Thursday, October 10, 2013

Window on Eurasia: Is Russia about to Return to Gigantist Development Projects of the Past?

Paul Goble

            Staunton, October 10 – At the end of 1984, even before becoming head of the CPSU and launching perestroika, Mikhail Gorbachev said that one of his priorities was to end the gigantist economic projects that had driven Soviet planning, a declaration that won praise from reformers but that contributed like so many of Gorbachev’s ideas to the destruction of the Soviet Union.

            That is because gigantist projects like the Virgin Lands campaign and the BAM railway project, for all their shortcomings and irrationalities, were one of the most important sources of inter-regional investment transfers in Soviet times, and plans to end them meant that each republic and region would increasingly have to look to its own resources for development.

            Now, a Russian governor has proposed returning to the use of such projects, a suggestion that has sparked a debate not only about their utility in general but about their specific meaning in a time of scarcity and after the enormous expenditures Russian President Vladimir Putin has made in Vladivostok for the Asia-Pacific Summit and in Sochi for the Winter Olympics.

            Ten days ago, Vyachesav Shport, the governor of Khabarovsk kray, said that many of the giant projects that Moscow had proposed 50-60 years ago but then shelved should be revived because these efforts “will allow for the development of the economy of the Far East to a qualitatively new level and also strengthen the economic-political position of Russia in the Pacific region as a whole” (

            Most of these projects had their origins in Stalin’s time but were shelved after his death because his successors were not prepared to use forced labor in the same massive, but even after 1953, Soviet leaders until Gorbachev were attracted by gigantist projects as a means to stimulate development and national unity.

             Now, has asked two Russian politicians, Sergey Mitrokhin of Yabloko and Aleksandr Chuyev of Just Russia, to answer four questions about the value of such projects for Russia’s future (

            First, the two were asked whether Russia needed gigantic projects.  Mitrokhin agreed that it does but argued that “under the present corrupt regime, any project becomes an occasion” for the theft of budgeted funds rather than a real source of growth.  Chuyev for his part said that the main thing was to be selective and not to think that gigantist projects by their nature were a good thing.

            As far as the Sochi Olympics is concerned, he said that he had a divided view. On the one hand, he said, it is clear that “we have spent too much money on it.”  On the other, this investment will undoubtedly pay some dividends albeit perhaps not as many or as large as many of its backers had hoped.

            Asked about the risks of such projects, Mitrokhin said that the real risk as in “the extremely unstable political economic climate” in Russia rather than in the projects themselves. If the projects make sense and if investors can make money in them, they will invest. If not, then not.

            Chuyev said that “any megaproject will always be risky” because “it has not only economic but often political significance as well.”  Consequently, one has to be clear in talking about just what risks are involved. The two were then asked whether investors could be found. Both said yes if risks are reduced.

            And finally asked whether such projects would benefit the population.  Mitrokhinn said that it would be incorrect to say that any recent major project had brought “any benefit to the population” but that it would be wrong to say that such projects in principle cannot do so.

            Chuyev in contrast said that “megaprojects do bring benefits” if only in the form of good jobs, news infrastructure, and focus on the opportunities available for development of areas that may have received too little of it in the past.

            Given Vladisvostok and Sochi, it is clear that Putin is prepared to push such enterprises, but budgetary stringencies, problems with similar projects up to now, and both political and practical objections may make approval of such gigantist projects more difficult. At the same time, not moving in that direction will only exacerbate centrifugal forces in the country.

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