Yaroslav Shedov's blog

Need for Speed: Can Russian Participation in Rail Baltica Help Boost the Economy of the Russian North-West and Improve Cultural Connectivity with Baltic States in the Post-Pandemic World?

October 11, 2021
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The current pandemic has had a significant negative impact on all countries around the world. While border closures are undermining cultural connectivity between countries, they do not help improve the already wounded relations between Russia and the Baltic States. New economic stimuli are in need to boost the wounded economies. And the faster and more comfortable ways of traveling are becoming even more paramount in building cultural bridges. Can Rail Baltica be one of such economic boosters and catalysts for the Russian North-West and improve cultural connectivity with the Baltic States?

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Source: diena.lt

1. The Speed and New Job Opportunities

First and foremost, Russia needs Rail Baltica to improve connectivity with the Baltic States. At the moment, it can be described as appalling and shocking. It will take up to 7 hours and 30 minutes to travel by diesel-powered locomotive train from St. Petersburg (Russia) to Tallinn (Estonia), a distance of 370 km which can be covered by car in 5 hours. By comparison, the distance of 680 km from Paris to Nice is traveled by the TGV train in 5 hours and 30 minutes. The reason for the significantly slower speed of the so-called “Baltic Express” (the official name of the train from Moscow to Tallinn via St. Peterburg, whose journey time is nearly 15-17 hours) is the fact that the two sections of this railway, one from Kingisepp (Russia) to the border with Estonia (a length of 35 kilometers), and from Narva (Estonia) to Tallinn (211 kilometers) have not been electrified yet. Besides, there is no direct flight between these two cities, although a large minority in Estonia is Russian. Someone would argue that it would not be financially viable because of the short distance between St. Petersburg and Tallinn. However, there used to be a direct flight, but as the Estonian air company went bankrupt, all flights were canceled. Moreover, the feasibility argument can’t be wrong. For example, Finnair operates several flights a day between Helsinki and Tallinn in spite of the short distance, as short as 86 kilometers, while there is also a daily ferry that goes across the Gulf of Finland. As a result, Russians and Estonians may cross the border only on foot, by car and bus, while having only two crossing points, one of which is a tiny (162 meters long) bridge over the Narva river.

The trains between St. Petersburg and Riga, as well as between Moscow and the Latvian capital are not in a big hurry either. It takes approximately 17 hours to cover the distance of 573 kilometers (St. Petersburg-Riga), while the same journey can be completed by car in 7 hours. At the same time, having taken a train to Vilnius, a passenger may enjoy a peaceful ride with the train’s average speed of as low as 58km/h. Such a low speed is indeed the best representation of the current relations between Russia and the Baltic States.

However, Russian participation in Rail Baltica could be a potential game changer for the St. Petersburg and Pskov regions. Despite the closeness to the border of another state, the Pskov Region is among the top 20 regions in Russia with the lowest income of the population. Nearly 16 percent of the population is living below the poverty line. There are at least two potential high-speed railway lines that may go through Pskov city and its region: St. Petersburg-Pskov-Riga and St. Petersburg-Pskov-Vilnius-Warsaw. There is no doubt it can be an economic booster for the entire region. Pskov can become one of the key passenger and transport hubs of the Russian North-West. At the same time, it will help to develop the regional rail services in Pskov and its neighborhood, the Velikiy Novgorod region, while RZD will create its own logistics center and technical services for trains, which will eventually create new job opportunities for the local population.

At the same time, modernization of the railway line in the Russian North-West and its connection to Rail Baltic may help boost the flow of tourists in the region, and the recent introduction of special e-visas, which are easy to apply for, may help attract even more visitors. The only condition for that type of visa is that tourists will have to enter Russia only through certain crossing points. Therefore, crossing points at the Russian border with the Baltic States, where the high-speed trains will go through, may be added to that list of crossing points.

2. Resetting Cultural Interactions

The good thing about tourism is that it is not simply about bringing cash to the local communities, but it is also about cultural interaction. On its own it is one of the ingredients for cementing the foundation for normalizing relations between Russia and the Baltic States. Speaking of cultural connections, it is worth mentioning Russian minorities as nearly 25% of people living in Latvia are ethnic Russians, 24% in Estonia, and 5.8% in Lithuania. For quite some time, Russian officials have been discussing the importance of not leaving the Russian minorities on their own in the post-Soviet republics. However, the words are not always transferred into actions. Effective and comfortable means of transportation between the border countries is the most pragmatic way of making sure that Russian minorities can easily travel to their historic homeland and stay connected with their friends and relatives. Currently, as was discussed in the previous paragraphs, it all reminds us that the transportation links between Russia and the Baltic states have been stuck in the 20th century without any sign of potential modernization. It is hard to analyze what impact it has on the daily lives of Russians who live in the Baltic countries, and Estonians, Latvians, and Lithuanians whose businesses are in some ways connected with Russia, but it definitely does not make their lives easier. The development of transport, especially at the border section of the country, is crucial not only for boosting tourism and business, and ensuring that native Russians and Russian speakers can easily travel to Russia, but it creates the first impression of the country. If travelers or businessmen are traveling to the country on a diesel-powered train with an average speed of 60 km/h, then it will not be a surprise that it may only create distorted signals of the country.

