Natural Resources Development in the Republic of Sakha: Russia's Diamond Producing Region
This thesis is an empirical study of a regional economy that is undergoing rapid social and economic change. The principal objective of the thesis is to advance a comprehensive view of past and present development of the Republic of Sakha, using available economic and historical information.
The Republic of Sakha (Yakutia) is one of Russia’s most resource-rich regions, the political unit with the largest land area within the Russian Federation, and a region with a particularly strong, ethnically-based local government. The current economic structure of the Republic of Sakha is primarily defined by an export-based diamond industry. In Sakha, enormous real and potential windfall from natural resource development amplifies the existing chaos, typical in Russia, caused by the tangle of economic transition, regionalism, ethnic politics, and corruption.
The last one hundred years of development and reform in the Republic of Sakha can be addressed by a unified explanation. This thesis proposes that, rather than create a new paradigm in development economics, the Sakha case study is extremely consistent with existing explanations of a subset of economies that rely heavily on export-led growth of primary resource production. Historical evidence suggests that the successive development of specific natural resources ("staples”) for use or sale outside the republic defines the development of the Republic of Sakha since the I9th century and throughout the entire Soviet period. The current state of Sakha's general economy, the recent changes in the structure of this economy and the performance of the main industries and firms continue to function through the exploitation and export of the region’s natural resources. The process of privatization and the mechanism for export and sale of resource production are paramount issues in understanding the current structure of the Sakha economy.
Management of natural resource rents is closely linked with the current and future possibilities for the Republic of Sakha to achieve long-term economic growth and significantly higher standards of living for the people living within the region. Different views about Sakha’s development are discussed in the context of development policy. A comparison is made between available options for Sakha’s development and management of resource rents with parallel choices made in the State of Alaska (United States).
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