Russia's Tunnel Vision

Russia's Tunnel Vision
A Moscow bureaucrat says he'll build a link to Alaska. If you believe him, I've got a bridge to sell you.
BY CLAUDIA ROSETT
Thursday, January 4, 2001 12:01 a.m. EST

To kick off the new millennium comes news from Moscow that Russia is ready to build a land link to America. This would take the form of a tunnel under the Bering Strait, connecting the Russian far eastern region of Chukotka to the far western reaches of Alaska. It seems what’s mainly needed now is money. A lot of money.

Maybe sometime in the next 1,000 years there will come a day when this tunnel is actually a good idea. For now, it is a notion to treasure mainly for its big-ticket mix of the grandiose and the absurd. As such, it provides one of the best fables yet for the follies of the Clinton administration’s approach to building ties with Russia. It’s also a nice, fresh reminder of the kind of temptation the new Bush administration needs to avoid.

The Russian estimate is that the tunnel would have to cross some 60 miles, almost half of that under icy seas; and it would take 20 years to build, costing $50 billion to $60 billion. But Alaskans note that the tunnel itself would be only the beginning of the job. Bob King, press secretary to Gov. Tony Knowles, explains that even if the tunnel were to get built, the further problem would be that “there's nothing on either end.”

The finished tunnel would be a land link between two of the most sparsely populated, inhospitable and trackless regions on the map. On the desperately poor Russian side, the nearest road leading to the rest of civilization is about 1,000 miles from where the tunnel would start. Life there is so lean that even without roads, people keep contriving ways to exit. Since the 1991 Soviet collapse, almost half the already scant population of Russia’s far northeast has decamped for better climes.

On the Alaskan side, the nearest city, Nome (population 3,500) is reached mainly by air. The only land route to the nearest highway is a journey of hundreds of miles along the old Iditarod Trail, crossing a large mountain range and the Yukon River--by snowmobile or, as a few still prefer, dogsled.

It also remains a stretch to expect that in the relevant future there would be mighty cargoes thronging a Bering tunnel, even assuming a sudden sprouting of infrastructure on the adjacent tundra. Russia still needs such features as rule of law, including enforceable property rights, before it can be either a powerhouse of production or much fun as a transshipping point.

The prospect of linking almost-nothing with not-much, at huge cost, has not deterred Viktor Razbegin, director of Russia’s Center for Regional Transportation Projects, who for years now has been trying to lay the groundwork for this venture. This week Mr. Razbegin told Russia’s Itar-Tass news agency that a feasibility study has been submitted not only to the U.S. and Russian governments but to the World Bank. He said he expects the project to go forward.

The weirdest part is, though the World Bank says it has not yet received this proposal, there’s plenty of precedent for Mr. Razbegin’s faith that eventually he will get at least some chunk of the money he seeks. Maybe not enough to really start a tunnel. Almost surely not enough to finish it, let alone connect it with a rail line or a road. But perhaps enough to make at least the floating of the whole grand scheme a profitable concern--at least for the floaters. This might be expected for the simple reason that American policy for years now has been to sink billions of dollars into Russian development projects, even though the predictable result has often been a sunk project and a bunch of soaked U.S. taxpayers.

Westerners aren't the only losers. Such projects drain Russian energies away from the building of genuinely productive institutions and private enterprises and toward the destructive art of milking the system. And along with wasting resources, the process also creates a damaging load of contempt. The Russians learn that Americans are chumps, the Americans that Russians are crooks.

Which brings us back to U.S. policy toward Russia. The Clinton administration's basic approach has been to set forth, and help fund, grand plans for Russia and not to worry about the moral infrastructure of law and incentives for integrity.

The most infamous example was the implied U.S. guarantee of investments in Russia, followed by the $23 billion bailout package the International Monetary Fund put together in 1998 with the support of the U.S. Treasury. Demonstrably, such aid was no less ridiculous a project than the idea of building a tunnel from nowhere to nothing. Yet the ensuing Russian devaluation, default and disappearance of billions in IMF money was not enough to stop President Clinton last year from promising more.

Behind the U.S. itch to go on doling out money, there is logic of a perverse kind. Bureaucracies from the IMF to the World Bank to the European Bank for Reconstruction and Development cultivate their own bureaucracies, dedicated among other goals to keeping themselves employed by dumping tax dollars into projects that are too often tunnels to nowhere. It's reasonable to worry that the Bush administration will be tempted to give its own chums some berths on this gravy train instead of shutting it down.

Just about everyone would be better off if America would take a hint from the history of Alaska. Forget the tunnel vision. If we want a deep connection with eastern Russia, and if Washington feels it must get involved, there’s really only one good bet: buy the place.

Ms. Rosett is a member of The Wall Street Journal's editorial board. Her column appears Thursdays on OpinionJournal.com and in The Wall Street Journal Europe as "Letter From America."