Washington International Law Journal


The situation in the Russian Far East epitomizes the acute need for economic reform and development in Russia. The region boasts an enormous wealth of metals, oil, gas, coal, timber, and marine resources, but has long suffered from excessive dependence on the central government's administration and its accompanying historical neglect. Taking a cue from China's successful use of special economic zones as a means to encourage economic reform, some Russian policy-makers have proposed special economic zones as a means to encourage development. Russia's early laws establishing special economic zones, however, did not produce self-sustaining results due to a lack of appropriate legal and physical infrastructures, as well as political and economic instability. In addition, concerns over corruption and the imbalance of power between local and central authorities contributed to their failures. A Draft Law on Special Economic Zones proposed in 2003 by the Russian Ministry of Economic Development and Trade demonstrates the newly increased sophistication in Russian economic planning. Contrary to the criticism levied by its opponents, the Draft Law is not likely to conflict with Russia's future World Trade Organization obligations. As presently drafted, however, the Draft Law may not satisfy the development needs of the Russian Far East. Specifically, the Draft Law provides for excessive centralization of authority and fails to clearly allocate rulemaking responsibilities among various levels of government. In addition, it contains overly strict criteria for establishing special economic zones, and has the potential to disrupt some existing special economic zones. Accordingly, Russian legislators should revise the Draft Law to remedy these deficiencies.

First Page