North Eurasian Infrastructure and the Bering Strait Crossing by Rachel Douglas

EIR Economics

Conference in Yakutsk, Siberia North Eurasian Infrastructure And the Bering Strait Crossing by Rachel Douglas

Aug. 28—A three-day conference, “Comprehensive Infra- structure Development in Northeast Russia: from Limita- tions to Growth,” took place Aug. 17-19 in the East Siberian city of Yakutsk. With participa- tion from major Russian regional and national institutions, it was representative of “a spirit of optimism coming from a fac- tion in Russia; one of the few important reversals of back- wardness on the planet, so far, in recent years,” identified by Lyndon LaRouche in the LPAC Weekly Report1 of Aug. 11, © 2003 J. Craig Thorpe, commissioned by Cooper 2011. A major focus of the Ya- Consulting Co. kutsk event was the project to Above: Artist’s link Eurasia and North America rendition of the by a multimodal connection, terminal on the including rail, across the Bering Alaska side of the Strait—a great project pro- Bering Strait Railway moted by LaRouche since Tunnel. Russia’s coastline is in the 1978, and a natural extension distance. Right: Proposed route for 1. http://www.larouchepac.com/ the tunnel. node/19062

10 Economics EIR September 2, 2011 of the North American Water and Power Alliance ics, has its roots in Academician Vladimir Vernadsky’s (NAWAPA) design. KEPS organization, the Commission for the Study of The discussions reported from the meeting dem- Natural Productive Forces, of 1915-30. The Council onstrated what LaRouche emphasized in the LPAC was formerly headed by the late Academician Alexan- Weekly Report of Aug. 24 (see Feature in this issue): der Granberg, a specialist in regional development that if the United States does what we must, regarding projects who vigorously advocated building a tunnel productive employment in rebuilding the real econ- across the Bering Strait, until his death last year (see omy, “probably the most enthusiastic partner of the EIR, Sept. 3, 2010), and who was an endorser of the United States in such an undertaking as this, would be November 2009 “Call To Put the LaRouche Plan to Prime Minister Putin of Russia. . . . Putin’s announced Save the World Economy on the International Agenda.” project objectives are in this same direction. Russia is Last year, the SOPS design of the Bering Strait project a very important country, despite the hard times it’s won the Grand Prize for innovation at the Shanghai come upon in recent years, because it commands a World Expo-2010. vast area of rich natural resources, and has an indus- Dr. Victor Razbegin, acting head of the SOPS, told a trial and transportation, and so forth, skill, and scien- pre-event press confer- tific background, that it can be a major factor in col- ence in Moscow on Aug. laboration, not only with China, which it already 12 that the Yakutsk con- tends to collaborate with, but also with a Europe ference would subsume a coming out from under the mess that exists there, discussion of prospects now.” for creating the multi- The Yakutsk discussions also, together with debates modal corridor between around the financing of related Siberian and Russian Eurasia and America, as Far East goals, dramatized that it will be impossible to well as a Chamber of build great development projects as some kind of rear- Commerce and Industry guard action, seeking financing for them within the business summit for dying global monetarist system. They require coopera- Arctic regions. In April tion among nations, each operating with a genuine 2007, Razbegin spoke Dr. Victor Razbegin credit system, as LaRouche has defined it, and with the about the Bering Strait principles thereof governing agreements among them. project at a Moscow Those principles include the orientation of all lending conference on “Megaprojects of Russia’s East,” where to physical-economic activity, and its strict protection, a paper by LaRouche, “Mendeleyev Would Have Ap- under the Glass-Steagall principle, from cannibaliza- proved,” was presented; Razbegin also sent a paper to tion by financial speculation. the Schiller Institute’s September 2007 event in Germany, “The Eurasian Land-Bridge Becomes a Development Reality.” Corridors At the Aug. 12 press conference, Razbegin said: The Yakutsk confer- “The only segment that remains before the continents ence was hosted by the are linked is 4,000 km in Russia and 2,000 km in Alaska government of the Sakha and Canada, so this is a key, pivotal project for develop- Republic-Yakutia, with ing the entire infrastructure of our Northeast. The proj- sponsorship from Rus- ect is for building an integrated main line, not only a sia’s Council for the Study railroad, but a highway and an electric power transmis- of Productive Forces sion line, linking the power grids of the continents. (SOPS) and Chamber of After we build this segment, four out of six continents Commerce and Industry. will be interlinked by these systems.” The SOPS, a joint organi- The regional SakhaNews agency gave extensive zation of the Russian EIRNS/Rachel Douglas coverage to the conference, as did Gudok (“the Whis- Academy of Sciences and Academician tle”), the Russian Railways newspaper. Russian Rail- the Ministry of Econom- Alexander Granberg ways CEO Vladimir Yakunin, whose position in charge

