have reached unbridgeable levels continues to push the Moscow administration to establish new equations both internally and externally.
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