Russkiy Mir Executive Director Vyacheslav Nikonov was a guest on the Vesti FM radio program Full Contact, hosted by Vladimir Soloviev. The program focused on issues concerning Siberia and the Far East as well as the tasks set out before the new state corporation for developing this region of Russia.
Vladimir Soloviev: What specific steps should the state take to develop these regions in such as way as to ensure that they do not turn into giant enclaves of migrants from neighboring countries?
Vyacheslav Nikonov: For now they are not turning into giant enclaves. The situation is such that in the border regions the Chinese economy is growing much faster, and so there is no stimulus to move to Russia.
What needs to be done? A lot needs to be done! And some things are being done: for example, major projects are being implemented on Sakhalin, and Sakhalin has turned into one of the most dynamically developing regions of the Russian Federation. Major investments are being made with regard to the Sakhalin-1 and Sakhalin-2 projects. And a major investor in these projects is Japan. They have already built what is perhaps the largest LNG plant in the world. And Japanese tankers are delivering LNG to Japan, to China and to other states in Southeast Asia. So these kinds of major projects really are needed – the pipeline projects going from Sakhalin to the mainland, from West Siberia to East Siberia and further on to the Pacific Ocean and China. This represents a very substantial development of energy infrastructure. This can be followed by the development of very important projects related to cross-border trade and the creation of port infrastructure, and of course trans-Siberian transit represents an enormous untapped opportunity. Right now the volume of transit along the trans-Siberian route is rather small. Furthermore, 85% of this volume is going in one direction – from West to East. For the most part, the boxcars travelling in the direction of Europe are empty. At the same time, the volume of trade between East Asia and Europe is on the rise, particularly in terms of volume. The transit value exceeds $65 billion. If a portion of this transit is handled by Russia, then this could lead to colossal development.
Soloviev: There doesn’t seem to be anything new here. Why create a separate structure in Russia and provide it with immense authority if the Japanese are already providing money for the LNG plant?
Nikonov: If we do not develop on our own, then we won’t have our own production capacities. If we do not invest while other countries are, then this could develop into a threat to our sovereignty. At the same time, we have opportunities which we are unfortunately not using to develop our own regions, but they are now beginning to be used. For example, I was very pleased with the Russky Island project, where the Far Eastern Federal University is being built. This is the first university campus to be developed in Russia in the past 30 years. Meanwhile, China builds two to three dozen such campuses each year.
Soloviev: But who is building it? Where did the labor come from?
Nikonov: There are various laborers there, but the fact of the construction itself is gratifying, as for many years nothing was built there. You have to understand that the Far East is sparsely populated, which in turns means that the consumer buying power is low. It is not profitable, for example, to build Japanese and Korean automobile factories there, and they won’t do it. They will build in our country, and investment from the Asia-Pacific region is rapidly rising, but this isn’t investment into the Russian Far East.
Soloviev: What can be done to boost consumer buying power? What should the state do?
Nikonov: I think that there should be a very different tax regime, so that people don’t have the desire to move to other regions where there are jobs. For the state the most important task is to create jobs, to create an attractive economic climate and raise the standard of living via direct payments, including social and pension benefits. People need to be attracted to the region.
Soloviev: That’s understandable, but what kind of money are we talking about here? How much do we need to pay someone to stay there? I asked listeners how much money would be needed to entice them to move to Siberia and the Far East. Many said 60,000 rubles a month and an apartment.
Nikonov: I don’t know how much we would be ready to give a specific specialist, but in light of the creation of this new corporation [the state corporation for development of Siberia and the Far East – ed.] it is becoming more or less clear what kind of figures we are talking about. Since funds are going to come from the national prosperity fund, i.e. oil and gas revenues, then this is about $22 billion dollars over the next 10 years.
Soloviev: That’s no small amount.
Nikonov: This really is a lot of money, which could make a real impact.
Soloviev: To what extent do you really believe that in this project? Will it not lead to the formation of some sort of Far East Republic? Does it not remind one of the famous East India Company?
Nikonov: If we do not invest in the Far East, then the possibility of losing it becomes very great. After all, the population there is shrinking: 6.5 million people – that’s four times less than in North Korea. And then there is South Korea, Japan, China and ASEAN countries. Control of this territory could be lost, and we might not even notice it happening. There are no alternatives to the development of this region. The fact that Siberia and the Far East are important to our country, our economy and the strategic position of Russia is also quite clear.
Thus there are no alternatives to these development tasks for the Far East: we either develop it or we lose it.
This was understood by Stolypin, who launched a major resettlement program, thanks to which we can still hold on to this region. This was also understood by Soviet authorities, which carried out a number of projects aimed at developing cities, creating new industries and reinforcing the region’s security, which then greatly helped us in World War II. And this understanding exists today.
We have a strategic window of opportunity, primarily because in the near term China will be looking to the east – to the United States, Taiwan and the South China Sea – rather than to the north. I do not expect any pressure in the direction of the north in the next few decades, and this window of opportunity should be used.
