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The Moscow Times, July 1, 2004

Selling Out Russia's Forests

By Boris Kagarlitsky

Russia is bracing itself for the privatization of its forests. The crucial step in this process will be the new Forestry Code, a draft of which is to be considered by the State Duma in the near future. An initial version of the code, approved by the government in early spring, referred directly to private ownership of forest land.

According to Greenpeace estimates, this could pave the way for privatization of up to 90 percent of Russia's forests. The Natural Resources Ministry does not seem to have any objections, apparently believing that the forests will finally fall into "good hands."

What those hands will do with the land once it is theirs is another matter. There can be little doubt that they will engage in the relentless logging and export of timber. Currently, the sale of unprocessed timber accounts for more than 50 percent of Russia's exports. If the draft code becomes law, it will enable the sale of some 843 million hectares of forest to private logging companies.

We are talking about big money. Forests are, like oil, one of the country's chief riches. If private capital comes to rule the industry, the result (as in the oil sector) will be the formation of oligarchic corporations that control not just resources, but entire regions. The draft code also allows the sale of forest land to foreigners. The only areas off limits to non-residents would be those located in border zones -- national security, after all, is priority No. 1. The rest of Russian territory, a huge swathe of which is wooded, could be bought wholesale.

The original draft of the Forestry Code stirred up a murmur of disapproval among environmental organizations and the wider public. Then the text underwent some revision and some of the wording was toned down. Government officials now try to avoid the word "privatization." As a result, the document has become extremely ambiguous, although its general thrust has remained unchanged. The long-term leasing proposed by the code's authors differs little from privatization -- after 10 years of leasing, tenants would be eligible to buy forest land outright.

Environmentalists complain of numerous technical flaws in the code and a lack of explicitly defined rules and regulations. There are no provisions for public oversight of forest land privatization, and the Cabinet is even considering the possibility of privatizing nature reserves and protected lands. Under the new code, a leaseholder who annually fells trees covering an area of 1,000 hectares could limit replenishment efforts to a one hectare area; formally, this would be in strict compliance with the code.

However, even if the code contained tougher regulations and mechanisms for enforcement, they would just be ignored. Given that the government admits its inability to control what goes on in the country's forests now, clearly this task will become virtually impossible once the forests are transferred to private hands. Incidentally, one of the main arguments cited in favor of privatization is the government's inability to enforce existing laws. The authorities are unable to prevent illegal felling and timber smuggling -- so the answer, apparently, is to legalize them. Imagine if in a few years we are told that the police are unable to prevent burglaries, so it is necessary to pass a new law allowing thieves to enter our homes unobstructed and take whatever they like.

Even Yabloko leader Grigory Yavlinsky, hardly a radical, has noted that "the reforms of the 1990s in Russia have resulted in the creation of an economic system based on the complete fusion of business and officialdom -- a system that is anti-environmental by its very essence." If the authorities are unable to ensure order in Russia's forests (or to protect historical monuments), it is not due to a lack of resources or funding. When it comes to the war in Chechnya or the maintenance of a giant bureaucracy, the government comes up with the wherewithal, and the same goes for the upkeep of an expensive propaganda machine. The powers that be are not interested in protecting public goods. Indeed, their aim is quite the opposite: to facilitate the transfer of these resources into private hands.

However, the potential impact extends far beyond the officials in the Natural Resources Ministry and even beyond Russia's borders. Logging in Brazil has long been a source of concern around the world. Russia's forests are just as much the lungs of the planet as Brazil's, only for the eastern hemisphere. If the planned reform is successfully implemented, its repercussions will be felt throughout the whole of Europe.

Boris Kagarlitsky is director of the Institute of Globalization Studies.


See also:

the original at

Privatisation in Russia

The Moscow Times, July 1, 2004

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