Author`s name Dmitry Sudakov

Siberia to become the center of the universe

A bold initiative of the development of the Far East and Siberia threatens to turn into a transformation of the remote Russian regions into an energy and raw material appendage. A guest of Pravda.Ru video studio, a well-known economist and head of the analytical department of the Alpari agency Alexander Razuvaev is convinced that nothing would attract investors better than the raw materials segment.

Alexander, you are saying that investors will come primarily to the minerals extraction sector. But when we talk about the development of the Far East and Siberia, we mean the socio-economic recovery of the region. Is it possible to shift from the raw materials industry to the development of other sectors of the economy of these regions, such as fishing or agriculture? Can these lands be used for something other than extraction, can they be developed somehow?

"There are different margins here. Fishing in the Soviet era was a very profitable industry. Then all the money and the entire fleet have sailed away. As for the rest, it can be done, but it is still not comparable in terms of profits. Relatively speaking, the proceeds of Rosneft last year were $160 billion. This is roughly the size of the entire economy of Ukraine, and is slightly less than the size of the economy of Kazakhstan. When developing something, we must think not only about wages, about these areas, but also how cost-effective it is for the budget and for the country. Oil and gas are more than profitable.

Incidentally, the Chinese have contacted "Gazprom." What took them so long? They wanted to see what the Americans achieve in terms of shale gas revolution. They have decided that there was no clarity yet, and that the Americans will not create anything interesting. The Chinese decided nevertheless to refocus on Russian traditional supplies. Again, we must understand that Russia is pursuing oil and gas production by conventional methods, respectively, Russia, unlike the United States, does not have environmental risks."

But the Chinese have plenty of their own resources they are happy to use, I'm talking about coal. Coal is supplied to the Russian market from China in large quantities. Meanwhile, in Siberia we have enough Russian coal. Wouldn't it be more profitable for us to mine our own coal and abandon Chinese imports?  

"This is not only a question of politics but, above all, profitability. There used to be a time when Russian coal companies were doing well, but now it is a question of profitability. We must understand that our economy is stagnant, and, accordingly, it makes demand for energy resources stagnant. That is, if we look at the production of electrical power, it is falling. Why? Because the industrial production has stagnated, and if we take metallurgy, it is generally falling as well. Metallurgy used to consume a lot of electricity. Now it is consuming much less. We are hopeful that the situation will change, and when it does change, we will think about it."

There are frequent talks about moving the capital from Central Russia to Siberia. Do you think it is possible?

"From my point of view, there is politics, and there is economy. What is politics? If we do form a Eurasian Union, we should consider that Belarus is still small compared to Kazakhstan. If we rightly consider NATO and Europe a hostile unit, the capital should be somewhere in the middle, right? There is, of course, the question of Slavic brotherhood (in my opinion, it is very controversial), because a third of Ukrainians fought on the side of the Reich. They shot down our planes during the Georgian war in 2008; they fought against us in Chechnya. Our Slavic brothers Bulgarians fought against us on Hitler's side. I think that the Russian state was not founded by Svyatoslav, Princess Olga and Vladimir the Red Sun like classical textbooks tell us, but it was likely founded by Alexander Nevsky and Batu Khan. That is, Russia is a continuation of the Horde. It is no accident that Ukrainians call us the Mongols.

If we act based on this assumption, the capital should be somewhere in the east. Again, many countries (a classic example is Kazakhstan) have created their capitals from scratch. I believe that the capital should be an ancient site, sacred, comparable with Moscow and St. Petersburg. I think the best capital would be Tobolsk. Tobolsk was the capital of Siberia, and then for a large bribe of Siberian merchants the capital was moved to Tyumen. Tobolsk has a lot to offer. This is a very ancient city. It's small, but just right if we want to make it the administrative center.

Well, this is more about politics or ideology, but from an economic standpoint, should the capital be transferred to Siberia?

"The economy largely determines politics. If we're talking about money, Asian demand is very important now. The Soviet Union that sought global expansion was forced to tie its export flows to Europe, because at the time, in 1970s, it was nearly the center of the world. I think future center of the world in the 21st century is Asia. Accordingly, for this economic expansion, for the supply of raw materials, we need to move ideology and capital towards Asia.


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