Russia’s Roads, Trains, Planes Frustrate Business

Andrey Filatov, co-owner and chief executive of N-Trans, speaks during the Reuters Investment Summit in Moscow September 24, 2013. REUTERS/Grigory Dukor

Graeber,Guest blogger / September 26, 2013 Russia’s President Vladimir Putin arrives to attend the Enniskillen G8 summit, at Belfast International Airport, Northern Ireland in June. Peter Muhly/Reuters/File Enlarge The head of the World Bank in Russia saidWednesdayhe was alarmed by the slowdown in the Russian economy. The bank said the Russian economy was slow to emerge from a recession still gripping parts of the eurozone despite recovery elsewhere in the world. It said the government’s investment activities slowed down in part because of the completion of the Nord Stream natural gas pipeline through the Baltic Sea. Its dependence on oil and natural gas exports, meanwhile, exposed the Russian economy to additional risks. With Europe finding new sources of natural gas, and Asian economies looking at Canadian markets, the Russian economy is starting to retreat behind the former Iron Curtain. offers extensive coverage of all energy sectors from crude oil and natural gas to solar energy and environmental issues. To see more opinion pieces and news analysis that cover energy technology, finance and trading, geopolitics, and sector news, please visit . Recent posts The Christian Science Monitor Weekly Digital Edition The World Bank said it revised its growth projection for the Russian economy from its May estimate of 2.3 percent to 1.8 percent for 2013. “The economy appears to be growing close to its capacity, constrained by feeble investment activities and a tight labor market,” Birgit Hansl, World Bank coordinator for economic policy in Russia, said in a statement. (Related article: Why Canada’s Oil Future isn’t Going South ) RECOMMENDED: Fracking. Tight oil.

Is Russia’s economy running out of gas?

Why? Ports are closed and railway yards haven’t been built,” Filatov told the Reuters Russia Investment Summit this week. Outside the main cities of Moscow and St Petersburg, roads are often rutted, airports dilapidated and trains jammed up in bottlenecks. The Ministry of Transport estimates that poor roads mean Russia’s economic output is 7-9 percent lower than it could be. Freight trains traveled at an average speed of less than 10 kilometers per hour last year, a 15-year low. “The two biggest cities in the country aren’t even joined by a decent road… You don’t need to discuss this, you need to get on with it,” Filatov said. Critics point to corruption and cost overruns in projects. One of Russia’s most ambitious infrastructure programs is for the 2014 Winter Olympics, to open on February 7 in the Black Sea resort of Sochi. The cost of hosting the Games is expected to rise to $50 billion, much more than expected initially and more than any other Olympics. Much of the city and Olympic village currently resembles a muddy construction site.