Jan. 9, 2015 by Darius
I just finished The Siberian Curse: How Communist Planners Left Russia Out in the Cold by Russia experts Fiona Hill and Clifford Gaddy. The Siberian Curse is a comprehensive scholarly look at the economic price Russia has paid, and continues to pay, because of mistakes made by Soviet central planners in developing Siberia.
Siberia has long been seen as central to Russian identity. For starters, it provides the basis for Russia’s vast territory. During tsarist times, Russian rulers were obsessed with settling and developing Siberia because of the concept of terra nullius, meaning empty land. According to international sovereignty conventions at the time, land had to be settled and developed in order to be considered to be the sovereign territory of a country. While other European powers like Britain and France built colonial empires, Russia expanded east and north into Siberia.
After the Bolshevik Revolution, though, did Russian (now Soviet) rulers really focus on Siberia. Massive projects were undertaken to exploit Siberia’s fabulously rich natural resources, from coal and gold to timber and diamonds. Unfortunately, though, while Siberia has enormous natural resource reserves, extracting these resources are very difficult. The primary foe in Siberia is the cold. Because of Asia’s geography, the Russian climate becomes colder and colder going east in a straight line from Moscow. In eastern Siberia, it is not uncommon for temperatures in January to reach -50° Celsius. In such conditions, machines break down constantly. Any sort of economic activity in Siberia must be very labor-intensive. However, convincing people to move to Siberia proved very difficult. The early Soviet solution was simple: force them. Siberia had been used as a penal colony for centuries. The Soviets, through the gulag system of prison camps, forcibly relocated hundreds of thousands of people to work in Siberia. In fact, one of the explicit goals of the gulag was the development of Siberia. The gulag was so successful at getting cheap (i.e., slave) labor to Siberia that Soviet planners proceeded as if they would have limitless labor forever.
The gulag system and the economic development planned around it are today a huge burden on Russia. Hill and Gaddy argue that economic planning during Soviet times has left modern Russia with a fundamentally bad allocation of population and resources. Today, Russia east of the Urals has too many cities in too cold of places because people were not free to move where it would make sense according to free market economics. Although many Russians moved out of the coldest regions after the fall of the USSR, the fundamental fact remains that many Russian cities are built where no cities should be. The costs of maintaining Siberia are enormous. Precise estimates are impossible, but it is likely that the ongoing misallocation of population and resources, left over from the Soviet period, are costing Russia between one and two percent of GDP every year. Siberia has become an economic ball and chain dragging behind the rest of Russia.
Unfortunately, change will be very difficult both politically and economically. Russian politicians across the political spectrum continue to romanticize Siberia as a land of opportunity, while internal migration restrictions are again impeding Russians’ freedom to leave Siberia. Furthermore, as populations in the coldest areas decline, costs do not decline as well. The Soviets built everything on a massively centralized scale. Heating and electrical systems, for example, are city-wide. It is effectively impossible to scale down or reform these systems.
The Siberian Curse, published in 2003, is first and foremost a scholarly work. That means it isn’t the most lively book ever written. (Hill and Gaddy’s newer book, Mr. Putin: Operative in the Kremlin, is a more pleasurable read and, incidentally, is coming out in a new edition that incorporates analysis of 2014 events in early February.) The Siberian Curse is, however, chock-full of interesting and important information on Russia, its history, its geography, and its economy.