3. Importance of Rail Baltica for Kaliningrad Region

Rail Baltica could also be crucial for Kaliningrad and its economic growth. Kaliningrad, like St. Petersburg and Moscow, has poor travel connectivity with Baltic States, Poland and Germany, despite its extremely close geographic proximity. To get from Kaliningrad to Moscow, a passenger will have to travel nearly 18 hours by train, while to St. Petersburg it takes 1 day to complete this voyage. Meanwhile, there are no train services available for traveling to the Baltics States, Poland, or Germany. For example, the last train operating on the route Kaliningrad-Berlin stopped its service 8 years ago. Since then, the Russian and German sides have periodically announced plans to get that train back on track, but no one has moved on to real action. In 2018, the German Ministry of Transport considered a plan to launch a train from Berlin to St. Petersburg through Kaliningrad which would go through Frankfurt and der Oder to the border with Poland and further in the direction of Warsaw. There was a sense of optimism for the potential of that idea as the railway line, apart from small sections in the Berlin area, had recently been expanded. That would allow the trains to travel at a speed of 160 km/h. Taking into account the fact that the cultural and economic tie between Russia and Germany has managed to survive after the sanctions’ crossfire, the expectations for the development of passenger traffic in this direction seem to be realistic.

When you analyze the poor level of transport connectivity along the Baltic coast between Germany and Kaliningrad, there may arise a feeling that the Second World War ended not in 1945 but several years ago, while the Cold War paradigm is still alive. It is indeed a tragedy and a lost opportunity for the Kaliningrad region, as there is no doubt that if more high-speed train services could operate between Kaliningrad and the neighboring countries and the rest of Russia, it would represent a great opportunity there for the reasons described above.

4. Improving Transport Links with Belarus via Rail Baltica

Rail Baltica can also become a kind of accelerator for the upgrade and development of the railway line between Moscow and Minsk (Belarus). If at some point in the near future it is decided to launch a high-speed train to Vilnius and Kaliningrad via the Rail Baltica railway lines, it will inevitably lead to the upgrade of the railway tracks between Moscow and Minks to adapt them to the use of a high-speed train. This initiative can go further and it can be suggested to upgrade the railway track to Warsaw or even Berlin, so the high-speed railway line can potentially bring closer German and Russian capitals. At the moment, even with the brand-new train “Strizh”, it takes nearly 22 hours to complete the journey from Moscow to Berlin.

The launch of a high-speed train between Moscow and Minsk is a pragmatic choice, not only because of the potential cooperation with the Rail Baltica project, but also because of the possibility to improve the transport links with Belarus. For quite a long time, the officials of Belarus and Russia have been discussing the further movement of economic integration within the framework of the Union State, and indeed, the transportation links between Russia and Belarus has to be one of the key priorities for that. The future integration between Belarus and Russia may sound realistic, but in fact, it sounds very vague taking into consideration that both countries have not managed to develop effective and comfortable transportation connections between each major city yet. For the train to complete the journey from St. Petersburg to Minsk, it will take nearly 12 hours, while the train from Moscow to Minks will complete the journey of 750 kilometers in 7 hours. In comparison with that, the train completes the same distance between Milan and Naples in 4 hours and 30 minutes. Moreover, prior to the Ryanair accident and sanctions imposed on the Belarusian airline, Belavia, there had been more flights from Minks to Ukraine than to Russia. For instance, you could fly from Minsk to Kiev, Odessa, Kharkov and Lvov, while regular daily flights to Minsk are only available from Moscow and St. Petersburg. There is no doubt that it is not politicians who bring countries closer to each other, but people, their interactions, and their daily journey between cities and countries, as well as their communications. That’s exactly what makes the EU stronger, as people from different countries constantly communicate on a daily basis, and a well-developed and well-planned transport network helps a lot with that. A traveler, businessman, or a member of the family can easily take a train in Paris and in three-four hours arrive in Amsterdam, Brussels, Köln or London. Besides, as an alternative to that, there is a wide range of low-cost airlines across the EU. In some sense, it is indeed a soft power that has become the foundation of modern Europe. Russia and Belarus have to follow the same formula if the governments of these countries believe in the idea of integration and the concept of the Union State. The Ukrainian drama has already shown that giving loans with loose conditions, which may look more like a charitable give-away financial gift, can eventually create the situation where you may lose the money, and what is more important, friendly relations with a country which has been an ally for many centuries. Likewise, if there was much better transport (railway) communication between Ukraine and Russia, it would be highly likely that conflict would be avoided. If the lessons are not drawn from that, the same scenario may happen with Belarus-Russian relations. That’s why it is crucial to develop a fast and efficient railway network and evaluate the potential of Russian participation in Rail Baltica not only in the context of the Belarus-Russian transport upgrade but also in the context of Europe from Lisbon to Vladivostok.

