Calhoun: The NPS Institutional Archive DSpace Repository Theses and Dissertations 1. Thesis and Dissertation Collection, all items 2018-03 Development of the Russian Far East: challenges facing Russia’s pivot to Asia Young, Oyunchimeg Monterey, California: Naval Postgraduate School http://hdl.handle.net/10945/58276 Downloaded from NPS Archive: Calhoun NAVAL POSTGRADUATE SCHOOL MONTEREY, CALIFORNIA THESIS DEVELOPMENT OF THE RUSSIAN FAR EAST: CHALLENGES FACING RUSSIA’S PIVOT TO ASIA by Oyunchimeg Young March 2018 Thesis Advisor: James Clay Moltz Second Reader: Anne L. Clunan Approved for public release. Distribution is unlimited. THIS PAGE INTENTIONALLY LEFT BLANK REPORT DOCUMENTATION PAGE Form Approved OMB No. 0704–0188 Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the Office of Management and Budget, Paperwork Reduction Project (0704-0188) Washington, DC 20503. 1. AGENCY USE ONLY 2. REPORT DATE 3. REPORT TYPE AND DATES COVERED (Leave blank) March 2018 Master’s thesis 4. TITLE AND SUBTITLE 5. FUNDING NUMBERS DEVELOPMENT OF THE RUSSIAN FAR EAST: CHALLENGES FACING RUSSIA’S PIVOT TO ASIA 6. AUTHOR(S) Oyunchimeg Young 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) 8. PERFORMING Naval Postgraduate School ORGANIZATION REPORT Monterey, CA 93943-5000 NUMBER 9. SPONSORING /MONITORING AGENCY NAME(S) AND 10. SPONSORING / ADDRESS(ES) MONITORING AGENCY N/A REPORT NUMBER 11. SUPPLEMENTARY NOTES The views expressed in this thesis are those of the author and do not reflect the official policy or position of the Department of Defense or the U.S. Government. IRB number ____N/A____. 12a. DISTRIBUTION / AVAILABILITY STATEMENT 12b. DISTRIBUTION CODE Approved for public release. Distribution is unlimited. 13. ABSTRACT (maximum 200 words) In the face of Western sanctions after Russia’s invasion of Ukraine, President Putin has shifted the Kremlin’s focus toward Asia to stimulate Russia’s economic development. To aid in this process, he has prioritized developing the Russian Far East (RFE) by populating the region through multiple incentives, including a federal law granting a hectare of free land to those willing to relocate to the RFE. However, the plan has met several challenges, due to inadequate infrastructure to attract citizens from developed western regions of the country, limited employment opportunities, and a lack of domestic and foreign investment. These problems are closely related to one another and must be resolved simultaneously for development to succeed. Russian policy reforms, better incentives, more favorable immigration policies for foreigners (including neighboring Chinese), and a closer working relationship between the Kremlin and the local administration to decrease corruption will all be needed if Russia is going to have any hopes of deriving meaningful benefits from its pivot to Asia. 14. SUBJECT TERMS 15. NUMBER OF Russia, Far East, Pivot to Asia, challenges of Far East development, Free Land Initiative, PAGES climate, out-migration, Trans-Siberian Railroad, environmental challenges, economic 125 development 16. PRICE CODE 17. SECURITY 18. SECURITY 19. SECURITY 20. LIMITATION CLASSIFICATION OF CLASSIFICATION OF THIS CLASSIFICATION OF OF ABSTRACT REPORT PAGE ABSTRACT Unclassified Unclassified Unclassified UU NSN 7540–01-280-5500 Standard Form 298 (Rev. 2–89) Prescribed by ANSI Std. 239–18 i THIS PAGE INTENTIONALLY LEFT BLANK ii Approved for public release. Distribution is unlimited. DEVELOPMENT OF THE RUSSIAN FAR EAST: CHALLENGES FACING RUSSIA’S PIVOT TO ASIA Oyunchimeg Young Captain, United States Air Force B.S., Brigham Young University-Hawaii, 2002 M.S., Weber State University, 2010 Submitted in partial fulfillment of the requirements for the degree of MASTER OF ARTS IN SECURITY STUDIES (EUROPE AND EURASIA) from the NAVAL POSTGRADUATE SCHOOL March 2018 Approved by: James Clay Moltz, Ph.D. Thesis Advisor Anne L. Clunan, Ph.D. Second Reader Mohammed M. Hafez, Ph.D. Chair, Department of National Security Affairs iii THIS PAGE INTENTIONALLY LEFT BLANK iv ABSTRACT In the face of Western sanctions after Russia’s invasion of Ukraine, President Putin has shifted the Kremlin’s focus toward Asia to stimulate Russia’s economic development. To aid in this process, he has prioritized developing the Russian Far East (RFE) by populating the region through multiple incentives, including a federal law granting a hectare of free land to those willing to relocate to the RFE. However, the plan has met several challenges, due to inadequate infrastructure to