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When Russian President Vladimir Putin gave his State of the Nation speech in February, the press coverage in the West focused on what he said about missiles and relations with the U.S. But that accounted for only a brief portion of his talk. The lion’s share was spent on domestic issues, key among them the rejuvenation and expansion of Russia’s infrastructure.
Those projects range from a massive road-, bridge-, and airport-building program, renewal of urban housing stock, and new gas and oil pipelines to big investments in the “Northern Passage” sea route between the Far East and Europe over the top of Russia. Experts are divided on whether the infrastructure effort will provide the long-term benefit to Russia that has been promised or whether it’s even to public benefit at all. But the Russian people seem to appreciate it.
“Such big projects, requiring so much financing, always have a variety of reasons behind them, including political, economic, and social ones,” says Olga Kryshtanovskaya, a political sociologist. “But sure, our authorities want people to have better jobs, improved surroundings, and better quality of life, if only to keep them quiet.”
Until last year, two remote villages in Russia’s poorest republic – Tuva, near the Mongolian border in distant Siberia – spent four months out of 12 cut off from direct access to civilization.
During those months, when spring thaws and the slow autumn freeze made it impossible to cross the broad Yenisei River by ferry or ice bridge, the 2,000 or so people living there sometimes went hungry. If there was a medical emergency, the only option was evacuation by helicopter.
But last year, a Ministry of Defense construction brigade built them a solid bridge, according to Russian reports, ending the community’s historic isolation and enabling residents to drive into the regional center of Kyzyl in about half an hour at any time of year. Reached by telephone, Chechek Targan, deputy chair of the formerly cutoff Kara-Khaak settlement, said that local people were over the moon about their new bridge.
“This was our dream. We used to have trouble getting food deliveries in off-season; now we eat fresh bread every day,” he said. “Life is definitely better.”
This story is one of many of its type to be found in Russian media lately. There seems little doubt that the vast infrastructure renewal program championed by Vladimir Putin is beginning to spread far beyond tourist showplaces like Moscow and St. Petersburg.
Some economists criticize the plans as throwing money – which Russia has plenty of these days – at problems without a coherent, long-term economic strategy. Others warn that it smacks of Soviet-style central planning and risks the dysfunctional outcomes that system often produced. Still others say that, as ambitious as they sound, the plans are just a drop in the bucket, given Russia’s immense expanse and crushing infrastructure needs.
But few deny that changes are actually happening and opening up new possibilities across the country, from that new bridge in Siberia to the restoration of train service in Torzhok, a neglected industrial town just a couple hundred miles from Moscow.
“There are a dozen big projects outlined by presidential decrees of May 2018” after Mr. Putin’s reelection, says Vladimir Klimanov, an economist with the Russian Presidential Academy of National Economy and Public Administration (RANEPA). “Infrastructure is the key to Russia’s future economic development. We need to develop connecting links between regions. Without that, regional economic development is hardly possible.”
Those projects, outlined in a Russian government document, range from a massive road-, bridge-, and airport-building program, renewal of urban housing stock, and new gas and oil pipelines to big investments in the “Northern Passage” sea route between the Far East and Europe over the top of Russia, which climate change has made increasingly viable.
“There is money coming in from the state budget, so work will get done,” says Natalia Zubarevich, a social geographer at Moscow State University. “There is also an intention to attract investments from private business, something we should watch for. It’s possible the state will put pressure on businesses to get involved.... But the money is coming. Of course, the preference will be for big projects” with huge budgets and maximum publicity.
The use of high-profile showpiece events to drive local infrastructure development is not a new idea. Russia spent over $50 billion to stage the Sochi Olympics five years ago. Like many big Olympic spectacles, it produced a fair number of white elephants, like giant stadiums and overbuilt transport hubs, which Sochi still struggles to maintain and find uses for. But the city also received a much-needed makeover of its port, transport, sewage, and electrical infrastructure that transformed daily life for its citizens.
Last year’s FIFA World Cup, hosted by Russia, cost $14 billion but brought new hotels, transport facilities, and other improvements that continue to serve the inhabitants of the 11 Russian cities where it was held.
A lot of attention has been paid to the $3.7 billion, 12-mile Kerch Strait Bridge, a politically motivated project which opened for road traffic last year and will cement the annexed Crimean Peninsula firmly to Russia when its railroad span becomes operational later this year. It’s a prospect Mr. Putin made much of in his February State of the Nation address, saying that it will create “a powerful development driver for Crimea.” But the Kerch project is only one of more than 20 impressively long bridges that have been constructed in Russia during the Putin years.
Roads, often cited as Russia’s greatest misfortune, have seen major improvements in recent years, including a sixfold increase in expressways. The Russian government intends to invest about $100 billion to help the country’s far-flung regions modernize their road networks before Mr. Putin’s term of office ends in 2024.
‘There is no actual strategy’
As good as it may sound, many economists doubt that all these efforts will produce the national makeover that Mr. Putin has proclaimed as his program for the next five years.
Vladimir Kvint, one of Russia’s leading economic strategists, says the investments are necessary to overcome Russia’s legacy of decaying Soviet-era infrastructure. But he says they are not connected with a systematic assessment of the country’s needs and are unlikely to stimulate the economic dynamism that official statements promise.
“Of course these are useful projects, but infrastructure investment isn’t just about fixing past inadequacies. It should be about the future,” he says. “We don’t know how useful all this investment will be because there has been no systematic study. We need a strategy that identifies and prioritizes the needs of economic development, coordinates them with specific infrastructure projects, and allocates the needed resources to realize them. We have lots and lots of documents with the word ‘strategy’ in their titles, but there is no actual strategy.”
Others argue that the whole focus on infrastructure is a red herring. Daniil Grigoryev, an expert with the left-wing Institute for Globalization and Social Movements in Moscow, says Russia’s main economic problem is the Kremlin’s pursuit of neoliberal austerity measures aimed at taming inflation, reducing government debt, and balancing the state budget. That’s been successful, but it’s resulted in stagnating incomes, deteriorating social services, and a rollback of benefits the population once had, such as low retirement ages.
“The right way to drive our economy forward would be to strengthen consumer demand and improve public living standards,” Mr. Grigoryev says. “These infrastructure projects, more pipelines and transport corridors and such, are mostly intended to boost Russia’s export potential on behalf of big business. Russia is still a country that mainly exports raw materials, oil, and gas. This form of development will only reinforce those dependencies. The projects themselves are about channeling money to favored big construction firms. So it’s austerity for the majority, fresh infrastructure to promote the interests of the rich.”
Opinion polls do seem to show that infrastructure development is popular among Russians, and there is no mistaking the thumbs-up of the folks in Kara-Khaak for their new bridge.
Mr. Putin’s two decades in power have been an exercise in maintaining high public-approval ratings by delivering what Russians seem to want, from rapidly growing living standards in the last decade to strong pushback against Western sanctions and geopolitical pressure in recent years to an ambitious infrastructure program today, says Olga Kryshtanovskaya, one of Russia’s leading political sociologists.
“Such big projects, requiring so much financing, always have a variety of reasons behind them, including political, economic and social ones,” she says. “But sure, our authorities want people to have better jobs, improved surroundings, and better quality of life, if only to keep them quiet.”