Saturday, December 24, 2011

Trans-Siberian Railway: Voice of Siberia

by Ekaterina Serikova

Do you know where Siberia is located? Some Europeans feel that it is just “too far”. I would not exaggerate by saying that even Russians do not always know exactly where this region is located, assuming the periphery of it. However, it would have been even worse  if  in  the  20th   century  the  general  governor  of  Eastern  Siberia  N.  Muravyov- Amurskly did not start to build Great Siberian Way that connected central Russia with Siberia. This railway had significant influences on many areas’ development where it was built, while analyzing its impact on the development of Siberian region is of particular interest. The goal is to show how government  infrastructure projects can give live to economy of a particular region, entailing certain extent of policy selectivity and a matter of history.

The  project  heavily  affected  the  Siberian  region  in  several  aspects:  industry development, trade, labor mobility, foreign investments, and international relations.

Siberia was a huge and well-endowed region, having huge reserves of coal and peat, more than 50% of the whole of Russia’s forest reserves, lots of gold fields, salt, and non- metallic minerals.  Obviously, the Railway aimed to take advantage of these industries, which caused their rapid development. For  example, the changes in gold industry was caused not only by increased gold extraction, but also by structural changes, such as the switch from manufactures to modern factories as well as technical renewing due to easier transporting of necessary inventory and hardware. Thus, despite the Russian-Japanese war, average yearly gold extraction in 1901-1910 was 2289 poods1, which is 127% higher than during the last decade of the 19 century2.  Since the railway needed fuel, coal industry advanced a lot: by 1910 coal extraction already constituted 7% of total Russian coal extraction. Being mostly developed as “servicing” industry for the railway, coal industry growth also improved technological progress in other industries, switching them away  from  firewood   usage.  Other  industries  mentioned  above  were  also  raised significantly: salt, wood, and butter was exported heavily.

Obviously, such intensive industrial growth attracted huge capital inflow in the region. By 1912 a large net of trade places was already created: 60,000 retail shops, total trade in the Siberian part of the railway increased more than in 4 times in 1900-1913.

The Railway also led to the movement of labor to the cities located along the way, which can be explained  by people’s expectations of higher wage and access to larger market. Consequently, the cultivation area was extended together with agriculture growth and increased specialization. 80% of all imports of agricultural machinery in Russia were sent to Siberia because there were huge amount of unused land and lots of labor that came  because  of  the  Railway.  Later,  these  places  became  the  largest  and  the  most developed  Siberian  cities  with  the  highest  land  rent  –  Novosibirsk,  Irkutsk,  Omsk, Krasnoyarsk, which are still fundamentally important  Siberian cities. The creation of large cities and movement of labor into them, however, caused demise of  previously popular trade places, such as the Irbit fair that stayed more than 100km away from the Railway.

However, the overall impact of the railway was not as positive as it seems to be: many economists claim that the Great Siberian Way was the cause of making Siberia a “raw materials adjunct” for the whole of  Russia. As we can observe, development of local industries was not symmetric, it mostly favored industries  that  were connected closely with the needs of the railway. For example, metallurgy died as fast as it was raised  due to railway needs: smelting cast ironing was 540,000 poods in 1895 versus 150,000 poods in 19082.

Beside  this,  relations  between  Russia  and  China  began  to  develop  sharply: merchants from Siberia moved to China as well as a huge number of swindlers flowed into Siberia being attracted by high  profits. The rise of local and international trade caused progress in banking sector: by 1912 there were  already  106 bank offices in Siberia. However, they were mostly involved in trading finance instead of local heavy industry financing.

Being started from a local project connecting central Russia with Siberia, now Trans-Siberian Railroad is the largest international railway in the world that connects Far East with Western Europe, reaching 5,867 miles in length. For the country, it is also the source  of  income  which  has  increased  throughout  the  time  together  with  increased international trade and railway’s capacity. After 100 years of existence, this Railroad can still offer perspective alternatives for the future: there is a plan of prolonging the Railway to Sakhalin Island over the Nailski Strait, which will connect Eurasia with Sakhalin3.

Trans-Siberian Railway demonstrates a dramatic support of successful government interventions  in  economic  life  and  regional  development.  Despite  policy  selectivity favoring some particular places  (cities  along the railway), such interventions can be vitally essential for initial economic development of far regions.


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