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Thanks Keith,
A winner once more.
REH
----- Original Message -----
Sent: Sunday, November 09, 2003 11:23
AM
Subject: [Futurework] The heat problem of
Siberia
When the Communist regime in the Soviet Union
collapsed just over a decade ago, and Yeltsin allowed the most massive
privatisations of its major industries to take place at give-away prices, most
economists were opining that Russia, with its acknowledged technological
expertise and superb education system in the sciences would be setting a
cracking pace -- certainly when compared with China, which was then only
taking small hesitant steps into a free market.
However, that was not
to be and, before too long, many reasons were given why Russia has since
performed so lamentably. True, in the last year or two, its growth rate, at
about 7 or 8%, has been very respectable -- bdetter than Europe by far,
in fact -- but this is mainly due to the current high price of oil. However,
the standard of living of the vast majority of Russians, except for a few
oligarchs and a new largely parasitic, well-off middle-class in Moscow and St.
Petersburg, has hardly changed at all. Among the reasons given are that
there's still an absence of comprehensive property law (and its support by an
independent judiciary) making it almost impossible for new small businesses to
start, a poor banking system, an overwhelming centralised bureaucracy (a
cultural hangoever from both Tsarist and Communist Russia) and a great deal of
corruption almost everywhere.
One of the consequences of all this is
that labour is still largely immobile in Russia. This was always the case in
Tsarist times when most of the serf population couldn't leave the estates of
their lords except in special circumstances and often at great risk, and also
in Communist times when large numbers of workers were sent to faraway places
to work in this industry or another and not allowed to return to their former
homes, or indeed to go anywhere else. But it is still the case that most of
the population of Russia are not mobile, not so much trapped by heavy
government regulation these days, but by circumstances. For one thing, there
are too few new businesses and industries to offer opportunities and encourage
voluntary migration and, for another, the government doesn't know how to move
them in large numbers for what seems to us to be a curious reason.
It
is that because so many Russians in Communist times were drafted into
intensely cold regions, they could only survive there if they lived in large
centralised heating systems in new specialised cities and towns. Large numbers
of people are stuck psychologically because, for a generation or more, they
are hardly prepared for life elsewhere; but they are also stuck because it is
logistically difficult, if not impossible for any sort of significant
government make-work initiative to be devised elsewhere which could bring them
out in large blocks. That is, even if the government wanted to do
so.
The authors of a recent book, Fiona Hill and Clifford Gaddy, have
devised a curious, but significant indicator for this curious, but significant
consequence of the way the former Communist regime displaced large populations
of people into Siberia. It is called "temperature per capita". In Russia,
despite global warming in a climatic sense, the average Russian's immediate
environment has become cooler -- at least when compared with people living in
a free labour market in otherwise comparable conditions, such as Canada. This,
too, must therefore be part of the overall reason why Russia has not done well
in the last decade.
What follows is a review in this week's Economist.
In my view it is one of the most interesting items this week.
Keith
Hudson
P.S. I almost heading this posting as "Love in a Cold Climate",
referring to the best-selling novel of some 40 years ago, by Nancy Mitford,
because I was tempted to say that, while making love in Siberia is probably
not totally impossible -- though I wouldn't personally like to try --
the prospect of raising a family there must be appalling. The "Siberian
effect" must be a contributory factor why the fertility rate in Russia is now
much less than replacement rate. The large populations still in Siberia must
be due to tumble quite precipitously in the coming decades -- and then who
will maintain the centralised heating systems for the remainder! The present
government who apparently want to keep the population high in order to keep
the Chinese out must be quite worried.
<<<<
DESTINY AT
-60°C
The Siberian Curse: How Communist Planners Left Russia Out in
the Cold. By Fiona Hill and Clifford Gaddy. Broakings Institution; 213
pages; $46.95 hardback, $18.95 paperback.
Russia is the wrong shape.
Too big, far too long, flat for much of the way and accursedly mountainous in
between; but above all, as Fiona Hill and Clifford Gaddy show in this
fascinating study, the wrong shape economically.
Its problem, in a
word, is Siberia. All Russia's rulers have been obsessed with territory, and
Siberia, with its vast expanses, unearthly cold and untold reserves of oil,
wood, diamonds and metals, is an obsession-forming place. Both the tsars and
the Bolsheviks moved people there, both to exploit the wealth and stake
Russia's claims to the land -- the Bolsheviks most effectively, with planned
cities and labour camps in Siberia's remotest reaches.
As a result,
millions of people ended up in Siberia who would never have gone there in a
market economy. Canadian cities, for instance, cluster near the southern
border; people who go north do so only seasonally. Alaska's only biggish city
is Anchorage. Russia, though, is dotted with such mining towns as Norilsk
(metals, population 235,000) and Mirny (diamonds, population 40,000), where
winter lasts 10 or 11 months, temperatures drop to -60°C, and the nearest big
cities -- themselves none too warm -- are hundreds of miles away.
Using
a clever indicator, "temperature per capita", the authors show that while the
average Canadian's environment has got warmer over the past century, the
average Russian's has grown colder. Cold means cost: in Soviet times,
construction and living costs were up to 50 higher in Siberia and the Russian
Far East than in European Russia. Distance means cost too: a developed economy
depends on internal as well as external trade, and trade over thousands of
miles is expensive. Instead of forming an economic network, Russia's cities
are islands, with few economic links except back to Moscow. Many, overinflated
by Soviet planners, are too big to survive economically. Yet Soviet cities are
also the hardest in the world to shrink, because they rely on centralised
heating that can be cut off only to entire neighbourhoods one at a
time.
What all this adds up to is that turning Russia into a true
market economy is tougher than anyone thought. Rampant corruption,
crony-capitalism or a weak banking system are minor annoyances compared with
the fact that too many Russians are simply living in the wrong places for the
economy to work properly. Some are already moving west; nobody builds company
towns in the Arctic circle any more. But, say the authors, the government
needs to help. "The basic principle is to maximise labour
mobility."
How? Unfortunately, the book contains only a few general
suggestions, such as easing restrictions on internal movement and providing
financial incentives. But as the authors recognise, the first and biggest
problem is psychological: the sense that Russia's wild east, like America's
wild west, is part of the country's manifest destiny. The typical Russian
leader wants Siberia not emptied out, but re-populated as a buffer against the
trickle of Chinese immigration that he fears could become a flood (even though
no Chinese wants to live at -60°C any more than a Russian does). If only some
of them would read this book, Russia might start shifting towards the right
shape.
>>>>
Keith Hudson, Bath, England,
<www.evolutionary-economics.org>
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