America’s China Policy Is Not Working
The Dangers of a Broad Decoupling
My grandfather was enamored of his car, a Soviet attempt at an all-wheel-drive offroader. Even though it was 20 years ago, I still remember that going for a drive with him was a special treat: he only wheeled his prized possession out for ritualistic camping and fishing trips. But it wasn’t just for off-roading that grandad needed his 4x4. The vehicle was necessary to get by on the Russian roads of the 1990s, which were so dilapidated that it was common practice for drivers to meander onto the dirt shoulder, which provided a markedly smoother ride than the massively potholed, uneven “paved” surface. More than a decade later, after being picked up from Moscow’s Domodedovo airport, my taxi driver repeated the same maneuver on the capital city’s highways.
It’s no secret that Russia is a kleptocracy in which the state is run for profit by a criminal elite while average citizens shoulder the cost. Road corruption in this setting appears to be a logical revenue stream for all involved—from top officials who pilfer from the roads budget, to construction companies cutting corners, to local traffic cops taking bribes for the most minor traffic violations. Such bribes can be anywhere between $15 to $200. And even if bribes can be avoided, one might still have to cover the cost of a new chassis: because of this perfect storm of graft, roads are littered with holes large enough to dislodge wheels from vehicles.
Roads in Russia have always been inadequate. During the imperial era, strategic highways connected major cities and served primarily postal and military functions. Apart from those, however, dirt roads were the norm. The Soviets, upon inheriting the muddy mess of the country’s roads, sought to improve the infrastructure through labor conscription for local road improvement; such work was often poorly executed and helped to normalize an amateurish approach to what should be a sophisticated engineering endeavor. For thoroughfares of strategic importance, the Soviets allocated vast state funding, resulting in roads of considerably better quality: unsurprisingly, the route linking Stalin’s dacha to the Kremlin was “kept,” as Lewis Siegelbaum wrote, “in a super condition.”
Even today, the divide between local and strategic roads persists. To be sure, local elite have access to vast road funding. In 2017, Russia spent more than 255 billion rubles ($4.2 billion) on roads; the projected estimate for 2020 is upwards of 296.5 billion rubles ($4.9 billion). The officials are left mostly to their own devices when it comes to using that money, though. Tellingly, one senior government official stripped the pavement from 30 miles of road and simply sold it to a company for personal profit. And overall, Rosavtodor, the federal roads agency, is considered one of the most corrupt branches of a deeply corrupt government.
MEET THE ROTENBERGS
Arkady and Boris Rotenberg are the leading businessmen of Russian infrastructure development. The Rotenbergs—labeled “the king[s] of state orders” by Forbes Russia and sanctioned by the U.S. government in 2014 for “provid[ing] support to Putin’s pet projects by receiving and executing high price contracts for the Sochi Olympic Games and state-controlled Gazprom”—are close to Russian President Vladimir Putin. Their relationship stems from a childhood bond formed while practicing under the same judo master. According to Forbes Russia, last year alone Arkady Rotenberg’s companies received over 55o billion rubles ($9.2 billion) in government contracts.
In 2014, Arkady’s company, Mostotrest, won a deal for the construction of a 130-mile section of the new M11 motorway, which will run parallel to the existing M1o between Moscow and St. Petersburg. Mostotrest was the only participant in the tender process. An internal audit has already discovered that revenue from the tolls will not be enough to cover the costs of construction or maintenance. To make up for the deficit, either more funds will need to come out of the state budget, a burden that the taxpayers will shoulder, or the builders will cut costs. There is also a risk that the project will simply not be completed at all.
Meanwhile, the Rotenbergs have been awarded two more prestigious construction projects with highly nationalist overtones. Perhaps the most brazen example is the $4.3 billion construction of a Kerch Straitroad bridge to the illegally annexed Crimean Peninsula: the project was awarded to Arkady Rotenberg. Although a bridge is not strictly necessary to accommodate transport between the peninsula and Russia, a new link holds highly symbolic value—a physical connection between mainland Russia and the newly annexed peninsula. “Besides financial profit,” as Rotenberg himself explained, “I also want the project to mean something for future generations.” The bridge is scheduled to be completed by the end of 2018, although only time will tell.
Given the history of past Rotenberg projects, it is likely that the M11 and other projects will end in vast overruns of budget and schedule. Arkady Rotenberg’s companies received more than $7 billion in contracts for the 2014 Sochi Winter Olympic Games. That sum is equivalent to the entire cost of the previous Winter Olympics in Vancouver.
The situation looks even worse when one examines individual projects. Of the $12 billion earmarked for the Olympic Games—the final budget was estimated at $51 billion—nearly $7 billion went toward a 28-mile stretch of highway known as the Adler–Krasnaya Polyana—the project was overseen by another close associate of Vladimir Putin, Vladimir Yakunin, former head of Russian Railways. According to opposition politician Alexei Navalny’s Anti-Corruption Fund, Yakunin’s Russian Railways awarded a no-bid contract to Transinzhstroy, which in turn contracted with Rotenberg’s Mostotrest. Esquire Russia calculated that the original cost of the road was so exorbitant that it would be comparable to paving it in luxury materials such as caviar or $100 bills. Since that article was published in 2014, the cost of the road has increased by $1.8 billion. It is unclear whether the road has yet been completed.
Russians seem to have grown resigned to the institutionalized corruption that produces their crumbling roads. Campaign groups now present mock awards to regions with the worst roads. Meanwhile, surveys show that contact with Russian traffic police, for example, is a major point of corruption. One account describes how officers in Dagestan extorted a truck driver, Aleksandr Chertkov, after pulling him over for no reason whatsoever. According to a New York Times piece, they forced him to “breathe into a funnel fashioned out of paper towels. ‘The Breathalyzer shows that you have been drinking,’ he was told. ‘The fine is 3,000 rubles.’” There are hundreds of other anecdotes of police officers extracting bribes from innocent citizens—so many that the practice has spurred the use of dash cams in most Russian cars.
IS RESISTANCE FUTILE?
Some Russians have chosen not to simply record encounters with police but also to resist the spread of corruption. In 2015, scores of Russian truck drivers led a multi-day strike against the Platon fee, introduced as a tax to improve roads but widely viewed as a scheme to enrich the elite connected to Putin, particularly Igor Rotenberg, son of Arkady, who managed the company in charge of collecting the tax. In the end, the tax remained, and it was nearly doubled within the first few months of its imposition. It is estimated that Rotenberg will receive $129 million from the federal budget annually until 2027 from the tax. Meanwhile, public demonstrations have taken a novel form: in Saratov, Russian activists protested by painting faces—mouths, in particular—of politicians and local officials over the most irksome potholes in town.
For now, Russia’s officials have chosen to prey upon the state they are supposed to represent. They steal from the roads on which they themselves travel, and then ignore the sorry state of their country by drawing the curtains in their automobiles as they speed through the crumbling infrastructure. To make their journey as quick and painless as possible, they’ve taken to blaring sirens to clear other traffic from their path.
It’s unlikely that roads will improve any time soon. That would only happen after a serious change in the regime’s priorities. The current government profits from disorder—in the case of roads, through repair contracts. Roads have long held symbolic meaning for Russia: they are the thoroughfares linking the federation’s many regions and nationalities together. Those ties have been tested by years of graft and neglect. To get a sense of how Russia is faring, the West must look past the Kremlin’s military posturing, and instead observe the daily grind of commuting on Russia’s roads.