- 28.9% 1y performance
- 19.3% volatility
In their power play, the three Eurasian behemoths, Russia, China and Europe will remodel the continental mass as they attempt to realign
The wild card weighing on the outcome could well be Siberia, both pivot and enigma
Theater of totalitarian terror, land of untold natural wealth, bastion of industrial prowess during the Great Patriotic War, continent of extremes in every sense, Siberia is the key to Eurasian destiny
Russia and China have found common ground and a degree of shared interest - based on access to Siberia's natural resources and trade - but no obvious motives seem to point to a deeper partnership
To resolve dire infrastructure needs, further exploration of natural resources and address dire environmental collapse, Russia will seek to diversify foreign associates
The game changer - on the western end of Eurasia - could well be Europe, with its powerful energy conglomerates and capable infrastructure operations
Siberia is the vast expanse beyond the Ural Mountains, an immense and massive presence, usually acknowledged by Western analysts as Russia’s backyard of natural riches and the country’s disputed border with China
Modern Russian sources define Siberia as a region extending eastward from the Ural Mountains to the watershed between Pacific and Arctic drainage basins, and southward from the Arctic Ocean to the hills of north-central Kazakhstan and the national borders of both Mongolia and China
Encompassing more than three-quarters of Russia's total territory, the continental size of Siberia is difficult to grasp, at 5 million sq. miles (13 million sq. kms) about 30% larger than both the U.S. (9.8 million sq. kms) and China (9.6 million sq. kms) and dwarfing continental Europe (Western Russia included)
The division in 3 administrative regions, the Ural Federal District of Western Siberia hugging the Urals, the Siberian Federal District of Eastern Siberia, in fact the central region, with Novosibirsk its largest city, and the Far Eastern Federal District, all the way to the Pacific, further obscures the geopolitical destiny of Siberia
Theater of totalitarian terror, land of untold natural wealth, bastion of industrial prowess during the Great Patriotic War (as the World War II conflict is named to this day in Russia), continent of extremes in every sense, Siberia is the key to Eurasian destiny in this century
In their power play, the three Eurasian behemoths, Russia, China and Europe, will not shed the principles which drove their century-old strategies in war and in peace any time soon (if at all)
Eurasia will be remodeled as the powers attempt to realign and the wild card weighing on the outcome could well be Siberia, both pivot and enigma…
A forward looking discussion about Siberia has to be grounded in a troubled recollection of the suffering inflicted by the Soviet Union on its own
The scale of forceful displacement of entire populations, and the magnitude of the crimes committed by the Soviet regime, are beyond imagination, making words sound weak, without luster or respect due to the victims
Initiated under Lenin in 1919, in the footsteps of the labor-based penal system dated back to the Russian empire, when the tsar instituted the first "katorga" camps in the 17th century, the concentration camps were transformed by an order of magnitude under Stalin from 1929 until the dictator’s death (1953) and formally disbanded in 1960 (as part of Khrushchev’s destalinization program), to be completely eliminated as late as 1987 under Gorbachev
The list of millions of victims goes on and on - from ‘dekulakization’, forcing farm collectivization on a powerless peasantry in the 1920’s, to Stalin's Great Purge, a crackdown on all forms of dissent, real and imagined, falling indiscriminately on anyone murmuring a word against party leadership or even without voicing any dissent at all, leaving no one above suspicion, to displacements aimed at national minorities – Ukrainians, Poles (from East Poland occupied by the USSR in 1939) or Central Asians
According to Anne Applebaum, eminent historian of the Gulag, Soviet archives referred to 476 camp systems, all across Russia, each one made up of hundreds, and some even thousands, of individual camps
The number of victims is so impossibly large as to be humanly inconceivable and shrouded in approximations highlighting individual tragedy and social catastrophe on a scale unheard off, from 15 to 20 million people…
According to Ms Applebaum, 18 million people passed through the system and an additional 6 to 7 million people were deported to ‘exile villages’ – a total reaching 25 million, 15% of the Russian population
Engineered by Stalin to secure total control over the regime, the prisoners of the Gulag system turned out to be an inexhaustible source of free slave labor assigned to massive construction projects and mining operations
Work on infrastructure such as the Moscow–Volga Canal, the White Sea–Baltic Canal, and the Kolyma Highway were quickly turned into massive propaganda opportunities, supposedly redeeming ‘convicts’ and ‘reforging class enemies’
Of the images posted on the referenced Internet site, this photograph of construction work on the 227 kms (141 miles) White Sea-Baltic Canal, of which 48 kilometers (30 miles) were man-made, is among the least harrowing
Involving 126 000 laborers, and constructed by almost exclusively manual labor provided provided with inadequate tooling over 20-months time span (1931 - 1933), official records put the number of deaths at 12 000 to 25 000 (with Ms Applebaum putting her estimate at the higher number) - setting the human sacrifice at more than 1 000 per month...
