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Russia's turn to the East: to be continued

Why and how to build a "Greater Eurasia"

Relations within the Eurasian continent will in time only be strengthened in the line of interaction between Russia and the countries of the East, reads the next report of the Valdai Discussion Club. Despite the fact that Russia's trade and economic cooperation with its Asian neighbors has not yet reached a high level, it will only intensify. At the same time, one of the key directions should be the creation of various systems, including security and transport links, within the "Great Eurasia" - Russia's potential new support in world politics.

Russia's turn to the East: to be continued
Most Russian researchers agree that the current stage of the Russian turn to the East can be described as comprehensive and strategic. In particular, this viewpoint is central to report "Towards the Great Ocean - 5: from the East to the Great Eurasia", prepared by experts of the international discussion club "Valdai".

China continues to be a priority, and in the foreseeable future there are all prerequisites for further deepening of the strategic partnership. An important advantage is the absence of systemic contradictions between Beijing and Moscow, as well as the unity of foreign policy views, which was confirmed during the visit of Russian President Vladimir Putin to China in June 2016, as well as the first in the history forum "One Belt, One Way" Beijing in May 2017 year.

At the same time, lately Russian diplomacy has managed to form a close network of partnerships with other major regional players. There is an improvement in relations with Japan, which is interested in diversifying foreign policy ties and views Russia as a powerful independent player. In this regard, it is worth emphasizing the number and quality of high-level meetings with the Japanese side, in particular, the decision to resume negotiations between the countries in the "2 + 2" format (defense and foreign ministers), as well as the presentation of an eight-point plan for the development of bilateral economic cooperation.

India plays a more important role in Russia's foreign policy priorities, which, with the coming to power of Prime Minister Narendra Modi, actively joins the Eurasian initiatives. For example, in 2017, India officially joined the Shanghai Cooperation Organization.

At the same time, there are a number of economic circumstances that hinder the development of cooperation between Russia and Asian partners. The main one is the rather low level of trade and economic ties. In particular, the trend of recent years has been the reduction in trade with most partners in the region, which is primarily associated with a drop in economic growth rates in Russia, as well as in individual APR countries. We can also mention the weak diversification of Russia's export supplies to the states of the region. For example, in the structure of Russian exports to China, 64% falls on mineral products (oil and gas), in the ASEAN countries this figure is 55%.

Table 1. Dynamics of Russia's trade with Asian partners, billion dollars

Республика Корея
Source: Trade Map. Bilateral Trade

Despite the negative dynamics of bilateral trade, this trend can not be regarded as evidence of a crisis in relations with the countries of the region. Moreover, in the foreseeable future, we should expect intensified efforts by Moscow and regional partners to increase economic cooperation. In particular, great expectations for the development of the Russian-Chinese dialogue are related to the promotion of the interface of the Eurasian Economic Union and the Economic belt of the Silk Road, as well as the signing of a bilateral agreement on trade and economic cooperation.

There is a potential for increasing the volume of trade with Japan, which is primarily due to the interest of Japanese companies in expanding their presence in the energy sector of Russia. So, the share of the Japanese side in the Sakhalin-1 project is 30%, in the Sakhalin-2 project - 22,5%.

As for the Republic of Korea, here the greatest potential is connected with attracting Korean investments to the Russian Far East, first of all, agriculture.
Good prospects are opening up in Russia and India in cooperation in the oil and gas sector. One of the most promising agreements is the signing of a contract between Rosneft and Indian corporation Essar for the supply of 100 million tons of oil to India during 10 years. In addition, in June 2017 India and the EAEC began official negotiations to conclude an agreement on the establishment of a free trade zone (FTA).

Finally, Russia and the ASEAN countries are also aware of the need to intensify economic dialogue. A special role in this direction was played by the anniversary Russia-ASEAN summit that took place in Sochi in May 2016. It marked the formation of strategic partnership between the parties, as well as mutual interest in the development of economic cooperation in the format of the EAEC-SCO-ASEAN.

The promotion of this idea, together with the other flagship initiative of conjugation of the EAES and EEPS, serves as a symbol of the Russian turn to the East, and lays the foundation for the creation of a new geo-economic and geopolitical space of Greater Eurasia. Due to its youth, the concept of "Big Eurasia" has not yet received a clear practical content, its final goals, the main mechanisms of interaction are vague. However, even now we can single out the main contours of the Eurasian partnership. Firstly, we are talking about the creation of a common continental system of co-development, cooperation and security from Jakarta to Lisbon, based on existing mega-initiatives and institutions. Secondly, Greater Eurasia will not rely solely on the accumulated luggage of Russian-Chinese relations. A significant role will be played by other non-Western centers of power - India, Iran, Japan, the Republic of Korea, ASEAN. 

