Wednesday, September 26, 2007

Window on Eurasia: Russia’s Transport System Failing to Fulfill Strategic Tasks

Paul Goble

Vienna, September 26 – Almost a century ago, tsarist Prime Minister Sergei Vitte observed that “Russian roads must support that country’s strategic, political and commercial requirements.” But now, according to one analyst, Moscow’s focus on money from the export of raw materials has caused the Kremlin to forget these words.
As a result, Anna Loginova writes in an essay posted online yesterday, not only are other countries taking advantage of Russia’s shortcomings in its transportation system, but there is a real danger that its existing transport network will not prevent the country’s disintegration (
The notoriously poor quality of Russia’s highways and its failure to develop mixed transportation corridors so slows the movement of goods and services over them that this factor alone is costing the country two percent of its GDP – or some 700 billion rubles a year (28 billion US dollars), she says.
Those losses in turn are further compounded by incredibly slow processing of freight at Russia’s land and sea borders, all factors that are prompting both domestic Russian firms and foreign countries to explore every possible way to ship their goods around rather than through Russia.
Unfortunately, given Moscow’s focus on exporting raw materials (mainly oil and gas), the antiquated nature of Russia’s legislation regulating transportation, and a bureaucratic culture in which responsibility is divided and no one wants to rock the boat by criticizing others at the same level, there is no immediate way out.
But Loginova suggests, the country would earn immense returns from creating a super-agency or ministry that would oversee the transportation ministry – which she suggests has been especially neglectful about planning – the customs service, and the economic development ministry.
Were that to happen, even for a short time, she argues, it would be possible for Moscow to take five steps that would put the country on track to becoming a transit power in its own right between Europe and Asia rather than simply an exporter of raw materials to both.
First, she says, it would allow the rapid development of a planning document concerning mixed mode transit corridors for the next seven years. Second, it would allow for the revision of the country’s aging legal infrastructure – some laws governing transportation date to the 1950s and make no reference to airfreight.
Third, such an agency would help promote the coordination of public and private institutions to ensure that these corridors would be built according to the most modern standards. Fourth, it could create a standing annual order for the construction of such corridors.
And fifth, Loginova says, it could create special operational institutions to oversee the operation of these corridors while attracting private capital to help pay and maintain them, something that the private sector could not do on its own, the economic specialist suggests.
At the conclusion of her article and perhaps as a reflection of her sense that few in the upper reaches of the Putin regime will be inclined to listen to such arguments, at least as long as the oil and gas money continues to flow in, she advances another one more likely to get the Kremlin’s attention.
“It is obvious,” she says, that “the development of Siberia and the Far East cannot be realized as it is being done today,” only as export channels. Instead, she continues, “sooner or later, the current course will lead to a strengthening of the centrifugal tendencies and create the preconditions for the destruction of the state.”
Developing better highways and investing in modern and fast intermodal transport corridors can help prevent that, Loginova insists, and thus developing the transportation system must come to be recognized as an important, even vital component of the country’s national security strategy.

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