September 2, 2011 EIR Economics 11 FIGURE 1 the late Soviet period) to Ya- Proposed Route of the Interhemispheric Railroad To Connect Alaska kutsk, capital of the Sakha and Chukotka Through the Bering Strait Railroad Tunnel Republic. Until now, this city of 250,000 people, lo- cated at 62†gN, has had no rail connection to the rest of Russia.

Bering The Russian Railways Strait Railroad program and the other fed- Tunnel eral programmatic docu- ment for Siberia and the Russian Far East, the “Pro- gram for Economic and Social Development of the Far East and Transbaikal to the Year 2013,” have both come under heavy pressure Main railroad line Existing railroad line for cutbacks since full-scale Proposed future line financial turmoil broke out Other future rail line in 2007. While Russia’s The proposed Bering Strait Railroad Tunnel is 65 miles long between the multi-hundred-billion re- portals, with 53 miles under water, and two islands, Big Diomede and serve fund, amassed from Little Diomede, in the central channel. the proceeds of selling oil and natural gas, was spent to bail out the banking Hal B.H. Cooper, Cooper Consulting Co. system, budget monies assigned to these programs of the state-owned company gives him ministerial rank have often simply not been disbursed. Yakunin and in Prime Minister Vladimir Putin’s Cabinet, was in- other allies of Putin have fought tenaciously to save volved in planning the event. Gudok of Aug. 8 inter- them. One of their strongest arguments is that, with- viewed Fyodor Pekhterev of the Institute of Transport out the repopulation and development of these re- Economics and Development, on how the Russian gions, it will be impossible to preserve Russia as a Railways line to Yakutsk, continuing on to Magadan on unified nation. the Sea of Okhotsk, and to the Bering Strait coast of the Victor Ishayev, the presidential envoy for the Far Chukhotka Region, will link to Alaska. East Federal District (FEFD), informed Putin in an Aug. TPP-Inform, the Chamber of Commerce and Indus- 16 meeting, that “the reduction of federal budget spend- try media outlet, reported Aug. 23 that the conference ing, assigned for implementation of [the 2013] Program had drawn 500 people, including from Russia, China, measures in the FEFD, totalled 80%.” Last December’s South Korea, the U.S.A., and some European countries. federal budget law cut 147 billion rubles (approximately $24 billion) from this spending for 2011-13, which was Building Railroads already a 62% reduction, and another 35 billion rubles The construction of a rail line to Magadan, and of the disbursements which were confirmed, went to then all the way to the Chukotka village of Uelen, as purposes not included in the Program. the potential terminus of the Bering Strait crossing on Ishayev asked Putin to throw his weight behind key the Russian side, is defined as a “strategic” project in projects in the Far East. He proposed the speedy forma- Russian Railways plans for 2016-30. The company’s tion of a working group to prepare the technical specifi- strategy through 2015 includes construction of the cations for the long-discussed bridge connection be- first leg, a railroad from the Baikal-Amur Mainline tween Sakhalin Island and the Eurasian mainland, (the BAM, or second Trans-Siberian railroad, built in which will not only allow greater economic integration

12 Economics EIR September 2, 2011 Planned Russian Railroad Development to 2030

NORWAY Uelen

DEN. SWEDEN

FINLAND Murmansk Pevek

EST. POLAND LATV. St. Petersburg LITH. Pskov Petrozavodsk Indiga Arkhangelsk Kharasavey

