Comments on the presentation by Prof. Pilyasov
Online workshop: Multilevel Governance and Interregional Cooperation:
Vol. 3 – Sustainable regional development, international cooperation andthe protection of the Arctic environment
September 14, 2021
Shinichiro Tabata
Slavic-Eurasian Research Center,
Hokkaido University
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Contents
1. General remarks
2. The Siberian Curse
3. Choices of settlement
types or the future ofcompany towns
4. Population in the Arctic
5. Distribution of rents ofresource production

Prof. Pilyasov raised a very
important problem of the Russia’s
Arctic development, i.e., typology
and selection of resource
development models, and typology
and selection of territorialdevelopment or settlement.
• Пилясов А.Н., Путилова Е.С. Периферийная инновационнаясистема и ее место в процессе освоения ресурсов российскойАрктики. В сб.: Российская Арктика сегодня. РФФИ. 2020.
• Пилясов А.Н., Путилова Е.С. Современный ресурсный проектАрктики для промышленной политики России: полюс роста
национальной экономики или "собор в пустыне"? Север ирынок: формирование экономического порядка, 2020, том 3, с.
4-17.
• Пилясов А.Н., Потураева А.В. Арктический фасад России:современное состояние, вызовы неравномерного развития иприоритетные меры государственной политики// ВестникСанкт-Петербургского государственного университета. Сериянаук о Земле. 2021.
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They discussed that in the time of the Soviet Union, many
Russians began to live in Siberia for the development ofnatural resources.
They compared temperature per-capita (TPC) of the
USSR and Canada (TPC: population-weighted averagetemperature). While Canada’s TPC rose more than one
degree from 1920 to 1990, in Russia TPC decreased
thanks to Soviet policies that moved population to theextremely cold regions.

F. Hill & C. Gaddy, The SiberianCurse: How Communist Planners
Left Russia Out in the Cold
(Brookings Institution Press, 2003).

Source: C. Gaddy &W. Ickes, Bear Traps
on Russia’s Road toModernization(Routledge, 2013), p.
38.
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They argued that eventually this caused a huge amount of costs because of thecoldness of the region. After the collapse of the Soviet Union, when economic
rationality or efficiency became the most crucial criteria for the economicsystem, population in Siberia drastically declined.
In the 1990s, the Russian Government has tried to implement a resettlement
program for those who had been induced to work in the North generations ago.
*Nuykina, Elena (2011) Resettlement from the Russian North: An Analysis of State-induced
Relocation Policy (Arctic Centre Reports 55). Rovaniemi: University of Lapland[https://core.ac.uk/download/pdf/29574444.pdf]

This argument implies that we have to consider the necessity or the benefits ofthe economic development and its costs before we begin any development
projects.
Question to Prof. Pilyasov (Slide 21) : What does “social costs” mean in thepoint 4 of the conclusion?
He wrote “There are numerous social costs for the production area from new technologicalsolutions” and mentioned “the costs of social exclusion and extraterritoriality.”4

Choices of settlement types
or the future of company towns• In addition to the selection of resource development models, the selection ofsettlement systems is very important. Prof. Pilyasov argued stationary vs.
temporary settlement system (Slide 13) or rotational (growth poles) vs. nonrotational (traditional) territories (Slide 20).
• Apparently, in the case of greenfield project or development of new place(Slide 9), temporary or rotational system is much better than stationary ortraditional system. No need to construct a new town (company town ormonotown) for the resource development in the Arctic.
• The problem is developing or maintaining existing sites (towns) when theresource production has already peaked out and began to decrease, orcompletely stopped.
• This is not only the problem in the Arctic, but also the problem in Hokkaido.
There are several towns where coal production stopped due to resource
depletion. Whether should we maintain these towns or should we encourageemigration (outmigration) and close these towns?
5Population in the Arctic• Whether is it good to increase population in the Arctic, when we take
into consideration its costs?
• Strategy of development of the Arctic zone of the Russian Federationand guarantee of national security until 2035 (adopted by Presidential
Decree No. 645 of October 26, 2020)• Net migration rates (net migration per 1000 inhabitants) in the Russian Arctic
2018
-5.1

2024
-2.5

2030
02035
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• The Russian Government still expects the increase in population in the Arctic.
• Whether is it possible and whether is it desirable? As I told above, newresource developments in the Arctic should be carried out by rotation or
temporary workers.
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Distribution of rents of resource production• I agree with Prof. Pilyasov’s argument (Slide 19).

• “Profit centers in corporate headquarters, social and environmental costcenters in mining areas. Growing social inequality within Arctic communities.
The benefits of new projects are poorly "spilled" into the regional and localeconomies.”

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The case of Sakha (Yakutia)• Different contribution of the diamond and oil sectors to the republicaneconomy• Rough estimates of Sakha’s export value in 2018
• Diamond: USD 3.9 billion• crude oil: USD 5.8 billion• Oil sector• Most of the rents or value-added are not realized in Sakha but transferred toMoscow, where oil companies are headquartered.
• Most of the rents of the oil sector are not realized in the mining industry but
realized as trade and transportation margins and taxes due to the low
producers’ prices.
• 100% of mineral tax on crude oil: revenues of the federal budget8• Diamond sector• The headquarters of Alrosa (diamond monopoly) are located in Sakha. Most ofthe rents from the diamond sector are realized in Sakha.
• 100% of mineral tax on diamond: revenues of the republican budget• Reasons of this differences between the oil and diamond sectors• Location of headquarters of mining companies• Distribution of mineral extraction taxes between the Center and regions• What is possible to do to improve this situation?

*S. Tabata, The Contribution of Natural Resource Producing Sectors to theEconomic Development of the Sakha Republic, Sustainability 2021, 13, 10142.
https://www.mdpi.com/2071-1050/13/18/10142.
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