Beacon of the first five-year Plan (1928-1932), the canal has also become a symbol of absurdity because, countering initial plans for a 5.4m (17.6 feet) canal depth, cost and time constraints of the Plan, pressed by Stalin, rendered a much shallower draught necessary, limiting commercial potential of the canal to a large degree
- Initial studies of cost ballooned from allotted 60 million roubles to 359 million roubles (assuming canal equipment could be imported) and were forthwith rejected, according to Mikhail Morukov (p. 157)
- Assigned to one track of the future canal at the start, and because of cost considerations, forced (and 'cheap') Gulag labor ended up in charge of the entire project, which did not solve the lack of canal equipment and qualified labor - a November 29, 1930 report by the deputy director of the Gulag, Y.Rappoport, suggesting that “a few skilled workers be arrested”, is quoted by the same author (p. 158)
Technical innovations to make do with poor equipement from the use of primitive wooden derrick furnaces to melt iron and steel and manufacture other necessary materials to a unique wooden sluice gate capable of maintaining the multiple pressures of the water - and the motivation of the forced labor, incentived by modest food extras and (most importantly) 'work credit' reducing the term of sentence - established the Gulag system by the mid-1930's as the dominant construction organization for all large infrastructure projects in the Soviet Union
"Russia's power will grow with Siberia"
Attributed to 18th century scholar Mikhail Lomonosov, the statement adorned the walls of Russia's science classrooms until the 1980's, according to Ms Hill
Traded presumably as early as the 8th and 9th centuries, furs, salt, wax and minerals from the Urals and Siberia became the mainstay of the Duchy of Muscovy's economy along the Via Regia, which extended as far afield as Brugge, Antwerp and Santiago in Northern Spain by way of France from Vitebsk on the Dvina river (flowing north west into the Baltic), Smolensk and Kiev, both on the Dniepr river (streaming south to the Black Sea)
Siberia's mineral resources became the backbone of Russia's industrialization, starting in the 19th century, delivering a massive economic surplus relative to its population ever since
What could be seen as a paradox is that the Siberian concentration of natural resources - with some 80% of Russia's oil, natural gas and coal - came to epitomize the economic centralization of the Soviet regime, footing the bill of misdirected planning seemingly forever
Arguably, Siberia's riches - and sparse population - acted as a magnet for Moscow's ambitions, driven simultaneously by economic opportunity and by deep insecurity over potential foreign interference
Opportunity fueled industrial planning, expanding cities in the harshest continental climates - a second paradox with city life in a barren unwelcoming landscape - with on average 1 inhabitant per square kilometer and impossibly complex (and costly) infrastructures to maintain
A smattering of 20th century Siberian cities dot its continental immensity, creating intractable problems of infrastructure, environmental risk and hard to reach manufacturing clusters
To name some of the major cities of the region...
