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The Russian Road To China

A Road in Vladivostok in the Russian Far East
A Road in Vladivostok in the Russian Far East
Since Vladimir Putin rose to the pinnacle of power nearly a decade ago, the Russian elite has been fond of holding up the orderly Chinese model of authoritarian economic modernization as a better path to follow than chaotic and messy Western-style democracy.

Modernization, of course, encompasses many things. But as a fascinating article in "Vedomosti" on July 13 points out, an important element is infrastructure improvement:

Rapid development is impossible without roads, reliable power supplies, communications, and ease of movement. Every country that modernizes its economy encounters this obstacle and eventually remedies the situation. Those that fail remain stuck in the past.

So how is Russia doing on this score? And how does it compare to its Chinese role models?

"Unfortunately, there is nothing for Russia to brag about in this particular area," writes the article's author, Vladislav Inozemtsev, director of the Center for Post-Industrial Studies and Free Thought.

Let's look at some statistics.

In 2008, at the peak of Russia's oil boom, it built just 2,300 kilometers of highway. According to Inozemtsev, this is what China builds on average in just ten days.

And how do costs compare? In China, Inozemtsev writes, a kilometer of four-lane highway costs $2.9 million. In Russia it costs more than four times that -- a staggering $12.9 million!

And the trend is not just confined to roads. It is costs more than three times as much to construct warehouses in Russia as in China, and more than twice as much as in Brazil. In fact, Inozemtsev points out that warehouse construction in Russia costs more than in France or Germany.

The Russian state grossly overpays for construction ... because those who associate themselves with the state are parasites. Almost $230 billion was poured into Russian infrastructure projects between 2006 and 2008 - and there is practically nothing to show for it. It is no wonder that this market is completely non-transparent and off limits to foreign companies. And it is not surprising that the cost of participating in this market increases by 25-40 percent each year.

Nearly a decade of oil-fueled economic growth and little to show for it once the petrodollars stopped rolling except for a bloated oligarchic class that got rich on its ties to the state.

This, in short, is one of the main reasons Russia's Putin-era elite is finding itself in so much trouble today. As I have written here, instead of building roads and infrastructure, they chose to use oil wealth to build something called "sovereign democracy."

Even by their own standards of a Chinese-style modernization, the current regime comes up short.

-- Brian Whitmore

About This Blog

The Power Vertical
The Power Vertical

The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It offers Brian's personal take on emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or


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