Roots of Russia's economic dilemmas: Liberal economics and illiberal geography

This article advances the thesis that there are specifically Russian aspects of economic geography, in the form of severity of climate, distance (including the dislocation of population as compared to natural resources) and the preponderance of costly land transport over cheap sea transport, that tend to make the costs of production in Russia a multiple of what they are almost everywhere else in the world. Under these circumstances, the Russian state must play a central role in economic development if Russia is to develop as a civilisation, as distinct from certain raw materials enclaves. The article examines the infrastructure crisis facing the Russian economy after a decade of cumulative capital depreciation, the scale of investment requirements over the next decade, and the ways in which geographical factors impinge upon the costs of production and the decision to invest. In the conclusion, an essentially Keynesian approach will be applied to the problem of Russian economic development in an increasingly liberal international political economy.