Yakutsk, located some 450 kilometers from the Arctic circle (pop. 300 000) is the largest city located in continuous permafrost and one of the largest that cannot be reached by road
- the Lena highway running north-south along the Lena river connects the Yakutsk region with the Trans-Siberian Railway corridor
- with the exploration and development, since the early 20th century, of some 150 gold mines in the Amur region, in Siberia's south-east, the network combining Trans-Siberian railway and Lena highway was - and remains - the crucial link for food supply and labor transportation
- as for Yakutsk itself, the road is running east of the Lena river while Yakutsk is on the west bank of the river...making the road accessible only in summer, by passenger ferry and in winter, by ice road over the river (provided the ice is thick enough...) and leaving the river impassable most of the year due to flooding, ice floes or semi-thawed ice
- plans for a bridge have been on the drawing board, seemingly forever, with the latest project approved by President Putin in November 2019
Norilsk, in the Siberian north-west, above the Arctic circle, was founded in the late 1920's to mine the largest-known nickel-copper- cobalt - platinum - palladium deposits (permanent pop. 170 000)
- Norilsk could be seen as symbol of Siberia's oversized mining industry - with nickel ore smelting directly responsible for severe pollution
- according to estimates quoted by NASA, 1 percent of the entire global emissions of sulfur dioxide comes from this one city. Heavy metal pollution near Norilsk is so severe that it is now economically feasible to mine the soil, which has been polluted so severely that it has economic grades of platinum and palladium
Founded in the late 19th century, Novosibirsk in Siberia's south-west is the third most populous city in Russia (1.5 milion)
At the crossing point of the Transsiberian railway under construction at the time, the city grew into a major transport, commercial and industrial hub and the relocation of many factories from European Russia after the German invasion (June 1941) asserted Siberia's favored status in two ways, as fount of economic strength and - of no less importance - wellspring of resurgent Russia under attack from Nazi Germany
And the list could go on of cities buttressed by the Trans-Siberian, the continent's indispensable infrastructure, girding Siberia's southern rim
- Omsk, pop. 1.2 million - on the Trans-Siberian line and close to the border with Kazakhstan - Russia's largest oil refining complex, built around the oil and natural gas fields - where privatization of the mostly state-owned enterprises, following the dissolution of the Soviet Union, was the subject of running battles between the former party elite, the emerging nouveau riche, and criminal syndicates, with Sibneft a prized asset
- Krasnoyarsk, pop. 1 million, station along the Trans-Siberian Railway, benefitting from the evacuation of dozens of factories from Ukraine and Western Russia during World War II and and today one of Russia's largest producers of aluminium
- Irkutsk, pop. 0.6 million, still another station along the Trans-Siberian, benefitting from the industrialization drive of the Soviet regime, is the heartland of Russian aviation industry
Siberian curse or dilemma ?
Profiles of some of Siberia's (and Russia's) largest cities give credence to dire macro-economic projections - and then some
Roundly condemned as absurd legacy of central planning by twenty-first commentators, the poor distribution of capital and labor and the distorsion of Russia's economic geography lock a large part of modern Russia (cities, factories and people) behind inadequate and hugely expensive infrastructure
From this critical angle, the cost to maintain entire cities without proper infrastructure, to squander energy at well below market prices and to run factories in the wilderness indeed looms large against Siberia's supposed contribution to national product
Adding environmental disaster to the picture, hinted at in the snapshot of Norilsk, and involving possibly the entire industrial apparatus of Siberia, exposes the population to unfathomable health risk, a source of political instability bar none...
