Political Economy of A Russian Republic : Sakha (Yakutia)

                            Political Economy of A Russian Republic : Sakha (Yakutia)

In this week, i would like to discuss on the Republic of Sakha which is located in the Russian Far East.As discussed in earlier entry Sakha is considered as one of the richest provinces of the Russian Federation as per the deposit of natural resources.This week, i focus on the political economy of this republic with an overview of the natural resources.It shows the hidden potential of this republic with it's contribution to Russia's economy.

The Sakha Republic is the biggest republic of  Russian Federation.It roughly covers one fifth of the Russian Federation.But it is sparcely populated (approximately one million). It is considered as part of Russian Far East which covers one third of the  Russian Federation.Northern part of the Sakha Republic is sitauated in the Arctic region and it is considered as the coldest permanently human inhabited place on the earth.The Sakha Republic has two important eco-systems: the taiga and the tundra.Sakha or Yakut, the major inhabitants of the republic (the name of the republic derived from them), primarily resides in the central and southern part of the territory.The pre-1992 name of this republic was Yakut Autonomous Soviet Socialist Republic.The pioneer Russians erroneously called Sakhas as Yakuts and the name Yakut reverted back into the original name Sakha just after the disintegration of USSR..Sakha are Turkic speaking people whose ancestors were considered to be migrated from Central Asia in and around 12th-15th centuries.Besides Sakha the republic also has significant number of Slavic population which includes the Russian "old timers"(starozhyli), the descendants of fur trappers,Cossacks, prospectors, traders and priests.As history says Russia's eastward expansion started under Ivan The Terrible in mid to late 16th century. Russia founded a fort on the Lena River in 1632 and later it developed into Yakutsk the present capital of the Sakha Republic.But Russian population was insignificant in most part of the tsarist rule.Slavs (both Russians and Ukrainians) came in big numbers in 1970s and 1980s as part of industrialization of the republic.A lot among them left it just after the disintegration of Soviet Union.Besides these two major ethnic groups the republic also hosts indigenous people of north : the Evenki, the Chukchi and the Yukagir (they are considered as the earliest inhabitants of  the Sakha Republic). They were reindeer herders mostly occupied in the north of the republic.

As mentioned in introduction the Sakha Republic is considered as the major depository of natural resources. It has almost all major elements of periodic table but for convenience it is better to focus on the major ones.Sakha is the major producer of diamond, gold, coal, antimony, tin, niobium, rare earth metals, iron, lead, zinc, manganese, molybdenum, tungsten, silver, copper, mica, zeolites, apatite, graphite and other precious stones.Besides it is the major store house of  hydrocarbons : petroleum, natural gas and coal. The Sakha Republic is also rich of both forest products and livestock.

Among the natural resources diamond is the most important element.Sakha supplies almost 99% of Russia's  and around quarter of world's diamond production.The selling of diamond is considered as the monopoly of Almazy Rossii-Sakha (Alrosa) which is controlled by the government (both federal and republican).The Shaka Republic is also the major producer of gold in Russia.It almost produces 20% of its gold supply.The mining of the precious metals in Sakha is the monopoly of Sakha Gold Company, an umbrella group which includes Indigir Gold Company, Dzhugdzhur Gold Company and Nezhdansk Gold Company and all are under government control.The fourth major company, the Aldan Gold Company also sells its products through the government system.Sakha also produces significant amount of other precious metals.For example in 1994 it produced 20 tons of gold, 5,100 tons of tin,10,000 tons of antimony, two tons of silver and 160 tons of tungsten.The Republic of Sakha also has significant amount of hydrocarbon investment.Out of 30 sites which are explored since 1950s, only four or five are fully functional.All others are in different stages of development. But still there is lot of ambiguity about the potential of Sakha's hydrocarbon resources. It is considered  that it will be the next major source of natural gas.Coal production of Sakha is  declining in comparison with the Soviet times.

The Republic of Sakha is different from the mainstream Russia in different ways.It caused  the demand of independence of Sakha from Russia.It was more prevalent in the tumultuous period of 1991-92. The political leadership of the Sakha Republic found it as an ideal opportunity to declare their sovereignty. The Sakha declared its sovereignty on 27 September 1990 but it never renounced its incorporation into Russian Federation.As part of their sovereignty declaration Sakha received symbols such as a flag, an anthem, laws on citizenship and finally the control over it's natural resources within it's border.The federal leadership didn't have much option but to accept Sakha's demand which was unthinkable under Soviets.Three major documents sealed the fate of Sakha with the Kremlin : the federal treaty of 1992; the 1993 constitution of the Russian Federation; and the 1992 constitution of the Sakha Republic, amended further in 1994.Through these, the Sakha Republic got a certain level of economic independence.As part of Russian Federation Sakha got federal support, big market, common currency and multiculturalism.The Sakha Republic also got several fiscal advantages.For example it secured the right to keep most of the tax revenue collected within its borders.It even denied its gold to federal government in 1998.Similarly the Sakha Republic was not even ready to implement most of the Moscow's liberalization policies.Sakha's irresponsible behaviour invited lots of criticism from Russian nationalists.But in the uncertain period of the early 1990's Russian leaders were not ready to alienate all powerful Sakha President Mikhail Nikolayev.

As a major supporter of Boris Yeltsin in Moscow, Nikolayev cleverly utilized his personal relation for the advantage of his own republic.Many of the Soviet style relationship continued into the post-Soviet times.As in Soviet period Sakha received federal grant  and preferential credit for the development of its infrastructure.Personal level relationship among political leaders were still strong.The positive nature of Yeltsin - Nikolayev relationship further led to the peaceful settlement between Moscow and Yakutsk over the ownership of the natural resources.Moscow compromised a lot because it couldn't afford another wave of disintegration process.According to Titchotsky : The Sakha today is a hybrid between a sovnarkhoz, and an American state in its relationship with the federal government.Sovereignty of American states and states rights are usually associated with populist rights against the elitism of the federal government. Sakha's sovereignty, unlike that of American states, is not a populist sovereignty. Sakha's sovereignty can be better compared to an exclusive territory granted by Russia's president Yeltsin to a loyal ally, Sakha's President Nikolayev.

The Republic of Sakha's future is still uncertain.It's economy is still dominated by the export of diamonds.But it is facing major threat from competitors such as Canada in international market.The current Russian President Vladimir Putin is also not happy with the privileges which are enjoyed by the autonomous republics.So pressure from the Moscow is so high.Again Sakha's future is more or less tied to the east and south than west (i mean China, Japan and Korea).The further excavation of natural gas may strengthened Sakha's financial position.But it all depends on the development of transportation facilities to export it's natural resources to other parts of the world.It demands huge investment and Russian economy is not in a position to do that.In future other global powers may involve in Sakha in a major way and it may led to the termination of isolation of this Russia's wild eastern frontier.

References:

1) Balzer, M. and Vinokurova,U.A (1996) "Nationalism, Inter Ethnic Relations and Federalism : The Case of the Sakha Republic (Yakutia)," Europe-Asia Studies,48(1) :101-120.

2) Cienski,J. 1995 (11 January) "Yakuts find sovereignty precious as its riches." Anchorage Daily News,1.

3) Kirby, E.S (1980), "Communism in Yakutia - The First Decade (1918-1928)," Slavic Studies,25,27-42.

4 Tichotsky, John (2000), Russia's Diamond Colony : The Republic of Sakha, Harwood Academic Publishers : Amsterdam.