attract citizens from developed western regions of the country, limited employment opportunities, and a lack of domestic and foreign investment. These problems are closely related to one another and must be resolved simultaneously for development to succeed. Russian policy reforms, better incentives, more favorable immigration policies for foreigners (including neighboring Chinese), and a closer working relationship between the Kremlin and the local administration to decrease corruption will all be needed if Russia is going to have any hopes of deriving meaningful benefits from its pivot to Asia. v THIS PAGE INTENTIONALLY LEFT BLANK vi TABLE OF CONTENTS I. INTRODUCTION..................................................................................................1 A. MAJOR RESEARCH QUESTION..........................................................1 B. SIGNIFICANCE OF THE RESEARCH QUESTION ...........................2 C. LITERATURE REVIEW .........................................................................3 1. Environment ...................................................................................5 2. Domestic Economy .........................................................................7 3. Foreign Investment ......................................................................10 D. POTENTIAL EXPLANATIONS AND HYPOTHESES .....................12 E. RESEARCH DESIGN .............................................................................13 F. THESIS OVERVIEW .............................................................................14 II. SETTLEMENT IN THE RUSSIAN FAR EAST ..............................................15 A. NO MAN’S LAND: THE RUSSIAN FAR EAST .................................16 B. HISTORICAL BACKGROUND: CHANGING OWNERSHIP OF THE RFE............................................................................................17 1. Russia’s Expansion to the Far East ............................................18 2. Soviet Union’s Plan for Its Far East ...........................................19 C. POPULATION CHALLENGES: OUT-MIGRATION AND IMMIGRATION ......................................................................................22 1. Russian Immigration: Organization and Policy .......................22 2. Out-migration from the Region ..................................................24 3. Immigration: Could It Be a Solution? .......................................26 4. Post-Soviet Immigration ..............................................................26 D. SOLUTION TO POPULATE THE LAND: FREE LAND TO ALL RUSSIANS.......................................................................................29 1. The Free Land Project in the News ............................................30 2. Free Land in the Russian Far East: Gift or Burden? ...............33 3. Implementation of the Free Land Law ......................................34 4. Challenges of the Far Eastern Hectare Project .........................36 5. Unsuccessful Initiative: Non-existent Benefits Package ...........38 III. INTERNAL FACTORS AFFECTING THE DEVELOPMENT OF THE RUSSIAN FAR EAST ................................................................................41 A. ENVIRONMENTAL CHALLENGE: THE HARSH CLIMATE ......42 B. ECONOMIC CONDITIONS ..................................................................45 1. Tsarist Russia’s Economic Development of the RFE ...............46 vii 2. The Transport System—The Lifeline for Economic Prosperity......................................................................................48 3. Economic Development: Priority or Periphery? ......................52 C. ILLEGAL ACTIVITIES, ENVIRONMENTAL DESTRUCTION, AND ENSUING POLLUTION ...............................55 1. Illegal Activities with No Regard to the Environment .............55 2. Proposed Solution to Resolve Issues Related to the Region’s Periphery Status ...........................................................58 IV. THE POTENTIAL ROLE OF NORTHEAST ASIA IN THE DEVELOPMENT OF THE RUSSIAN FAR EAST .........................................61 A. RUSSIAN FEDERATION ......................................................................62 B. CHINA ......................................................................................................64 C. JAPAN ......................................................................................................68 D. SOUTH KOREA (ROK) .........................................................................72