F. Hill and C. Gaddy, in 'the Siberian curse' (Brookings Institution 2003), put Siberia's natural resources in perspective
- the entire Russian economy pivots around oil, natural gas and metals
- this is why world prices (determining export revenues) and domestic downstream benefits for defense, for construction, for manufacturing and transportation (such as machine building to produce railway cars for oil transport) command the country's economic wellbeing
Looking back over the past 150 years, continuity of Siberian exploitation is indisputable from the first industrial ventures by the tsars in the later 19th century to the massive industrialization led by Stalin from the 1920s to the 1970s infrastructure boom in the Siberian Far East
But it has been security considerations which, in a mutually reinforcing interaction with the vast economic benefits, which made Siberian natural riches central to State policy
- this has been true in the late 1930's and during the war with Nazi Germany when the build-out of a huge industrial-military complex behind the Ural Mountains, out of reach of Germany's army, allowed a reversal of fortunes, exhausting Germany's industrial capacity while Soviet military production expanded unrelentingly from 1941 on ("The Wages of Destruction" by A. Tooze, 2006)
- the sacrifice of millions of soldiers and civilians in the Great Patriotic War ultimately was not in vain, but the industrial lesson is still vivid for Russia's leaders today
- the 1970's State-led infrastructure build-out in the Far East, the Siberian region on the Pacific coast and north of the China border, and the transfer of a significant part of military forces were a direct consequence of the 1969 stand-off with China
Strategic continuity is arguably impervious to regime change in Russia, if history is any guide
Within this scope, the recent political and economic detente with China, attested by the new 'Power of Siberia' natural gas pipeline, may be real enough as an additional dimension of a complex game of chess between world powers, but not a reversal of Russian strategy...
Westward bound, and as early as 1944, General de Gaulle, the former French President and the leader of the 'Free French' during World War II, rejected a post-war division between East and West, with European geography stretching "from the Atlantic to the Ural Mountains", a formula repeatedly used in the 1950's and a divisive stance in Europe today, hardly shared in Eastern Europe, under the boot of the USSR for too long
Looking eastward, China's GDP is approx. ten times larger than Russia's - and growing with a new Silk Road, renamed Belt and Road Initiative, drawing regional economies of South-East Asia and Central Asia within Chinese orbit, closing in on Russia's borders
All of which puts Russia at a crossroad to preserve control, compelled to engage in a balancing act of which Siberia seems destined to be the pivot
Even though vast difference in population density on either side of the border between Russia and China leads periodically to Russian resentment about pervasive Chinese influence across the border, territorial integrity hardly seems at risk (even if past 'unequal' treatises between the two countries tend to fester)
Economic independence of the Siberian Far East, avoiding potential over-reliance on Chinese trade, could be the real prize... and the ability to champion Siberia's potential the key
From a Russian perpective, parcelling out exploration rights, infrastructure projects and environmental clean-up investments between Chinese and Western businesses may not be as farfetched as today's tensions might imply
The power of the Federal government, foremost of President Putin, is unchallenged in its ability to jam such a policy down public and private throats ... and establish a rule of law on unruly local partners, State-owned enterprises and private oligarchies
All of which does not put the onus so much on President Putin's strategic options - Russia's vested interest in Siberia's development is clear - or on China's leadership - the country's engagement in economic globalization secures privileged political access across the world, all around Russia and in Russia itself...
The two world powers have found common ground and a degree of shared interest - based on access to Siberia's natural resources and trade - but no obvious motives seem to point to a deeper partnership. Russia is edgy and sensitive to China's economic might, and China probably has richer pickings in Asia in its sights ...
The game changer - on the western end of Eurasia - is Europe, with its powerful energy conglomerates, Royal Dutch Shell , British Petroleum and Total , and its infrastructure operations, Vinci and Bouygues of France , ACS of Spain , Hochtief of Germany asset, Skanska of Sweden and on ...all of whom are ready, and already have been involved in Siberian projects
The politics of economic sanctions - to which Russia has been subjected since the annexation of Ukrainian Crimea (2014) - were warranted but did not prove to be effective in a global world where Western powers wield a smaller (and shrinking) stick...
As isolationism takes hold, America's aloofness compels the European Union, and the individual European States, to reconsider their options...
Siberia beckons... and the dilemma may well be Europe's alone