The state remains as important to Russia's prospects as ever. This is so not only because, as in any society, an effectively functioning state administration is necessary to the proper functioning of a complex economy and legal system, but also because, in Russian circumstances, factors of economic geography tend to increase costs of production compared to the rest of the world. These mutually reinforcing factors include: the extreme severity of the climate, the immense distances to be covered, the dislocation between (European) population centers and (Siberian) natural resource centers, and the inevitable predominance of relatively costly land transportation over sea-borne transportation. As a result, it is questionable whether Russia can exist as a world civilization under predominantly liberal economic circumstances: in a unified liberal global capital market, large-scale private direct capital investment will not be directed to massive, outdoor infrastructure projects typical of state investment in the Soviet period.
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