Thirdly, Greater Eurasia is an open partnership, including for Europe, which has been repeatedly discussed at the highest level. Fourth, Greater Eurasia is an independent growth pole that rejects hegemonism, military-political alliances, asymmetric dependence, sanctions and any other form of economic and diplomatic war as a way to achieve foreign policy goals. In this respect, a different attitude to world politics is taking shape in Greater Eurasia. Such important principles as respect for international law, recognition of the leading role of the UN, political and cultural pluralism, respect for the sovereignty and territorial integrity of countries are being raised to the absolute. Fifth, Greater Eurasia offers its participants the liberalization of the economic space, greater openness and flexibility, a refusal to politicize economic ties and, in general, mutually beneficial cooperation.

From an international political point of view, Greater Eurasia is an important support of Russia in world politics, a factor of its formation and strengthening in the role of an international center of power, cooperating with the main players. The most important national priority of the 21st century on the way to the formation of a consolidated Eurasian space is the accelerated modernization of Siberia and the Far East, the transformation of the Far Eastern territories into an active participant in the regional processes of cooperation and co-development. At the same time, the territories of advanced development created in the Far East serve as key instruments for integrating Russia into technological, value-added chains in the Asia-Pacific region. To date, 18 TOP has already been launched, in the territory of which 11 enterprises operate, at the stage of construction and installation work there are still 34. To realize the set goal of Russia, first of all, it is necessary to expand the range of products supplied to the countries of the region with a special emphasis on the production of resource-intensive, energy-intensive and water-intensive goods.

In addition, the most important task is to increase the efficiency of the Ministry of Far Eastern Development and profile structures. One of the key problems in this direction is a low level of awareness of these institutions and TOPs in the countries to which they are oriented. It is noteworthy that the version of the site on the TOP in the Eastern languages ​​has not been launched so far and that changes are not expected in the near future. A significant barrier is also the lack of a clear division of responsibilities between regional agencies (the Russian Export Center, the Agency for Investment and Export Support of the Far East) responsible for supporting Russian exporters.

Other shortcomings include the lack of strong channels of communication between the institutions of development of the Far East and leading scientific institutions in the region and the country as a whole (universities, think tanks, foundations). Moreover, a serious administrative restriction is the lack of reliable information from local authorities on the development of business ties between China and the neighboring regions of Russia, as a result of which it is not possible to fully assess the real scope of cross-border trade, economic and investment cooperation.

Achieved within the framework of the Russian turn to the East requires not only the development of already established directions, but also the launch of new initiatives and projects and, most importantly, a long-term development strategy in a wider regional context.

One of the key areas of the Russian agenda should be the creation of a system of continental security. The space of Greater Eurasia is characterized by the growth of conflict potential. There is an escalation along the US-China line, which, with the arrival of the administration of Donald Trump, risks becoming more open and systematic. The problem of the South China Sea and the North Korean problem are rapidly globalizing. The Indo-Chinese conflict is exacerbated by the plateau of the Reports, relations between Beijing and Tokyo remain tense. All this, coupled with the weakness of the regional security institutions, primarily the aseanocentric ones - the ARF and the EAC, forms a "request" for an active and relatively independent arbitrator and security supplier. This circumstance creates an additional "window of opportunity" for Russia in terms of expanding its influence on the platforms of multilateral cooperation in Eurasia. It is expected that the Shanghai Cooperation Organization should become the main negotiating platform in the sphere of security in Eurasia. At the same time, as one of the leaders of the SCO, it is critically important for Russia to restructure the current institutional format, taking into account the recent expansion without losing the effectiveness of the organization.  

An equally important task is the creation of a coordinated transport strategy for Greater Eurasia and the strengthening of integration institutions. The leading institution, designed to create the legal conditions for the creation of transport and logistics infrastructure in the territory of Greater Eurasia, should be the EEU. For Russia, the strengthening of international cooperation around the center of Eurasia fully meets the task of establishing the Union as an interstate union with elements of supranational integration.

In addition, a qualitative increase in the involvement of the EAEC in regional integration initiatives is needed, primarily by expanding the negotiating agenda of the Eurasian Economic Commission (ECE) and coordinating the work of ECE with the activities of Russian ministries and specialized agencies. From the point of view of Russia's interests, a strategically important direction is the promotion by the Ministry for the Development of the Far East of the requested position through the ECE with a view to improving the conditions for Russian exporters in the APR countries.

In practical terms, the realization of this goal is seen as possible through the adoption of the following set of measures:
• development of special formats for concluding preferential and non-preferential trade and economic agreements with regional partners;
• conclusion and subsequent implementation of investment projects according to the scheme "tariff removal in exchange for attracting investment";
• regulation of the visa issue and the regime of stay of foreign workers in the Far East;
• regulation of transport and tourist services with the APR countries, taking into account the interests of the Far East.
It is also advisable to establish close ties with international and regional development institutions - the Asian Bank for Infrastructure Investments (ABIA), the Silk Road Fund, the New BRICS Development Bank, the Eurasian Development Bank (EDB) for implementing large-scale infrastructure projects in Russia with an emphasis on the Far East. When building work with development institutions, it is strategically important for Russia to increase the number of proposed projects and attract effective consultants for the preparation of applications, as well as coordination of similar projects by both Russian specialized agencies and the Eurasian Economic Commission.
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