When Russia staged a big Arctic conference earlier this year at the historic northern port city of Arkhangelsk, it was hard to escape the contrast between the sunny optimism of Russian officials who spoke at the venue about their country’s northern economic development opportunities and the bleaker views of residents on the street who griped about the lack of jobs and investments in the area. Unemployment in the region runs high, and for lack of jobs, many young, educated people end up leaving for brighter prospects elsewhere.
Igor Orlov, the governor of Arkhangelsk region, says he has high hopes this could change thanks to plans to build a big new railway and accompanying deepwater port. The rail line, known as the Belkomur, would help haul coal, fertilizer, oil, timber and a variety of metals from Siberia and the Urals to a new deepwater port planned outside of the city of Arkhangelsk. Orlov points to estimates that the Belkomur’s construction could create up to 6,400 jobs, while its operation could employ up to 40,000.
“The local people will be involved in the construction works,” Orlov told Arctic Deeply. “The project will create growth conditions for them, young people will get prospects, social infrastructure will emerge.”
The project is largely being bankrolled by a Chinese company, China Poly Group Corporation, at an expected cost of $5.5 billion. It is part of China’s broader foray into northern resource projects, notably seen with an investment in a new liquefied natural gas (LNG) plant on the Yamal Peninsula. Such projects offer much-needed cash as Russia grapples with the impact of Western sanctions. Russian officials say trains could be rolling along the Belkomur line by 2023.
But over many decades similar plans have been proposed in northern Russia without coming to fruition, according to Paul Josephson, a professor of Soviet history at Colby College in Waterville, Maine, and the author of “The Conquest of the Russian Arctic.”
While acknowledging what’s changed over the years – “in the past they used slave labor and now they’re hoping to use well-paid workers with hard hats and steel-toed shoes” – Josephson wonders whether ambitious railroad projects, hobbled by long distances and difficult terrain, will be any easier to complete today.
Arctic Deeply spoke to Josephson about Russia’s long-standing dreams of unlocking its northern riches with ambitious infrastructure projects, and what obstacles continue to stand in the way.
Arctic Deeply: These plans have, in a manner of speaking, been on the books for a long time. Should we be expecting them to materialize anytime soon?
Paul Josephson: Let’s consider what the Chinese are doing, not only in Russia but in Africa. They’re claiming that they’re going to come in and build all sorts of infrastructure and finally unlock the resources that the Europeans tried to unlock in the 19th century and first half of the 20th century with their own railroads. Cecil Rhodes had this idea to have a railroad from Cairo to Cape Town.
Why are the Chinese any different, that their money and their technological prowess will open up resources that no one else has been able to, whether in Africa or in the Russian Arctic? This is very difficult, obviously – the climate, the geography and so on. There will be lots of money and there’ll be lots of effort, but it’s hard to imagine that it will be done according to any kind of hard and fast schedule. The schedules are not written in permafrost.
Arctic Deeply: At the conference, Russian officials spent most of their time speaking about the future, and there were always big numbers attached to the future. The governor says that 40,000 jobs are going to be produced as a result of the railway. How credible are these numbers?
Josephson: Many of the documents that the Russian government puts out, just like a budget of any government, it’s a wish list in many respects – “We want this because there will be more jobs.” For example, the Russian ministry for the state corporation of atomic energy, Rosatom, has put out these plans to build scores of reactors by 2030. That is, “This is what we would love to do if we had the money.” It’s a hope, it’s a desire. It may be utopian, but that’s what visionaries do.
I think these are far-fetched, given Russia’s economic situation, the difficulty of the investor environment, the obligation to rely on the Chinese and others. There’s also a $30 billion investment to tap Siberian oil for China. There are discussions of building a transfer canal to bring water from the Siberian rivers into China, as well.
Arctic Deeply: There is also the big Yamal LNG project. That’s a real thing, right? It’s actually being built. I suppose you could point to that as an example of how China actually is putting new infrastructure in the ground in Arctic Russia.
Josephson: That’s right. I think that will certainly happen, but given the extent of these projects and the difficulties of past experience around the world, President Vladimir Putin’s endorsement may not mean anything different.
President Putin also wants to have a moon base by 2030. Is that going to happen? I don’t think so. It just seems like a very difficult thing to do with all of these massive projects. This railroad, these pipelines, this money from China … It just seems a little far-fetched.
Arctic Deeply: What are some of the considerations that have led to this relationship where China is looking to bankroll projects in Arctic Russia?
Josephson: In some senses, China is resource-starved, especially for oil and gas. It’s trying to wean itself from coal. It wants more water. It needs more timber. Its forests are in danger. It needs various rare metals for its computer and other industries. It sees Russia as a great source of that, so the investment is worthwhile.
The Chinese feel they can work with the Russians and not be discouraged by the same discouragements faced by many Western companies that have been in Russia and have left, because of the opaque laws and sudden midnight attacks by tax officials. Or because Russia has taken back its joint Russian-Western oil, gas and other operations and made them fully Russian. I think that they both think they can play the other, because they have real needs. Russia needs investment and it wants to develop its resources.
Also, it’s extremely important for regional governors to bring in capital. There’s a national Arctic development plan that the governor of Arkhangelsk is clearly interested in. There are many cities in the Arkhangelsk region, and in Petra and Karelia and so on, that have – the Russian word is razrukha – they’ve fallen into decay since the 1990s. There’s been tremendous out-migration, especially of young men but also of young women.
Arctic Deeply: We certainly saw that in the city of Arkhangelsk. Lots of dilapidated buildings and apparently the historic port is in pretty shabby condition. The young people that we met on the street were saying there are no jobs. They were maybe hoping to get a job with the military. Cabbies complained about how all the money is going to Moscow and none of the money is coming there.
Josephson: I think that’s fair. Moscow is a black hole of power and money. I spent a lot of time in the northwest and I was on a Fulbright [scholarship program] in Arkhangelsk for four or five months in 2007 or so. I’ve gone back a couple of times and things are … It is a kind of decay. If you look at the history of Arkhangelsk, when Stalin died and Khrushchev came to power, he promised investment the way that the governor is hoping for today. There was some investment. New apartment complexes and so on.
There was no bridge across the northern river where there is now. Until the Khrushchev era they had to build an ice bridge or use ferries – until the 1960s. Imagine a Canadian lumber city of some repute, in 1962, that had to rely on ferries or ice and snow bridges across a frozen river. Investment in the Russian north, except for the strategic industries – not in some of the social infrastructural cities – has lagged considerably.
It does seem as if the unemployment is higher, the infrastructure is more decrepit in these cities. It’s not the hope that the governor has and he rightfully has the hope. Of course he wants 40,000 more jobs. I’m just skeptical because you don’t see this working out in the past. Why is the future different? I don’t get it yet, I’m sorry to say.