BELARUS Ust-Kara Smolensk Vologda Vorkuta Obskaya Bryansk Moscow Syktyvkar UKRAINE Norilsk BELKOMUR Kursk Nadym Nizhny Novgorod CORRIDOR A R C T I C C I R C L E Voronezh Tambov Kazan Polynochnoye Magadan Perm Khanty-Mansiysk Nizhnevartovsk RUSSIA Yakutsk Samara Yekaterinburg Rostov Saratov Ufa Volgograd Olekminsk Lensk

S Chelyabinsk E Elgin Aktyubinsk Orenburg V Elista S (coal) I B R A I L R O A D Astrakhan Bodaybo Nalchik Tomsk Omsk Ust-Ilimsk Tynda E GEORGIA Ust-Kut IN Krasnoyarsk L Komsomolsk- Novosibirsk IN M A on-Amur ARM. KAZAKHSTAN B R A I K A L-A M U Makhachkala AZER. D Khabarovsk Irkutsk Chita A O Ulan Ude R I L R A T N JAPAN R A N S - S I B E R I A

TURKMENISTAN IRAN MONGOLIA CHINA CHINA Vladivostok UZBEKISTAN

Existing railroads New freight railroads New railroads of social importance Planned high-speed rail corridors New railroads of strategic importance Northern sea route

BasedBased on a map rreleasedeleased by by Russian Russian Railways Railways with with the the title title “Pr “Prospectiveospective Topology Topology of the of theRussian Russian Federation's Federation’s Rail RailNetwork Network Devel Developmentopment until 2030, until” 2030,” our map our shows map railrshowsoad railroadupgrades upgrades and new construction,and new construction, included in included the government's in the government’s plan for 2007-2030. plan for The2007-30. program The was program adopted was in adoptedApril 2007. in AprilTargette 2007.d high-speed Targetted rail high-speed corridors rail are corridors centered on are centeredMoscow, onYekaterinbur Moscow, g,Yekaterinburg, and in central and Siberia. in central Among Siberia. the “railr Amongoads ofthe strategic railroads importance, of strategic” planned importance, for construction planned for between construction 2015 and between 2030, 2015is the and3,500 2030, km line is the from 3,500-km the Lena lineRiver from near the Yakutsk Lena River,to a Bering near StraitYakutsk, crossing to a Bering at Uelen. Strait “Railr crossingoads of at social Uelen. importance Railroads” oftie social cities, importancewhich would tie otherwise cities that be wouldisolated, otherwise to the national be isolated, rail network. to the national rail network.Not all existing Not all rail existing lines arraile shown. lines are Many shown. lines Many connect lines to railrconnectoads toin railroadsadjacent countries, in adjacent which countries, are not which shown are her note. shown here. be completed next year. The first 266 km of the 800-km track from Berkakit on the BAM, to Yakutsk, had already entailed construction of 45 bridges and moving of 29,000 cubic meters of earth, when it was completed two years ago, EIR reported in January 2010. Yakunin also informed Putin that “there is a creative discussion going on, over whether to build a bridge or a tunnel” to cross the Lena River. The Lena crossing is crucial for the Ya- kutsk vicinity, as well as