5. The Importance of Transport Projects’ Diversification for Russia

Last but not least, is this: when such an ambitious project as Rail Baltica is being carried out right next to the Russian border, it can be a fatal mistake not to use that opportunity. Someone would argue that this project is too small for Russia, as it has been actively participating in the New Silk Road and its railway lines are being used by Chinese cargo, and it is highly probable that they will be exploited that way in the near future. However, relying on one, even such a large project as the New Silk Road, is not pragmatic enough, as China itself does not consider this project as the only route for delivering goods. The Trans-Caspian International Transport Route is one of the routes that has started to be used more actively by China. It begins in China, runs through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, Turkey, and further to European countries (see Figure 1). Since the collapse of the Soviet Union, China has started to begin its groundwork in Central Asia. From 2002 to 2005, bilateral trade between Central Asian states and China increased from $2.3 billion to $8.8 billion. By 2019, the economic figures had grown to $46 billion. The economic activities have also been followed by social and political influence in the region and increased its presence across all sectors in the Central Asian countries.

The Chinese government has started to consider how to replicate that success in the Caucasus region. The Trans-Caspian International Transport Route has allowed China to remove all logistics barriers. The first train from China to Baku was launched in 2015.

Figure 1 Trans-Caspian International Transport Route

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Source: https://middlecorridor.com/en/route

In 4 years’ time, the trade between China and Caucasus countries has increased from $1.9 billion to $3.6 billion (see Figure 2). Countries of the Caucasus region are not simply used as the transit stops of the Trans-Caspian International Transport Route for Chinese goods to final destinations in Europe. The Transport Route allows China to develop its own project and gain more political and social influence in the countries which have always been considered to be the sphere of Soviet and Russian interests.

For instance, in Armenia, Chinese enterprises have acquired stakes in Armenian companies that produce copper and textiles (the key Armenian exports to China), while the number of Chinese ventures operating in Armenia has increased from five in 2016 to thirteen in 2020.

Figure 2 Chinese trade turnover with the South Caucasus countries (million dollars)

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Source: https://carnegie.ru/commentary/83950

Chinese companies are also playing an important role in Azerbaijan’s policy of modernization of its industries. Since 2018, a number of large-scale Chinese projects have been launched, such as a $1.17 billion integrated steel plant and a $1.5 billion industrial park at Alyat Port. While many projects go beyond trade, for example, Huawei introduced a special program for Azerbaijani students called “seed for the future” that allows them to study computer science in China, and some Chinese universities have also launched partnership programs.

There are also several projects in Georgia, such as the country’s largest glass bottle production line, a $160 million gas-to-electricity plant, and the largest tunnel in Georgia, which will be a part of the Trans-Caspian International Transport Route. All these examples are important for consideration as they prove that China will not purely rely on the New Silk Road that runs across Russia. This case study is another great illustration of how the transport project can be used not only as of the transfer of cargo trains but also as the booster for other industries in the economy. Taking this argument into consideration, it is indeed crucial for Russian officials to analyze any possible ways of taking part in Rail Baltica as it will help Russia to be more flexible in terms of participating in various transport projects and, very likely, help the Russian North-West economy recover after the current economic crisis.

6. Final Thoughts

There is no doubt that Rail Baltica is an exceptional and ambitious project which can play an important role in the economic development of the Russian North-West and improve the cultural connectivity between Russia and the Baltic States if Russia participates in it. High-speed trains are becoming more of a necessity than monkey tricks. We can see how France is now upgrading its TGV trains, and French manufacturer Alstom is going to launch the brand-new TGV-M and deliver the brand-new trains in 2024. The UK is constructing its own H2S project to connect London and Birmingham and the North of England with the high-speed railway system. Japan and China (the high-speed train network covers nearly 38,000 km, nearly 10 times bigger than that in Spain, which is considered to have the longest high-speed rail network in Europe and the second one in the world) have been traveling at high speeds for many years. I strongly believe that Russia and the Baltic States will be better off if Russian RZD (Russian Railways) takes part in this project for the reasons discussed in this article. It is indeed unacceptable for the 21st century to have such poor rail-transport connections between the Baltic States and Russian cities, as well as with Belarus, Poland, and Germany. If the only obstacle to such cooperation in politics, then it is a significant loss for Russian North-West and the Baltic States.

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