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Demographics Undermining Russia's Position in Asia

Russian President Vladimir Putin chaired a meeting of the Security Council in Moscow dedicated to addressing the social and economic problems of the Russian Far East. In Putin's assessment, the situation in the region, which borders China, had become so grave as to constitute a threat to the country's national security.

According to a transcript on the Kremlin website, Putin declared in his opening remarks that past government action had failed to overcome the Far East's grave problems. These include the district's declining Russian population and its imbalanced economic activities. Putin also warned that the region's failure to develop effective economic, information, and transportation networks had isolated it both from the rest of Russia and from East Asian integration processes. "All these factors pose a grave threat to our political and economic positions in Asia and the Pacific, and, without any exaggeration, to the national security of Russia as a whole," the president concluded.
To address this situation, Putin instructed both federal and regional authorities to draft a comprehensive program of action to develop the district's energy industry, public utilities and transportation, logistics, and telecommunications infrastructure. Rather than transfer additional federal budgetary resources to the Russian Far East, Putin urged national and local officials to pursue public-private partnerships, special economic zones, innovative tariff and tax policies, and other creative development mechanisms.

Putin acknowledged that widespread organized crime and corruption continue to plague the region. He called on the federal and regional governments to adopt urgent measures to improve the performance of the law enforcement agencies operating in the district. He specifically cited Operation Energy in neighboring Siberia as a model for emulation. According to Putin, this anti-crime campaign led to the apprehension of many criminals and retrieved large sums of money for the state.

At the end of his opening public remarks, Putin announced the attendees would discuss establishing a government commission on the socio-economic development of the Far Eastern Federal District. In its closed session, the Security Council duly created such a state commission, under the chairmanship of Prime Minister Mikhail Fradkov. Putin's presidential envoy to the region, Kamil Iskhakov, subsequently said the commission could function as a de facto Ministry for the Russian Far East.

Solving the demographic problems of the Russian Far East will require action to reverse the overall decline in the Russian Federation's population. In his May 2006 annual address to the Russian Federal Assembly, Putin called Russia's demographic challenge the country's most acute national security threat. From 1992 to early 2005, the population of the Russian Federation fell from 148.3 million to 143.5 million. This decline would have been even more severe without the 6 million immigrants, many of them ethnic Russians from the newly independent Soviet republics, who moved to Russia during this period.
The Russian Statistics Service estimates that without further immigration, Russia's working age population could decline by 18-19 million during the next two decades, a decrease equivalent to almost 30 percent of the 67 million Russian citizens who are active in the national economy. Even if the Russian government succeeds in raising the country's low birth rate through additional subsidies to heads of large families, the resulting influx of new young workers would not occur until after 2025.

To help fill this gap, the Russian government plans to encourage more immigration from other parts of the former Soviet Union. In Oct. 2006, Putin announced that the Russian government would spend $170 million in 2007 to facilitate the voluntary repatriation of Russians living outside the Russian Federation (estimated to number 20-30 million people, with two-thirds currently living in other former Soviet republics). The authorities also will allow non-Russian citizens from the other former Soviet republics to seek multi-year employment in Russia as temporary guest workers. Despite the Putin administration's policy of offering generous benefits to new ethnic Russian immigrants, experts doubt Russia can attract a sufficient number of additional workers from the other former Soviet republics.

To overcome the Far East's labor shortage, some influential Russian analysts have proposed significantly expanding the permissible levels of Chinese immigration. Thus far, these ideas have encountered insurmountable opposition. National security considerations have long made Russian government officials reluctant to relax controls on Chinese immigration into Russia. In addition, many ordinary Russians fear that increased competition from Chinese laborers and retailers would hurt the employment prospects of the native Russian community. Other Russians oppose allowing more Chinese to reside in Russia on racial grounds. Few Russian politicians appear willing to ignore these views, especially given the impending presidential transition and other elections.





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