© 2005 J. Craig Thorpe, commissioned by Cooper Consulting Co. being the designated starting Proposed Lena River rail utility bridge in Sakha Republic, Russia. The Lena crossing is the point of the railway to the designated starting point of the railway to the Bering Strait. Bering Strait. of Sakhalin and the Primorsky Territory on the main- Where Will the Money Come From? land coast, but also represents a potential rail route to Vasili Usoltsev, deputy chairman of the State Duma Japan. Committee on Problems of the North and Far East, was Ishayev also reiterated the importance of building a quoted in an Aug. 18 Voice of Russia radio report on the second leg of the BAM, to handle increased freight as Yakutsk conference, saying that “the first and main Siberia’s raw materials are developed. The older, more question is to preserve the population and attract popu- southerly Trans-Siberian Railway is already operating lation flows” to the area. This will mean roads and rail- at capacity. Speaking at the Yakutsk conference, Inter- roads, he said, but also new projects such as “creation fax reports, President of the Sakha Republic-Yakutia of a Far East grain corridor,” and “a powerful electric Yegor Borisov forecast that existing East Siberian re- power system”; both are being integrated into a new source development plans will increase BAM freight strategy for developing the Far East and the Transbaikal traffic four- to six-fold by 2020. In early 2010, Ishayev areas to the year 2025. and Yakunin gave a joint press conference on the On Aug. 11, Russian Federal Space Agency head needed expansion and upgrade of the BAM, for which Vladimir Popovkin affirmed another aspect of the they were attacked in Novaya Gazeta, the paper co- country’s Far East development, announcing that con- owned by London’s favorite, ex-Soviet leader Mikhail struction of the Vostochny Cosmodrome space launch Gorbachov. center and science city will begin next month. Over five On June 14 of this year, Yakunin met Putin, to give years, 30,000 workers will build research centers, an the Prime Minister a comprehensive briefing on Rus- academy for young scientists, an astronaut training sian Railways investment activity and plans, including center, and space manufacturing facilities in the Amur the completion of guidelines for expanding high-speed Region near the Russian-Chinese border. rail service in many parts of Russia. According to the In view of how the previous decade’s package of Russian Railways publication RZhD-Partner, Yakunin development programs for the region has been savaged reviewed the priorities for rail in Siberia: the second by budget cuts, various schemes have emerged to ad- branch of the BAM, modernization of the Transbaikal dress the question of “where the money will come Railway, and pushing ahead to the north. “Have you from” for all these projects, at the Yakutsk conference made it to Yakutsk yet?” asked Putin. and elsewhere. Gennadi Alexeyev, a Sakha Republic Yakunin replied that the railroad to Yakutsk should official, said that his diamond-rich region wants to co-

14 Economics EIR September 2, 2011 finance the Bering Strait crossing project, especially if should not be left to the type of financial vultures which the Russian federal budget falls short. dominate the PPP process under globalization. It is a Russian Railways issued a press release on Aug. 22, matter of state policy, and the outlook of these Russian announcing that it will be unable to carry out its Far officials confirms that leading circles in that country East development program for 2011-15 without more would be immediately in tune with a real shift by the government backing. “The main constraint in imple- United States to an American System credit policy, key- menting fully the proposed activities for the develop- noted by the Glass-Steagall principle, and as elaborated ment and modernization of the existing railway net- by LaRouche in his latest seven-point guideline for work in East Siberia and Russia’s Far East is the lack of solving the global breakdown crisis (see Feature). financial resources,” said the statement. “Given the Alexander Levintal, Ishayev’s deputy: “We scale of the problem and the significant amount of in- should see advanced development of road and rail investment required, Russian Railways believes that frastructure here [in the Russian Far East] and im- solving these tasks without the appropriate government provement in the investment climate in Russia as a key support will be impossible.” aim,” including construction of the corridor to the So many Russian think tanks and so much of the Bering Strait. Russian media are controlled by financier interests, in- Senator Aslambek Aslakhanov, formerly an ad- cluding London ones directly, that the inevitability of visor to Putin: “We have reported on this project to “private financing” for infrastructure development has Putin, and it seems that we convinced him. He wanted become a constant drumroll in the press. RIA Novosti, the Economic Development Ministry and the Trans- writing Aug. 16 about Ishayev’s push for the BAM ex- port Ministry to weigh in. . . . I immediately told the pansion, asserted that “experts believe” that the project Prime Minister they would oppose it.” (But, added In- will cost 1.1 billion rubles, and “will have to be financed terfax, in fact the Transport Ministry is supportive.) through private investments.” “The geopolitical aspects of the intercontinental rail At the Yakutsk conference, Sakha Republic official Alexei Struchkov boasted that public-private partner- ships (PPPs) would be the route to obtaining financing This English for Far East infrastructure. He said that the republic will translation of submit draft enabling legislation at the federal level for the work of changes to investment laws, and is drafting a regional Russia’s “Law on Public-Private Partnership,” detailing incen- authoritative tives for private investment in Yakutia. A plenary session economist, of the conference was devoted to PPPs; it was chaired by Stanislav Yermolai Solzhenitsyn of McKinsey & Company, son of Menshikov the late Russian writer Alexander Solzhenitsyn. presents a Vedomosti financial daily reports that Russian Rail- critical analysis ways, for its part, has submitted a plan to the govern- of the complex ment for issuance of “government infrastructure economic bonds” in the amount of 400 billion rubles, to finance processes in rail construction needs not covered by the federal Russia over the budget, through 2015. Officials of the Economics Min- last 15 years. istry and Finance Ministry have attacked the scheme, with an official of the latter insisting, “You can’t do that. Government bonds are issued only to finance the Available through EIR deficit.” But in Yakutsk, several of the participating officials Order by calling 1-800-278-3135, or at the laid out a truly grandiose perspective for continental de- EIR online store, at www.larouchepub.com. velopment, including the Bering Strait project. It is on a scale that cannot be addressed merely by bond schemes $30 plus $4.00 for shipping and handling within an otherwise collapsing system, and it certainly

