Russia's Far East has shown the country's lowest economic growth performance and worrying demographic trends. There is a little more than 1 person per 1 sq. km of its territory, and just over 12.5 people per 1 sq. km in its densest region, the Maritime Territory. The local population is declining for natural reasons and because of migration. The Far East is poorly integrated in the country's economy. All these factors are a cause for concern about the future of this Russian region. Many people fear that illegal immigrants from China will colonize and eventually seize control of the region. Another worry is that the region will economically break away from the rest of the country and change its focus to the Asia-Pacific region.
True, realistic politicians and analysts believe such sentiments are absolutely groundless, unless the apocalyptic predictions about the destabilization of the huge Chinese state under the pressure of economic and social contradictions come true. Those politicians who exaggerate danger posed by China do so either for selfish reasons or out of mundane prejudices. However, the need to work out a full-fledged strategy for the Far East's economic and social development remains a priority.
Looking for alternatives
One of the problems the authorities face is that it is hard to use the industrial potential built up in the Far East back in the Soviet era. During the transition to a market economy a substantial part of this wealth became unwanted because of its inability to compete and because a number of industries were closed. The old "distance competition" against the West did not help in selecting the best technologies, nor did it yield any funds for industrial modernization. And now Russia has no trump cards to launch competition in the Far East for the markets of popular high-tech products, which were seized by Asian "tigers," including China, long ago. The region's traditional forest and fishing industries also need investment for technical modernization and the export of value added products.
Alternative ideas for speeding up the development of the Far East are being discussed in Russia now. Hopes are being pinned on the possibility of transforming it into Russia's easternmost link between the Asia-Pacific region and Europe, the South Caucasus, the Balkans and the Middle East. Today, Russia's competitive advantage is the Trans-Siberian-Baikal-Amur (BAM) railway system, which could almost halve the time of cargo transportation from Southeast Asia to Europe compared with sea shipments across the Suez Canal.
However, this idea has its critics. Competition on the market of international cargo transportation from the Asia-Pacific region, South Asia and West Asia to Europe and the Middle East is becoming increasingly fierce. Skeptics say that Russia is lagging behind the leaders in international container railway transportation. Nor is it clear if surface transportation will be able to rival ocean freight, which is much cheaper and simpler. So, the project requires a serious feasibility study and is unlikely to yield immediate results.
Game worth the candles
Finally, the Russian government has adopted a strategic plan for establishing a powerful pipeline system in East Siberia and in the Far East with a view to switching part of oil and gas exports from Europe to Northeast Asia and the Asia-Pacific region. First, the country does need to diversify its energy exports. Second, the demand for oil and gas is growing fast in the Asia-Pacific region. Third, oil and gas exports will soon yield profits that could be invested in the modernization of the socio-economic sector in the country's eastern regions.
There is also a crucial fourth factor. A branched pipeline system will make it possible to develop large oil and gas deposits in the Krasnoyarsk Territory, the Irkutsk Region and in Yakutia to provide the region with energy and resolve the export problem. The pipelines will connect oil and gas deposits in the north of European Russia to export terminals in the Pacific Ocean, Yakutia in the north of the Far East to the Maritime Territory in its south, and East Siberia to the same areas. As soon as gas deposits in East Siberia are linked to the Unified Gas Supply System, another line will be available for integration between Russia's Asian and European regions. As a result, a complex national and international network of ties can be built in eastern Russia to cover foreign trade, transport transit, the industrial division of labor and an exchange in technologies. In short, the game is worth the candles.
Finally, turning eastern Russia into a meaningful economic entity may improve the strategic situation on the country's eastern borders. It is one thing to demand respect for the country's borders, and quite another to protect an economically developed and structured space integrated in the national economy and a network of international business contacts. Nuclear missiles cannot be used to haunt every illegal immigrant, yet these can be a good deterrent to protect developed territories integrated in the Russian economy, the entire Eurasian continent and the Asia-Pacific region.
By Yury Alexandrov