Regional Development and the Siberian Curse

by: Karen Simbulan

Our fifth morning in Novosibirsk focused on a discussion about the regional development of Siberia. Dr. Larisa Melnikova from the Faculty of Economics at Novosibirsk State University began her lecture by introducing us to the “Siberian Curse,” a book written by Fiona Hill and Clifford Gaddy from the Brookings Institute.

Hill and Gaddy posited that Russia had too many cities spread out across too large a territory to become a successful market economy.  According to them, the Siberian cities would not have developed to their current size under normal market conditions due to the region’s harsh weather conditions. Rather, Siberia’s cities evolved as a result of Soviet economic planners who, dictated by nationalistic and defense reasons, sought to fill Russia from the Urals to the Pacific by creating “artificial cities” in places and under conditions that normally would not have fostered the creation of cities.

Hill and Gaddy also introduced the concept of the TPC – or the Temperature per Capita, which is derived by taking the mean temperature in January and multiplying this by the city population and dividing the sum by the national population. Based on this measure, the cities in Siberia are responsible for Russia’s “coldness” and are dragging Russia’s economy behind. Based on the TPC, among all the Siberian cities, Novosibirsk, Siberia’s capital, is the coldest city in Russia.

In their opinion, in order for Russia to become a successful market economy, people from Siberia will need to migrate westward on a large scale, and the large cities in the coldest and most remote regions will have to downsize.

But Dr. Melnikova disputed these findings, noting that the biggest cities in Siberia developed along the path of the Transsiberian railroad. She also disproved the claim that these cities developed due to socialist planning by pointing out that most of the large cities in Siberia have a long history, having been established from the 17th to the 19th centuries, before the establishment of the USSR. She further noted that, contrary to Hill and Gaddy’s findings, Novosibirsk is actually thriving at the moment, with economic growth being driven by a growing population due to the influx of migrants.

In the second part of her lecture. Dr. Melnikova introduced the students to the two approaches to regional development: the space-neutral approach proposed by the World Bank via its World Development Report, and the place-based approach.

The space-neutral approach notes that development and economic growth will always be unbalanced and any attempts of government authorities to intervene to spread development evenly in a country will only result in undermining the course of natural growth. Thus, spatially targeted interventions should be used sparingly, and only when spatially blind institutions are in place and spatially connective infrastructures are present. This approach places importance on the mobility of the population to move to the bigger cities to further fuel economic growth and development via the agglomeration effect.

The place-based approach, on the other hand, takes the position that all regions in a country have the potential to contribute to national development. The key to a country’s development does not lie solely in the development of mega-urban cities and regions, but also in the development of all regions as a whole.

Dr. Melnikova criticized the space-neutral approach to development by noting that it is based on the unproven assumption that national welfare is connected to urban expansion. She further pointed out that this approach does not seem to apply to Europe, a number of whose highly productive cities are not large metropolises but rather small and medium-sized cities. Dr. Melnikova noted that the Russia federal authorities seemed to be taking the space-neutral approach to development. However, on the regional level, regional governments were taking measures to foster economic development within their own regions.

Panel Discussion Planning

In the afternoon, the students from the Brandt School and the Novosibirsk State University were divided into 4 groups and were instructed to find an issue that presently affected Russia, give an analysis with a focus on the political, economic or social dimension, and provide policy recommendations to address these problems.

After being given the opportunity to meet in groups to come up with topic proposals, the students gave short presentations to Julia Tantoh and Dr. Olga Echevskaya regarding their topics for feedback and further guidance.