September 2, 2011 EIR Economics 15 line would be difficult to exaggerate: It will not only main problem is political. It is difficult for the partici- ensure the strategic integrity of our state, but will de- pating countries to reach agreement: Russia, the velop the infrastructure of the Far East and Siberia as U.S.A., Canada, and the East Asian countries which a whole.” have a stake in it.” Victor Razbegin: “There is very great interest in this project from governments, as well as private in- Related Articles in EIR vestors. It represents absolutely new possibilities for “Russian-American Team: World Needs Bering organizing world freight flows. This involves almost Strait Tunnel!” May 4, 2007. 5% of all freight flows in the world. . . . Investment is Lyndon H. LaRouche, Jr., “The World’s Political not an obstacle. . . . The project will pay for itself Map Changes: Mendeleyev Would Have Agreed,” May within 15-20 years. You can understand why. For Ya- 4, 2007. kutia, building the railway has already reduced the V.N. Razbegin, “Eurasia-North America Multi- cost of delivering a ton of freight by a factor of 7 or 8. modal Transport,” Sept. 28, 2007. This project is key from the standpoint of developing “Grand Prize Goes to Bering Strait Project,” Oct. the entire intrastructure of northeast Russia. . . . The 22, 2010.

time, with the need for stabilization and development of the Koreas and the Russian policy of developing Russian Gas Pipeline Will the Russian Far East, intersecting North Korea’s need Promote Korean Peace for economic assistance. The sources also said that the recent revival of Aug. 18—After years of tension on the Korean talks between the United States and North Korea, Peninsula—tension fanned by British geopoliti- with South Korea’s support, indicates that the moves cians—both Russian and the U.S. (under Secretary toward easing tensions are being coordinated be- Clinton’s direction) have intervened to cool the si- tween Russia and the U.S. State Department, with tutation. Most importantly, Russia’s Foreign Minis- China always being consulted as well. ter, Sergei Lavrov, told South Korean Foreign Min- North Korean leader Kim Jung-Il travelled to ister Kim Sung-hwab on Aug. 17 that Russia’s Russia to meet with President Dmitri Medvedev on Gazprom had obtained agreement from North Aug. 24, discussing both the pipeline deal and pos- Korea to proceed with plans for the construction of sible revival of plans for an inter-Korean railway a gas pipeline through North Korea, to deliver Rus- line, connecting South Korea to China and Russia sian gas to energy-hungry South Korea. through North Korea—thus completing the “Eur- Lyndon LaRouche has emphasized for many asian Land-Bridge from Pusan to Rotterdam.” Kim years that peace negotiations in regions subject to Jung-Il stopped in China on his return trip, where he British “divide and conquer” conflict can only be briefed Chinese State Councillor Dai Bingguo, re- successful, if regional cooperation on physical devel- peating his pledge to Medvedev that North Korea opment projects provides the bedrock of the agree- was ready to resume the Six-Party talks on de-nucle- ments. arization, including on abandoning their nucear Gazprom and Korea Gas will begin consultations weapons programs and testing. Due to the huge in- this month on the pipeline project. The plan was orig- vestments required for the project, Russia is particu- inally proposed in 2008 during South Korean Presi- larly concerned that repeated flair-ups between North dent Lee Myung-bak’s visit to Moscow, but has not and South Korea could jeopardize the entire project. been acted on until now, due to tensions between On the other hand, only such region-wide infrastruc- Seoul and Pyongyang. ture projects can provide the physical economic basis Sources in South Korea told EIR that the interests for lasting peace. of Russia and South Korea have come together at this —Mike Billington

16 Economics EIR September 2, 2011